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Why Internet exchange points suffer low patronage in Nigeria

By Adeyemi Adepetun
10 February 2015   |   9:21 pm
• Service providers still route traffic abroad • Only 37 out of 184 operators connected • ATCON claims harsh business clime crippling members THERE are strong indications that Nigeria’s multi-million dollar Internet Exchange Points (IXPs) may continue to experience low patronage, as majority of the Internet Service Providers (ISPs) in the country are not yet…


• Service providers still route traffic abroad

• Only 37 out of 184 operators connected

• ATCON claims harsh business clime crippling members

THERE are strong indications that Nigeria’s multi-million dollar Internet Exchange Points (IXPs) may continue to experience low patronage, as majority of the Internet Service Providers (ISPs) in the country are not yet connected.

  According to The Guardian findings, with Nigeria home to about 184 ISPs, only 37 are currently connected to the IXPs. The country currently has three IXPs, situated in Lagos, Port Harcourt and Abuja.

   The Guardian learnt that while the federal government would commission two new ones in Kano and Enugu before the end of the year, the established ones cost as much as N35 million each.

  A reliable source in the industry told The Guardian that some ISPs in the country still depended on Internet hubs that were located outside the country, in places like the United States (U.S), Israel and some parts of Europe.

  According to him, this meant that Internet traffic from Nigeria went directly to the foreign hubs thereby causing serious capital flight inform of transit charges paid to foreign ISPs by some of their Nigerian counterparts.

  It will be recalled that the need to ensure Nigerians have access to reasonably priced Internet connection, increased broadband penetration as well as keeping Nigeria’s Internet traffic local propelled the idea of the IXPs by former President Olusegun Obasanjo during his first term as the president of the country.    

  An IXP is a physical infrastructure through which ISPs exchange Internet traffic between their networks (autonomous systems).

  The function of an IXP is to reduce the portion of an ISP’s traffic, which must be delivered via their upstream transit providers, thereby reducing the average per-bit delivery cost of their service. Furthermore, the increased number of paths learned through the IXP improves routing efficiency and fault-tolerance.   

  Indeed, analysts have stressed that one of the most cost effective ways of managing Internet traffic in any country is to ensure is kept within the nation. They noted that that was to avoid the imbalance in the global telecommunications connectivity that forced some countries to send local traffic designed for local destinations through international hubs located outside their nations thereby attracting extra cost and consuming more international bandwidth.

  According to them, this meant that that facility would save the nation some foreign exchange if fully implemented and ensure immediate drop in connectivity costs as well as bandwidth costs.

  Today, Nigeria has about 78 million of its population connected to the Internet, but majority of the traffic are routed abroad before they are returned to the country, mostly through the narrow band, as broadband penetration, which is expected to guarantee faster Internet connectivity is still meagre at about eight per cent.

  As such, this is responsible most times for the slow Internet speed delivered to consumers by the operators, due to poor latency and connection speed.

  Speaking to The Guardian, the Chief Executive Officer of IXP of Nigeria (IXPN), Muhammed Rudman, said that though there had been significant increase in the traffic that was routed locally, “but they are not yet sufficient to impact hugely on the country’s economy.”

  Rudman, who said that the impact, would be felt in another two years if the needed environment was created and the push for improved ubiquitous broadband was sustained as had been canvassed by the Ministry of Communications Technology and the Nigerian Communications Commission (NCC).  

  Indeed, Nigeria has about four submarine cables including MainOne, Glo1, WACS and SAT3 with 11 Terabytes bandwidth capacity that can guarantee improved local Internet Traffic, but the IXPN boss said that challenges including increase in access charge, multiple taxation, exorbitant Right of Way (RoW) levies for fibre deployment were affecting operators and subsequently limited ISPs power to route traffic locally.

  He explained that the cost of assessing the Internet was still high in Nigeria because some ISPs still routed traffic abroad; stressing that operators hosted their contents on servers outside Nigeria because it was easier, less cumbersome and at times cheaper.

  While, Africa and indeed Nigeria still struggle to create a balance in bridging Internet cost, a study, commissioned by the Internet Society and conducted by independent strategy and research consultancy, Analysys Mason, noted that IXPs had played a key role in the development of an advanced Internet ecosystem across North America, Europe and Asia.

  The report said that the benefits of IXPs to ISPs and the country’s economy as a whole was huge, including among others, lower international capacity costs, along with an improved quality of service resulting in additional revenues, with a total value worth of millions of dollars per year.

  Like Rudwan stated, the Internet Society’s report observed that ISPs found it cost-effective to use their international Internet connections to exchange domestic traffic, a process often known as ‘tromboning.’

  According to the study, Tromboning is the result of unilateral action, with each ISP independently concluding that it is more cost-effective to use its international connections for domestic exchange than to connect to every other ISP separately. It, however, said that the use of international capacity for domestic traffic was expensive, and this tromboning could be eliminated, with cost savings, if ISPs adopted a cooperative approach to create a local IXP where domestic traffic could be exchanged.   

  The IXPN boss, who confirmed that only 37 ISPs were connected to the IXP, said that ordinarily, ISPs that connected to the exchange point would save about 20 per cent of their bandwidth cost.

  Rudman also urged government to find a way to lower fibre cost and transmission line in Nigeria. “For example, taking content from Lagos to Enugu and back to Lagos is high. People host content abroad because it is more convenient and cheaper.”

  He also posited that government must provide a way to improve electricity, saying that without that, it would become a problem to grow. 

  Rudman further added that some of the challenges for low patronage had been due to some poor government policies, lack of awareness, poor content development, high cost of fibre deployment and transmission, among others.

  He added that Nigeria must be sensitised on local hosting, saying that there were clear advantages on that. He also believed that government policies must ensure that all sites and content were hosted locally, especially for security reasons.  

  Speaking on the issue, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Lanre Ajayi said that majority of the ISPs, especially the big players are connected to the exchange. 

  He also added that due to the vicissitudes of the business environment, larger percentage of them was no more in operation.

  According to Ajayi, there was need for government to create a favourable environment for business growth, stressing that such was critical to wooing investors into the economy, especially now that the country plans to develop its broadband potential.

  Also, Kehinde Aluko, a telecoms expert noted that ISPs might continue to shun the local exchanges because of the country’s under-developed distribution networks, which included national long distance fibre, metro fibre and last mile connectivity, which constituted huge challenge, especially because of the cost implications.

  According Internet Society, one of the emerging markets where IXPs had enabled the economy to grow well was Kenya.

  The Internet Society study noted that there had been huge successes in Kenya, where the country’s Internet Exchange Point (KIXP) currently localised more than 1Gbit/s of peak traffic, dramatically reducing latency (from 200-600ms to two-10ms on average), while allowing ISPs to save almost $1.5 million per year on international connectivity.

  The study said that the IXP also increased mobile data revenues by an estimated $6 million for operators having generated at least an additional traffic 100Mbit/s per year, helped the localisation of content in the country from Google, was critical to raising government tax revenues and increasingly acts as a regional hub for traffic from neighbouring countries.  

Another report, which focused on Rwanda, noted that the country, which had just four licensed ISPs as at 2005, was ranked first place in Africa, in terms of broadband downloads speeds and 62nd globally, with a speed of 7.88 megabits per second (Mbit/s) as at two years ago.

  However, information has it that with the completion of the government sponsored fibre-optic cable expansion project in 2011, telecommunication services across the country have improved tremendously.

  An unconfirmed report claimed that Nigeria had overtaken South Africa in terms of Internet speed in less than 11 years after reforming its communications networks and market. The report also revealed that Nigeria had an average connection speed of 322kbps with a peak rate of 5674kbps, while South Africa’s average speed was faster at 496kbps, the country’s peak speed was only half that of Nigeria, at 2172kbps.

  Speaking to The Guardian, an Executive Director with IPNX, a leading ISP, Ifeanyi Amah said that it was an advantage to be connected locally, stressing that routing abroad increased latency rate and a times made service slow.

  Amah, who said that Internet speed in Nigeria was based on specific operator’s operations speed, noted increased and improved transmission line in the country would ensure high speed service delivery.

  He explained that routing abroad was like wanting to connect GTB site through MTN platform, but the ISP still first took the traffic to an Internet hub to places like in London before it was returned to the country, “this is why service a times are slow because it consumes more bandwidth.

An official of a Kwara based ISP, not yet connected to the country’s ISP, who simply gave his name as Daniel, but wouldn’t want the name of his firm mentioned  lamented that it is still challenging to route traffic locally because of poor transmission network.

    “When I say transmission, I mean that the concentrations of regulators are still to areas considered very lucrative for business. They are yet to see Ilorin and the need to have transmission line here. Here, we still route from Europe. It still cost more to route from Ilorin to Abuja or Lagos and back because of poor infrastructure. Though more bandwidths are consumed, but it appears to be convenient for us, at least for now. But I see us connecting to Nigeria’s IXP as soon as business environment improves”, he stated.

     According to him, most ISPs are out of business because of poor infrastructure, especially power, adding that the Universal Access Service License granted by NCC to some big players like MTN, Airtel, Globacom, Etisalat and others have also impacted on the fortunes of ISPs and led to the collapse of many of them.

    At the commissioning of the Lagos hub in 2011, IXPN Chairman, Chief Chima Onyekwere had said that the key purpose of such infrastructure was to allow networks to interconnect through the exchange.

 “In effect, the benefits to all the networks or operators are a reduction in costs, latency and bandwidth typically. Normally traffic passing through an exchange is not billed by any party while traffic through an operator is. Without much ado, we would like to point out that prior to the establishment of the IXPN exchange of traffic was routed through foreign countries. This is an inefficient traffic process until this development”, he said.