• Thursday, November 30, 2023
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High routing cost compel telcos to connect to local exchange


The exorbitant cost associated with routing local internet traffic internationally and the need to enhance the quality of broadband services is compelling telecommunications operators in Nigeria to interconnect their internet traffic to the Internet Exchange Point of Nigeria (IXPN), BusinessDay can now reveal.

Established by the Obasanjo administration, this physical infrastructure is designed to facilitate the keeping of local internet traffic within the country’s telecom network and foster digital inclusion. A few years back many telecoms operators and Internet Service Providers (ISPs) were very reluctant to connect to the local exchange.

Telecoms operators had earlier complained that “house keeping issues” and security of the infrastructure were some of the reasons hindering them from connecting to the IXPN. But it seems that the cost reduction benefits accrued from connecting to the infrastructure has become a major attraction for operators. BusinessDay learnt that four of the biggest mobile operator – South Africa’s MTN, United Arab Emirates (UAE), Etisalat, India’s Airtel and second national operator, Globacom have all connected their internet points to the N35 million local internet exchange. “There is no gain in taking internet traffic out of the country just to routed back through an international link.

“It is too costly for the consumers, telecom operators and the internet experience is not desirable. It is only natural for us (operators) to connect to the IXP”, Johnnie Coleman, Chief Technical Officer (CTO), Main One Cable Company told BusinessDay in an interview. It is estimated that the IXPN currently saves Nigeria $7.2 million annually. This figure represent transit charges paid to upstream (foreign) ISPs. Studies conducted by the Internet Society, a global body which promotes the use of the Internet for the benefit of all people throughout the world, has shown that the infrastructure saves Nigerian operators over US$1 million in connectivity costs per year.

This huge financial resource, according to analysts could be redirected towards the provision of better local infrastructure and innovative services to customers. Speaking in an interview, Muhammed Rudman, chief executive officer of IXPN, said the infrastructure has made significant impact on the entire internet ecosystem as internet traffic has increased tremendously by about 4,000 percent. “We are exchanging right now at peak bandwidth periods of about 2 Gigabits per second local Internet traffic which is quite huge and it is increasing constantly. Even with the drop of bandwidth in Lagos to $300 per megabits per second (Mbps), due to the landing of underwater cables, you will realise that we are talking about 2,000 bits per second.

“So multiply that by $300, it will come to about $600,000. So we are saving the country $600,000 monthly because each ISP that is paying us, is paying us averagely about $5 – $6 per Megabits per second.” Karen Rose, senior director of development strategy, Internet Society is of the view that IXPs offer more than just cost and performance benefits. “IXPs serve as a catalyst to dramatically enrich the internet ecosystem, opening a new world of possibilities with comparably minimal investment”, she added. It was gathered that the development of the IXP has favored local content development in Nigeria, with initiatives such as Google’s network build to Nigeria.

By virtue of this connection, Nigerian ISPs and telecoms operators can receive Google content (YouTube videos) locally rather than over international capacity.