Internet users yet to enjoy cost cuts

The financial gains of exchanging Internet traffic locally are yet to translate to lower rates for consumers as Kenyan content generators continue to shy away from hosting their data locally.

According to research carried out by Analysis Mason earlier this year, Internet service providers (ISPs) are increasingly utilising the Kenya Internet Exchange Point (KIXP) to connect to each other, saving millions in the process.

About 25 ISPs are currently exchanging traffic at KIXP, a process known as peering, and saving an estimated Sh12 million annually, while increased mobile data usage associated with KIXP has led to additional earnings worth Sh504 million ($16 million) annually.

“Overall, the IXPs have had the direct effect of lowering the operating costs for local ISPs while increasing the traffic, and where relevant corresponding revenues,” reads the report.

However, industry players claim that the savings are yet to reach the critical mass required to directly precipitate lower connectivity rates for end users. They reckon that the savings would be much higher if content providers hosted more of their data locally.

“When computing our charges for data, we take into account our entire cost base, of which savings from routing costs form a relatively small component,” said Safaricom CEO Bob Collymore.

He said these savings would likely remain insignificant until major generators of Internet traffic, such as social media platforms and webmail services, start hosting their content here.

Safaricom has the capacity to route .85 gigabytes per second (Gbps) of traffic through KIXP but routes 0.5 Gbps. This translates to about 16 per cent of its total Internet traffic. AccessKenya routes three per cent of its traffic through KIXP.

“Consumers download content much faster if it has been peered locally. They save time and it encourages them to access more content on the Internet,” said the ISOC regional development manager and KIXP chief technical officer, Mr Michuki Mwangi.

Early in Kenya’s Internet evolution, ISPs decided to purchase international transit in order to access the Internet.

In such a system, an email sent by a Safaricom user in Nairobi would be routed to an international carrier before it eventually reached the recipient on the Orange network, also in Nairobi. The ISPs incurred heavy costs in international transit fees.