Bandwidth Costs Around the World

Cloudflare, a global network provider, has recently updated its analysis of bandwidth costs in different parts of the world. The company's network now spans 86 cities across 45 countries and offers protection to over 4 million Internet properties. Bandwidth is the largest recurring cost for providing their service. In Europe and North America, transit costs are around 10 units per Mbps, with peering rates of about 60% and 40%, respectively. This results in an effective regional cost of 4 units in Europe and 6 units in North America. Africa has the highest transit prices globally at 140 units, but Cloudflare manages to peer around 90% of its traffic there, resulting in an effective cost of 14 units. In the Middle East, where Cloudflare can peer all its traffic, bandwidth costs are effectively zero. In Asia (excluding the Middle East), transit costs are seven times higher than in Europe or North America, but peering rates of around 60% result in an effective cost of 28 units. South Korea is a notable exception with transit costs increasing due to new government regulations. In South America, transit prices are very high at 170 units, and peering rates of about 60% result in an effective cost of 68 units. In Oceania (Australia and New Zealand), transit costs are also extremely high at 170 units, but peering rates of around 50% result in an effective cost of 85 units. Six expensive networks (HiNet, Korea Telecom, Optus, Telecom Argentina, Telefonica, Telstra) account for nearly half of Cloudflare's bandwidth costs despite representing less than 6% of the traffic. These providers have refused to discuss local peering relationships and are more than an order of magnitude more expensive than other bandwidth providers around the globe. To encourage these six networks to be on the right side of a free and open Internet, Cloudflare has moved its Free customers off these transit providers. The company is hopeful that it will soon be able to serve all its customers across all the networks they interconnect with.