What drives pricing for Dedicated Internet Access, globally?

When it comes to Dedicated Internet Access (DIA), you might assume that the price is all about bandwidth. After all, more megabits per second should mean a higher cost, right? Well, yes. Also, not. 

It is true that in some countries, doubling your bandwidth from 100MB to 200MB can double the price (think Northern Africa or MENA), while in others, the jump is minimal. Here’s an anecdote: we recently offered a 1Gbps connection to a customer who was initially interested in 200Mbps for a site in Italy. The price difference was so small that they opted for the faster connection, getting more value without sacrificing budget.

So, what’s really impacting the price of DIA across the globe? Let’s dive into four key factors.

1. Market competition

Having options naturally drives down costs, and in markets where competition thrives, pricing tends to be more favorable. Unfortunately, healthy competition is not always an option. Prices will skyrocket due to limited choice in highly regulated countries, where there is usually a monopoly, duopoly, or government-owned infrastructure.

For example, the U.S., Mexico, and parts of Western Europe benefit from a healthy competitive landscape, resulting in more attractive pricing for your DIA. On the other hand, in certain African and Gulf nations, where just a few providers control the market, costs can be significantly higher and tough for any negotiation.

2. The ISPs’ and providers’ footprint

Coverage plays a massive role in determining DIA pricing. An Internet Provider with no direct infrastructure in specific sites will rely on third-party networks to deliver services, leading to higher costs. And while this may sound obvious, it is not always evident on the surface. 

Carriers and ISPs claiming to be “regional” or “global” do not necessarily own the entire infrastructure and may end up outsourcing part of the scope to more local ISPs. 

This isn’t a problem, but it highlights the importance of having deep insight into your provider’s actual coverage, which gives you leverage to negotiate or make more informed decisions.

Case in point: One of our ISPs in Cameroon recently informed us that they are expanding their coverage. Now, we know that they will be able to provide more competitive pricing while improving access for businesses in some areas of the country.

3. Service bundling

Another factor influencing price is the volume of services you buy. Purchasing a single line can cost more than negotiating a bulk deal across multiple locations or services. The more you need, the more leverage you have to negotiate discounts.

At GNX, we already have all this volume with these local ISPs. By bundling the demand, we often get better pricing for our customers. It’s simple math: the bigger the volume, the better the price.

4. The economy, macro & micro

In our globalized world (thanks to the Internet, of all things!), everything is connected –even WAN pricing. Inflation, higher energy costs, and fluctuating exchange rates in various countries can significantly impact production costs, affecting the overall cost of internet services.

For example, while you might expect to get the same or more amounts of bandwidth or data in Turkey for less due to a weaker currency, the reality is different. Many internet service providers (ISPs) source equipment from other countries, in euros or dollars, raising their costs. So even though the Turkish lira is devalued, the cost of connectivity remains high, which is reflected in the final price for customers.

Getting the best deal

At GNX, we specialize in finding the best solution for your connectivity needs, no matter where in the world your business operates. With access to thousands of local and regional ISPs on a global scale and years and years of building relationships, market insight, and local expertise, we know how far we can push to ensure you get the best possible price for the service that best fits your business needs.

What’s more, we are fully transparent. All GNX customers gain immediate access to our carrier-neutral platform, GNX+, enabling them to quote, compare multiple ISPs, and order services with just a few clicks.