Global Trends in IP Transit Pricing: The Shift Towards Affordable High-Capacity Networks

The global IP transit market continues to undergo significant transformations, driven by advancements in technology and the expansion of high-capacity infrastructure. Providers worldwide are now shifting towards 100 Gbps internet backbones as a standard, enabling cost reductions and enhancing profitability despite lower prices. This trend, fueled by increased competition and efficiency in transport networks, is reshaping the dynamics of internet traffic costs globally.

The Decline of IP Transit Prices: A Universal Norm

Over the past few years, IP transit prices have consistently declined, reflecting broader trends in regional transport markets. The integration of high-capacity infrastructure and new technologies has enabled carriers to achieve greater scale and efficiency, translating to lower transport prices. Consequently, IP transit prices have followed suit. By Q2 2025, 100 GigE prices had fallen by an impressive 12% annually since 2022 in major markets. This downward trajectory underscores how cost savings are passed on to service providers and end-users while fostering increased competition.

One of the most notable drivers of these price reductions is the activation of large-scale subsea cable systems, particularly in historically expensive regions like South Asia and Africa. These systems not only lower unit costs but also intensify market competition by enabling providers to deliver services at more affordable rates. Additionally, growing local peering initiatives and content localization further enhance network performance and minimize dependence on costly subsea links.

Established Hubs See Prices Bottoming Out

In well-established network hubs such as London, Miami, and Singapore, where competition and infrastructure have reached maturity, the story is slightly different. While IP transit prices continue to drop elsewhere, these hubs are witnessing a stabilization at the lower end of the price spectrum. For instance, in Q2 2025, the lowest reported pricing for 100 GigE in such competitive markets remained steady at $0.05 per Mbps per month, while 10 GigE prices held at $0.07 per Mbps per month. These figures highlight how the market has reached a point where further reductions may no longer be feasible without significant technological advancements.

Amidst these stabilized prices, a notable trend is emerging: the gradual adoption of 400 GigE services. Although still in its infancy and primarily targeted at major global hubs in Europe and the U.S., 400 GigE has started to gain traction among customers in need of ultra-high capacity. Currently, its cost averages $0.08 to $0.09 per Mbps—approximately 3.3 times the price of 100 GigE ports. While the sales mix for 400 GigE remains small, its expansion signals a new era of IP transit services catering to ever-growing data demands.

A Competitive and Evolving Future for IP Transit

Looking ahead, the ongoing evolution of IP transit markets suggests continued price erosion as networks scale to meet increasing bandwidth requirements. With innovations in infrastructure and a steady move towards integrating next-generation technologies, carriers are well-positioned to cater to diverse customer needs while maintaining profitability. Key research indicates that markets will retain this competitive momentum, ensuring users benefit from improved performance and affordability in internet services.

For those seeking comprehensive insights into these transformative trends, TeleGeography’s IP Networks Research Service provides a deep dive into international internet capacity, traffic, pricing, and market analysis. This service remains an invaluable resource for monitoring the pulse of the global telecommunications industry.