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A new study, commissioned by the Internet Society and conducted by independent strategy and research consultancy Analysys (News - Alert) Mason, has revealed the far-reaching economic and societal benefits of establishing Internet Exchange Points in new markets.

The results were derived after examining the critical cost and performance benefits of IXPs in Kenya and Nigeria, two sub-Saharan countries that have been on the leading edge of Internet growth in Africa.

The study was conducted as part of the Internet Society's Interconnection and Traffic Exchange Programme, which aims to foster robust, efficient, and cost-effective Internet interconnection environments in emerging economies.

IXPs serve as critical hubs for data traffic exchange in the global Internet infrastructure. Today, many up and coming markets do not have well-established IXPs, which forces domestic Internet traffic onto long-distance international links and results in significantly higher costs and latency.

Over 350 IXPs around the world enable local email hosting providers and Internet backbone carriers to efficiently exchange Internet traffic between them.

For the first time, this new study quantifies how IXPs enable Kenya and Nigeria to save millions in telecommunications costs and raise additional revenue in these countries. It also shows how IXPs encourages the development of locally hosted content and services.

As per the Internet Society report, the Kenya Internet Exchange Point has dramatically reduced latency of local traffic, speeding data from 200-600ms to 2-10ms on average, while saving local ISPs nearly $1.5 million per year on international connectivity charges.

Also, in Nigeria, the Internet Exchange Point of Nigeria has experienced a similar reduction in latency while currently saving operators over US$1 million in connectivity costs per year.

"This study puts into clear context the commonly accepted but seldom quantified proposition that IXPs are essential for any country aspiring to tap into the global Internet economy," said Karen Rose, senior director of development strategy at the Internet Society, in a press release.

She further added, "Offering more than just cost and performance benefits, well-run IXPs serve as a catalyst to dramatically enrich a country's Internet ecosystem, opening a new world of possibilities with comparably minimal investment. We hope that this study will help inform the dialogue among government, business, and technology leaders of emerging countries still struggling with cost and bandwidth issues to show them, in no uncertain terms, the benefits IXPs can yield for developing the most fertile ground possible for Internet growth."