Unpacking the Last Mile: Local Access Pricing Insights

When our TeleGeography analysts speak with procurement teams, we often hear about the persistent challenges of trying to source crucial last mile connectivity. While demand for high-capacity circuits is surging, the underlying procurement processes and commercial models are struggling to keep pace.

Powered by TeleGeography’s most recent update to the Local Access Pricing Database, this post dives into common sourcing challenges for last-mile connectivity and what exactly carriers were buying in the second half of 2025.

Where this local access pricing data comes from

Our pricing team rigorously refreshes and expands our Local Access Pricing dataset twice a year. We recently completed a major undertaking with our H2 2025 research cycle—covering local access transactions from July to December 2025. We collected nearly 84,000 quotes across 350 cities worldwide, drawing on contributions from over a dozen of the largest multinational carriers in the global telecommunications market.

Last-mile access sourcing challenges

Sourcing an off-net local loop—the line connecting a customer’s site back to a carrier’s PoP—is rarely a straightforward process. Based on our extensive conversations with the procurement teams contributing to this pricing update, we’ve identified three critical challenges carriers currently encounter when procuring off-net last-mile connectivity for their clients.

Ensuring Path Diversity: A persistent challenge for procurement teams is securing genuine redundancy amidst physical infrastructure constraints. While enterprises increasingly demand high-availability, low-latency circuits, sourcing teams often procure local loops from different providers that ultimately share the same underlying incumbent fiber duct. In these scenarios, a single physical disruption can trigger a simultaneous failure of both “redundant” paths. To truly mitigate this risk, sourcing teams can focus on sourcing local loops with “Protected Circuits” that guarantee physically independent routes for connecting to the customer premise.

Scalable Bandwidth Solutions: A significant friction point is the lack of flexibility in bandwidth contracts compared to the Middle-Mile market. Companies are currently forced to purchase fixed bandwidth (i.e., a 1 Gbps commit) based on maximum potential usage to ensure 100% peak uptime. This leads to carriers paying for high capacity circuits they rarely utilize. Sourcing teams are struggling to find “burstable” or dynamic pricing models in the Last Mile that would allow them to flex bandwidth up and down based on daily traffic patterns, rather than being locked into rigid, long-term fixed-capacity terms.

Sourcing Inefficiencies: Conventional methods for sourcing local access are still largely constrained by manual procedures, frequently utilizing fragmented pricing data, extensive email correspondence, and static spreadsheets. Procurement teams are now under pressure to move from these outdated manual workflows toward third-party sourcing platforms. By offering a marketplace that enables rapid, transparent, and automated vendor evaluations, these platforms represent a vital shift as AI-enhanced tools increasingly permeate enterprise operations.

What carriers were buying in H2 2025

Demand for local loops remains heavily concentrated at the high end. A striking 70% of all recorded circuits operate at ≥51 Mbps, underscoring a sustained requirement for high-capacity access among both providers and enterprises. This trajectory has been remarkably consistent; since our H1 2022 research cycle, the share of circuits in the ≥51 Mbps range has climbed from 50% to its current peak.

Distribution of Carrier-Sourced Local Access Loops by Bandwidth, H2 2025

Note: The chart demonstrates the percentage share for each bandwidth range of the total carrier inventory of local access loops purchased or renewed during the study period.

Furthermore, 33% of local loops reached the ≥1,000 Mbps range, with significant adoption across Europe, the U.S. & Canada, and Asia. This highlights the growing accessibility of gigabit Ethernet as a modern alternative to legacy TDM connections.

Interestingly, 8% of all circuits purchased were at the very low speed of ≤1-4 Mbps. Our analysis revealed that 77% of these slower circuits were for local access connections in the United States and Canada, often concentrated in cities like Washington, DC and Philadelphia. This suggests that some carriers are still compelled to leverage legacy TDM networks—which still account for 7% of all reported local loops—in parallel with newer Ethernet offerings.

Looking ahead for local access pricing

The last-mile market has substantial ground to cover when it comes to optimizing its sourcing processes. As ever, we will be closely monitoring how local market dynamics and shifting demand continue to shape this critical segment of the telecom landscape.

If you’re looking for global, granular Local Access or other pricing data, our Network Pricing Database has the telecom industry’s most comprehensive pricing data.

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