Before anyone get's too excited, remember that ISP's don't buy e.g. 1Mbps IPC to give you 1Mbps ADSL. There is a oversubscription of 20 to 50 times.
So in actual fact, that R135/1 Mbps IPC amounts to enough bandwidth for 20 to 50 Mbps of actual broadband access.
In other words, if you have a 10Mbps fibre service, the IPC is only costing the ISP around R70/m
It doesn't really work that way anymore, your internet would be unusable otherwise (you would just sit in queues and drop packets). ARPU (Average Rate Per User) is more important in this regard. So you take an ISPs peak data volume, divide it by the number of clients you have running and you get an ARPU (this is a generalisation). Any ISP who oversubscribes this will get packet loss - which isn't great. I'm not going to share ARPU values on fibre, but I can tell you they're much higher than 2 Mbps and steadily increasing as users consume more data.
Take 2 Mbps @ R135 - it costs your ISP a minimum of R 270 to purchase your bandwidth back from Openserve. Add line rental, transit costs, support costs and more and you get an idea of the extent to which your ISP is subsidising an Openserve service.
Sure, costs are relatively expensive, but think about what you are getting as an ISP: Access to every single broadband connection in the entire country, at a single point of entry to your network.
With other interconnections, you as the ISP must provision fibre interconnects to multiple handover points all over the country, and still pay for backhaul to your network. You are also only getting access to one fibre provider's network per interconnect. So let's say that you want to interconnect with 10 fibre networks. You probably need between 30 and 50 interconnects all over SA. And that is to access only their customer bases on fibre.
I'm not even mentioning ADSL here. There the costs of building/operating are sky high compared to fibre.
I can assure you that it is cheaper for an ISP to operate a presence in all 3 regions, including power and cross connects, as well as sufficient national capacity, than it is to aggregate 1 Gbps of Openserve to a single point. National Long Distance capacity is currently about 10 - 15 times cheaper than IPC. Remember also, Openserve's R135 rate is only if an ISP connects in all 3 regions. If you're only in 1 you pay about 50% more. And your users take the latency penalty.
