Telecom industry experts have been stressing the need for local Internet exchanges inside Pakistan to avoid the unnecessary routing of local traffic to overseas and then back to Pakistan. See my post about broadband wish list for Pakistan for past coverage and the writings of Tariq Mustafa, dating back to 2007 where he makes a case for an IX for Pakistan.

Recently, in a ceremony coordinated by PTA, it was announced that PTCL and Trans World Associates (TWA) have signed an agreement on establishment of local Internet peering for routing of domestic email and Internet traffic. It was decided that initially the link between two parties will be of fast Ethernet providing a peering capacity of around 80 to 90 Mbps.

This is a good first step and every one who worked on this must be applauded for getting the ball rolling. However there’s a lot of work that needs to be done. The concept has to be expanded to a true local internet exchange (IX) which benefits all parties which need this. The current peering arrangement benefits two parties, PTCL and TWA. Tariq Mustafa explains at Telecom Grid Pakistan – excerpt below:

Peering is when two ISPs tie up circuits and clear mutual traffic free of cost – for mutual benefit – both parties stop paying a third party for traffic that they originate for each other.

An IX is when a set up is constructed where ANYBODY can hook up and exchange local traffic essentially at near zero cost (transmission costs are always everyone’s own headache to manage). An IX stands a far better chance to establish and promote the value of local contents. An IX also impacts the overall bandwidth market in terms of pricing and establishment of IX is generally resisted by the main players in fledgling bandwidth markets like Pakistan as in short run, it falsely appears, that an IX would take revenue away from main players. However, in the longer run, the overall data market grows with one or more openly and neutrally operated IXs in place and everyone benefits.

The hope is that we will see local IX established in near future.