Wednesday, June 01, 2005

DS3 Price Trends

Like most telecommunications services DS3 prices (commonly known as T3) have been falling for the last few years. This is due to several factors. Competition has been heating up since deregulation in 1996. The number of companies offering DS3 service has exploded. With more competition in the marketplace service providers have to reduce their DS3 prices to attract customers and keep them from going to competitors. DS3 service providers are desperate to keep margins but even more desperate to keep adding customers. This competetive arena has created a buyers market for DS3 lines and pricing is as favorable as it has ever been!

The soft economy and crash of the stock market has also contributed to the reduction in DS3 prices. Since the peak of the market in 1999 many companies have gone out of business and no longer require service. This means there's a smaller pie available and there are plenty of telecom providers trying to get their share. Once again, the buyer is in control and can shop until he or she finds the price that is right for them.

A final reason for the reduction in DS3 pricing is the fact that equipement costs and the cost of supplying the bandwidth have decreased. This means that companies can supply the bandwidth at a lower cost. As bandwidth usage continues to increase as a result of bandwidth hungry applications like video on demand and graphic heavy applications the price of bandwidth will continue to drop. The only factor that seems likely to inhibit prices from falling much further is the "last mile" or the connection from the users premise to the service providers' POP (Point of Presence). But that's best saved for another discussion. For now, enjoy those affordable DS3's and good luck finding a price that's right for you!

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