Current street prices for US Internet Transit
Michael.Dillon at radianz.com
Michael.Dillon at radianz.com
Tue Aug 17 08:37:03 UTC 2004
> Those are apples & oranges. You cannot compare bandwidth in countries
> without the same fiber infrastructure as the US ( and with government
> owned PTTs controlling almost all access to the US market.
Bang on!
U.S. prices reflect a mostly complete disintermediation of the telecom
industry in that the provider who sells you transit probably also owns
the fiber in the ground and is able to specify the entire suite
of technology and operations between the glass strands and IP transit.
So rather than reflecting slim margins, perhaps the prices reflect
sensible cost structures.
Let's not forget that it was only about ten years ago that telcos were
able to get away with selling telecom services in which 75% or more of
their cost base was in billing systems and overhead.
> Anyway, I suspect "more turbulence in the industry" for the next few
> millennia, no matter where prices are. :-)
It will take at least a generation before the people who once experienced
grossly overinflated margins are all gone and people stop trying to
recreate the golden age of telecom again. Think highways and gas pipelines
and electrical grids. IP transit networks are a utility and they should
be cheap, ubiquitous and reliable. Anyone who wants to get rich in this
business should be looking at value added services and not transit.
It won't be long before IP transit is a real commodity and everyone will
have the same cost structure and prices across the board. There will be
margin for well-run IP transit utilities but no more boom times.
--Michael Dillon
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