Round the world and back
Emails sent and received in Africa typically leave the sender for a long journey outside the continent, usually to Europe, America or even Asia before returning to the inbox of the intended recipient around the corner. Locally-relevant media content also takes a similar trajectory, with queries going outside the continent when a user wants to visit a webpage, listen to a podcast, or watch a local video. Content providers serving Africa usually find it easier to host their content outside the continent due to infrastructure, security and cost reasons.
The process of routing traffic outside the continent puts more costs on Internet service providers and delays content delivery to the region by approximately 150milliseconds which further compromises the user experience. A study commissioned by the Internet Society in Rwanda discovered that a local content developer achieved a savings of only USD 111 per annum on hosting overseas, but this cost Rwandan ISPs about USD 13,500 in transit costs to deliver the content to local users.
A rising continent
For a continent described as fast growing, such data delays are starting to add up. In less than two decades, the African narrative has flipped on its head. From the “hopeless” plotline embraced in 2000, the African continent has undergone an incredible transformation in several key indicators. While large portions of the continent’s 1.2 billion people live in poverty, many of Africa’s 54 nations have made significant progress in health, education and standard of living. Over the past ten years, real income per person has increased by more than 30%, whereas in the previous 20 years it shrank by nearly 10%. Over the next decade its GDP is expected to rise by an average of 6% a year, not least thanks to foreign direct investment. FDI flows continue to grow, with the biggest boost coming to countries like Kenya and South Africa, while West Africa outpaced other regions as the leading recipient on the continent, according to an Ernst and Young report.
This changing narrative is more than a resource boom. Africa may have benefited from the surge in commodity prices over the last decade but economic growth is starting to come from other places. The most resource-intensive economies are working hard to diversify. Prior to the oil price crash in 2015 and the resulting recession in Nigeria, the economy had achieved a steady growth of 5% for about 3 years. This growth was not enabled by the usual suspect; oil exports. With the stagnation of the Nigerian oil industry, growth has surprisingly come from technology, construction and financial services. The Services sector now represents 60% of Nigeria’s GDP.
According to the McKinsey Global Institute’s 2016 Report, Africa’s overall GDP growth averaged just 3.3 percent, between 2010 and 2015, considerably weaker than 4.9 percent a year between 2000 and 2008. But this growth hid a marked divergence; oil exporters hit by the decline in oil prices and the political turmoil of the Arab Spring (Egypt, Libya and Tunisia) experienced a slowed growth rate, from 7.3% to 4.0%. For the rest of Africa, growth actually accelerated to 4.4 percent in 2010 to 2015 from 4.1 percent in 2000 to 2010.
Technology and regional trade
There is one way of boosting intra-regional trade, economic growth and development: domestic technology. Unlike other continents, Africa has lost on this opportunity for growth, with intra-regional trade quoted at just 18% in 2014; Europe, for example had 69% of exports to other countries on the continent, Asia had 52% and North America had 50%.
Smartphone adoption is starting to drive the digital revolution in Africa, leveraging the power of mobile and metro infrastructure networks and the influx of submarine cables to transform services in commerce, health, education, agriculture and energy. With an effective enabling environment, this digital revolution can be pervasive across African countries, connecting more people on the continent and boosting more effective trade. Apps such as M-Farm, which connects buyers with farmers and enable farmers to sell goods at the correct market value, can allow sellers of natural commodities in Jos to connect with buyers in Kinshasa. Applications like M-Pesa, which transformed the entire trading and economic landscape of Kenya; payment gateways like Interswitch, eTranzact and Paga and eCommerce platforms like Konga are examples of how the internet is fueling trade across the continent.
The silver bullet
In order for the continent to continue to reap the benefits of the enormous investment in telecoms over the last ten years, especially in terms of intercontinental connectivity and terrestrial fibre networks (submarine cable investment is over USD3.8 billion and terrestrial networks have seen over USD8 billion of investment), the Internet experience of end users must be improved. How can we improve the internet experience for users? How can we maximize the connectedness of the internet while improving quality of service and reducing transmission costs? How can we stimulate interconnections and encourage local traffic exchange between content providers, networks and users within the continent?
An effective way is the domiciliation of locally-relevant content on the continent. Across the continent, accessing Google platforms have become faster recently as a result of its local hosting strategies. With a click, you can access the most updated traffic map, search results and even play videos without buffering. This is only possible because Google has placed hundreds of thousands of “cache servers”; servers strategically hosted with ISPs around the world to improve end user performance. These servers provide users in these countries with the best experience as popular and relevant content from one of the world’s largest content providers is now available to them at previously unfathomable speeds. This localization and interconnection has seen local traffic by a few telcos jump from less than 3MBs to over 50MBPS in less than two weeks!
Local content is key
While caching may seem revolutionary to many, it pales in comparison to the effect that fully local data centers and locally-hosted content will have on the internet experience of end users. The data center that will power the digital economy in a region must be as close to endpoints as possible to ensure reduced latency. Local data centers (called edge data centers) guarantee lower bandwidth costs, quicker access to more content providers and carriers, local peering and lower latency for local markets. For a continent on the rise, local data centers provide access to resources that would otherwise not be accessible. To make good decisions, Africans need access to the best content.
The success of the mobile payment and eCommerce platforms in Africa which enabled significant growth in trade was maintained by fast connectivity. For online shoppers; speed is critical. A web traffic study in 2012 discovered that 47% of consumers expect a web page to load in 2 seconds or less; 40% abandon a website that takes more than 3 seconds to load. Online speed and latency continues to be the engine that will make or mar continental commerce.
Local data centers and internet exchange points will enable online efficiency to overcome these latency problems. Without IXPs, the internet will not function efficiently, as the different networks need a ‘meet-me’ point to directly interconnect with every other network and exchange traffic. As vital enablers of the internet ecosystem, IXPs have increasingly been adopted by nations across the world, with about 350 globally. Africa has significantly less IXPs than other countries; 21 of its 51 countries have IXPs. The increased influx of global content providers and international blue chip organizations with local data hosting requirements to the continent also makes a strong case for an interconnection service, to provide reliable high speed connectivity platform for users to access locally hosted content without the impact to user experience characterized by content round tripping.
Connecting the dots
Giving the importance of traffic growth as a useful indicator of the health of the entire Internet ecosystem, MainOne has dedicated itself to building the first Internet hub in West Africa, with a new interconnection solution by its data center subsidiary MDXi dubbed “Open-Connect”. Open-Connect facilitates increased interconnection, collaboration and peering for customers within its data center.
MainOne has aggressively created an enabling ecosystem for domestic internet via infrastructure investments, partnerships and enabling most of the bandwidth-hungry tech start-ups in Nigeria and Ghana with bandwidth sponsorships. In partnership with the Lagos State Government and the Co-Creation Hub, MainOne also laid fibre infrastructure in what has been dubbed Silicon Yaba, Africa’s leading technology cluster. This physical infrastructure has enabled technology companies including startups like Andela, Konga, Co-Creation Hub, BudgIT, Paga, and OLX among others to quickly scale up their operations.
With connections to some of the world’s largest internet exchanges in Amsterdam and London, local exchanges in Lagos and Ghana and 50+ Points of Presence locations across West Africa, MainOne is West Africa’s most connected telco, enabling carriers, ISPs, content providers, multiple cloud platforms and enterprises of all sizes to quickly and easily increase their network footprint and peer without investing heavily in additional infrastructure or resources. MainOne has invested in its private submarine cable, from Europe down to Africa and growing regional and metro terrestrial fibre optic networks across 9 countries in West Africa. The company also owns the region’s premier Tier III data center, with 600racks in Lagos and has started developing its second facility in Sagamu, Ogun State. These approaches are a boon for business because they provide higher capacity, lower costs, and promote the digital economy of West Africa, which in turn increases the number of consumers who use the internet.
This article was first published in 2017/18 Forbes Africa ICT Outlook.