Untangling the complexity of interconnect in Africa

Liberalised markets create competition, and that creates more operators in the market. But all those voice and data operators don’t usually operate in isolation: nearly all of them have to connect together to deliver voice and data.

Russell Southwood spoke to Ike Nnamani, CEO of Medallion Communications about the the “carrier hotel” he provides.

The larger and more complex markets in Sub-Saharan Africa may have anything from 50 to several hundred companies providing voice and data services to different parts of the market.

If you try and draw what it would be like if each one connected individually to each other, you end up with a very messy ball of spaghetti.

In South Africa, independent data centre Teraco provides a “meet point” for operators so that it can exchange traffic with others in one place. Also national IXPs allow local data traffic to be exchanged between members, an increasingly important role as the volume of local African content increases.

With cloud-based, value-added services on the rise, the situation can only get more complex.

Ike Nnamani came home in 2003 and by 2006 had set up Medallion Communications with a couple of friends.

He had seen what happened elsewhere and knew it would be needed in Nigeria:”The idea came from my global experience in Canada and the USA. All over the world there are telehouses which are the ‘meet points’ for the industry. For example, you have Telehouse in London and similar ones in the USA.”

So Mediallion Communications provides four core services: interconnection between operators; a clearinghouse for interconnected calls; co-location in either private or meet-me rooms; and an aggregation of VAS providers (including bulk SMS aggregators, mobile money service providers, .ng servers, the Nigerian Internet Exchange and Google). It has almost every carrier or operator of any significance as its customer.

All international fibre capacity is distributed through its facilities. Some people buy into all of its services, whilst others may only choose one. It has two physical facilities, one on Victoria Island in Lagos and the other in Abuja.

It has expansion plans to set up facilities in other cities including Port Harcourt, Enugu, Ibadan and Kano and these will be completed before the end of the year.

Its clearinghouse service creates independent call records for interconnected calls. Therefore if there is a dispute between carriers it can be settled on the basis of these records:”We charge per minute of the call and it’s at a cost base plus rate agreed with the companies.”

“It’s the same with data but it’s megabytes instead of minutes.’ Voice traffic has increased over 1000% per cent as more operators have come in and seen the need to share infrastructure.

This kind of facility is essential for the new emerging online space in Nigeria using smartphones:”What we’ve done is make it cheaper and more efficient for them to operate. Firstly, the ISPs can interface with the local Google cache and this saves a lot of money on international bandwidth which is a major advantage”.

“Secondly, we’ve put infrastructure in that can serve content to local carriers and there’s lots of that. There’s also lots of commercialisation of e-commerce. You can’t pay with Visa or Mastercard but things can be done locally, using Interswitch. The important part is the convergence of technology, creating an enabling environment for everyone to do their core business.”

These kind of “meet points” are essential for any market that has operators that need to interconnect and will be an essential hub for serving local content and e-commerce services.

A transition will take place in more mature markets from individual “meet points” between operators to the creation of independent, trusted facilities of this kind. It’s another form of privately run, shared infrastructure that will save costs and time.

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Untangling the complexity of interconnect in Africa