Hosting Websites Locally Saves Nigeria N15 Bn Through Localisation of Internet Traffic with IXPs

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Nigeria, with the help of local Internet Exchange Points (IXPs), has saved about $40 million (N15.2 billion) through the localisation of internet traffic, that would have gone abroad.

According to a recent study by Internet Society (ISOC), the huge savings were achieved due to the growth of Internet Exchange Point of Nigeria (IXPN) peak traffic from just 300 Megabits per second (Mbps) to 125 Gbps in 2020.

The study which was titled: “Anchoring the African Internet Ecosystem: Lessons from Kenya and Nigeria’s Internet Exchange Points Growth”, marked the ISOC progress report of 2010 goal to achieve 80% local accessibility of African Internet traffic.

70% of Nigeria’s Internet Traffic localized

As of 2012, Nigeria had approximately 30% localised internet traffic. Today, nearly 70% of traffic is localized and is poised to keep increasing. The growth of localised internet traffic was driven by the rise of IXPs which are key to enable local traffic exchange and access to content online.

The number of IXP’s Point of Presence (POP) in the country increased from just one in 2012 to 8 in 2020. Nigeria’s leading IXP provider, IXPN grew from just 30 peering networks carrying 300 Mbps in 2012 to over 71 peering network carrying peak traffic of 125 Gbps in 2020.

IXPN has 7 Point of Presence (POP) in Nigeria. It has 4 in Lagos and one each in Abuja, Port-harcourt and Kano

Speaking on the growth, IXPN Chief Executive Officer, Muhammed Rudman, said the report is a testament to the good happenings in Africa, especially in Nigeria.

“The over 400 fold in the growth of local traffic is significant, which translates to about 70 per cent traffic for most of the service providers connected to IXPN. We hope to sustain this trajectory and to provide similar services to other regions within the country,” he added.

The growth of IXPN over the last 8 years was attributed to several factors. Here are some of them;

42% Internet Users

The percentage of Internet users in Nigeria has increased significantly in the last few years, from 16% in 2012 to about 42% of the population today.

There has also been a substantial increase in mobile broadband subscribers, based in part on a considerable drop in the price of data. The average cost of international IP transit decreased substantially from $450 to $27.45.

In terms of submarine cable capacity, two cables are available and two more are scheduled to be operational soon, including one owned by Google.

The increase in subscribers and the drop in the price of IP transit helped the growth of IXPN

0 to 8 Data Centres in 8 years

During the initial report in 2012, there was no data centre in Nigeria. Today there are 8 major data centres in the country. Rudman revealed that the addition of more data centres significantly helped the growth of IXPN.

He also added that the attraction of foreign content providers, especially the big players such as Google and Facebook also significantly affected its growth.

There are currently 9 foreign content providers in Nigerian. They include Akamai, Amazon Web Services, Cloudflare, Facebook, Google Caches, Google Edge PoP, Limelight, Microsoft, Netflix

Adoption of Local hosting

As of 2012, all website in Nigeria were hosted abroad as there were no data centres in the country. Today, there are about 8 data centre in the country but a significant amount of companies still host their websites abroad.

According to the Nigeria Internet Registration Association (NiRA), the country loses up to N60 billion worth of foreign exchange to other countries every year as payments for web hosting services. As of 2016, less than 2% of domain names were registered in Nigeria.

However, Rudman revealed that more Nigerian companies realising that they can host their website locally also contributed to the growth of IXPs.

“A lot of Nigerians are now hosting their servers locally and we have attracted some of the big players in Internet content into the country, such as Google, Facebook and Alkamire, and presently we are trying to bring other bigger ones to the country,”

Muhammed Rudman, Chief Executive Officer IXPN

Benefiting from COVID-19’s Digital revolution boost

Following the outbreak of the COVID-19, The digital revolution was accelerated as people began to adopt tech like video conferencing platforms for remote work.

With the internet becoming a lifeline for many people, the growth recorded by IXPN, according to the ISO study, puts Nigeria in a better position than ever before to cope with and contribute to the current digital revolution.

Speaking on the digital revolution, the Senior Director, Internet Technology and Development for the Internet Society, Michuki Mwangi, said the report shows Africa was ready but its success will depend on the collaboration of policymakers, regulators, businesses embracing IXPs and other stakeholders

“It’s clear Africa is ready to embrace the digital revolution to spur economic development. But reaching this goal will depend on our community of passionate people on the ground, policymakers, regulators and businesses embracing IXPs and working in collaboration to create these essential local traffic anchors,”

Michuki Mwangi, Senior Director, Internet Technology and Development for the Internet Society

Recommendations

For Nigeria to significantly contribute to the current digital revolution and ISO to achieve its goal of localising 80% of African Internet traffic, the report made several recommendations.

First, awareness must be raised about the benefits of local content hosting like reduced hosting cost and peering at the IXP among a broad range of stakeholders.

Also, it recommended that smaller Internet service providers (ISP) connect to their local IXPs in order to widely peer with other members and thereby increase the efficiency of their interconnections.

Similarly, It recommended aggregation of demand for backbone capacity and local content hosting to help lower costs for smaller ISPs and local content developers respectively, to help enable them to connect to their local IXPs.

In conclusion

Every year, billions of naira are lost to foreign countries, as local companies are paying millions of dollars in scarce foreign exchange to foreign hosting firms. However, with the evident growth of IXPs and increase in data centres, Nigeria can start healing the economy by saving money that will have otherwise been spent abroad.


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