Interconnection agreements to drive down high pricing in Africa

04 October 2012 | Kavit Majithia


High capacity prices in Africa are set to drop significantly if carriers build on the influx of internet exchanges and interconnection agreements in the region.

According to a leading industry figure, the continent’s need to establish regionalised internet hubs is starting to be met as regulators and governments begin to back such projects.

Despite an influx of connectivity from subsea cables in the region, internet companies and carriers are still plagued by extremely high prices to access capacity, hindering Africa’s development.

Referring to Africa as “the missing continent”, Henk Steenman, CTO at Dutch internet exchange company AMS-IX, believes his company’s recent agreement with subsea capacity system SEACOM, announced at Capacity Africa 2012, is a pioneering project for increased access and availability into European and US networks.

He claims increased access to these content-rich markets will mean a further reduction in high prices because of an increase in data traffic.

Steenman told Capacity: “Exchanges like these will enable content flow from Europe and the US into Africa, meaning African companies will not have to pay to get access to content from somewhere else. This will naturally have a positive effect on high capacity pricing.”

AMS-IX is presently building up its internet exchange in Mombasa, Kenya, with Steenman claiming the exchange “is working with different parties to keep traffic local and create a regionalised hub in the region”. He claimed: “Capacity prices remain high because there is a lack of cross-border connectivity, but initiatives such as these can fill such a gap.”

AMS-IX confirmed to Capacity it intended to expand such a model to other worldwide emerging markets.