As airfare soars, transpacific data prices plummet

Anyone who has watched airfare prices between the United States and East Asia in recent years has noticed a pronounced rise. A year ago, this correspondent found it more affordable to fly from Beijing to Istanbul and then Istanbul to New York instead of a direct flight.

Data prices from Singapore, Hong Kong, and Tokyo to Los Angeles have dropped significantly over the last year:

Data from TeleGeography’s Wholesale Bandwidth Pricing Database reveal that trans-Pacific circuit prices have plummeted over the past two years. Between Q2 2009 and Q2 2011, the median monthly lease price for a 10 Gbps wavelength from Los Angeles to Tokyo fell 63 percent, from $98,500 to $36,000. Prices are tumbling on other trans-Pacific routes, too: Over the past 12 months, median 10 Gbps wavelength prices from Los Angeles to Singapore fell 33 percent, while Hong Kong-Los Angeles 10 Gbps prices declined 39 percent.
Median Trans-Pacific 10 Gbps Wavelength Prices, Q2 2010-Q2 2011

A key driver of falling trans-Pacific circuit costs has been the construction of three new undersea cables since 2007: The Asia-America Gateway (2008), Trans-Pacific Express (2009),[1] and Unity (2010) cable systems. The construction of these cables introduced both new capacity and a host of new competitors.

For selfish reasons, I would prefer airfare to drop as well. But for environmental reasons, and for the purposes of a faster and more reliable transpacific internet experience, I’m glad to see this infrastructure coming online.

[1] The Trans-Pacific Express was originally slated for completion before the 2008 Olympics, but it is notable as a direct U.S.–China link, which required FCC approval.





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