Partial fulfillment for award of the degree of Master of Science in Information technology

Table of Contents

Internet Service Providers (ISPs) in developing countries are incurring high operating costs. Chief among the costs is the telecommunications cost of getting traffic to other networks of the Internet. Developing countries local Internet traffic is billed at the same rate with internationally accessible content hence high operating cost for the ISPs. Internet traffic moving from one ISP to another ISP in the same developing country has to be routed overseas as a result; developing countries are suffering from Internet connectivity that is expensive and slow compared to developed countries.
ISPs in Kenya have realized that infrastructure is one part of connectivity and without local content; costs of connectivity will remain high. This is because local Internet traffic traverses the expensive International links. Kenya has little local content and it should shift attention to local content generation and hosting as a way of pushing down Internet connectivity costs and keep local traffic local. Also if ISPs use the right interconnection models they can be able to reduce the high Internet cost, reduce latency and increase access speed.
Using data collected from the local telecommunications industry in Kenya, the researcher established that: Internet bandwidth cost is high in Kenya due to lack of local content, poor regional access, lack of competitive choices and high regulatory fees. The criteria Internet Service Providers use in choosing peering members include:
geographical coverage, minimum capacity requirements, symmetry of traffic exchanged and proximity of exchange points. Savings increase when the ratio of local traffic increases and savings decline when the ratio of international traffic increases.
In this study the researcher has explored the Peering and Transit ISP interconnection models and determined that the Peering model is preferred when there is high ratio of local traffic to international traffic while the Transit model is preferred when there is high ratio of international traffic to local traffic. Even if fiber optic is operational in Kenya, Internet cost will remain to be high unless Kenya starts local content generation.