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U.S. East-West Bandwidth Price StabilizationContinues

Posted: 03/2000

Telecommodities Indices

U.S. East-West Bandwidth Price Stabilization
Continues

The Real-Time Bandwidth Exchange*Revealed Price Index (RTBX*RPI), which tracks the
current weighted average price of coast-to-coast DS-3 pricing, shows prices have
stabilized over the past several months.

The January index showed a sign of strengthening, as prices of U.S. East-West DS-3s
crept up 0.27 percent to $41,056 per month. Last year’s December-to-January price movement
was a 4.78 percent decrease.

Some feel the reasons for this bandwidth price strengthening is that major carriers are
holding off on lighting fiber already in the ground. Their justification is that carriers
do not want to see their markets crumple. Others feel demand is outpacing supply due to
new markets such as the ASPs emerging to provide high bandwidth-consuming applications; or
a combination of both.

What will be interesting to see in coming months is how carriers deal with this
continuing spike in bandwidth demand. Will they stand by to let prices increase, or are
they willing to gamble and deploy additional capacity to gain market share at lower
prices?

In the international termination rate market, the more mature European market continues
its recent upturn as rates for major European routes spiked upward for a second straight
month: UK +50 percent and Austria +18 percent.

We even see Latin American rates creep upward, as Colombia’s rates increase 16 percent.
China and the Far East rates continue to decline.


Graph: DS-3 Bnadwidth RTBX*RPI
and RTBX*RFP-360 Indices

Top International Spot Rates

Country Current
Month
Last
Month
Change %
Austria $0.0825 $0.0700 $0.0125 18%
Brazil $0.0600 $0.0600 $ – 0%
China $0.0550 $0.1470 $(0.0920) -63%
Colombia $0.0925 $0.0800 $0.0125 16%
Dominican
Republic
$0.0750 $0.0850 $(0.0100) -12%
France $0.0600 $0.0600 $ – 0%
Germany $0.0650 $0.0650 $ – 0%
Hong Kong $0.0425 $0.0425 $ – 0%
India $0.3850 $0.3850 $ – 0%
Israel $0.0950 $0.0950 $ – 0%
Italy $0.0750 $0.0750 $ – 0%
Japan $0.0950 $0.0950 $ – 0%
Korea,
Democratic
People’s Republic
of China
$0.1200 $0.1200 $ – 0%
Mexico $0.0650 $0.0650 $ – 0%
Netherlands $0.0500 $0.0500 $ – 0%
The Philippines $0.1500 $0.1700 $(0.0200) -12%
Taiwan,
Province of China
$0.0400 $0.0850 $(0.0450) -53%
United Kingdom $0.0450 $0.0300 $0.0150 50%

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