If your long-term T1 line contract is nearing its end, comparing current prices online might surprise you. To see how much prices have dropped, try using our quote engine at T1 Rex.
The drop in T1 prices might be as much as 25%, 33%, or even 50%. What’s behind this significant change?
In the past, T1 or T-Carrier lines were specialized digital services offered exclusively by local phone companies. These lines were primarily used by call centers, large phone systems, corporations requiring internet service, or for private point-to-point connections. Today, there’s a growing demand for T1 service across the board.
This surge in T1 demand is driven by two factors. First, even small and medium-sized businesses are adopting digital lines to support various operations like point-of-sale systems, accounting software, supply chain management, and online activities. For instance, even a local restaurant now provides free WiFi to customers using an affordable wireless router.
Essentially, internet connectivity has become indispensable for businesses of all sizes. While smaller businesses may opt for ADSL or cable modem services, these options often come with “best effort” service without any guarantees. In contrast, businesses that rely on their network for crucial functions like credit card processing, online ordering, and communication with their main office typically need a fractional or even a full T1 line.
But with the increasing demand, why are prices declining instead of going up? One reason is technological advancement. The original T1 transmission technology, developed in the 1950s, was designed for internal use within phone companies to carry multiple phone calls. Installing T1 lines for businesses was expensive due to the need for specialized copper wiring and signal boosters for distances exceeding 6,000 feet. Furthermore, only one T1 circuit could be established per 50-pair wire bundle due to potential signal interference.
However, the landscape has changed significantly in recent years. The introduction of HDSL (High Speed Digital Subscriber Line) has made T1 technology more reliable and affordable. HDSL can tolerate minor imperfections in copper wiring and doesn’t require signal regeneration for distances up to 12,000 feet. Despite the “DSL” in its name, HDSL offers a guaranteed service equivalent to traditional T1, using a modernized modulation method. The latest standard, HDSL2, goes a step further, providing T1 service over a single standard phone line. This innovation simplifies and speeds up T1 line installation, ultimately reducing costs.
The other contributing factor to lower T1 prices is increased competition in the telecommunications sector following deregulation. While businesses previously had limited choices for T1 services, they can now explore numerous options through telecom brokers. The influx of competitive digital line providers has resulted in more competitive pricing. It’s worth noting that even though competitive carriers (CLECs) offer voice and data services, the actual installation might still be handled by the local phone company, as they own the copper lines.
While T1 prices have been falling, this trend might not continue indefinitely. As economic conditions improve, unused capacity in the telecom industry will decrease. This shift in supply and demand could lead to price increases in the future. Therefore, it’s crucial to consider this factor when negotiating a one, two, or three-year contract with the current low rates.
Similar price reductions have been observed in higher-bandwidth digital services such as DS3, OC3, and Ethernet, contributing to the cost-effectiveness of enterprise-level VoIP solutions.
Before renewing your current contract, exploring all available options is recommended. Visit T1 Rex and utilize our free quote service to make an informed decision.
