Many people wonder what it takes to provide an uncapped ADSL service, and how much money ISPs make from these services.
MyBroadband asked a well-known ADSL provider to shed some light on the issue, and it provided a formula which is used to calculate the bandwidth cost for uncapped services.
The major components are wholesale IP Connect (IPC), international bandwidth, local transit, and peering costs.
IPC is by far the highest cost, followed by local transit from non-peering providers, international connectivity, and peering.
The bandwidth percentages listed in the formula refer to the portion of bandwidth which is served through the three different components: peering, local, and international bandwidth.
An estimate suggests that around 50% of bandwidth is international, 30% is served through peering points, and 20% is paid-for local bandwidth.
It should be noted that the formula only shows the bandwidth cost of an uncapped ADSL service, and excludes marketing, support, billing, and other admin costs.