Trans-Atlantic bandwidth – the hangover lingers

from Telegeography:

>>Trans-Atlantic bandwidth – the hangover lingers

Despite the balancing of supply, demand, and price since the turmoil of the early 2000s, the market for trans-Atlantic bandwidth faces a looming supply hurdle. The trans-Atlantic submarine cable market was a stark example of the capacity glut in the early 2000s. Six new cables entered service between 2000 and 2003, greatly exceeding near-term requirements. The excess capacity and competition crushed prices, resulting in a wave of bankruptcies and financial restructuring.

The bandwidth glut now lies well in the past: rapidly growing international bandwidth requirements restored the balance of supply and demand, and cable operators have been adding capacity to their networks since 2004. Superficially, the trans-Atlantic market now appears sound: prices have stabilized, and demand grew 38% in 2008. However, clouds loom on the horizon.

Oxygen Founder’s New Global Bandwidth Exchange

from Giga OM, a new Global Bandwidth Exchange:

>>the launch of his new startup, BuySellBandwidth.com, through which carriers around the globe are able to buy, sell and swap capacity. You’re probably saying to yourself, “Haven’t I heard of this before?” Indeed, even Enron tried to start a bandwidth platform. But BuySellBandwidth.com is more akin to private exchanges or ECNs on the stock market, where membership is by invitation only.

...

So far a dozen carriers — including PCCW, KPN, PLDT, Globe Telecom, Cable & Wireless, Reach and Tata Communications — have signed up with Tagare’s exchange, which at this point is free. Bandwidth brokers, by comparison, currently perform this service at 10 to 15 percent of the sale price. “Over time I will charge a small membership fee,” Tagare told me. He’s hoping each transaction will be worth millions of dollars.

Cogent - new discounts for customers

Cogent this morning is announcing new discounts for customers who commit to three-year contracts and for higher volume service provider customers. The new three-year price for Ethernet service is a flat $7 a megabit, a dollar less than the previous rate for contracts of two years or more. For service providers who buy Ethernet services at volumes between 100 megabits per second and a Gigabit, rates are as low as $6 per megabit for a three-year contract. Service providers who buy between one Gigabit and 10 gigabits will enjoy a three-year contract rate of $5 a meg, and those that consume a full 10 gigabit port can pay as little as $4 a meg on a three-year contract.

Industry Internet Year over Year Revenue Growth

A very nice spreadsheet about bandwidth growth/rate decline from Telecosm - Ike Elliott :

Industry Internet Year over Year Revenue Growth
	Rate of Price decline in price per Mbps
Rate of Bandwidth Growth	20%	22%	24%	26%	28%	30%	32%	34%	36%	38%	40%	42%	44%
50%	20%	17%	14%	11%	8%	5%	2%	-1%	-4%	-7%	-10%	-13%	-16%
55%	24%	21%	18%	15%	12%	9%	5%	2%	-1%	-4%	-7%	-10%	-13%
60%	28%	25%	22%	18%	15%	12%	9%	6%	2%	-1%	-4%	-7%	-10%
65%	32%	29%	25%	22%	19%	16%	12%	9%	6%	2%	-1%	-4%	-8%
70%	36%	33%	29%	26%	22%	19%	16%	12%	9%	5%	2%	-1%	-5%
75%	40%	37%	33%	30%	26%	23%	19%	16%	12%	9%	5%	1%	-2%
80%	44%	40%	37%	33%	30%	26%	22%	19%	15%	12%	8%	4%	1%
85%	48%	44%	41%	37%	33%	30%	26%	22%	18%	15%	11%	7%	4%
90%	52%	48%	44%	41%	37%	33%	29%	25%	22%	18%	14%	10%	6%
95%	56%	52%	48%	44%	40%	37%	33%	29%	25%	21%	17%	13%	9%
100%	60%	56%	52%	48%	44%	40%	36%	32%	28%	24%	20%	16%	12%
105%	64%	60%	56%	52%	48%	44%	39%	35%	31%	27%	23%	19%	15%
110%	68%	64%	60%	55%	51%	47%	43%	39%	34%	30%	26%	22%	18%
115%	72%	68%	63%	59%	55%	51%	46%	42%	38%	33%	29%	25%	20%