Pakistans first domestic Internet Exchange Point (IXP) was launched last week with much fanfare in Islamabad. The development is significant because without a local IXP, even local Internet traffic that is meant for local destinations has to be routed through distant third-party networks and other IXPs located in faraway shores. This not only results in higher costs and delays (latency) in local data transfer, but also risks potential breach of locally-bound data traffic by international actors.

Now, housed at the Higher Education Commission (HEC) premises in Islamabad, the IXP would route the local data traffic within Pakistan. Regional countries like India and Bangladesh have such exchanges for years. Pakistans IXP has been some time coming. Some of the industry players including some telcos, data centers, and local Internet Service Providers (ISPs) are said to have come aboard. More players are expected to follow as a couple of more IXPs are expected to be set up in Lahore and Karachi.

Since the Islamabad IXPs launch, sector stakeholders both in the public and private spheres have been suggesting in the media that cost savings and quality of service (QoS) will improve customer experience. But no one seems to have a clear idea on the scale of operational savings and consumer surplus.

But technically, an IXP should save the ISPs and broadband operators unnecessary international routing of domestic traffic, which comes to the tune of a few thousand dollars for every GB of data traffic. With growing data volumes in Pakistan where almost a million mobile broadband users are being added per month, cost savings could become significant over time if multiple IXPs start operating.

One hopes that those cost savings will be translated by the broadband service providers (BSPs) to customers. The transfer can come either through better tariffs or through adequate investments in network infrastructure. There is a lot more that BSPs can do to improve their QoS and coverage metrics.

While the IXPs launch is laudable, it must not take the governments sight away from the fact that rural areas are receiving less attention so far as broadband connectivity is concerned. IXPs are a needed remedy for the large cities, where there is excess fiber-optic capacity. Fiber has to be taken to rural areas so that rural connectivity can come at par and play its role in achieving social development goals.