I’ll just type this here till I have time to do a more detailed analysis. I got inspired to start as I was commenting on a Facebook post. Please forgive the disjointed format.
There are several approaches that Nigeria can take to reduce the cost of quality internet access for individuals, schools and businesses that need it.
1. Build local data centres in several regions (not just at the coastline in Lagos) and provide web hosting at the same rates that people already pay to overseas providers. When I say build, I don’t mean award contracts; I mean utilize what is already on the ground. I know a few Universities around Nigeria that have decent facilities with round the clock power, climate control, servers, etc. Why should they go to waste if businesses can be built to sustain them? Ditto for several government owned facilities.
The options presently available for local server hosting are affordable only to the rich who probably have inhouse server rooms anyway. More on that some other day.
2. Ensure there is good connectivity between the regional data centres (and/or Exchange Points). We can start from geopolitical zone to geopolitical zone and then move from state to state. As of today, there are multiple regional connections each owned and maintained by a different telecom provider, each undersubscribed and overpriced because the operator is trying to recover his maintenance cost and bank repayments from a significantly smaller customer base than projected initially. Yeah, if we had not run NITEL into the ground, all of us will be riding on that infrastructure now.
3. Deal with the highway robbery under the guise of right-of-way taxes and encourage the growth of small specialized ISPs that can cable a corner of say Agege with a smaller team and without bloated costs. If AgegeFiber has a direct connection to a switching point in Ikeja where Google, Facebook and GoMummy have servers, they can offer almost unlimited data for peanuts!
…. Below is the initial comment I was typing on Facebook before it grew too long.
The telcos that should have the muscle to create quality data centres are too lazy because they are making easy money from other sources. If they would offer web hosting services for less than the cost abroad and same quality, a lot of our content will come home and then it will be cheaper to access.
That there is the reason you have cheap data elsewhere in the world. Most of the popular hosts have servers that are literally down the road, so why charge a limb to access it?
The cost of data bundles here can also come down if we have well-connected data centres across the regions. For example, most of the telcos increased data allowances because they found that much of our traffic is in form of YouTube, Google apps and other cache-able data. Google for one has a local cache in Nigeria which is connected via the local Internet Exchange (in Lagos) and telco connections here are cheap flat rate per-port fees.
If a Facebook and two major CDNs were to emulate this and place servers in say four different parts of Nigeria, prices will crash because it will cost the telcos less to fetch content from a local point. Now unless the CDN operators have inordinate amounts of faith, they will not come to a location without solid connectivity and power.
Today, it still cost so much to move traffic locally than it costs to move traffic between Lagos and London. That’s a story for another blog post anyway.
Long story short: Build good data centres with reliable regional connectivity and your people will have cheaper faster Internet access. Your telcos will also save money because they will pay less to overseas providers. Encourage small specialized wired telcos with lower overhead costs.
ps: i have worked in the industry here for a few years and one of my daytime jobs is managing a wholesale internet consortium bandwidthconsortium.org
Again, this was all done from a mobile phone so please excuse the uncoordinated writing.