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Leased Line Costs

An Analysis of Pricing & Locations

leased line costs

Leased line costs are determined by numerous factors. In this analysis we will look at the key factors which determine the cost of a leased line. We'll compare geographic areas in the UK, speeds, technologies and analyse the bearing these factors has on the price quoted.

 

"UK leased line costs range from £230.33/month to over £700/month. Choosing the right supplier has the largest impact on monthly costs." 

 

Graph: Comparing 100Mbps & 1Gbps Leased Line Costs In Major UK Cities

leased line cost by uk city

How much does a leased line cost?

Leased lines range from £230.33 to £729.17 depending on the speed of service you require, the service level agreement commitment made by the provider and your service location's distance from the carrier's network or BT Openreach infrastructure.

These prices are based on a leased line price comparison of London, Manchester, Birmingham, Leeds, Glasgow, Sheffield, Bradford, Edinburgh, Liverpool and Bristol in December 2017. BT leased line costs were included as were TalkTalk, Virgin, Vodafone, SSE, M247, City Fibre and several more. 100Mb and 1Gb leased lines speeds were compared and compiled in the graph above.

"Supplier choice is the most significant factor when considering leased line costs. If you only do 1 thing, compare all providers at your location!"

 

Graph: How Choice Of Provider Impacts The Cost Of A Leased Line



Supplier choice for leased lines has rapidly evolved since the deregulation of the telecoms market. According to economic principles, more choice, should equal more competition and lower prices.

To demonstrate this in more detail, we compared pricing available for a 30 Mb leased line on a 100Mb bearer. The terms were kept consistent, 36 month contract, wires only.

The location we chose to analyse was Wolverhampton Wanderers football stadium, Molineux Stadium, Waterloo Rd, Wolverhampton WV1 4QR.

The results were as follows: Virgin £210.89/month, TalkTalk £242.02/month, Vodafone £256.77/month, BT £305.52/month, SSE £718.67/month.

The price differential between the lowest cost provider and the highest cost provider for a 30/100 Meg leased line was an incredible, £507.78/month or £6093.36/annum. The most expensive 30 Mb circuit was 340% more expensive than the cheapest!

"Adding 1 Mbps of speed to your leased line costs approximately £1.30/month."

 

Graph: How Bandwidth Speed Impacts The Cost Of A Leased Line


The speed of a leased line is a significant contributory factor to the cost of a leased line. To demonstrate this in more detail, we compared pricing from the same provider at the same location for a 10 Mb / 20Mb / 50 Mb / 100 Mb / 200Mb / 500Mb and 1Gb leased line.

The location we chose to analyse was the HQ of Kidderminster-based Titan. Titan supplies steel wheels to significant excavator manufacturers such as Caterpillar, Komatsu, Volvo and Liebherr. Titan is located at: Bridge Rd, Cookley, Kidderminster DY10 3SD

The 10 Mb / 20Mb / 50 Mb / 100 Mb leased line costs are on a 36 month, wires only contract on a 100 Mb bearer. The 200Mb / 500Mb and 1Gb leased line costs are on a 36 month, wires only contract on a 1 Gb bearer. The provider used was TalkTalk.

The costs were as follows: 10 Mbps, £311.69/month; 20 Mbps, £326.09/month; 50 Mbps, £371.21/month; 100 Mbps, £397.60; 200 Mbps, £601.90/month; 500 Mbps, £1272.79/month; 1 Gbps, £1599.26

It should be noted that TalkTalk had the lowest prices up to 200Mbps, then Virgin had the cheapest pricing for 500Mbps and 1Gbps at £845.13/month for either speed!

The difference between the cost of a 10 Mb leased line and a 1 Gb leased line is: £1287.57 or based on a 990 Meg difference £1.30/Mb of speed.

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"It is a common thought that distance is a major impact on leased line costs, for locations < 20 miles from a BT PoP this isn't true."

 

Graph: How Distance Impacts The Cost Of A Leased Line

 

The distance between the carrier PoP and the customer termination of a leased line is commonly cited as a significant contributory factor to the cost of a leased line. To demonstrate this in more detail, we compared pricing from the same provider at the same speed for a 0.5 miles, 1 miles, 2 miles, 5 miles, 10 miles and 20 miles distance.

The location we chose to analyse was MANAP the Manchester internet exchange at TelecityGroup, Kilburn House, Lloyd Street North, M15 6SE where BT have a PoP.

IT Farm is in this building at Kilburn House, Manchester Science Park, Manchester M15 6SE.

0.5 miles away is Asda Hulme Store, 100 Princess Rd, Manchester M15 5AS.

1.0 miles away is Job Centre Plus, 96 Wilmslow Rd, Rusholme, Manchester M14 5BJ

2.0 miles away is Withington Library, 410 Wilmslow Rd, Manchester M20 3BD

5.0 miles away is Northenden Golf Club, Palatine Rd, Manchester M22 4FR

10.0 miles away is Manchester Airport, Manchester M90 1QX

20.0 miles away is W Mandeville, 2 Macclesfield Rd, Holmes Chapel, Crewe CW4 7NE

We chose BT as the price supplier for a 100 Mb leased line 36 month contract, wires only and these were the results:

IT Farm, £458.02/month; Asda Hulme Store £458.02/month; Job Centre Plus £458.02/month; Withington Library £458.02/month; Northenden Golf Club £458.02/month; Manchester Airport £458.02/month; W Mandeville £872.29/month.

If a business is located under 20 miles from a BT PoP the price of a leased line is not significantly likely to be impacted by distance from the local PoP.

"Cityfibre offer an 8:1 contended 1Gbps leased line for £350.00/month and an uncontended 1:1 1Gbps leased line for £617.00/month. This represents a percentage cost increase of 176%."

 

 

What is a contention ratio and how does it impact the cost of a leased line?

Contention ratio is a networking term that refers to "the ratio of the maximum potential demand to the actual bandwidth."

The higher the contention ratio, the greater the number of users that may be trying to use the actual bandwidth at any one time and, therefore, the lower the effective bandwidth offered, especially at peak times.

Contention ratio. (2017, October 11). Retrieved December 06, 2017, from https://en.wikipedia.org/wiki/Contention_ratio

Most leased lines are only used by the business that purchases them, and the bandwidth is dedicated to that single customer. The fibre line and the bandwidth are not shared so it is uncontended. If you order a service advertised as 1:1 contention then you'll be sure you will receive the entire capacity you order 24 x 7. If your business orders a 100Meg line then the guaranteed bandwidth over the service is 100Mb.

In reality, a contended service at 5:1 means that the 100Mb may be shared, and the business may not receive 100Mb. It may only receive 20Mb, 30Mb or 40Mb over a the contended service at peak times.

The contention has an impact on the telecoms network provider's costs. A 1:1 contention ratio is far more expensive to guarantee than a 5:1 contention ratio. This is because the carrier can sell the 5:1 contended service's bandwidth five times. You should expect a 1:1 contention ratio leased line to be more expensive than a 5:1 contended leased line.

To directly compare the impact of contention on leased line costs we compared 2 services with the same supplier, Cityfibre, at EH2 4HQ. At this location Cityfibre offer an 8:1 contended 1Gbps leased line for £350.00/month and an uncontended 1:1 1Gbps leased line for £617.00/month. In this instance the cost of an uncontended leased line is £267.00/month or £3204.00/annum. This represents a % cost increase of 176%.

leased line costs comparison

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