What Is IP Transit? Definition, How It Works, and Benefits for Businesses & ISPs

The Internet is no longer simply a supporting facility for businesses. For companies operating digital services, cloud platforms, e-commerce, data centers, online applications, or large-scale customer networks, reliable Internet connectivity has become an essential part of daily operations.

However, as Internet traffic continues to increase, network requirements are also becoming more complex. Businesses need more than just high bandwidth. They also require connectivity to various Internet networks, appropriate routing, and infrastructure that can scale alongside their business needs.

So, what is IP Transit, how does it work, and what benefits does it offer businesses? Let’s take a closer look.

What Is IP Transit?

IP Transit is an interconnection service that connects a customer’s network to the global Internet through a transit or upstream provider. This service enables a network to send and receive traffic to and from various other networks across the Internet.

Simply put, IP Transit can be compared to access to the global Internet highway. Imagine a company operating its own network with servers, data centers, applications, or users that need to communicate with various services and networks around the world. To enable communication with other networks, the company needs connectivity to a broader Internet infrastructure. This is where IP Transit plays an important role.

In practice, IP Transit generally uses the Border Gateway Protocol (BGP) to exchange routing information between Autonomous Systems (AS). Through BGP, networks can announce and learn network prefixes, allowing traffic to be routed toward the appropriate destination networks.

IP Transit is commonly used by Internet Service Providers (ISPs), data centers, businesses with high bandwidth requirements, digital service providers, and organizations operating their own network infrastructure. In simple terms, IP Transit works as follows:

IP Transit Flow

For other destinations, the routing path may vary depending on the available network topology and routing policies. Therefore, IP Transit helps customer networks establish connectivity to a broader range of networks across the Internet.

How Does IP Transit Work?

To understand IP Transit, it is important to first understand several key components, including Autonomous Systems (AS), ASN, BGP, IP Prefix, and upstream providers.

• The Customer Network Has an Autonomous System

Companies or network operators that manage their own network infrastructure may have an Autonomous System (AS), which is identified by an Autonomous System Number (ASN). An ASN is used to identify a network within the Internet routing system. For example, an ISP may operate its own network serving thousands of customers. The ISP has its own ASN and a number of IP prefixes used for its network and customers.

• The Customer Network Connects to an IP Transit Provider

The customer network then connects to an IP Transit provider. At this stage, the two networks can use BGP to exchange information about the networks that can be reached. For example:

An ISP, referred to as ISP A, operates customer networks across several regions and announces specific prefixes through BGP to its IP Transit provider.

The provider can then propagate the routing information to other networks across the Internet according to the applicable routing policies.

• BGP Determines How Traffic Is Routed

Border Gateway Protocol (BGP) is one of the key components of IP Transit. BGP enables different networks to exchange information about available routes.

However, it is important to understand that BGP does not simply look for the “fastest” route. Route selection is influenced by various attributes and routing policies, such as AS Path, Local Preference, MED, and the policies of individual network operators.

Therefore, the quality of an IP Transit service is not determined solely by bandwidth. Other factors, including routing quality, interconnection, network capacity, redundancy, and provider connectivity, also play an important role.

• Traffic Is Forwarded to the Destination Network

Once the appropriate route is available, traffic from the customer network can be forwarded through the IP Transit network toward its destination.

For example, a company in Indonesia may access an application hosted on a server in Singapore. In simple terms, the traffic flow can be illustrated as:

For other destinations, the routing path may be different depending on the network topology and applicable routing policies.

Through this process, IP Transit enables customer networks to establish connectivity with a broader range of networks across the global Internet.

What Is the Role of BGP in IP Transit?

If IP Transit serves as a connectivity path to the global Internet, BGP can be understood as one of the key mechanisms used to exchange routing information between networks. BGP works by exchanging information about network prefixes that can be reached by a particular network. For example, an ISP may have:

• Its own ASN
• Its own IP addresses or prefixes
• A customer network
• Connections to multiple providers

Through BGP, the ISP can announce its prefixes to its providers and receive information about other networks that can be reached.

In certain network designs, organizations may use multiple upstream connections. This enables strategies such as multi-homing and redundancy to improve network resilience.

Therefore, when discussing IP Transit, terms such as BGP, ASN, IP Prefix, and upstream provider are often closely related.

Examples of IP Transit Use Cases in Business

To make the concept easier to understand, here are several examples of how IP Transit can be used:

• ISP: Connecting Customers to the Global Internet

One of the primary users of IP Transit is an Internet Service Provider (ISP). For example, an ISP may operate a fiber-optic network serving 100,000 customers. This network enables customers to access various websites and digital services. However, the ISP still needs connectivity to a broader Internet infrastructure so that customer traffic can reach different destinations across the Internet. 

IP Transit can be used as one of the ISP’s upstream connections. In simple terms: ISP Customers → ISP Network → IP Transit → Global Internet.

As the number of customers and the volume of traffic increase, it becomes increasingly important for ISPs to have a network design capable of handling the required capacity and routing requirements.

• Data Center: Providing Connectivity for Servers

A data center can host various servers and applications operated by businesses. These servers need to communicate with users across different networks. With IP Transit, a data center can obtain connectivity to a broader Internet infrastructure. For example: User → Internet → IP Transit → Data Center → Server.

This is particularly important for data centers supporting applications with a large number of users.

• E-Commerce: Managing High User Traffic

Imagine an e-commerce platform running a major promotional campaign. During certain periods, the number of visitors may increase significantly due to promotions or flash sales.

The platform requires connectivity capable of handling high traffic volumes to its application servers, APIs, databases, CDNs, and cloud services.

In this scenario, IP Transit can be one component of the connectivity infrastructure supporting the platform’s Internet access.

However, it is important to note that IP Transit is not the only factor that determines the performance of an e-commerce platform. Server capacity, databases, CDNs, application architecture, load balancing, and security also play important roles.

• SaaS Companies: Serving Users Across Multiple Countries

Software as a Service (SaaS) companies with users across multiple countries require connectivity that can reach networks globally.

For example, a company may operate a business application used by customers in Indonesia, Singapore, Japan, and Australia.

The quality of connectivity to different networks can be one of the factors affecting the user experience. With the right network infrastructure, businesses can manage connectivity and routing according to their operational requirements.

• Digital Content Providers

Companies that distribute video, images, software, games, or other digital content can generate significant amounts of Internet traffic. As more users access the content, the volume of data that needs to be delivered from the service provider’s infrastructure to end users also increases.

IP Transit can serve as part of the connectivity infrastructure supporting the distribution of this traffic across different networks.

Difference Between IP Transit and Internet Dedicated

IP Transit and Internet Dedicated can both be used for business connectivity, but they serve different functions, architectures, and network requirements. In simple terms, Internet Dedicated focuses on providing dedicated Internet access to a customer, while IP Transit focuses on network interconnection and providing customer networks with access to the broader global Internet through a transit provider. 

The appropriate solution depends on the organization’s network architecture, operational requirements, traffic profile, and connectivity objectives.

Zetta-Transit: Connectivity for Businesses to the Global Internet

Every business has different network requirements. ISPs, data centers, digital service providers, and organizations handling high volumes of Internet traffic need connectivity that can support the growth of their networks.

Zetta-Transit is designed to support connectivity requirements to the global Internet, while taking into consideration factors such as network capacity, routing, redundancy, and future network expansion. 

For ISPs, data centers, digital service providers, and businesses with high traffic requirements, connectivity is about more than bandwidth. Other important considerations include routing quality, network capacity, redundancy, connectivity coverage, and the provider’s ability to support growing network requirements.

As businesses become increasingly connected, the network infrastructure supporting them must also be ready to scale. Would you like to know whether IP Transit is suitable for your business network requirements? Discuss your connectivity needs with the Zetta team.

FAQ

• What is IP Transit?

IP Transit is an interconnection service that connects a customer’s network to the broader Internet through a transit or upstream provider. The service generally uses BGP to exchange routing information.

• What is the function of IP Transit?

The primary function of IP Transit is to provide connectivity from a customer’s network to the global Internet. IP Transit can also support high-bandwidth requirements, routing management, and redundant connectivity designs.

• Is IP Transit the same as regular Internet access?

No. Regular Internet access is designed to provide Internet connectivity for users or businesses, while IP Transit focuses more on network interconnection and is typically used by organizations with their own network infrastructure and more complex connectivity requirements.

• What is the relationship between IP Transit and BGP?

BGP is a routing protocol that enables different networks to exchange information about network routes. In an IP Transit service, BGP can be used to announce and receive IP prefix information between the customer’s network and the provider.

• What is the difference between IP Transit and IP Peering?

IP Transit provides access to a broader range of Internet networks through a transit provider, while IP Peering is a direct traffic exchange relationship between specific networks based on a peering agreement.

• Who needs IP Transit?

IP Transit is generally relevant for ISPs, data centers, digital service providers, businesses with high Internet traffic volumes, and organizations that operate their own networks and require global connectivity.

• Does IP Transit guarantee a faster Internet connection?

Not necessarily. IP Transit can help provide the capacity and routing required for large-scale network operations. However, overall connectivity performance is also affected by factors such as the destination location, routing, network capacity, latency, congestion, interconnection, and the overall network architecture.