Consumer Experience Dampened as 147 ISPs Route Internet Traffic Abroad

The quality of consumer experience in broadband  delivery is being dampened by the inability of Internet Service Providers (ISPs), especially those operating outside Lagos, Abuja and PortHarcourt, to connect their internet traffic into the country’s multi-million naira Internet Exchange Point (IXP), industry observers have said.

An IXP is a physical infrastructure that allows several ISPs and network operators to exchange traffic among their networks by means of mutual peering agreements which allow traffic to be exchanged at no cost.

Due to the lack of requisite national fibre transmission to make the connection with IXPs in the nation’s major cities, many ISPs are compelled to route their local traffic directly to foreign internet hubs. Market observers are of the view that sending domestic internet traffic via international gateways can add a significant amount of time to the delivery of internet traffic, as well as additional cost.

“This is not just because of the extra distance that the traffic travels, but also because of the number of extra hops that the traffic must traverse to get from one ISP to another”, said Michael Kende, co-head, global regulation and policy group at Analysys Mason, a research firm. According to Kende, this round-trip can delay the adoption and usage of sophisticated internet service offerings such as Voice over Internet Protocol (VoIP), video streaming and Internet Protocol Television (IPTV), which suffer the most from high latency.

Latency is a term used to indicate any kind of delay which occurs in data communication over a network. With Nigeria being home to about 184 licensed ISPs, only 37 are currently connected to the local IXPs.

The country has three IXPs, situated in Lagos, Port Harcourt and Abuja. The Federal Government is expected to commission two new IXPs in Kano and Enugu before the end of the year.

“Introducing an international transmission round-trip for domestic traffic exchange is intrinsically inefficient and adds cost to the internet services”, said Kende. According to him, this cost is ultimately passed on to end users in the shape of high access fees, and also “negatively impacts the company’s ability to make capital investments in their infrastructure, thereby impacting the adoption and usage of Internet services.”

Fixed-line broadband internet subscriptions in the country cost an average of 39 percent of average income, with the same figure for mobile broadband bundles hovering around 13 percent, says Alliance for Affordable Internet (A4AI). In Nigeria, IXPN localises 300Mbit/s of peak traffic with corresponding reductions in latency, and allows national telecoms operators to save over $1 million per year on international connectivity, according to a report by Internet Society.

Speaking with technology journalists in Lagos recently, Muhammed Rudman, chief executive officer of IXPN, said though there have been significant increase in the traffic that is routed locally, “they are not yet sufficient to impact hugely on the country’s economy.”

Nigeria has about four submarine cables systems on the coastline, including MainOne, Glo-1, West African Cable System (WACS) and NITEL’s SAT3, delivering about  11 Terabytes of international bandwidth capacity.

That sort of capacity can guarantee improved local internet traffic, but Rudman insists that increase in access charge, multiple taxation, inordinate Right of Way (RoW) levies for fibre deployment are hindering ISPs from routing their traffic locally.

He explained that the cost of internet access is high because some ISPs still route traffic abroad, stressing that many operators host their contents on servers outside Nigeria because it is easier, less cumbersome and in most cases, cheaper.

A source in the industry told BusinessDay that some ISPs still rely on Internet hubs located outside the shores of the country, in places like the United States of America (USA) the UK, Hong Kong, Israel and some parts of Europe. According to him, this means that Internet traffic from Nigeria goes directly to these foreign hubs, thereby causing serious capital flight in form of transit charges paid to foreign ISPs by some of their Nigerian counterparts.

Lending his view, Lanre Ajayi, president, Asoociation of Telecommunications Companies of Nigeria (ATCON), said majority of the ISPs, especially the big players are connected to the exchange. He said that due to the nation’s poor operating environment, a large number of ISPs are out of business. According to Ajayi, there is need for government to create a favourable environment for business growth. He  adds that this is critical to wooing investors, especially at a time when the country intends to harness its broadband internet potentials.

According Internet Society, one of the emerging markets where IXPs have enabled the economy to grow well is Kenya. The Internet Society study noted that there have been huge successes in Kenya, where the country’s Internet Exchange Point (KIXP) currently localises more than 1Gbit/s of peak traffic, dramatically reducing latency (from 200-600ms to 2-10ms on average), while allowing ISPs to save almost $1.5 million per year on international connectivity. The study said the IXP also increases mobile data revenues by an estimated $6 million for operators, having generated at least an additional traffic 100Mbit/s per year; helps the localisation of content in the country from Google; is critical to raising government tax revenues and increasingly acts as a regional hub for traffic from neighboring countries.

Ben Uzor