Actually the big problem is the lack of local loop unbundling in South Africa and the cost of the ADSL circuit. Until LLU happens ISPs will be unable to supply consumers with non-Telkom ADSL circuit and be unable to bypass Telkom's IPConnect product.
At the moment just the last mile cost of a 4MB ADSL connection is R543 (R130 odd for the compulsory voice line plus R413 for a 4MB ADSL line) and that's before we've even bought any bandwidth!!! So in my opinion the high bandwidth costs are just part of the problem.
We can have all the undersea cables in the world coming into South Africa, but it still doesn't change the fact that we have to fork out R543 before we've even bought a single megabyte of bandwidth capacity. Seacom won't change this and ISPs like WebAfrica don't currently have the power to change this.