Quality of Service Advantages :
Due to the lack of national wide fiber optic links in many of the developing countries, many ISPs still use VSAT satellite circuits for international connectivity to upstream ISPs. Satellite connections introduce significant latency (delay) in the network. More problematic is the reality that, without an IXP, even domestic traffic must be exchanged internationally
Even in the case of availability of fiber connections still the length of transatlantic cables introduces needless (though much smaller than the satellite connection) latency in the connection.
Significant network latency translates into extremely slow connections for users, putting
a tremendous range of Internet services out of practical reach. Local Internet business and content providers find themselves at an inherent disadvantage serving their local or international internet customers.
Forcing the international interconnection of locally hosted services and content is a major obstacle to the development of domestic Internet-based business. This is leading to migration of ecommerce, content providers and local business web hosting to be migrated to the United States or Europe due to cost reasons.
An IXP slashes network latency by eliminating the need for international interconnection for a domestic-bound traffic. The result is that more customers use domestic Internet services, increasing local demand for bandwidth and prompting a cycle in which ever more
bandwidth is dedicated to local interconnection. Since domestic bandwidth is always cheaper
than international bandwidth, the quality of services and business cases for domestic Internet enterprises improve dramatically – not just for telecom operators and ISPs, but for online banking, e-commerce sites, online government, enterprise VPNs, content hosting, web services, etc.
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