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Prices Continue to Come Down on Integrated Products
Monday July 07, 2008,
09:51 am ET
EAGLE MOUNTAIN, California, Jul. 07 /Aaron Bashorun/ --
During the 2000 Internet bubble meltdown, the telecom industry learned the hard way that
wild spending on network infrastructure was not the best approach to attracting new business
and investment. Over the past 7 years the industry, particularly the CLECs (Competitive
Local Exchange Carriers) have been focusing on building products that offer more bang
for the buck in order to compete with the Bells in their own backyards. One product that
has become the flagship offering to small to medium size businesses is the dynamic integrated
T1 line, which combines all the usefulness of 24 regular phone lines into a singe T-1
capable of delivering high-speed broadband on the same connection.
From 1997 to 2007, the average cost of a POTS (plain old telephone service) line from the
Bells has hovered in the $50 - $80 per month price range. During this same time period,
integrated DS1 (digital signal 1) lines - which is the equivalent of 24 standard lines -
have come down in price from $1000 per month to $400. Small to medium size businesses
who have more than 5 phone lines can now actually save money by upgrading their service.
"The real benefit I've seen since upgrading to a dynamic integrated T1 from Nuvox
Communications is simplicity" commented Johan Sebastian, a small business owner in
Clearwater, Florida. "My phones work great, my internet is fast, and the best part
is the reliability; I haven't had a single outage since I signed up for the new
service over a year ago. Before when we had DSL and POTS lines, every day was
an adventure."
"The average cost of a business phone line from the Local Bell Operating Company (ILEC) has
remained constant for the past ten years" noted Edwin Jones, a senior market analyst and
telecom industry expert. "At the same time the prices of T-1 lines have declined from near
$1000 per month to a staggering $350. Keeping in mind that a T1 connection is the equivalent
of 24 regular phone lines all bundled into one, it comes as no surprise that demand for these
services in on the rise."
Change does not happen quickly in an industry as so heavily regulated as Telecommunications.
Recent industry consolidation has provided huge alternatives to the incumbents, who
are now under pressure to keep up with new technologies while charging better prices
to retain and attract new customer bases.
The only thing that can get in the way of future progress is the law. You know, the one
that requires the RBOCs to lease their local loops to CLECs at a reduced rate so that
the customer can get a dedicated connection between their office and the CLECs' network.
If the FCC decided to lift this requirement, this whole deck of cards could come down
in a hurry, and when it does, you can kiss dynamic integrated T1 service for under $500
good bye!
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