Price strategy at LONAP Ltd - March 2026
The Economics of a Mutual IXP: How LONAP Scales with Its Members
In the infrastructure world, the relationship between a service provider and its users is typically defined by margins. At LONAP, that relationship is defined by a mutual, not-for-profit mandate. Because we exist to serve our members rather than external shareholders, our operational focus is narrow and intentional: to provide the most reliable peering platform at the lowest sustainable cost and for it to be delivered in as friction free way as possible.
We currently have over 17 terabits of connected member capacity. Here is the breakdown of how that model functions and why it directly impacts your network’s overhead.
The “What”: A Shared Cost Infrastructure
The core of our financial model is the equitable distribution of operating expenses. LONAP maintains a high-performance switching fabric across multiple data centres, which requires significant capital and operational investment. We aggregate these costs - including data centre space, high-spec switching hardware, optical intersite links, and 24/7 engineering support - and spread them across every connected port on the exchange.
The “Why”: Scale as a Shared Benefit
In a traditional commercial model, the “surplus” generated by growth is often retained as profit. In a mutual model, growth creates efficiency of scale.
- The Result: As more networks join LONAP and port density increases, the contribution required from each individual port to cover the fixed operating costs decreases.
- The Record: We don’t just talk about this in theory. Since 2018, LONAP has implemented six separate price reductions. As the exchange has grown, we have consistently returned those gains to our members in the form of lower port pricing.
The “How”: Engineering Your Path to 400GbE
We recognize that network growth is rarely a perfectly smooth curve. Moving from 100 GbE to 400 GbE represents a massive jump in both capacity and cost. To mitigate this “step-change” in your budget, we have engineered two specific pricing tiers:
- The 200G Intermediate Step: Members can now utilise a 200G committed data rate on a 400GbE interface. This includes a 25% burst allowance, providing significant headroom and a single cross-connect. It allows you to double your capacity without the financial leap to a full 400GbE port.
- Resilience via LAG Discounts: Many members utilise Link Aggregation Groups (LAGs) to ensure network uptime. To support this, LONAP offers an additional discount when aggregating 100GbE ports within a LAG. This lowers the cost barrier for building a resilient, multi-port architecture.
Stability through good Governance
Our approach to pricing is governed by three pillars:
- Fairness: Infrastructure costs are spread equitably across the membership.
- Predictability: We provide clear, affordable upgrade paths that prevent “bill shock.”
- Accessibility: We ensure that high-capacity peering remains viable for networks of all sizes.
By aligning our interests entirely with our members, LONAP remains a stable, transparent, and increasingly cost-effective foundation for the wider internet community.
Andy Rawnsley, Director for Finance, LONAP Limited
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