If your business operates its own autonomous system, runs a hosting platform, or delivers internet services to customers, IP transit is one of the most consequential infrastructure decisions you make - and one of the most opaque to price. This guide breaks down what IP transit actually costs in Australia in 2026, what drives the price, and how to ensure you are getting genuine value rather than just a low headline number.
IP transit is a commercial service where one network pays another to carry its traffic to and from the rest of the internet. The transit provider announces the customer's IP address space via the Border Gateway Protocol (BGP) and provides access to the full global routing table, enabling the customer to send and receive traffic to any destination on the internet.
IP transit is distinct from peering (where two networks exchange traffic directly, usually without payment) and from standard internet access (where an ISP manages the connection on the customer's behalf). Transit customers operate their own autonomous systems and IP addresses, manage their own BGP routing, and make their own decisions about traffic engineering and path selection. This level of control is why transit is the connectivity model of choice for ISPs, hosting providers, content platforms, and enterprises with sophisticated network requirements.
Globally, IP transit pricing has been on a sustained downward trajectory. According to TeleGeography's 2025 research, 100 GigE prices across major cities fell approximately 12% per year (compounded) from 2022 to 2025. In the most competitive international markets, the lowest 100 GigE prices held steady at around US$0.05 per Mbps per month, with 10 GigE floor prices at US$0.07 per Mbps.
Australia sits in the middle of the global pricing spectrum. It is not as cheap as the most competitive hubs in North America or Europe — where decades of dense fibre infrastructure, hyperscale peering, and intense carrier competition have driven prices to their floor — but it is significantly more affordable than it was five years ago, and the trend continues downward.
Several factors are accelerating price erosion in Australia specifically:
New subsea cable capacity. Australia is in the midst of its largest subsea cable buildout in two decades. The SMAP cable system — a 5,000 km domestic submarine cable connecting Sydney, Melbourne, Adelaide, and Perth with 400 Tbps of design capacity across 16 fibre pairs — became operational in early 2026. Vocus completed its East Coast Cable System linking Brisbane, Sydney, and Melbourne. Google's Tabua cable connecting Australia to the United States via Fiji is progressing, and the Hawaiki Nui system and SUBCO's APX East cable will add further trans-Pacific capacity. Each new cable system increases aggregate bandwidth into and between Australian cities, intensifying competition among transit providers and putting downward pressure on pricing.
Growing carrier competition. The number of providers offering IP transit in Australian data centres has increased steadily. More carriers competing for the same customer base in facilities like Equinix, NEXTDC, and Global Switch drives pricing down and service quality up. Independent infrastructure owners like Nexthop now compete directly with incumbent carriers, offering tier-1 connected transit at pricing that undercuts traditional providers.
Content localisation. The expansion of hyperscale content delivery networks and cloud on-ramps within Australian data centres means more traffic is exchanged locally rather than carried internationally. This reduces the cost component of transit that relates to international backbone capacity, contributing to lower per-Mbps pricing.
The shift to 100 GigE and 400 GigE. The industry-wide migration to 100 GigE ports — and the early rollout of 400 GigE services — has reduced the unit cost of delivering high-capacity transit. Providers that previously sold primarily on 10 GigE ports are now offering 100 GigE as the standard enterprise product, with proportionally lower per-Mbps rates.
Boost your network performance with our reliable IP transit service
Start your no obligation free IP Transit trial today and get connected within 72 hours!
Australian providers use several pricing structures. Understanding the differences is important because the pricing model affects your total cost as much as the headline per-Mbps rate.
The most common model for smaller commitments. You agree to a fixed monthly fee based on a specified port speed or bandwidth commitment. The MRC covers your access to the provider's transit service and typically includes a defined bandwidth allocation. This model is predictable and straightforward — you know exactly what you will pay each month.
A CIR is a guaranteed minimum data transfer rate that the provider commits to maintaining at all times. A higher CIR means the provider must reserve more network capacity for your traffic, which translates into a higher monthly cost. CIR-based pricing is common in SLA-backed enterprise transit agreements where consistent performance is contractually guaranteed.
Burstable billing allows you to exceed your committed bandwidth during traffic spikes without penalty, with charges calculated on the 95th percentile of your usage over the billing period. This means the top 5% of your peak traffic is excluded from billing calculations. The model is well suited to networks with variable traffic patterns — you are not paying for capacity you only use occasionally, but you are protected against unexpected demand surges. This is the most common billing model for larger transit customers in Australia.
Some providers offer flat-rate transit at a fixed monthly price regardless of usage, up to the port speed. This model eliminates billing uncertainty entirely but typically carries a higher per-Mbps cost than burstable or committed models. It is most common on smaller port sizes.
The single largest factor. Per-Mbps pricing drops significantly as your committed bandwidth increases. A 1 Gbps commitment will carry a materially higher per-Mbps rate than a 10 Gbps or 100 Gbps commitment from the same provider. If your traffic volumes justify a larger commit, negotiating on volume is the most effective way to reduce your unit cost.
Where you buy transit matters. Transit purchased in a well-connected, carrier-dense data centre in Sydney or Melbourne will be cheaper than transit in a less competitive market. Within Australia, Sydney has the most competitive transit pricing due to the concentration of carriers, peering exchanges, and international cable landings. Melbourne, Brisbane, and Perth follow, with pricing influenced by local carrier density and proximity to submarine cable landing points.
Price per Mbps is the number everyone compares. Routing quality is what determines whether you are actually happy with the service. A provider offering low per-Mbps pricing but poor routing — suboptimal paths to major destinations, high latency to key content networks, or limited peering — delivers a worse outcome than a moderately priced provider with well-optimised routing and strong peering relationships. When evaluating transit quotes, ask about the provider's peering policy, the number of peers on their network, and their routing to your most important traffic destinations.
The port speed you connect at affects pricing independently of your committed bandwidth. 10 GigE, 100 GigE, and 400 GigE ports carry different base costs. Providers are migrating sales mix toward 100 GigE as the standard, with 400 GigE becoming available in major Australian data centres.
Additional capabilities can affect pricing. Features such as DDoS mitigation, advanced BGP communities for traffic engineering, IPv6 support, and 24/7 NOC support may be included in the base price or charged separately depending on the provider. Clarify what is included before comparing headline rates.
Longer contract terms generally yield lower per-Mbps pricing. However, committing to a multi-year contract before you have validated the provider's routing quality and support responsiveness carries risk. Providers that offer no-obligation trial periods — allowing you to test the service before committing — reduce this risk significantly.
The most effective way to evaluate a transit provider is to use them. Providers that offer no-obligation trial periods allow you to assess routing quality, latency, and support responsiveness with real traffic before signing a contract. This is far more informative than comparing spec sheets.
Request looking glasses or route server access from prospective providers. Check their routing to your most important destinations — major content networks, cloud platforms, and your end-user markets. The cheapest per-Mbps quote is not the best deal if the routing adds unnecessary latency or takes suboptimal paths.
Commit based on your actual sustained traffic levels plus a reasonable growth buffer — typically 20-30% above your current 95th percentile. Over-committing to chase a lower unit rate wastes budget if traffic growth does not materialise. Under-committing results in overage charges or performance constraints. Review three to six months of traffic data before sizing your commitment.
Ask whether the provider owns their infrastructure or resells capacity from an upstream carrier. Infrastructure-owning providers control their routing, manage their own faults, and can resolve issues without third-party escalation. Resellers depend on their upstream provider for all three — which directly affects your experience when something goes wrong.
For networks where redundancy and path diversity matter, purchasing transit from two or more providers with complementary routing strengths provides both resilience and leverage. If one provider's performance degrades, you can shift traffic to the other. This also gives you negotiating power at renewal.
Nexthop provides premium IP transit from a tier-1 connected backbone across all major Australian data centre points of presence in Sydney, Melbourne, Brisbane, and Perth. Our transit service is built on a network we build, own, and operate — delivering optimised routing, low latency, and the responsive support that comes from dealing directly with the infrastructure owner.
No-obligation free trial. Test Nexthop's transit with your own traffic before making any commitment. We provision trial connections within 72 hours — because the best way to evaluate transit is to use it.
Competitive pricing. Nexthop's clients on average save 30% on connectivity services when switching from their previous provider. Our direct infrastructure ownership eliminates the resale margin layers that inflate pricing from traditional carriers.
Australian-based support. Our network operations team is based in Australia, with direct visibility into the infrastructure carrying your traffic. When you raise a fault, we investigate on our own network — no third-party carrier escalation.
Connected to 30+ data centres. Nexthop's transit is available across all major Australian colocation facilities, including NEXTDC, Equinix, Global Switch, and Macquarie Data Centres.
Contact Nexthop to start your free IP transit trial — provisioned in 72 hours, no obligation, no contract.
IP transit pricing in Australia varies based on bandwidth commitment, location, provider, and contract terms. Globally, published rates in 2026 range from US$0.03 to US$3.00 per Mbps per month, with Australia sitting in the mid-range of this spectrum. Per-Mbps pricing drops significantly with larger bandwidth commitments. The ongoing deployment of new subsea cable systems connecting Australian cities — including SMAP, Vocus East Coast Cable, and Google's Tabua cable — continues to put downward pressure on transit pricing across all major Australian markets.
IP transit is a paid service where one network pays another to carry its traffic to the entire internet. Peering is a mutual arrangement where two networks agree to exchange traffic directly, typically without payment. Transit provides access to the full global routing table, while peering provides access only to the routes of the peering partner and its downstream customers. Most networks use a combination of transit and peering to optimise cost and performance.
The 95th percentile billing model measures your bandwidth usage in five-minute intervals over the billing period, ranks them from lowest to highest, and discards the top 5%. You are billed based on the highest remaining measurement. This means short traffic spikes — such as overnight backups or brief surges during peak events — do not determine your bill. The model is widely used for IP transit in Australia and is particularly suited to networks with variable traffic patterns.
Evaluate transit providers on routing quality, not just price. Request looking glass access to check routing to your key destinations. Ask whether the provider owns or resells their infrastructure. Test the service through a trial period before committing to a contract. Assess the provider's peering relationships, support responsiveness, and presence in the data centres where your infrastructure is located. The cheapest per-Mbps rate is not the best value if routing quality or support is poor.
Some providers offer no-obligation trial periods. Nexthop, for example, provisions free IP transit trials within 72 hours with no contractual commitment. This allows you to test routing quality, latency, and throughput with your actual production traffic before making a commercial decision.
Co-founder | Managing Director
Nexthop products
We provide a simple, specialised product portfolio
| Product / Available Speeds | 500 Mbps | 1 Gbps | 2.5 Gbps | 10 Gbps | 100 Gbps | 400 Gbps |
|
Fibre Internet - Multi-Gig Internet |
|
|
|
|
|
|
|
Datacentre DIA |
|
|
|
|
|
|
|
Layer 2 Ethernet |
|
|
|
|
|
|
|
IP Transit |
|
|
|
|
|
|
|
Wavelength |
|
|
|
|||
|
Dark Fibre* |
|
|
|
|||
|
Next XC - DC dark fibre* |
|
|
|
* For dark fibre and Next XC the customer supplies the SFP to enable the 10, 100 & 400Gbps
IP transit is a necessary service that interconnects local and private networks to the global internet, thus allowing real-time collaboration, customer-facing applications, and access to cloud and Sa…
Sales Director
In the context of Australian business IT, availability is not only a prominent number but also a measurable risk factor. The Five Nines availability (99.999%) allows unplanned downtimes of only 5.26 …
Sales Director
Businesses rarely remain static. The transition for any growing business would mean the recruitment of additional staff, moving to the cloud, entering new markets, or adopting hybrid work, leading to…
Co-founder | Managing Director
