Overview of Interexchange Developments in other Regions and Relevance to the Caribbean

Max A. FigueroaVice President InternationalTerremark Worldwide, Inc.+305 807 4861mfigueroa@terremark.com

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What is a NAP?

An operator neutral transit medium that enables a high speed connection at a low cost given the massive concentration of telecommunications and Internet operators.

Facilitates the interconnection of telecom operators, Internet Service Providers, Content Providers, large corporations and small/medium businesses.

A great center for access and distribution of Internet traffic and services where everyone is connected at a distance of zero.

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History of NAPs/IXs

• Started in the Mid-90s as a National Science Foundation initiative to commercialize the Internet Backbone.• Four initial NAPs were located in in New York, Chicago, Washington, DC and

California.• Initially, the NAPs provided interconnection services within operator locations.

• Soon thereafter, IXs emerged around the world to concentrate capacity for connection of each region to the Internet backbone. • IXs typically provide the interconnection fabric and rely on third parties for the

collocation offering.• Managed services are normally not provided by the IX, relying on third parties or the

members themselves for ancillary services.

• Operator-neutral NAPs/IX appeared in the early 2000s to provide more services to a wider customer base.• The NAP of the Americas opened in 2000 as the first operator-neutral NAP in the

southern corridor aimed at facilitating interconnection between US and Latin America.• The NAP of the Americas combined a state of the art data center with the necessary

switching platforms and the managed service to create an attractive total package for its users.

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Key Requirements for a NAP

• Massive Connectivity• Successful NAPs are located in areas of very large concentration of regional

and international telecommunications networks.• A NAP is a critical part of the telecommunications infrastructure of the region as

it acts as a hub for telecommunications network and Internet content distribution.

• State of the Art Infrastructure• NAPs today host mission critical infrastructure for operators, content providers

and enterprises and rely on the robustness of their infrastructure.

• Complete Suite of Services• Today’s NAPs are global operations where customers rely on the operator for

an increased share of the operation of the infrastructure.• NAPs need to be able to enable new approaches such as cloud computing,

virtualization, data storage and advanced network security.

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The Network As The Enabler

Massive aggregation of fiber and satellite networksProvides access to business critical infrastructure through any medium

Mobile Phones

PDAs

Personal Computer

s

Corporate Data Centers

Exchange Point Platform

Data Center Infrastructure

Managed Services

Business Applications

Miami

Enterprise Customers

Exchange Point Platform

Data Center

Infrastructure

Managed

Services

Network Transport Public Internet

Santa Clara

Herndon

Sao Paulo

Madrid

Brussels

Amsterdam

Culpeper

Santo Domingo Bogotá

`

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Example of the Impact of a NAP on Internet Traffic

• In Miami, the NAP of the Americas has had an enormous impact on the Internet traffic volume between the US and Latin America.

• A similar effect occurred after the opening of the NAP do Brasil in Sao Paulo, Brazil.

South America Traffic (Mbps) 1999 2000 2001 2002 2003 2004 2005 2006Latin America Intra-Region 48 77 1,967 1,809 2,519 6,061 14,005 59,409 Latin America to US & Canada 953 2,634 14,014 23,524 48,386 76,807 121,848 258,196 Total 1,001 2,711 15,981 25,333 50,905 82,868 135,853 317,605 Source: Telegeography Global Internet Database 2006

NAP do Brasil Begins

Operations

NAP of the Americas Begins

Operations

Submarine Cables

Connecting South America

Inaugurated

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Example of Impact of a NAP on Connectivity Costs

Average Costs for STM-1 Circuit between US and Sao Paulo

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2001 2002 2003 2004 2005 2006 2007

Year

Average Annual Price Reduction – 78%Average Annual Price Reduction – 78%

Source: Telegeography Global Bandwidth Research Service

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Impact of Connectivity on a Country’s Economic Development – Western Africa

Source: Centro de Estudios Económicos Tomillo, 2007

R2 = 0.8639

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

Connectivity, 2004

Per C

apita

GD

P, in

PPS

(200

4)

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Impact of Reduction of 20% in Connectivity Costs in Western Africa

An increase of 1,6% in connectivity would result in the long term (5-10 An increase of 1,6% in connectivity would result in the long term (5-10 years) in an improvement of 5-6% of the per capita GDP in the region. years) in an improvement of 5-6% of the per capita GDP in the region.

Fuente: Centro de Estudios Económicos Tomillo, 2007

0.5%

0.5%

0.7%

0.8%

0.9%

1.1%

1.1%

1.1%

1.2%

1.7%

1.7%

2.0%

2.4%

2.6%

3.4%

4.0%

1.4%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Morrocco

Cape Verde

Gambia

Togo

Ghana

Senegal

Mauritania

Benin

Mozambique

Cameroon

Burkina Faso

Mali

Guinea

Nigeria

Chad

Republic of the Congo

Níger

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What About the Caribbean Region?

• Internet traffic is on the rise around the world, especially in Latin America and the Caribbean.

• Internet traffic capacity in the Caribbean is only 1% of the total regional capacity despite extensive connectivity.

• The region needs a NAP to complement the existing infrastructure.

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TCS-1TCS-1Antillas-1Antillas-1

ARCOSARCOS

EMERGIAEMERGIA

St. Croix

Global CrossingTO: Hollywood, FL

Grupo Hostos

Caribbean Regional Connectivity

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NAP del Caribe Project Objectives

Build and Operate a NAP in the Dominican Republic to provide to the Caribbean: Carrier Neutral

Connectivity Lower Connectivity Costs Highly Secure and

Reliable Infrastructure for Collocation of Mission Critical Equipment.

Professional and Managed Services

Traffic Aggregation and Distribution of Regional Traffic

To Become the Premier Interconnection Point for the Caribbean

Geographically situated as the connectivity center for Africa, Europe

and the Americas. Geographically situated to be An African Gateway to

Europe and the AmericasGeographically Situated to be the Gateway

Of the Caribbean

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NAP del Caribe Design

• Total construction volume of 10.000 m2

• 4.000 m² in collocation space• Designed to resist earthquakes and Category 5 hurricanes. • Electrical infrastructure design for high availability of 100% and

autonomous operation during 14 days. • Phase 1 in Operation; Phase 2 to begin operations in 2H 09.

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NAP del Caribe will be Connected to Our Global Virtual Marketplace

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Benefits to the Region

• The NAP del Caribe will provide the Caribbean region with a highly reliable and secure lnternet platform to house web-based solutions necessary to move the region towards the global information economy.

• Individual countries can connect to the NAP del Caribe via submarine fiber cable networks to enable a true distributed NAP infrastructure for the region.

• The NAP del Caribe is positioned to help promote economic development and contribute to the reduction of the digital divide.

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Conclusion

• The concept of the NAP/IX has evolved to become a full service center to house mission critical applications.

• A NAP is a necessary piece of infrastructure for the Caribbean to join the global economy and can bring economical and social benefits to the region.

• The NAP del Caribe can be the first step towards the development of this critical infrastructure in the region.