The wholesale price of communications circuits dropped 10% to 20% last year as network operators switched to higher-capacity links, market analyst Telegeography has reported.
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Telegeogrpahy said international demand for bandwidth remained strong, growing at a compounded annual rate of 52% over the past five years. But network operators found it harder to maintain revenues.
TeleGeography research director, Robert Schult, said, "Companies that may have purchased a few 155Mbps STM-1/OC-3 circuits five years ago are now opting for 2.5Gbps or 10Gbps wavelengths.
"These large circuits are far cheaper in terms of the price per Mbp of capacity than the smaller circuits, reducing the effective price per Mbp of capacity. Carriers need to sell ever-larger volumes just to maintain stable revenues."