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Agenda

Agenda. A view of Africa. … GDP growth in Africa is outpacing Asia. Nairobi, Kenya. Lagos, Nigeria. Johannesburg, SA. There are more middle income households in Africa than there are in India. (*KPMG ). The true size of Africa *Kai Krause. Cairo, Egypt.

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Agenda

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  1. Agenda

  2. A view of Africa …GDP growth in Africa isoutpacing Asia Nairobi, Kenya Lagos, Nigeria Johannesburg, SA There are more middle income households in Africa than there are in India. (*KPMG) The true size of Africa *Kai Krause Cairo, Egypt

  3. Myriad business opportunities • Estimated size of ICT enterprise services market • in 2013 – c. $9b • KEY DRIVERS FOR GROWTH: • Demand for connectivity and data • Continued growth in mobile sector • Mobile money • Content (media, broadcasting) • Mobile advertising set to grow

  4. South Africa as a launch pad Africa’s international bandwidth jumps to 1,479 Tbps in Dec 2012

  5. Terrestrial Fibre Increased investments by Governments and Private sector July 2012, Africa’s total inventory of terrestrial transmission networks reached 732,662km Fibre now reaches 40% of the African population 313m people were within reach of a fibre node Expected to reach 50% of population with completion of planned projects

  6. The changing landscape = IXP Opportunity

  7. Telco Environment • Key to success has been liberalisation on Telco market • SA Telco deregulated in 2008 • Dark Fibre introduced by DFA in 2009 • Several new Telco’s launched 2009 – 2012 • Teraco first neutral facility in Africa established 2009 • ISP’s begun to build own fibre networks • Submarine cables (SAT3/SAFE 2005, SEACOM 2009, EASSY 2010) • International bandwidth pricing drop (2008 – 2013) • Global Telco’s entering SA (BT, Level3, China Telecoms, Level 3 etc.) • NAPAfrica reaches over 100 members +8Gbps traffic

  8. African IXP Challenge Limited amount of active IXP’s in Africa both – only 26 IXP’s of which 18 IXP’s are active (AU – AXIS Project) Cost of Bandwidth at $50.00 per 1Mbps reduces opportunity for global new entrants – IXP donations very expensive e.g. Akamai Cross border capacity still limited and expensive therefore regional exchange points hard to motivate Majority of “eye balls” do not have technical skills or assets therefore still heavily reliant on transit Majority of countries still operate within a monopoly managed by governments Limited marketplace to obtain members – new members generally need to be convinced to let go of existing transit arrangements Existing ASN application process very slow and expensive for new entrants Larger networks hanging onto legacy transit revenues therefore generally do not join the exchange and if join polices are very selective Interconnection costs very high in non neutral data centres Interconnection costs between facilities very high ave. of $18000.00 1Gbps fibre non redundant Lack of collaboration between African IXP’s – all exchange points compete for content and members

  9. NAPAfrica Case Study Hosted in Teraco, neutral facilities – free interconnection to the exchange for all colo clients Funded by Teraco National footprint: Cape Town, Durban and Johannesburg Officially launched in early 2012 Currently peaking at over 5Gbps with more than 100 members Challenges: • Regulatory environment • Competition • Hardware costs • Skills shortage • Limited investment by international content providers

  10. Global Content Shortage • Instant marketplace opportunity: • Content Providers investment in Africa is limited; • Content Providers only able to deploy in major hubs and not multiple countries; • African IXP’s collaboration is limited – AF-IX key; • Content and “eye-ball” operators to collaborate; • Open distribution of content across borders is key

  11. African Transit Landscape $120.00 - FIBRE CROSS CONNECT $120.00 - FIBRE CROSS CONNECT $70.00 PER 1MPBS $70.00 PER 1MPBS 13 13 13

  12. African IXP Effect: Neutral Facilities Needed $0.00 PER CONNECTION $0.00 PER CONNECTION $00.00 PER CONNECTION $20.00 PER Fibre cross connect $20.00 PER Fibre cross connect 14 14

  13. NAPAfrica: Member Case Study 15

  14. African Requirements • For an IXP to be successful and sustainable it needs to be stable, reliable, and accessible by any network that fulfils the technical participation requirements. This means: • Standard, open and unrestricted interconnection policies - Everybody plays by the same rules. • Always-on, reliable, open hosting facility and infrastructure - Nobody wants content that is not always available. • Reliable, high quality structured cabling systems and procedures - Physical interconnection in the same facility should take hours, not weeks. • Multiple peers and unrestricted market-place – Carriers, ISPs, CDNs, Banks, Enterprises – An exchange cannot grow without peering members. • Scalable space and infrastructure for content growth. Moving a successful exchange is a complex, and costly exercise. Always plan for growth. • Effectively, the definition of a vendor neutral datacentreclearly illustrates that neutral facilities are a perfect fit for IXP deployment. 16

  15. Peering is Key: over 26 internet exchange points in Africa

  16. Thank you michele@teraco.co.za

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