GLOBAL OVERVIEW
The future of the Atlantic remains uncertain. Some industry experts express the possibility of prices either stabilizing or increasing rather than continue to trend downwards. On the other hand, future technological advancements could potentially lower the average unit cost and provide for better economics on younger systems.
$2,000,000
USD
$1,500,000 $1,000,000 $500,000 0
New York London
Ashburn Paris
Los Angeles Tokyo
Los Angeles Sydney
U.S. Fortaleza
Figure 14: 100Gbps IRU Prices, 2018 Source: APTelecom and others
$120,000 $100,000 $80,000 USD
route will see a small premium on the IRU’s currently being sold. A 100Gbps IRU connection from Ashburn to Paris is currently $1.1 million. However, the popularity of this route – and additional cable systems – will bring the price down over time. IRU’s are mostly sold on newer systems while older systems rely more on leases. Pricing in the spot market for leases varies, from $1,000 for 10Gbps to sub-$10,000 for 100Gbps. With older systems selling less IRU’s the region is a step closer to the possible shutdown of one or more cables.
$60,000 $40,000 $20,000 $0
New York – London
Los Angeles – Tokyo
Los Angeles – Sydney
Capacity on Transpacific routes remains high by comparison – owing Figure 15: 10G and 100G Lease Prices, 2018 to the lower traffic demand and lonSource: APTelecom and others ger cable system length. Even with multiple competitive cables landing in Japan, a tions between the United States and Australia. 100Gbps IRU on the United States to Tokyo route Currently a 100Gbps IRU along this route costs costs $1.5 million. However, over the years prices $1.85 million. (Figure 14) (Figure 15). came down faster compared to the Atlantic. This price erosion is expected to continue and as with the Transatlantic region additional cable systems 1.3 SYSTEM GROWTH planned along these routes should increase competition and lower prices over time. Prior to 2017, the world experienced nearly anemic growth in new system development due The Pacific region is more complex with more to economic uncertainty and the prevalence of diverse landing points, internet hubs and routes system upgrades. With a greater demand in new to choose from such as Los Angeles to Sydney markets and route diversity, system implementaand Singapore to Hong Kong. Prices for capacity tion has experienced a boom since the beginning between Los Angeles and Sydney have come of 2017. In all, 32 new systems will have been down over the years but remain more expenadded to the global network in 2017 and 2018 — sive, largely due to only 2 current direct connec- nearly double that of 2014-2016. (Figure 16)
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