Thursday, 09 December 2021

IPv4 is worth triple in 2021: will it affect the price of fiber?

The price of IP addresses is becoming a bigger and bigger problem. The price has tripled so far this year, reaching unimaginable prices just a year or two ago. And it does not seem that it will change in the next years since the addresses are increasingly scarce.

In 2019, we witnessed what seemed like the end, since the last available block was allocated in November. From there, it was necessary to wait for the RIPE, the Regional Internet Registry for Europe, the Middle East and Central Asia, to recover disused addresses to reassign them, as well as to carry out purchase and sale processes between private companies. In fact, there were long queues to access IPv4 address blocks.

These / 24 blocks are made up of 256 addresses, and the average price per address in 2015 was $10. However, little by little, the figure was increasing, and by the beginning of 2021 it had already exceeded $ 20. Now, in recent weeks, that price has skyrocketed and has tripled, where the price per IP address has reached $ 60 in recent weeks. Currently, it has dropped a bit to around 45 dollars, but it is a matter of time before it goes above 60 again seeing the trend that it takes.



There are no longer long queues to access addresses, but the price to pay for them is very high. In Spain, we are fortunate that the large operators have millions of IP addresses assigned, but Vodafone and Orange are among the five operators that have acquired the most addresses in Europe in the last six years.

According to the RIPE, which is the RIR (Regional Internet Access) that reassigns IP addresses in our area, Spain has 32,012,096 IP addresses. This figure of 32 million is quite high, although there are nearby countries that have more, such as France, with 82 million, or Italy, with 55 million.



Slightly more than half of these IP addresses are owned by operators, where Telefónica is the one who has around a third of the IP addresses in all of Spain. This is more than enough reason for a large operator not to have incentives to make the leap to IPv6, since they have plenty of IPv4 addresses for fixed connections, and in mobile networks they make use of CG-NAT. In addition, they charge for offering fixed IP addresses, where, for example, Movistar charges 30 euros per month if you want to have a fixed IP.



This, unfortunately, is no excuse for not implementing IPv6, since France, with more than twice as many IPv4 addresses as we do, already has a penetration of 48.44% of IPv6, while Spain is at a ridiculous 2.8%. Thus, we are ceasing to enjoy advantages such as safer and faster connections, being able to connect directly to devices without depending on NAT or ports. In turn, we are more exposed to rising IP address costs.



The high price of IP addresses can have serious consequences for Spain. To begin with, it can make it difficult for small operators to enter at affordable prices in our country, and this is the reason why operators such as MásMóvil or Digi resort to CG-NAT by default, grouping dozens of users under the same external IP. In turn, private companies that want to have their own IP addresses also see how the costs to obtain these addresses increase, where a block of 256 addresses currently stands at around $ 11,000.

Despite this, the price of fiber rates does not seem to be being affected, since once you have IP addresses in use and possession, the cost begins to dissolve. The problem is that demand is increasing, as we see in this RIPE graph, where Spain exported 675,000 IP addresses but imported 2.46 million. Between Vodafone and Orange they have received just over 1.1 million addresses, which at the current price are equivalent to about $ 68 million.



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