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The Middle East is fast becoming one of the world’s brightest connectivity hubs, as the region continues to shift towards a digital-first economy. Thinking back just ten years ago, many discussions described the Middle East’s internet connectivity market as ‘lagging’, with limited availability of internet exchange points (IXPs) and peering opportunities between carriers.
Fast forward to 2022, and the Middle East is the fastest growing market for internet users in the world, with an expected 10% growth rate between 2018 to 2023 to 611 million, according to Cisco. Volumes of traffic are also exploding, growing six-fold from 2016 to reach 15.5 exabytes per month in 2021, driven by upticks in demand for high-definition video, cloud-based digital transformation activities, and gaming.
As with several other regions in the world, peering growth and interconnectivity have been instrumental in supporting these digital milestones. After a slow start with UAE-IX in 2012, the Middle East’s neutral peering ecosystem has seen a number of exciting developments recently. These include the LINX strategic partnership with STC, the development of the JEDIX internet exchange point (IXP) in 2018, the AMS-IX strategic partnership with Batelco to form Manama-IX in 2019, and the recent Equinix partnership with Omantel.
The development of IXPs – which are physical, ideally carrier neutral interconnection points where different networks meet to exchange local traffic via a switch – are essential to the growth of a bourgeoning and well-functioning digital ecosystem.
Along with peering arrangements between carriers - and between carriers and content providers - IXPs help provide the shortest possible route for the flow of information between sender and receiver. Through IXPs, carriers and content providers forge partnerships to ‘exchange’ traffic between their networks.
Previously reliant on IXPs in Europe, Asia, and the US, the Middle East’s internet backbone has historically delivered unacceptable latency for many applications because of a shortage of local peering opportunities. This is rapidly changing, although for the region to thrive, it’s essential that the carrier and ISP community come together to further develop this critically important ecosystem for long-term success.
Addressing regulatory challenges
The current growth we’re seeing across the Middle East is incredibly positive and it’s likely to be sustained as the region’s economies continue to reap the benefits of digital initiatives.
As with any region, some key challenges persist. Those include fostering a positive regulatory and policy environment that’s conducive to continued growth.
According to the Internet Society’s Middle East and North Africa Infrastructure report, there are opportunities for governments to develop policies that could foster increased growth. This even extends to governments establishing IXPs themselves in some cases, although that’s mostly relevant where there was something holding back the industry to otherwise do it on its own.
Any regulation has to strike a balance between being low-touch and allowing the industry to regulate itself, and being too strong and ultimately inhibiting growth of the industry. This is a delicate balance and will depend on the particular circumstances of individual countries, but government support is critical for continued growth in the region.
There are a number of ways governments can provide support, including;
- Provide resources: such as a location or other resources to establish an IXP. This has been the case with SAIX in Saudi Arabia, which was established by the Ministry and hosted in a government data centre.
- Connect government services: to increase incentive, governments can connect their own e-government services to the IXP, so ISPs have to connect to the IXP to enable their customers to reach these services. This has been effective in a number of countries in the region.
- Foster an enabling environment: IXPs are impacted by investment and ta constraints, high costs, of accessing local fiber, and network deployment regulations, so reforms in these areas would be beneficial.
- Better intra-regional co-operation: while individual nations have done a lot to foster better interconnection environments in their country, the reality is that multiple IXPs are needed across the region and the environment needs to favour cost-effective interconnection between them. This has so far been missing.
Ultimately, a health IXP ecosystem is one that’s competitive and neutral, which results in lower pricing. Government support in fostering that is beneficial and, in some cases, critical.
Building the foundations for a strong digital future
Fostering a strong IXP ecosystem will be critical for the Middle East’s digital future. More IXPs in the region will be important for enabling digital transformation, building infrastructure resilience and attracting international investment, making it an important opportunity for economic growth and social development.
At Telstra, we’ve found that shortening the AS path and delivering more direct connectivity has an amazing impact on traffic volumes very quickly. It provides more opportunities for industries to connect and grow their businesses, providing the foundation for more low-latency applications and use cases.
Although it’s not just about the number of IXPs, but also the quality of the ones that are there. As Google’s Peering strategy lead for EMEA pointed out in 2018, successful IXPs productively engage the community and can leverage the ‘network effect’ to grow and attract investment.
The real value of an IXP isn’t in the switch itself, but in the entire ecosystem that is built around the switch, which includes technical expertise, concentration of content, data centres, and more.
That’s why, as carriers, it’s important to foster an inclusive and collaborative atmosphere that brings more value for customers. Telstra is committed to this vision, playing our part to connect Middle Eastern internet users to the fast-growing opportunities in the Asia Pacific region.
Through collaboration and new partnerships, we’ll strive to help the Middle East become the global digital powerhouse it aspires to be, and we urge all ISPs operating in the region to come together to help build the connectivity required to support that.
