China-US IRU Price Down

In a recent bid in Jan 2011 for IRU and Managed Hosting services, 10G IRU price for 15-year term over China-US submarine cable route went down to US$ 2.0 million.

 

The bids were invited by Qinghua University, the most famous university in China and the operator of the China Education and Research Network (CERNET), for the provision of an unprotected 10Gbps 15-year IRU between Qinghua University in Beijing and One Wilshire, Los Angeles, and managed hosting service at One Wilshire.

China Telecom, China Unicom, Deutche Telecom and Pacnet were invited for bids.

China Telecom was awarded of the contract with a surprising low price of approximately US$ 2.0 million for one unprotected 10Gbps 15-year IRU over TPE submarine cable system. China Unicom seconded by a quote of approximately US$3 million for similiar solution over TPE. The other offers were more than twice the offer from China Telecom.     

China Telecom and China Unicom are the initial parties of TPE consortium, invested approximately US$80 million and US$160 million respectively in TPE, and own respectively 15% and 30% of overall lit capacity of TPE subsea cable system, with total initial capacity no more than 640Gbps over its trans-pacific route. 

China Telecom led an more aggressive strategy to lower the China-US IRU price.

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