Prices for enterprise fixed and mobile network services around the globe have declined from 2017 through 2018 by up to 20%, with further declines expected through 2019.   Highlights:

• Since 2012, overall network service prices in the developed world have declined by 5% to 20% annually, depending on the specific service and geography, but enterprises often fail to achieve the full potential savings.
• Prices for nonstandard or legacy network services see little decrease or even increases.
• Although network technology improvements can reduce an operator’s cost of delivering service, network service providers (NSPs) will only pass on savings to customers when they’re pressured to do so.
• By 2020, 10 Mbps Ethernet access to Multiprotocol Label Switching (MPLS) or internet services will be priced lower than T1 or E1 access to the same services, from a premium of up to 1.5 times today’s T1/E1 price.
• By 2020, MPLS pricing in mature markets will equalize with business-grade internet services, down from the 10% to 20% premium in 2018.
• By 2020, the cost of 5G enterprise cellular services will be priced at a premium of 10% or less above 4G cellular services.

There is considerable country-to-country variation within regions. The countries with a greater degree of competition (three or more viable choices for a service) have seen larger price decreases than countries that have little or no competition. We have noted with an asterisk (*) the regions in which there is either too little data or where large variations in pricing exist, negating any meaningful “average” price trend.

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The North American telecommunications market is very mature, with highly competitive conditions. Within all five service group categories, there are more than three providers. Since the competitive landscape has seen some consolidation, the only truly viable way for Gartner clients to take advantage of these conditions is to create a competitive RFP.

• T1 or any other TDM-based access to any network services should be treated as legacy and only used when no other access services are available. These prices are not changing, and Gartner predicts they could possibly increase in the near future as providers are eager to shed those amortized assets.
• The pricing of MPLS and direct internet access, over optical Ethernet access, continues to converge with internet access typically not more than 10% to 15% cheaper than MPLS, while Ethernet services remain significantly cheaper. Broadband internet access pricing is not decreasing significantly, although average speeds are continuing to increase, as are the number of providers in the market.
• SIP trunking is fully mature, and existing ISDN lines should be replaced with SIP as soon as the contractual opportunity arises.
• Cellular is a mature service, with 4G LTE the default network technology for most voice, messaging and data plans. While 3G network fallback still is available for areas of weak 4G coverage, providers do not differentiate service plans or prices for the two technologies. Data plan cost reductions primarily have occurred due to more competitive negotiated discounts from standard or rate card prices. Standards-based 5G technology providing higher data speeds, lower latency and the ability to support significantly higher cellular endpoint density than 4G LTE will begin commercial availability in 2020 and later.