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Sep 21, 2012

Competing treaties, regional standards hampering connectivity

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Multiple cross-border connections and treaties should be used to ensure a fair price for interconnectivity and Internet-traffic transit, while regional blocs in Africa should standardise pricing regimes for Internet traffic, said a number of Internet terrestrial connectivity specialists at advocacy group Internet Society’s third African Peering and Interconnectivity Forum last month.

Common markets had shared business interests in supplying cross-border connectivity demand and the role that incumbent operators play in shaping increased connectivity among African countries was significant, they said.

Partnerships between terrestrial providers should be established to improve piecemeal procurement economics and to provide integrated service-level agreements across territories. Quality and price are determining factors for both African and international companies exploring opportunities on the continent, said undersea cable and network operator Seacom head of business development Aidan Baigrie.

“Affordability unlocks demand. It has been demonstrated between 2009 and 2012 that as prices decrease, elasticity drives up demand. There have been multiple price declines in Africa during that period, but the business case for telecommunications in Africa remained strong,” he said.

However, regulation was essential to create the necessary level of peering to enable affordable data transfers and single-agreement regimes. Africa should strive to act as a union to provide standard regulations and not replicate separate initiatives in different countries, driving up prices and creating bottlenecks between countries, he explained.

“Key to improving African connectivity is the fostering of connectivity between different telecommunications entities and operators, as well as establish carrier-neutral data centres, Internet exchange points for local peering and intelligent Internet Protocol networks.

“Local peering systems will drive up regional connectivity, enabling governments to leverage this to provide e-services according to international best practices,” advocated Baigrie.

State policy alignment was needed to establish a clear vision and an action plan for all players, including incumbents and regulators. The role of affordable pricing must also be taken into account because the potential demand that could be generated was large, he said.

There was a need to reduce terrestrial bandwidth costs because of the significant growth in internationally connected cable capacity to Africa, but this was not being used, owing to the hefty prices of terrestrial cross-border connections, which cost the continent about $12-billion in 2010.

“Sixteen countries in Africa are landlocked, but networks in place can benefit from providing greater access to subsea cables for Internet service providers in those countries and provide redundancy for those service providers,” said technology advisory firm Analysys Mason partner Michael Kende.

“A challenge is the limited capacity in Africa and the need to increase the availability of and access to terrestrial cross-border fibre. However, incumbent operators often object to creating these connections. This is where an independent regulator would be immune to lobbying by incumbent operators and craft regulations that benefit the whole industry, as well as support principles of open access in industry to reduce costs,” he explained.

“Transit costs across neighbours to access undersea cables add up for small economies and a backhaul fibre construction projects are difficult to justify economically, especially for the small capacities required. However, deploying terrestrial fibre backbones to enable mobile base station to base station connectivity is viable and can provide excess capacity for use as national long-haul or transit to neighbours. This solves the problems of connecting small towns and connecting to neighbours,” said Seacom head of product strategy Suveer Ramdhani.

Edited by: Martin Zhuwakinyu
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