Connectivity · Wholesale Transit

The Price of a Megabit

Wholesale bandwidth, from $1,200 a megabit in a 1998 survey to 17 cents in a 2025 filing.

• Survey $1,200/Mbps in 1998, filed $0.17 in 2025
• Halved every 1.6 yr to 2009, 3.2 yr since 2011
• DWDM: next bit on a lit fibre nearly free
• Nominal dollars; one firm’s filings after 2010

A megabit per second of wholesale internet, delivered for a month, cost about $1,200 in 1998. In Cogent’s most recent annual report it averages $0.17, roughly seven thousand times less, though the two figures come from different sources and the rule on the chart marks where the measurement changes hands. Dense wavelength-division multiplexing and erbium-doped optical amplifiers turned one channel on a fibre pair into hundreds, and one more bit on a lit strand came to cost almost nothing. In a market where, as Cogent has told investors every year since 2020, price is typically the only differentiating factor, all of that fall was passed through.

Through 2009 the price is William Norton’s DrPeering survey: by his own account a US going rate gathered informally at operations conferences, from polling maybe thirty to fifty people three to five times a year, in a column headed ‘min commit’. He calls the data anecdotal, from a variable and small sample, and would not recommend taking them as anything but very rough indications, so the site plots them on the single-author-survey terms it gives Carlson’s DNA synthesis and McCallum’s disk prices. From 2011 the source changes to Cogent Communications’ SEC filings. Their average price per megabit across the installed base, the aggregate monthly recurring fixed charges of those customers divided by their aggregate committed data rate, has been a standing line in every annual report since FY2013, which also first published the 2011 and 2012 figures. That is a blended price actually paid, not a quote, and one company’s book rather than a market. 2010 is absent because Norton published his figure for it that August, so it is not a full year and sits at the junction where half a year of error does most damage. His 2011 to 2015 numbers are August-2010 forecasts he never revised, and are not plotted at all.

The fall has slowed: the survey years halved every 1.6 years, the filed years every 3.2. Hold the port size fixed and the floor has flattened. TeleGeography’s lowest 100 GigE offer in the most competitive markets held steady at $0.03 per Mbps in mid-2026, and their own phrase for it is the bottoming out of reported low prices, though typical 100 GigE prices across their cities still fell 17% a year from 2023 to 2026. Yet the average megabit actually bought is still collapsing, Cogent’s filed figure falling 29.7% in 2025, because buyers keep climbing the port ladder, and that escape is shrinking: a 100 GigE port cost 6.7 times a 10 GigE for ten times the capacity in 2022, a 400 GigE port about 3.5 times a 100 GigE for four times the capacity in 2026.

One number a year hides the spread underneath it: Norton says his collected pricing always had a very large range, and he states the low or zero level commit he assumes only of the recent data, not the whole run, so the height of the early curve depends on the volume committed. Neither figure is the middle of anything: Norton’s is the min-commit column and Cogent competes on price by design. The geography moves at the boundary too: his survey is explicitly the US market, while Cogent sells in 57 countries weighted to North America and Europe. Every figure is nominal, since neither source adjusts for inflation, and in constant 2025 dollars the whole fall is about twice as large again.

Cogent printed the sentence defining this metric in its annual reports through 2019 and not since, so the definition is inherited rather than restated while the product mix changed underneath it. The company closed the Sprint wireline acquisition on 1 May 2023 and now sells optical wavelengths alongside IP. The filings say net-centric customers buy IP by the megabit and wavelengths by the connection, and give wavelength revenue and connections their own lines, good reason to think wavelength capacity is not in this denominator. Cogent does not say so outright, and that is the largest open question on this curve.

Source: Cogent SEC filings; DrPeering survey (Norton)

Download the data: ip_transit_price.csv · ip_transit_price.json

All curves · The chart is drawn in your browser and needs JavaScript. Every number it plots is in the table above.