There are various benefits of having an IXP in Pakistan for all the stakeholders identified above. In this document, we will briefly discuss those benefits.

a. Cost Savings:

Pakistan has an increasing number of Internet users. As a result, a substantial amount of local content is being produced in Pakistan. Some of the generated content is accessed primarily by local users. Anecdotal evidence suggests that a significant amount of such content is hosted outside Pakistan. For example, www.pakwheels.com is a highly popular website in Pakistan that is primarily of local interest but is hosted outside Pakistan. Doing so not only raises cost for the content provider but also for the incumbents who have to pay for the costly International Bandwidth. By having an IXP, the use of international bandwidth can be reduced resulting in cost savings. Several countries have observed these cost savings in the recent past. For example, Kenya and Egypt saved more than $1.5 million per year on International transit costs by having an IXP.

b. Lower Latency and Better User Experience:

One of the key benefits of having an IXP is that it can lead to lower latency for the end users. This is because for content hosted locally, traffic does not need to go through an incumbent operator. This lower latency will improve user experience due to direct peering between ISPs. For example, the typical round-trip latency from Lahore to New York ranges from 200ms-300ms. If the local content (previously hosted in New York) is moved inside the country, this can reduce latency to less than 20ms. In addition it will also help in reducing load on incumbent networks. The incumbent can use this spare capacity to attract new customers and offer new services.

c. Local Content Hosting and Content Generation:

By having an IXP, ISPs can directly peer with each other to exchange traffic. This would incentivize local content hosting that will lower costs and save on foreign exchange. Moreover, reduced cost savings will encourage more local content development.

d. Development of Local Cloud Infrastructures:

Cloud computing is emerging as a major technology for users across the world. Users can rent computational, storage, and networking resources on the cloud through a pay as you model. This helps in hosting large-scale web services by lowering capital costs. Such cost savings are essential for encouraging entrepreneurship in Pakistan (especially technology based startups) as new companies often have to host services for which initial capital investment can be too high to be viable. Unfortunately, all major cloud providers are hosted outside Pakistan. Having an IXP will facilitate developing of local cloud providers by reducing costs and improving performance.

e. Improved Security:

By having an IXP, a significant amount of traffic will remain local and would not have to traverse International networks. This will help lower security breaches and also help address any privacy concerns related to the local traffic in Pakistan.

f. Availability of Services in case of Disruption in International bandwidth:

Local content hosting facilitated by having an IXP will help prevent several global Internet outages that lead to reduction in International bandwidth (or temporary cutoff) from affecting local traffic. Even though disruption in International bandwidth is relatively rare but it does happen (e.g., due to cuts in undersea cables), which can in turn significantly impact local technology based companies by lowering their revenues.

g. Attraction for International companies like Google and dailymotion to create Local Images of their Servers, in Pakistan:

An IXP will also encourage local hosting of global services that require high bandwidth (e.g., Facebook) usage. International companies can deploy their content distribution networks (CDNs) at the IXP location to provide improved user experience. This would also substantially reduce International bandwidth usage leading to reduced costs.