Growth in lo­cal IXPs saves $40m

● Lo­cal traf­fic ex­change key to In­ter­net drive, say ex­perts

Business a.m. - - FRONT PAGE - Sto­ries by Omobayo Azeez

IM­PROVE­MENTS RECORDED in the op­er­a­tions of the lo­cal In­ter­net Ex­change Points (IXPs) in Nige­ria is sav­ing the coun­try up to $40 mil­lion in pos­si­ble cap­i­tal flight, among other ben­e­fits, Busi­ness A.M. has gath­ered.

This in­tel­li­gence emerged in the ....

IM­PROVE­MENTS RE CORDED in the op­er­a­tions of the lo­cal In­ter­net Ex­change Points (IXPs) in Nige­ria is sav­ing the coun­try up to $40 mil­lion in pos­si­ble cap­i­tal flight, among other ben­e­fits, Busi­ness A.M. has gath­ered.

This in­tel­li­gence emerged in the wake of Nige­ria’s at­tain­ment of the sec­ond phase of lo­cal in­ter­net traf­fic host­ing, mean­ing that nearly 70 per cent of in­ter­net traf­fic in the coun­try is lo­cal­ized.

In its lat­est re­port ti­tled, “An­chor­ing the African In­ter­net Ecosys­tem: Lessons from Kenya and Nige­ria’s In­ter­net Ex­change Point Growth,” the In­ter­net So­ci­ety em­pha­sized that the role of the IXPs is crit­i­cal to per­va­sive in­ter­net ac­cess at af­ford­able rates in Africa.

The growth of the IXPs in each coun­try was ex­po­nen­tial, as were the cost sav­ings from ex­chang­ing traf­fic lo­cally rather than us­ing ex­pen­sive in­ter­na­tional tran­sit, the rate stated.

The Kenya In­ter­net Ex­change Point (KIXP) grew from car­ry­ing a peak traf­fic of 1 Gi­ga­bit per sec­ond (Gbps) in 2012 to 19 Gbps in 2020, with cost sav­ings qua­dru­pling to $6 mil­lion per year, ac­cord­ing to the re­port.

In Nige­ria, IXPs grew from car­ry­ing just 300 Megabits per sec­ond (Mbps) to peak traf­fic of 125 Gbps in 2020, and the cost sav­ings in­creased forty times to $40 mil­lion per year, ac­cord­ing to find­ings by the In­ter­net So­ci­ety.

The re­port held that get­ting to this point meant fol­low­ing a sys­tem­atic path of stake­holder relationsh­ip build­ing and in­fra­struc­ture de­vel­op­ment.

It is a jour­ney all the way from 2012 that in both Kenya and Nige­ria, just 30 per cent of each coun­try’s traf­fic was lo­cal­ized and the rest re­sid­ing abroad, lead­ing to cap­i­tal flight.

Ex­perts re­ferred to this as stage one of the In­ter­net ecosys­tem de­vel­op­ment, at the cusp of mov­ing into Stage 2, the cur­rent phase.

In­ter­net So­ci­ety at­trib­uted the growth to pos­ses­sion of a strong base for growth, in­clud­ing an ex­ist­ing IXP that was well man­aged and trusted by lo­cal stake­hold­ers by Nige­ria and Kenya.

They also had static in­ter­na­tional con­tent avail­able via a Google Global Cache, but no other lo­cally avail­able con­tent, ac­cord­ing to the In­ter­net So­ci­ety’s record.

Ex­pe­ri­ence from man­age­ment of the traf­fic showed that each had the nec­es­sary foun­da­tion of trust and col­lab­o­ra­tion and the cor­re­spond­ing In­ter­net in­fra­struc­ture to grow as a hub.

The IXPs have trans­formed into mul­ti­site and mul­ti­c­ity IXPs with at least one node in a car­rier-neu­tral data cen­tre, while main­tain­ing their roles in de­vel­op­ing and sus­tain­ing trust and col­lab­o­ra­tion among their mem­bers.

Each IXP also dropped manda­tory peer­ing re­quire­ments to en­cour­age new mem­bers to join and make se­lec­tive peer­ing agree­ments.

“As a re­sult, all of the large in­ter­na­tional con­tent providers added at least one edge cache in the coun­try, and many also added a point of pres­ence (PoP).

“The re­spec­tive gov­ern­ments also played a role by de­vel­op­ing the In­ter­net sec­tors and adopt­ing dat­apro­tec­tion poli­cies, thereby re­in­forc­ing an en­vi­ron­ment of trust and wel­com­ing fur­ther lo­cal-con­tent host­ing,” the ex­perts said.

Mean­while, pro­gress­ing into Stage 3 of de­vel­op­ment and achiev­ing the In­ter­con­nec­tion and Traf­fic Ex­change (ITE) pro­gramme’s goal of 80 per cent of African In­ter­net traf­fic be­ing lo­cally ac­cessed will re­quire a num­ber of rec­om­mended ac­tions.

Ac­cord­ing to the ex­perts, th­ese will ben­e­fit the in­di­vid­ual stake­hold­ers as well as the broader ecosys­tem.

In its view, the In­ter­net So­ci­ety said aware­ness of the ben­e­fits of lo­cal con­tent host­ing and peer­ing at the IXP among a broad range of stake­hold­ers must be raised, which can be achieved via tar­geted ca­pac­ity build­ing and in­for­ma­tion ex­change, led by, or with the participat­ion of the IXPs.

In par­tic­u­lar, lo­cal con­tent de­vel­op­ers who cur­rently host their con­tent out­side the coun­try should host it in­side the coun­try to ben­e­fit from lower la­tency and thereby in­crease lo­cal traf­fic.

“In ad­di­tion, smaller In­ter­net ser­vice providers (ISPs) should con­nect to their lo­cal IXPs in or­der to widely peer with other mem­bers and thereby in­crease the ef­fi­ciency of their in­ter­con­nec­tions.

“Ag­gre­ga­tion of de­mand for back­bone ca­pac­ity and lo­cal con­tent host­ing can help lower costs for smaller ISPs and lo­cal con­tent de­vel­op­ers re­spec­tively, to help en­able them to con­nect to their lo­cal IXPs.

“Do­mes­tic back­bone in­fra­struc­ture must also ex­tend be­yond the main land­ing point for sub­ma­rine ca­bles and main pop­u­la­tion cen­tre into other pop­u­la­tion cen­tres, to fur­ther lower the cost of ex­chang­ing traf­fic and ac­cess­ing con­tent lo­cally.

“Fi­nally, an en­vi­ron­ment of trust and col­lab­o­ra­tion is key to the suc­cess­ful growth of any tech­nol­ogy in­fra­struc­ture. Stake­hold­ers must com­mu­ni­cate and con­nect as equals, work­ing to­gether to­ward com­mon stated goals and out­comes,” the ex­perts rec­om­mended.

Re­act­ing to the re­port, Muhammed Rud­man, chief ex­ec­u­tive of­fi­cer, In­ter­net Ex­change Point of Nige­ria (IXPN) said the cal­cu­la­tion by In­ter­net So­ci­ety is ac­cu­rate given that they know the cost of vol­ume of traf­fic and cost of band­width lo­cally and in­ter­na­tion­ally.

He said a typ­i­cal ser­vice provider that uses 100mpbs link with each of the mpbs cost­ing N10,000 will be pay­ing N1 mil­lion per an­num.

“But if you are con­nected to the Nigerian lo­cal ex­change point, 70 per cent of that traf­fic will now pass through the iXPN; so, that is 70mpbs.

“So, in­stead for him to pay N10,000 per mpbs, with the 70 it’s equiv­a­lent to N700,000, we will charge maybe N50,000 and that is a sav­ing of up to N650,000 for op­er­a­tors.

“Our own price is cheaper be­cause it is lo­cal. In the cal­cu­la­tion by the In­ter­net so­ci­ety, the lo­cal ex­change point is sav­ing up to $40 mil­lion per an­num. That is what we are sav­ing for the ser­vice providers,” Rud­man said.

He added that the iXPN has no com­peti­tor but only cre­ates a lo­cal mar­ket for op­er­a­tors in­stead of go­ing abroad.

“We lo­cal­ize traf­fic so that it can be ex­changed within Nige­ria. We don’t have com­peti­tors in­ter­na­tion­ally, but if you don’t con­nect to us, you will have to route the traf­fic in­ter­na­tion­ally and pay more money.

“That is why we are en­cour­ag­ing ser­vice providers to in­ter­con­nect at lo­cal in­ter­net ex­change point so that they can ex­change their traf­fic here,” Rud­man said.

Asked how op­er­a­tors have been re­spond­ing to this, Rud­man said most of the op­er­a­tors, es­pe­cially the big­gest play­ers, are be­ing lo­cally in­ter­con­nected.

“There are still some that have not fallen in line but we are still reach­ing out to them to en­sure that all of them are con­nected and ex­change traf­fic lo­cally,” he said.

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