New Year Marked by Across-the-Board Rate Adjustments
RateXchange trading activity surged at the beginning of the year.
Carriers adjusted their rates across the board with new wholesale promotions. This was
most clearly evident in nonindexed routes, such as Chile, Denmark, Jordan, the
Netherlands, New Zealand, Spain, Switzerland and the Syrian Arab Republic minutes spot
rates, which declined in excess of 30 percent since the last issue of PHONE+. Rate
increases in minute routes were few and far between, with Nicaragua being the primary
example. The voice over Internet protocol (VoIP) lead-generation market, which is not
currently indexed, is developing steadily with new routes and competition (e.g., Australia
at 5 cents per minute).
Price-setting on the major routes that comprise the RateXminute Index
was particularly liquid. This market liquidity has resulted in steady declines in every
route and minute index since mid-November without the major aberrations that occurred in
prior months. The RateXmegabyte continued its volatile course, even increasing more than
10 percent in a single week due to international private-line (IPL) price discrepancies
between carriers and the fact that demand for U.S. terminated IPLs somewhat outweighs
supply for spot contracts.
One trend that has become apparent since the RateXchange markets were
opened one year ago is the declining importance of contract terms in interconnection
agreements. Once a key tactic for negotiating better rates with contract terms of greater
than two years, the average contract term is steadily declining to month-to-month as a
standard. As trading begins on the switch-based Real-Time Bandwidth eXchange (RTBX)
through New York and Los Angeles, this trend likely will continue with commitment being
measured not by the date on a contract but actual minutes passed and revenue received.
The RateXminute is a composite index of all available offering prices
on RateXchange to carriers for the top 20 international voice minute routes weighted by
share of global volume as determined by Telegeography Inc. The RateXmegabyte is a
composite index of all available private lines more than 500 DS-0 miles long weighed by
DS-0 miles within the United States and international private lines (IPLs) from selected
routes to Europe and Asia weighted by share of global IPL volume. RateXminute Regional
Indexes are derived from selected countries within the top 20 routes included in the
RateXminute index. The indexes are updated and published every Tuesday at
www.ratexchange.com. Information is provided to the publisher by RateXchange and is
believed to be accurate. RateXchange nor PHONE+ assume any liability for inaccuracies or
decisions made by readers based on this information.
|Top International Spot Rates|
|United Kingdom||2.34 cents|
|Hong Kong||8.5 cents|
|South Korea||14.5 cents|
|Dominican Republic||19 cents|
|Taiwan, Province of China||9 cents|
The top international spot rates-per-minute cost of terminating a
call from the United States to a given country are the best offers to sell voice minutes
capacity at RateXchange as of Jan. 25, 1999.