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Direct peering, cost as roadblocks to telecom development- experts

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They were reacting to Nigeria CommunicationsWeek investigations that revealed that GSM operators are flouting Nigerian Communications Commission’s (NCC) guideline on the establishment of interconnect clearing houses, where telcos are mandated to route at least 10% of their traffic through the clearing houses.


Stakeholders in the country’s telecommunications ecosystem have identified direct peering among service providers as well as high cost of national transmission link as major obstacles to the development of telecommunications.

Direct peering is a business model where operators providing services or content exchange such service or content directly without going through a licensed third party platform.

They were reacting to Nigeria CommunicationsWeek investigations that revealed that GSM operators are flouting Nigerian Communications Commission’s (NCC) guideline on the establishment of interconnect clearing houses, where telcos are mandated to route at least 10% of their traffic through the clearing houses.

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As at today, most of the telcos are not reaching the mandated volume rather they are routing mostly through direct peering.More so, it was gathered that efforts to encourage local hosting of internet content in the country are being frustrated by high cost charged on provision of connectivity services to commercial data centres especially for content providers outside of Lagos.

For instance, universities and others that have digitized contents who are located in the north, south-east among others and intend to host them in data centres in Lagos are charged as high as 400% compared to offering them connectivity to the internet which enables them to host it outside of the country.

The implication of this scenario is that since it is far cheaper for them to get connected to the internet than data centres in Nigeria they prefer to host their servers out of the country which requires only connectivity to the internet, thereby endangering the survival of data centres as well as federal government efforts to encourage local hosting aimed at keeping local internet traffic local.

Ike Nnamani, chief executive officer, Medallion, explained that direct peering in voice interconnectivity is allowed by law and that the two options co-exist for the growth of the industry.

He urged operators to see the bigger picture of growth and survival of the industry which will enhance the contributions of the sector to the GDP of the country.
Nigeria CommunicationsWeek investigations also revealed that direct peering is happening between content giant Google and some GSM operators which see them exchanging internet traffic directly without going through Internet exchange point Nigeria.

This arrangement denies clearing exchange of revenue they would have earned if such traffics were routed through their platforms.

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Reacting to connection to data centres, Mohammed Rudman, managing director, Internet Exchange Point of Nigeria (IXPN), said: “For the information and communications technology to flourish especially in data centre and local hosting business, cost of in-country connection must be much cheaper than international connectivity. If all the telecommunications operators are interconnected at the various commercial data centres in the country, the cost of connecting universities and others located outside of Lagos to the data centres for them to host their servers locally will be reduced.”

He noted: Chinese content is in China, Indian content is in India and Nigerian content should be in Nigeria, this could be realized if the country is well interconnected through the various commercial data centres, telcos and exchange point.”

Mohammed however, urged relevant government agencies to engage telcos on the way forward to easy interconnectivity issues as well as sharing of fibre optic links just the way it is done in the colocation of masts, so that the industry could start experiencing the needed growth and development.


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