Data-first mobile network provider Rain is planning to launch a mobile service to add to its established fixed (home) fourth-generation (4G) and fifth-generation (5G) service offerings.

Rain launched its direct 4G retail services in 2018, and Africa’s first 5G standalone network in 2019, and offers wholesale services to other telecommunications and retail products directly to consumers across 4G and 5G.

The company, which is positioned as a low-cost data provider with a comprehensive and balanced portfolio, aims to leverage its spectrum to launch a mobile service in the near future.

The company acquired additional spectrum from the Independent Communications Authority of South Africa’s March 2022 spectrum auction in two components, says African Rainbow Capital (ARC) co-CEO Johan van Zyl.

“The first, which sits alongside its existing spectrum, allows for disproportionate efficiencies to bulk up Rain’s existing fixed wireless 4G and 5G offerings, while the second potentially launches it into mobile – that is an entirely new product offering,” he said during ARC’s financial results presentation for the six months ended December 31, 2022.

Rain secured two allocations of 10 MHz of the spectrum in the 700 MHz band, which specifically establishes Rain’s position as a full-service retail 4G and 5G network provider, and 20 MHz of the 2 600 MHz spectrum.

“Rain has grown rapidly over the past few years, aggressively expanding its network and generating strong financial results,” he says, noting that the network deployment continues to add to Rain’s 8 900 sites, which includes over 1 500 5G sites covering over seven-million households with data traffic volume comparable to that of Telkom and MTN South Africa.

“Rain is our most significant investment. It has done well over a relatively short period and achieved its budgeted R1-billion earnings before interest, tax, depreciation and amortisation (Ebitda) during the six months ended December 31, 2022.”

Despite the industry having been affected by the ongoing bouts of loadshedding implemented by State-owned power utility Eskom and battery theft, which led to a corresponding increase in costs, demand and sales have remained robust and Rain is on course for more than R2-billion Ebitda for the year ended February 2023, adds ARC co-CEO Johan van der Merwe.

Retail revenue increased 2.5 times faster than wholesale revenue over the last 30 months, with 5G retail revenue growing at a compound annual growth rate of 235% and now accounts for more than 50% of total retail revenue.

ARC Investments holds a 20.3% interest in Rain, valued at R3.6-billion.