Why do bandwidth costs vary dramatically by country?

TeleGeography® recently published their survey wholesale GigE internet access pricing for 2009. While this survey is not exactly analogous to MPLS and IPL pricing, it does offer a very reasonable representation.

Wholesale GigE Internet Access by Country:
New York: $9
London: $11
Tokyo: $31
Sâo Paulo: $51
Mumbai: $80

The differences in price by country relates, in part, to the amount of international bandwidth that connects to each country through the undersea cable infrastructure.

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