NetEqualizer News Blog

Although not free yet, bandwidth contracts have been dropping in cost faster than a bad stock during a recession.  With cheaper bandwidth costs , the question often arises on whether or not an enterprise can do without their trusty bandwidth controller.

Below, we have compiled a list of factors that will determine whether or not Bandwidth Controllers stick around for a while, or go the route of the analog modem,  a relic of when people received their Internet from AOL and dial up.

• In Many areas of the world bandwidth prices are still very high. For example most of Africa,  and also Parts of the Middle East  they do not have the infrastructure in  place to deliver high speed low cost circuits . Bandwidth controllers are essential equipment in these regions.

• Even in countries where bandwidth infrastructure is subsidized, and urban access is relatively cheap,  people like to work and play in remote places. Bandwidth consumers have come to expect bandwidth while choosing to live in a remote village. Many of these lifestyle choices find people far away from the main fiber lines that crisscross the urban landscape. Much like serving fresh seafood in mining camp, providing bandwidth to remote locations,  has a high price, and bandwidth controllers are more essential than ever in the remote areas of developed countries.   For example we are seeing a pick up in NetEqualizer interest in luxury resort hotels on tropical islands, and national parks , where high speed Internet is now a necessity but it is not cheap.

• Government spending on Internet infrastructure has grown out of favor, at least in the US. After the recent waste and fraud scandals, don’t expect another windfall like the broad band initiative any time soon. Government subsidies were a one time factor in the drop in bandwidth prices during the 2007 to 2010 time frame.

• As the market matures and providers look to show profit, they will be tempted to raise prices again, especially as demand grows.  The recession of 2007 drove down some commercial demand at a time when there was significant infrastructure increases in capacity, we may be at the tail end of that deflationary bubble.

• There was also a one time infrastructure enhancement, that gained momentum around 2007, this compounded the deflationary pressure on bandwidth. WDM technology allowed existing fiber to carry up to 16 times the original planned capacity.  We don’t expect any new infrastructure innovations of that magnitude to occur any time soon.  Moore’s law has finally cracked  (proved false) in the computer industry and so will the honeymoon increases in the carrying capacity of fiber.

• Lastly, the wireless frequencies are crowded beyond capacity and bandwidth is still hard to find here, and operators are running out of tricks.

• We must concede that we have seen cases where customers are getting bandwidth at such a low cost that they forgo investing in bandwidth controllers, but we expect that trend to flatten out as bandwidth prices hold steady or start to creep back up a bit in the coming decade.

Stay tuned.