On Aug 10 2007, J. Vogel wrote:
I just received a quote from AT&T for various levels of bandwidth
through bonded T1s, where they are quoting not in multiples of 1.5,
but in 1mbps increments. Seemed strange to me. However, what I
found to be even more confusing was that as the total bandwidth
increased, the price/mbps also increased, so that a 10 meg circuit
costs $50/mbps more than a 7 meg circuit. Is this common? Is there
a rational explanation for it?
Thanks for any help understanding this.
I've seen similar things when pricing partial T1 bandwidth. Anytime
fractional circuits were involved, the price/mbps went up. Optimal price
points were for full circuits, but full circuits may only make sense when
you can use the bandwidth. Sample quotes .75 mbps (1/2 T1) $400/month =
$533/mbps
1.5 mbps (full T1) $450/month = $300/mbps
2.25 mbps (1.5 T1s) $850/month = $378/mbps
3 mbps (2 bonded T1s) $900/month = $300/mbps
(Fractional T1s were priced based on # of 64kbps channels subscribed to, at
about $33/channel. I have seen per channel pricing down to $25.)
From the telco viewpoint, I understand that they need to install the same
line, infrastructure, and equipment regardless of whether the customer
wants a partial or full circuit. Therefore pricing reflects the full
circuit cost, even if only part of it is in use by a customer.
In your example they may be switching from bonded 1.5mbps T1 technology to
a fractional 45mbps T3 depending on where the price breaks are at.
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