Where do you get the R90/pm estimate?
Well, it's based on a heck of a lot of assumptions, any of which could be wrong and could throw the numbers off by a not inconsiderable amount, namely:
1) That they are likely making between R100 and R150 p/m on their 384K service, this is a *reasonable* profit margin given the need to offset the extreme losses made on the 4mbit service. My original estimate was that it was probably costing them closer to R100-R150 to provide, but after the rough calculation I couldn't see them offering the service if it cost them that much, since it would be nearly impossible to ever make money.
2) That it costs about R15 million p/m to provide between 1 and 2gbits of access (incl. SEACOM/Neotel, SAIX IPC and SAT-3 backup bandwidth, hardware expense amortised over the year, etc.). I might be a bit off on this estimation if there have been any substantial reductions in price, but it's roughly on-par with what I remember one having to pay for that much access.
3) That they're running at an average 60:1 contention ratio (worse than SAIX but still within reason), meaning that on average they are selling an equivalency of ±60gbits of bandwidth.
Given those calculations, 384kbits of bandwidth equals a cost of ±R91.50.
Now as I said, any one of those 3 can change things drastically, a higher or lower bandwidth cost, or (even more importantly) a higher/lower contention ratio could mean the difference between huge losses or huge profits, however, given the way the service performs, I would say those numbers are probably *close* to what they truly are.
