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Nigeria not reaping economic benefits of Internet — Rudman

Nigeria not reaping economic benefits of Internet — Rudman

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Mr. Muhammad Rudman is the Chief Executive Officer of the Internet Exchange Point of Nigeria. He speaks on the economic benefits of localising Internet traffic in this interview with IFE OGUNFUWA

What is the role of IXPN in the telecommunications industry?

Our role is to provide the physical infrastructure to interconnect all Internet service providers, telecommunications companies, educational institutions and all Internet Protocol-centric organisations to exchange local traffic locally.

 How has the progress been in achieving this goal?

Over the years, we have seen significant increment in the amount local traffic that is being exchanged and if we have to look at the size of the Internet pipe coming into Nigeria and what the service providers are actually utilising, we have realise that although we started with very insignificant amount as local traffic, it has now grown to about 25 per cent of the entire traffic of the service providers connected to the Internet exchange.

This means 25 per cent of their traffic is local while 75 per cent is international. We have come from the level of very minimum amount of traffic to that amount. Our target is that in the next two years, 50 per cent of traffic remains local within Nigeria. If you look at China for example, 80 to 90 per cent of their traffic is within China; it doesn’t go out. They have all their information hosted within China.

Before IXPN began operations, there were only VSAT service providers that used dish to connect to the Internet and SAT3. SAT3 is the submarine cable owned at that time by NITEL. Almost everybody passed traffic internationally and by the time we had the exchange point and we started connecting members, the traffic was insignificant.

Then over the years, the traffic started to build up and when we started adding content providers coming into the country, it increased the amount of local traffic.

The exchange point is actually the exchange of Internet traffic between two kinds of network. We have the eyeball networks and then content networks. Supposing you are using a network with 60 million subscribers, the network is not hosting any information with it. All the information you are getting with the network’s Internet data is not residing with the network but with international content providers like Facebook, Twitter, Yahoo, Google, etc.

The content networks and the eyeball networks meet and where they meet is called the exchange point. Google is one of our members and when you browse Google through any of the major network operators; it goes through our network to Google. That is how traffic is exchanged.

 What strategies are in place to achieve the 50 per cent local traffic target?

To achieve the 50 per cent traffic target, we will sensitise the public because many people don’t know that the technology we are talking about is actually physical infrastructure. Nigerians are consumers of bandwidth. We create content, host it outside just to import it into the country.

We are not really tapping into the economic benefits of the Internet. Rather, we are still consumers. For us to tap into that, we need to host our information locally. That is why everybody including individuals with website should understand that their website should be hosted locally, especially .ng websites.

We are also trying to sensitise the government to let it know that government data must be local. Right now, there is significant increase in government data that is hosted in Nigeria.

A lot of government data have migrated from the foreign countries back into Nigeria. The Galaxy Backbone is the company hosting their data. We are trying to attract international content providers like Facebook, Yahoo and others to ensure that their traffic remains local.

 There is an argument that hosting websites outside the country is actually cheaper. How true is this?

Hosting outside was cheaper but with the fluctuation in dollar to naira exchange rate, it costs almost the same. There was a time the dollar to naira exchange rate was very high; then it was cheaper to host locally.

What people need to understand is that we shouldn’t only consider the pricing alone. That is why we destroyed factories in Nigeria because foreign products were cheaper. People should know that there are associated costs of production in Nigeria like when you need to provide power as a business.

We all know that the cost of production in Nigeria is quite high. So we need to be patriotic enough to patronise local data centres even though it could be cheaper to host outside.

If you host your data locally, your website is easily accessible within Nigeria. If as a Nigerian company, your target audience are people within the country, why should you host your data outside the country? If you host it here, your website will be faster.

We need to understand that when you host it here, you will provide job for people by employing more hands, building more technical skills and if you host outside the skills will be developed somewhere else.

 How many companies are already connected to IXPN?

About 45 companies are connected to IXPN and we are targeting an additional 25 companies by the end of the year.

 What is discouraging companies from interconnecting through IXPN?

Right now, I don’t see the discouragement because all the major networks and service providers are interconnected except the smaller ones that are outside Lagos. For example, we had a discussion with an ISP in Adamawa that wanted to connect to the exchange point but the cost of connecting from Adamawa to Lagos is expensive.

The reason is that the cost of Right-of-Way is really expensive; fibre cuts from sabotage and road construction work also contribute to the cost. Sometimes, it is the local community that make demands before the companies are allowed to lay fibre or else they would vandalise the infrastructure.

For these reasons, cost of fibre is now expensive and if you build it at a high price, you must recoup your investment. Because the cost is high, the demand is low. Between states, only banks, government and oil companies can afford to pay to interconnect.

 What will Nigeria benefit from your partnership with Ghana Internet Exchange Point?

We have the opportunity of attracting all the West African countries because right now we have all the major service providers in Nigeria connected. We want to go beyond the shores of Nigeria and attract all the other exchanges especially the smaller ones across the region to interconnect with Nigeria. That will now give more opportunities to those countries and Nigeria.

The opportunity for Nigeria is that it will make Nigeria the hub of Internet content for the region. If you have a lot of physical interconnection within Nigeria, all the major content providers in the world right now with the increase in the size of the Internet will want to put their content closer to the end user. That is the current trend.

If the information is not closer to the end user, it means the end user will pay for that access, which will be expensive and there will be latency delay in terms of the distance. If Nigeria interconnects to most of the West African countries, it will ensure that all the major content providers will come into Nigeria. When they come into Nigeria, it means business opportunities for the data centres and the hosting companies.

If there are more businesses for the data centres, it means more employment opportunities. We need to take into consideration that Nigeria is the most populous nation in Africa and we have so much content. We are leading in terms of movies, music industry and others.

Imagine if all that content can be digitised and hosted within Nigeria. It means we can feed the entire African continent with the content. Not only that we are creating the content, we are generating revenue with the content.

 Are there plans to interconnect with other African countries?

The idea is not only to attract Ghana but other African countries. We decided to collaborate with Ghana because the country is an English-speaking country and has more in common with Nigeria.

It is like a pilot project for us to understand how it operates. Interconnecting two exchanges has never happened in Africa. The pilot will have to be with the most viable country that we have something in common. The pilot is still on and we are trying to identify the right business model.

What we want to build at the exchange point is to create regional traffic. We have international traffic that is expensive, local traffic that is cheap and regional traffic within Africa that is more expensive than local traffic but less expensive than international traffic.

The service providers will now be sieving traffic based on whether it is international, regional or local. That will create more business opportunities. Because Ghana is connected to Nigeria, any content provider that wants to host in Ghana will also have its content available in Nigeria.

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