Competition the primary determinant of access prices - analyst

Nov 26, 2013

According to TeleGeography, Median T-1/E-1 prices per month in western markets such as New York, London, and Frankfurt are often a bit higher than in Asian markets, but the price ranges are considerably narrower. The median monthly lease price for a T-1 in New York is $260, while the high price is just over $900 more at $1,175. Similarly, in London, the median E-1 price is $293 per month, while the high price is just over $1,400. In Frankfurt, the difference between the median price and high price is $845.

Access prices in Africa and Latin America are often particularly high. The median price for an E-1 is $669 per month in Johannesburg and $1,166 per month in São Paulo, while their high prices are upwards of $1,300 and $2,700 per month, respectively.

“Competition is the primary determinant of access prices,” said TeleGeography analyst Greg Bryan. “The presence or absence of competitive providers within a metro area can have a great effect on the monthly price customers pay. For example, median prices in established markets in South and East Asia, and in many western cities, fall close to the lower end of their wide price range.

"The majority of prices paid by customers cluster closely near the bottom of the range, suggesting that the high end reflects only a few special situations. Conversely, prices in developing markets in Africa and Latin America are significantly higher overall, and fall near the middle of a range of more evenly-distributed prices.”

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