Tuesday, November 29, 2005

DS3 Bandwidth is Getting Cheaper!

While many people predicted the end of price erosion for DS3 bandwidth it continues to fall. Service providers are up against stiffer competition and are desperate for new customers to fill their pipes and turn a profit. Are you ready to negotiate for a rock bottom price? Before you do, consider a few of the reasons for the drop in price on DS3 bandwith.

DS3 bandwidth pricing had reduced as companies have gone out of business and the large number of telecommunications companies are fighting for a place in a smaller market. While many service providers did have room to lose margin, many have come dangerously close to the edge of selling circuits at a loss and many have gone beyond this point. It seems that in the race to the bottom many providers failed to learn the lesson that selling at a loss does not create a long lasting and healthy company no matter how many circuits or widgets you sell. Many companies selling at a loss have already been in bankruptcy and look like they will repeat this exercise as they did not learn from their first go around. So, solvency of the DS3 bandwidth provider should be a consideration when looking at great bargains.

Another consideration in bargain shopping for DS3 serviceis the fact that all DS3's are not created equal. Many providers are convinced (and rightly so) that customers are focused on price and are not concerned with quality of service. Many providers are now oversubscribing DS3 service connections as though they were DSL connections. This means you may not get the bandwidth you thought you would get. Make sure when you look for that bargain price you also review the SLA (Service Level Agreement) and make sure the contract protects you and guarantees you will get the bandwidth to which they committed. Remember, when bargain hunting for DS3 service you'll most likely get what you pay for.

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