Nigeria eyes Africa’s internet exchange point’s number one spot by 2015

By Olubunmi Adeniyi

Lagos February 13, 2013: Nigeria is pursuing an ambition to move from its current third place behind South Africa and Kenya to become Africa’s number one internet exchange point (IXP) by 2015.

Managing Director, Internet Exchange Point Nigeria (IXPN), Muhammed Rudman, told Technology Times in an exclusive interview on Tuesday in Lagos that the exchange that enables routing of local internet traffic within Nigeria has now connected more internet service providers (ISPs) and phone companies to bring cost savings and other benefits to the internet community in Nigeria.

According to a report by the Internet Society (ISOC), South Africa leads the table as number one IXP in Africa followed by Kenya with Nigeria occupying the third place as at 2012.

Rudman says that 36 companies including the Big Four GSM networks counting over 100 million active phone lines are now connected to the IXP in Nigeria to enable them leverage the benefits of local routing of their internet traffic and offer better service to end users across the country. 

Nigeria plans to site one IXP across the six geopolitical zones while several collaborative initiatives are underway to improve Nigeria’s ranking among African IXPs that are bringing cost savings, efficiency and improved user experience to their internet ecosystem, Rudman told Technology Times.

According to an independent study by Analysys Mason commissioned by the Internet Society (ISOC), a non-profit organisation that promotes Internet-related standards, education and policy, and a key independent source on these issues, has shown that IXPs continue to deliver benefits to the Nigerian internet community and several economies across Africa.  

The study reports that, “In Nigeria, the Internet Exchange Point of Nigeria (IXPN) currently localises 300Mbit/s of peak traffic  with corresponding reductions in latency, and allows national operators to save  over $1 million per  year on international connectivity. The presence of the IXP induced Google to place a cache in Nigeria  as the first step in plans to build out Google infrastructure to Lagos, and is at the centre of a partnership to improve communications between universities.  The IXP also  helped  repatriate previously externalised financial platforms for online banking services.”

It further notes that, “Overall, the IXPs  have  had the direct effect of lowering the operating costs for local ISPs, while increasing the  traffic, and where relevant  corresponding revenues, of ISPs, with further benefits for those sectors that have incorporated the IXP  in their delivery of services, notably the revenue authority in Kenya, and educational and banking sectors in Nigeria. Finally,  it can be expected that over time, together with the decrease of  international bandwidth costs, the IXPs will help reduce Internet access tariffs and result in increased Internet penetration and usage.”

The ISOC survey indicates that Nigeria is in a strong position with respect to Internet access and usage, which is a reflection of a number of independent variables including a positive macroeconomic environment led by a widely respected regulator; a significant and increasing amount of international capacity as well as a strong and competitive mobile sector.

It also underscores the positive impact of IXPN in this instance because its success feeds off these other variables and also helps to fuel them.

According to the report, an IXP helps to deliver the benefits of liberalisation, lower prices and greater usage which in turn can provide support and credibility for the efforts to liberalize and develop the sector

The IXP in Nigeria was established in 2006 in Lagos as a neutral exchange, with the stated objective of reducing reliance on international transit for exchanging local traffic between members and to improve efficiency of operations and communication.
Today, IXPN aims at becoming a regional hub for West African countries, and a one-stop-shop company for content and service providers, which will necessitate removing the current restriction on allowing regional traffic to be exchanged at the IXP.

Also in pursuing its goal, ISOC discloses that the IXPN has largely been successful in reducing, if not eliminating, tromboning among its members.

“The small ISPs we interviewed state that all of their local traffic is now exchanged at the IXPN, while larger ISPs who belong to IXPN estimate that most of their local traffic is exchanged at IXP, while the rest is exchanged privately”, according to ISOC.
Also on the core benefits of NIXP, the Society notes that all IXP members have significant reduction in latency for access to local content, typically from 200-400ms without the IXP to between 10ms and low as a few milliseconds with the IXP.

In terms of the value of international routes , ISOC explains that ISPs are today typically paying in the range of $250-400 per megabits of traffic per month for international transit (the differences in values for wholesale services reflect a number of differences between buyer such as traffic volume, route, and use of self-owned capacity).

“Using an average cost of $300 per Mbit/s for international connectivity, the wholesale savings of exchanging 300Mbits/s at IXPN instead of using international transit to trombone the traffic is $1,080,000 per year,” ISOC says.

While giving this trend , the Society believes  that the benefits would continue to increase as existing members increase  their use of IXPN for all their local traffic and as additional members such as the  mobile operators join and begin routing traffic through IXPN.

ISOC states further that the Google’s presence and its potential in the Nigerian market is yet to be realized, given that some capacity constraints on the link between Google servers and the main data room of the IXP are soon to be alleviated.

According to the report, the presence of Google has been made possible by the presence of the IXPN, which offered a simple and direct access to a multitude of ISPs for Google, through installation, adding that the IXPN has an active impact in the areas of education and e-payment system in Nigeria.

“For example, the Eko-Konnect project (Lagos Higher Education Connectivity Project) launched at the end of 2009, saw a fast development phase, the linking of the University of Lagos, the Federal College of Education (Technical), the Yaba College of Technology and the Lagos University Teaching Hospital,” ISOC adds.