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World's Most Expensive IP VPN?

Think your IP VPN bills are too high?

Then don't move to Jakarta, Indonesia, home of one of the world's most expensive 2 Mbit/s E-1 VPN ports, priced at over $11,300 per month according to TeleGeography Inc.

Yes, IP VPNs have become a staple within multinational corporations, proving a secure tunnel into the company headquarters from remote offices and locations around the world. But their popularity doesn't make them a commodity.

Now, wanna hear something really sick? You can get the same VPN service in Jakarta, via a different carrier, with the same bandwidth, for a mere $1,347 a month. The difference in price has to do, of course, with where the connection is headed.

“The foundation of price discrepancy has to do with bandwidth pricing in and out of the country,” says Greg Bryan, pricing research analyst with Telegeography. “If it’s a country that isn’t deregulated yet where bandwidth is difficult to acquire, that adds to the cost.”

So the ports are the same and the technology is the same, but the price of bandwidth coming in and out of the country is not. That’s why in places such as Indonesia, you find such a wide range of prices -- the most expensive ones are linking single locations within that area back to a more competitive western market. The cheap ones are only linking within Indonesia.

Compare that to IP VPNs in New York which consistently cost around $1,000 a month whether they link in or out of the country. There is ample bandwidth coming in and out of the city which makes proving an IP VPN a relative cinch.

Another factor in pricing discrepancy is service level agreements (SLAs). All enterprise customers want strong SLAs and providing service guarantees between remote countries is expensive.

In New York or London, cities with widely developed infrastructure and an abundance of carrier hotel facilities, a VPN that connects locations within the city will likely cost the same as one that connects elsewhere in the world. And that cost will be relatively cheap in the area of $1,000 a month.

As to who is the offending $11,300 a month carrier, TeleGeography can't say, due to a non-disclosure agreement. But it is very likely to be a large North American or European carrier trying to come into that new developing region of Jakarta. “They’re basically trying to pull more margin into their network based on these more remote sites,” says Bryan.

— Raymond McConville, Reporter, Light Reading

jobbobo 12/5/2012 | 3:37:22 PM
re: World's Most Expensive IP VPN? I believe there is a great chance to outside carriers if they could keep a good relation with local goverment.
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