Rain shareholder announces plans for mobile services
African Rainbow Capital (Arc) released its interim financial results on Thursday and confirmed that 4G and 5G network operator Rain plans to launch mobile services.
This comes after Rain founder and director Michael Jordaan revealed they would launch nationwide mobile services, starting with 4G and expanding to 5G.
Rain’s 5G services are currently sold exclusively as a fixed wireless access alternative to fibre.
“The sector outlook remains positive after the successful spectrum auction and the potential consolidation of market players,” Arc stated in its results.
The potential consolidation Arc mentioned refers to a deal between Vodacom and the owner of Vumatel and DFA, CIVH.
Telkom has also announced that it is open to selling a minority stake in its wholesale and networks division, Openserve.
Arc said Rain was well positioned as a low-cost data provider that already has radio frequency spectrum in contested areas.
“The acquired spectrum will allow Rain to improve its coverage at a comparatively low cost,” said Arc, referring to last year’s spectrum auction.
“Rain also plans to soon launch a mobile service, utilising the newly acquired spectrum.”
Arc didn’t reveal any details about the planned mobile service.
However, industry speculation suggests a countrywide rollout points to a roaming partnership with one of South Africa’s major mobile operators.
Jordaan also assured in an interview on PSG Think Big that Rain’s mobile prices would be compelling.
“The packages have not been announced yet, but they will be very attractive,” Jordaan said.
A countrywide 4G, and ultimately 5G, mobile launch from Rain will put pressure on its competitors — Vodacom, MTN, Cell C, and Telkom.
With legacy products and millions of customers on expensive data products, it will be difficult for the big operators to match Rain’s uncapped pricing.
In addition to confirming Rain’s mobile service plans, Arc said that demand and sales remained robust.
“Rain is on course to achieve an EBITDA of over R2 billion for the year ended February 2023, after considering IFRS 16 adjustments as is industry practice,” it said.