This season’s European Peering Forum (EPF7) in Malta was a busy one.
Forgetting the infrastructure facilitators like ourselves and our Internet Exchange hosts for a moment, all the big network and content players were there – from Verizon, BT, KPN, Deutsche Telekom and AT&T on the network side to Akamai , Limelight, Google and Microsoft on content: over 200 people driving the Internet further afield, with everyone working hard as usual on strategies to meet ever-increasing demand in a responsible – and profitable – fashion.
What was most remarkable was not so much that business was clearly booming – as hosts DE-CIX pointed out there were more meetings scheduled than at any other EPF to date – but more about the direction in which the boom is moving: The Middle East and Africa.
There was a huge amount of discussion about interconnecting Africa and the Middle East – and this simply wasn’t the case a year ago.
From the conversations that were taking place, it was pretty clear that we’ll see significant acceleration of full-spectrum competitive Internet into these markets over the coming year.
Why is that?
There are a few overarching reasons, one on the infrastructure side and others on the marketplace side.
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Infrastructure Alert: The Pipes Are Calling
On the one hand, we now have a lot of bigger pipes hooked up to new and interesting places.
A wide range of submarine cables and landing stations – including LION2, WACS, ACE, SEAS and EIG routes have either recently been completed or are on the point of completion on the east and west coasts of Africa and the Indian subcontinent . These now have total connectivity to the north. This offers tons of new bandwidth to the region.
For many of them, like Namibia, it’s a first. For others, it provides diversity that breaks regional monopolies, and also comes at a time of increasing inland cable connectivity.
Massive Market: The Consumers Are Waiting
We also have a great deal of demand, and it’s rising. When dealing with Africa and the Middle East one must never forget the size of the population and their profile.
- Population: Africa – over a billion; the Middle East – just under half a billion. That’s 15% of the world’s population.
- Profile: The average age across both regions is in the mid 20s. In Europe and the USA it is nearer 40.
A massive number of eyeballs are currently being served – in many cases inadequately – out of Europe and Singapore. These people have the potential to be extremely active online – young connected people who like to go out and have a lot to talk about and share.
The move is already underway to supply this need. For instance a well-know business-oriented social network already has a major commercial presence in Dubai – India is currently their second biggest market after the U.S. , and activity is mainly on the west coast.
Grab your Partners: The Price is Falling
But the price so far has been wrong – Internet access in the Middle East and Africa currently still costs about 200 times what it does in Europe.
But all that is set to change.
In Europe there is a new IP Transit pricing war on the way. Last year we broke the dollar barrier per megabyte. And that’s not the end of it. Since then we’ve seen two consecutive 30% price drops.
What’s driving it down?
The usual – the race for market share.
People are chasing market share to keep their capital secure and flowing in the current squeezed environment.
For our customers this means that prices are dropping and markets are opening, with the major players looking to ramp up access to primarily the Middle East and Africa. What does that mean for you? Put simply, if you’re not on that bandwagon then get on it fast… this opportunity is far too big to miss.