South African mobile data network operator Rain is now valued at more than R15 billion by its parent company African Rainbow Capital (ARC). The valuation places Rain above Telkom, South Africa’s biggest fixed-line telephone group, which is valued at more than R12 billion on the JSE.
In an investment update published on Tuesday, ARC said: “The ARC Fund’s investment in Rain increased from R2, 5 billion at 30 June 2019 to R3, billion at 30 June 2020, mainly as a result of a fair value write-up of R479 million (2019: R364 million).”
ARC owns 20.7% stake in Rain.
Rain, partly owned by Patrice Motsepe, Paul Harris and Michael Jordaan, is taking on established players such as Vox, Vumatel and Telkom’s OpenServe in the lucrative broadband space.
ARC also revealed Rain experienced a surge in subscriber numbers as people were required to work from home.
“Economic and social activities have increasingly moved online, including schooling, entertainment and connecting with family and friends,” it said.
ARC added that by the end of April 2020, Rain had rolled out 447 5G towers and aims to increase this to 1500 by December 2021.
“Ultimately more than 2000 5G towers in larger metro areas throughout South Africa are planned, bringing ultra-fast broadband connections to homes and small businesses at an affordable cost.”
Rain 4G roll-out has also progressed well, with 5,500 active sites live as at the end of April.
Rain has three main income streams. Firstly, it earns roaming income from Vodacom in terms of an infrastructure and services agreement.
It secondly earns revenue from 4G data sales and also earns some income on the fixed reseller business which is in the process of being wound down to create capacity to expand the 5G network. The 5G network was launched in September 2019, thereby making South
Africa one of the first countries in the world to deploy this new technology.