In one of my recent blog posts, we looked at the ~two billion dollars worth of IPv4 assets AWS has collected over the last few years. One of the lessons from that story is that the IPv4 market is still very much alive and that folks are still happy to sell IPv4 resources and cloud providers are willing to pay big money to grow their business.
It’s always interesting to trace where all the sold IPv4 networks came from and who owned them previously. I’ve seen all kinds of entities sell their IPv4 resources. Examples include local police departments, libraries, car manufactures, and even large telecom hardware vendors. So I’m not sure if there’s a real pattern, other than those folks that received a large allocation decades ago and no longer need it, so it’s better to sell it.
One of the recent large transfers that caught my attention was the sale of (the majority of) the 184.108.40.206/8 IPv4 space. Since it’s such a large range and the story behind it is a bit unique, let’s take a closer look.
The Asia Pacific Internet Development Trust (APIDT)
In March of last year (2020), APNIC and the Japanese WIDE project announced the establishment of the Asia Pacific Internet Development Trust (APIDT). The announcement on the APNIC blog reads:
APIDT was created in line with the wishes of the Founder of the WIDE Project, Professor Jun Murai of Keio University, following his decision on the future use of IPv4 address space in the 43/8 block, announced today.
The article then explains the purpose of the Trust.
The Trust will use the proceeds of the sale of the address space to create a fund to benefit Internet development in the Asia Pacific region. This will include funding technical skills development and capacity building, improvements to critical Internet infrastructure, supporting research and development, and improving the community’s capability to build an open, global, stable and secure Internet.
So APIDT, a joint initiative of the WIDE Project and APNIC, is a newly created Trust that will be funded by selling the unallocated (87.5%) portion of 220.127.116.11/8. The proceeds of the sale will be used in support of Internet development in the APNIC region.
Selling the 43/8 addresses space
APIDT has recently completed the sale of the IPv4 address holdings in three separate stages via a sale by tender process. The IPv4 blocks sold in each stage were as follows:
Stage 1 offered the 18.104.22.168/9 block, subdivided into eight /12 blocks.
Stage 2 offered the 22.214.171.124/10 block, subdivided into sixteen /14 blocks.
Stage 3 offered the 126.96.36.199/11 block, subdivided into thirty-two /16 blocks.
The whole process took a while, the results of stage 1 and stage 2 were publicly visible in the RIR database last year (2020). For whatever reason, stage 3 took quite a bit longer and is still not fully public.
So who bought all the IPv4 addresses?
The lucky winners and, likely, big spenders are perhaps not surprisingly some of the major cloud providers.
Stage 1 - 188.8.131.52/9 block, subdivided into eight /12 blocks
The big winner of the first stage of the tender was Alibaba. They now own all of the eight /12 blocks. These have now been allocated as two /10 to Alibaba, 184.108.40.206/10 and 220.127.116.11/10.
Stage 2 — 18.104.22.168/10 block, subdivided into sixteen /14 blocks
Again a winner takes all result here. The winner of stage two is the other major cloud player in the Asia Pacific region: Tencent Cloud Computing.
The sixteen /14 blocks are now allocated to Tencent as one large /10 allocation: 22.214.171.124/10
Stage 3 — 126.96.36.199/11 block, subdivided into thirty-two /16 blocks
This one took a while but as of June 21st, 2021 we can see that just over 50% of this block, 188.8.131.52/12, has been allocated.
The first half, 184.108.40.206/12 goes to.. surprise surprise, AWS
The final two /16’s in this block are going to
220.127.116.11/16 NEC Corporation
18.104.22.168/16 LINE Corporation
The remaining blocks between 22.214.171.124/16 and 126.96.36.199/16 are yet to be allocated. So keep an eye on that.
For a full list of what IPv4 block was sold to whom, also see this Google Sheet:
How much money was made?
That question is hard to answer as the dollar figures for the winning bids have not been made public (as far as I know). However, we can make an estimate based on the known market prices.
There’s limited public information on what price IPv4 addresses are sold for. Typically the per IP address depends on the size of the IP ranges that are being sold. One public benchmark is the transaction between AMPR.org and AWS in 2019. In that transaction, AWS paid $108 Million for 188.8.131.52/10. That’s $25.74 per IP address.
A more recent public source is the ipv4marketgroup website. According to them, the per IP price for IPv4 blocks of size of /17 or larger (/16, /15, etc) currently range between $38 to $40 USD per IP. The graph below shows how prices have steadily increased over the years.
APIDT sold off the equivalent of 14,680,064 IPv4 addresses. So if we estimate the price at say $38 per IP, the total value of the sold IP addresses would be around $558 Million. While on the higher end, at $40 per IP the value would be $587 Million.
At a more conservative price of $34 per IP, the combined value would still be $499 Million (USD).
The sale of the 43/8 block shows the IPv4 market is still alive and thriving. We observe the market continues to find new resources to sell. In the example of APIDT, we estimated that the funds made available for the Trust as a result of the sale are likely somewhere between 500 to 600 million dollars. I’d say that’s a very healthy fund for the purpose of supporting Internet development in the Asia Pacific region.