Tactic 8 - Build into Cheap Transit Internet Region
Some Internet Transit markets are expensive. For example, in 2010 the price of Internet Transit in South Africa and Kenya was close to $400/Mbps, whereas Internet Transit could be purchased in London for $2-$4/Mbps. The question is, can you save enough money to cover the cost of building into London from these places?
This dynamic is generalized in Figure 3-8.
For an emerging set of ISPs from the newer ecosystems in Africa, Eastern Europe, and the Middle East, the answer is “Yes!”, especially when they have the goal to reduce the dependency on the transit providers in their home Internet region.
A company called SEACOM, for example, has been lighting transoceanic fiber into each country around the perimeter of Africa. This fiber replaces the high cost and complexity of acquiring cross-border circuits between neighboring countries, and also heads up to Europe. The reason I mention this reality is that this oceanic fiber deployment enables this play for many ISPs in Africa.
Similarly, one European IXP said that this is a popular tactic for ISPs coming to Western Europe from Eastern Europe or the Middle East. Cheap transit ($5-$10/Mbps) is a powerful lure for those who are paying $400/Mbps.
Figure 3-8. Tactic 8 - Buy Internet Transit in a better Internet region.