Fractional T1, DS1, T3, DS3

Is a Fractional T1 line really cost effective vs. a Full T1?

While it doesn't hurt to check fractional T1 line pricing since every locations' cost do vary, the majority of T1 line users opt for the full T1. The price break point vs. speed averages around 768 Kbits, half a T1. You will find you can get a Full T1, twice the bandwidth, for approximately $10 - $25 more per month.

A fractional T1 offers less bandwidth than a full T1 and comes with the same quality and performance guarantees as a full 1.54 Mbps T1 but costs slightly less. How much less bandwidth vs. the cost savings is the question. See Fractional vs. Full T1 below. Although the price reduction is not what you might expect it to be, this may put a T1 in your budget and be a great way to get dedicated service into your building. Once you have fractional service upgrading to full service is easy. The reason it is easy is due to the installation of a fractional circuit. A fractional T is a full T1 capable circuit - it is throttled back to deliver only a portion of the full t1 1.54 Mb bandwidth and normally your bandwidth can be increased within 5 - 10 business days.

Fractional service typically comes in 256Kbps increments from 256Kbps all the way to a full T1 at 1.5Mbps. Find the service that's right for you, but if you are supporting critical services think reliability. Reliability becomes critical when customers or employees depend on your connection for immediate responses. If your customers use your connection to access your databases or your server or the internet then reliability of your connection is critical. If your employees depend on your connections because you host the e-mail server in house or host web servers or ASP type products, your connection is considered critical. A critical connection can be viewed much like a lifeline, without which your business would be negatively impacted.

In the late 1990's, the cost for a fractional T1 line might have been about 35% - 40% less than the full 1.54 Mbps T1. Today, there is hardly any difference in price, maybe 10% to 15% at best. The cost of a Full T1 has come down considerably in recent years. A fractional T1 has a 50% - 854 bandwidth decrease but only a 5% to 15% price decrease. Fractional DS-3 (T3) on the other hand is a very cost effective solution since pricing is based on a portion of a 45 Mbps circuit.

Fractional T1 Line vs. Full T1

There isn't much of a cost savings between a fractional T1 and a full (1.5 Mbps) T1. Why? So we can better understand, let's start by taking a look at the specific costs of delivering a T1 service either Full or Fractional.

The service provider has two costs associated with your fractional T1 - the "local loop" and the "port". The local phone company ( LEC - Local Exchange Carrier ) provides and installs the loop. The T1 provider supplies the "port" which is the connection between the local loop and the Internet.

Loop Cost

The cost of your local loop is exactly the same - regardless if it's a full or fractional T1 because the local phone company always sets the local loop a 1.54 Mbps. Why? Because it takes the same amount of copper wires, time to install, and equipment to run a fractional T1. The LEC passes this cost to your T1 provider. Since there are no cost savings for the T1 provider or the local phone company on a local loop, the end user doesn't get any cost savings on this portion. Advantages - This can save time and reduce or eliminate install fees in the event you expand your bandwidth in the future. The Full T1 circuit is already in place.

Port Cost

The cost of the port has two parts. Equipment and bandwidth charges.
The equipment is the same for the local loop. The amount of time required to install and maintain the fractional T1 port equipment is the same as required for a full T1 port. No cost savings on equipment.

Cost Savings

For the T1 provider, bandwidth charges make up probably only 10% of the total cost of providing a T1. Fractional T1 providers are willing to discount services only slightly because it only costs them slightly less to offer the fractional T1 instead of the full T1! Except for bandwidth expenses, the T1 providers' cost of offering fractional and full T1 service is nearly the same when selecting speeds of 512 Kbits or 768 Kbits.