5G provider Rain outlines plans for South Africa

 ·8 Oct 2019

5G operator Rain has outlined its plans for South Africa in the near-to-mid term.

Speaking to journalists in Sandton, Johannesburg, on Monday (7 October), chief executive officer, Willem Roos said that the commercial availability of Rain’s 5G network “will be a matter of weeks rather than months”.

In September Rain made its service available to select customers as part of a soft launch – with unlimited internet from R1,000 per month.

Currently Rain has 3,200 4G sites, and 250 5G sites, Roos said. He said the Rain network is probably approaching the size of Telkom’s network and is also competing with Cell C.

“The scale is significant,” he said, adding that by the end of 2020, Rain aims to have 5,000 4G sites and 700 5G sites in South Africa.

“Our initial 5G network of 250 sites already ‘passes’ 500,000 households. That’s almost an equal size to the two largest fibre network operators in the country.”

Rain said a good percentage of its customers are reaching speeds of 700Mbps, with the average speed being just above 200Mbps.

Revenue growth

Currently, the biggest portion of Rains business is as a roaming service. “The biggest portion of our business is our wholesale roaming services. We are a performance layer for Vodacom – It’s where we get the majority of our revenue,” Roos said.

The contract has been running for two years, and when questioned about its value, Roos said: “I am going to have to be vague on that.”

On the consumer side, he said that the company currently has around 100,000 4G mobile data subscribers.

Roos said that the company’s 4G mobile data product is designed as a niche offering which works well as a secondary, cheaper mobile data solution.

Roos said that Rain’s 5G service can properly compete with fibre-to-the-home, as a fibre in the sky operator, in a market of four million homes and SMEs in metro areas with a high average revenue per user (ARPU). “We are bullish on South Africa, and we are hopeful we can start to see some growth.”

He noted that competition in the uncapped fibre space is strong, with packages ranging between R500, going up to R1,500. Rain’s soft launch offer for 5G is R1,000 per month. “We believe that fast internet to the home is through routers.”

Roaming partnership

The majority of Rain’s revenue comes from its roaming agreement with Vodacom, and the expansion and management of its 4G network are essentially outsourced to the mobile operator.

“For a large part of our 4G towers, the day-to-day managing of the sites is outsourced to Vodacom. For our 5G towers, that is all done internally.”

Like Vodacom and MTN, Roos said that battery theft at its towers is costly. “We sit with exactly the same issue relating to battery theft which drives up the cost,” he said.

When asked how Rain expects its roaming agreement with Vodacom might be affected by the allocation of additional spectrum to mobile operators, Roos said: “You can never have enough spectrum.”

“We certainly support that the spectrum must be made available. We’ve always assumed that would be the case,” he said.

Roos stressed that its roaming partnership with Vodacom has fixed terms, and he believes the economic interests of both parties are aligned in the implementation of a roaming agreement.

Future plans

“We have weird and wonderful plans for the future,” Roos said, pointing to the over-the-top space, without elaborating. “But we are focused on our core business,” he added, noting that he expects market share to be in the single digits.

Rain will also soon launch an online RICA process. RICA or the Regulation of Interception of Communication Act is a law in South Africa that makes it compulsory for everyone to register all new mobile phone numbers.

Roos said that the company has no immediate plans to expand outside of South Africa, certainly not within the next five years. He said that while the telecoms industry in South Africa is mature, “we don’t have legacy, we have good spectrum assets. We will ride the wave of the transition from 4G to 5G.”

Read: Rain launches 5G in South Africa – pricing and coverage

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