Nigeria is Africa's largest telecom market by subscription and investment after South Africa. With IxPN, Nigeria is estimated to be able to save more than US$200 million in its first year of operations, with additional prospects for a reduction in scam e-mail and heightened security. Formed to interconnect ISPs (Internet service providers), private telecom operators and higher institutions in Nigeria, the IxPN will also ensure that Internet users in Nigeria do not have to rely on global Internet exchanges.

"The commissioning of IxPN boosts hopes for reduced costs of Internet service," said Eric Osiakwan, director of the continental Africa Association of Internet Service Providers (AfriSPA) last week.

Despite several cables servicing Africa, the cost of Internet access has remained high due to lack of Internet exchange points and scarce local Internet content, which forces ISPs to link to international exchange points even for local traffic.

Nigeria is the second country in Africa to set up an Internet exchange point in about two years. In 2009, the Kenyan government set up a Government Internet Exchange Point (GIXGP), which allows government ministries, agencies and ISPs to peer and connect directly without third parties.

Ubuntu Media, meanwhile, plans to create relevant online content aimed at attracting local traffic in the continent. African ISPs have to pay huge sums of money to link to the Internet in the rest of the world due in large part to the lack of Internet content stored locally. On the other hand, ISPs from outside the region rarely link to African countries because there is little Internet content from the continent that is in high demand in the rest of the world.