Why Lease Lines Needn't Cost The Earth

Lease lines used to cost a fortune. A 2Mb dedicated connection in central London used to cost £26,000pa. Now, if you're in the right part of central London, you may be able to get a 1000Mb connection for less than that! And in the rest of the UK, prices have fallen too.

So it may be cheaper for you to get a lease line than you'd think.

Why the Price of Lease Lines Keeps Falling

Just as PCs have fallen in price and grown in power, so too have the routers and switches that power lease line connections.

Every few years, lease line providers (and their key suppliers) refresh their networks, replacing older networking equipment with faster, cheaper and higher capacity versions.

Fierce competition between lease line providers has resulted in these benefits being passed on to customers, as lower lease line prices, and higher bandwidths for the same monthly charge as before.

Lease Lines are Cheaper Thanks to the Popularity of ADSL?!

There are over 15 million ADSL connections in the UK. But ADSL only provides a link from the customer to the local telephone exchange. How does the data you receive get to your local exchange in the first place? It gets there through large high-capacity lease lines.

Fibre circuits for use in lease lines

When installing these lease lines, major carriers may need to dig up the road, at great expense. While they're at it they often install more optical fibre capacity than they need. So the next time they need to add capacity, they won't have to spend a fortune digging everything up again. Instead, they'll be able to use the spare fibres they installed, or add additional fibres by blowing them along the existing fibre ducts using compressed air. This is far cheaper than digging up the roads, so reduces the cost of adding backhaul capacity for future leased lines.

EFM Copper Circuits Have Added an Additional Way To Deliver Lease Lines

Up until recently, lease lines with over 2Mbit/s of connectivity would require a fibre circuit to link you to your provider's existing network.

However, research scientists have figured out how to use copper circuits to deliver symmetric connections with speeds of up to 10Mbit/s over distances of several kilometers, by using multiple copper pairs. This has provided an additional way for providers to deliver lease lines, and has increased competition, putting downward pressure on lease line prices in some areas.

Lower Prices -> More Demand -> Greater Economies of Scale -> Lower 'Contribution To Fixed Costs'

The falling price of lease lines has put them within reach of most businesses. Meanwhile, businesses have become ever more reliant on email and the web, increasing their willingness to pay for high-capacity reliable connections.

This rise in demand, and the growing affordability has increased the number of customers each lease line provider serves. The growth in customer numbers has outstripped the growth in fixed costs, reducing the contributions individual customers pay towards those fixed costs.