Europe Special: European capacity and pricing trends
In collaboration with TeleGeography.
Figure 1: European international bandwidth usage, 2007-2011
Despite the maturity of Europe’s telecommunications market, the region has shown exceptional growth in the last three years. International bandwidth usage in European countries increased by 46% in 2011 to 49.8Tbps, which was slightly down compared to the 2010 growth rate of 51%.
Western Europe accounted for seven of the top 10 bandwidth-consuming countries in Europe in 2011. Germany had the highest international bandwidth usage in the region, accounting for 18.1Tbps, and was second only to the US globally. The UK followed with 14.5Tbps.
While western countries led the region in overall bandwidth consumption, eastern Europe saw the fastest growth in bandwidth usage. In the past five years, nine of the 10 European countries with the highest cumulative annual growth rates have been in central and eastern Europe.
Figure 2: Change in regional internet capacity connected to Europe, 2002-2012
As the role of the US as an internet hub has waned in the past decade, Europe has emerged as a major internet hub for many regions.
The relative proportion of international internet bandwidth connected to Europe has increased steadily between 2002 and 2012 for the Middle East (ME), North Africa and sub-Saharan Africa.
While capacity between Europe and Asia has grown rapidly in recent years, only 10% of Asia’s international internet capacity was connected to Europe in 2012.
Figure 3: Weighted average annual E-1 prices in select European cities, 0-15km
Major business and internet hubs such as Frankfurt, Amsterdam and Paris have some of the lowest annual E-1 local access circuit prices in Europe. Prices in these three cities ranged from $3,900 to $4,600 per year in H2 2011.
While southern and eastern European cities such as Madrid and Moscow, and some cities in the UK, tend to be more expensive, the highest priced city for E-1 local loops was in Ireland.
Figure 4: Median 10GigE IP transit prices in Europe, Q2 2009 to Q2 2012
Europe hosts a vibrant IP transit market, attracting international buyers from Africa, the ME and Asia. Not only have price declines accelerated in the region in the past year, but prices have become increasingly uniform among major hubs in western, northern, eastern and southern Europe.
Median 10GigE IP transit prices in these markets lay between $1.5 and $2/Mbps in Q2 2012, while prices in secondary markets such as Belgrade, Istanbul and Moscow ranged from $4 to $6/Mbps.
The $1.67/Mbps median monthly price for 10GigE ports in London fell 40% per year compounded annually from Q2 2009 to Q2 2012. The lowest 10Gbps price quoted in London was $1/Mbps for a 10GigE port.
Figure 5: Frankfurt-London 10Gbps wavelength prices, Q2 2009 to Q2 2012
Bandwidth prices continue to fall throughout Europe, and regional pricing distinctions between European bandwidth markets are converging.
The median monthly 10Gbps lease price reported to TeleGeography by global carriers on the Frankfurt-London route fell 20% compounded annually between Q2 2011 and Q2 2012 to $4,364.
The lowest price reported on the route was $2,641 per month, falling 31% compounded annually during the period. Prices are headed still lower, spurred on by emerging deployments of 100Gbps transmission equipment.