VPN Prices Vary Widely, Says BRC

LONDON -- Prices paid by major international companies for the same international VPN & Frame Relay services vary hugely, according to an independent analysis by BRC Consultancy Ltd, London. The results of BRC's report, Market Prices for International IP VPN & Frame Relay Prices in Major Networks show that there is little consistency in prices, with some suppliers charging four times as much or more for the same connection. This is even after taking account of factors normally influencing price, such as service level agreements, contract terms and contract size. Discrepancies found included price variations of 9 to 1 for frame relay links between France, Germany, Italy, Netherlands and Switzerland using 128 kbit/s ports and a CIR of 64 kbit/s; of 4 to 1 from two different suppliers for 128 kbit/s VPN ports in Belgium, both with throughput guaranteed at 50% of port speed; and 7 to 1 for two similar frame relay links from Brazil to the US. "Prices seem to be based on what individual customers are prepared to pay," says David McCron, Director of BRC Consultancy. "The challenge for suppliers is to use clearly defined service levels and other factors to justify varying price levels." VPN and Frame Relay prices were found to be very different. Some VPN's are very much cheaper than frame relay, but low cost VPN's tend not to come with guarantees of end to end throughput across the network. The recent spate of bankruptcies suggests that some VPN prices may be too low. BRC Consultancy Ltd.