Many service providers did have room to lose margin, however, some providers have come dangerously close to the edge of selling circuits at a loss and many have gone beyond this point. It seems that in the race to the bottom many providers failed to learn the lesson that selling at a loss does not create a long lasting and healthy company no matter how many circuits or widgets.

Many companies selling at a loss have already been in bankruptcy and look like they will repeat this exercise. Many T1 providers are convinced that customers are focused on price and are not concerned with quality of service. Many providers are now oversubscribing T1 service connections as though they were DSL connections. You might not get the bandwidth you thought you would get.

Make sure that when you look for that bargain price you also review the SLA (Service Level Agreement) and make sure the contract protects you and guarantees you will get the bandwidth to which they committed. Remember, when bargain hunting for T1 service you will most likely get what you pay for. 

Therefore, the general moral to the story is by all means do negotiate for the best price you can get. Make sure that critical factors such as reliability, Service Level Agreement, QOS, and scalability are met in addition to price attractiveness. T1 bandwidth downward pricing trend is continuing.

Although it was predicted that prices would plummet, the rising has been successive over the last few years.  Service providers are up against stiffer competition and are desperate for new customers to fill their pipes and turn a profit.

If your company is ready to negotiate for a rock bottom price, first consider a few of the reasons for the drop in price on T1 bandwidth. A little preparation will allow you to take best advantage of the circumstances.