Understanding dark fiber lease rates as demand continues to grow

October 17, 2017

dark fiber

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Fiber optic expansion alone has seen companies invest in the range of $5 billion by 2021, a move largely driven by the increase in demand for faster internet.  Streaming video by itself will account for 82% of all web traffic in just a few short years.  Now is the time for businesses to do important research and figure out telecom solutions for the future.

 

As businesses in the telecommunications industry search for cost effective solutions to solve this problem, one solution remains: dark fiber.  Also known as un-lit fiber, it is any unused fiber networks that have been previously laid. 

 

Whether you are leasing your own or looking to purchase dark fiber for lease, knowing what pricing models are out there and how dark fiber is generally priced in different markets can help you make a well-informed decision for your business.

Pricing Models

There are a handful of pricing models that companies use determine what dark fiber lease rates should be.  The three most common are upfront payment, monthly lease and annual lease. 

 

Upfront payment means that you would pay a set fee per strand per mile when leasing the fiber route and also pay a proportional share of maintenance fees yearly. 


Monthly and yearly leases are fairly simple to understand.  In these models you would pay a set fee per strand per mile monthly or yearly and then add on a share of maintenance fees you would pay monthly or yearly.

 

In all three of these models it is possible that you would have to pay a one-time activation fee and/or get discounted lease rates depending on how many strands and/or miles of fiber you lease.

 

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Metro Area Market Pricing

In metro areas, the price for fiber is going to always be substantially higher on a per mile basis because it is more expensive to build a fiber network in metro areas.  Further, the more urban areas will be considerably higher than suburban areas depending on the demand within the urban market.  That being said, there is always an exception to the rule.  Occasionally, if the urban market is competitive enough, prices will be pushed lower making urban dark fiber routes more cost-effective.

Long Haul Market Pricing

Long haul pricing is a little bit more consistent.

 

Prices in this market range from roughly $500 to $2000 per strand per mile.  The more desirable long-haul or commercial fiber routes will be on the higher end of this spectrum, where as non-profit and other routes will be on the lower end or in the middle.

Prepare to Upgrade Your Network

With bandwidth demand on the rise in 2017, now is the time to make the necessary preparations and assess any areas of opportunity for potential infrastructure upgrades.

 

BDC Group, Inc can offer a wide variety of turn-key solutions, telecom equipment and services including fiber splicing options.

 

BDC Group has also revisited the site development process and engineered an exclusive high grade steel customizable regeneration platform that will act as the connection for your fiber regeneration site, an alternative to expensive concrete shelters.

Ready to talk? Contact us today so we can help you solve your 5G ribbon splicing delays!

Using an FRCP (Fiber Regen Cabinet Platform) gives you the ability to reduce lead times with an 8 to 10-week site build. This provides an estimated 60-70% savings cost and an overall 50% minimum energy cost savings. The customized high-grade steel platform can be placed anywhere and will decrease overall cost of ownership over time.

 

Take advantage of our free consultation and setup a time to speak with one of our experienced project managers to assess any potential opportunities for your growing network!