South African network operator with plan to tackle global 5G problem

When the United States Department of Commerce placed Chinese technology firms like Huawei on the Entity List in 2019, it didn’t just hurt those companies and their customers. It hobbled the progress of 5G worldwide.

Rain South Africa, which had gone all-in on 5G fixed wireless access (FWA) that year, soon began to feel the sting of the U.S. trade war with China.

Progress in the development of customer-premises equipment (CPE) stagnated. Routers with 5G capabilities remained expensive, and their Wi-Fi capabilities lagged.

To illustrate the impact of the trade war, it is useful to consider previous generational upgrades in cellular technology.

2G was introduced in the early 90s and became available in South Africa around 1994.

Roughly ten years later, in 2004, Vodacom launched 3G in South Africa. In 2012, just eight years after that, Vodacom introduced the first LTE services.

During these big milestones, there were several transitionary steps. For example, Vodacom launched HSDPA technology in 2006 which offered much faster download speeds over 3G.

Devices supporting the technologies also rapidly became cheaper during their adoption cycle, including home routers and portable Wi-Fi hotspots.

While Rain launched its fixed 5G network in February 2019 — just seven years after Vodacom introduced LTE — broader industry uptake stalled when the U.S. enacted trade restrictions against Huawei and others in May.

High-end smartphones were quick to support early versions of 5G, with the functionality soon trickling down to mid-range devices.

By 2024, 5G had started becoming available on devices at entry-level price points.

These include the ZTE Blade A72 5G, which Ackermans lists for R1,499 as a Vodacom exclusive in-store deal. It is also sold online for under R2,000 at some retailers.

Additionally, MTN launched its Icon 5G smartphone in November for R2,499.

However, while the prices of 5G-supported smartphones have decreased in recent months, 5G CPEs have not enjoyed similar scale or price reductions.

Rain realized years ago that the trade war could be a significant potential threat to the ongoing development of 5G FWA unless a neutral party took action.

It looked for a partner to help develop the device it needed but could not find any suitable companies at the time.

This resulted in Rain designing and manufacturing its own 5G router, the101, which it launched in 2023.

While this initial foray into consumer electronics was successful, Rain recognized that continuously developing and manufacturing such devices was not sustainable for a telecommunications company.

In a recent interview with MyBroadband, Rain CEO Brandon Leigh explained that they quickly realized that producing hardware was a distraction from their core mission to provide excellent and affordable broadband connectivity in South Africa.

For these reasons, several of Rain’s co-founders decided to establish a new company called RainX.

“Our shareholders and partners also didn’t sign up for Rain Africa to become a crazy startup. That’s not our mandate,” Leigh said.

“There’s no business case to say, ‘Let’s go make some drones.’ Even though I think it’d be quite fun, it’s not our business as Rain South Africa.”

RainX was incorporated in Singapore and counts three Rain co-founders among its directors — Willem Roos, Roger Grobler, and Brandon Leigh.

Leigh declined to comment on the amount invested in RainX, only saying that future funding rounds will likely occur.

Their goal with RainX is to build scale and sell products that deliver high-quality 5G fixed wireless access worldwide, with Rain South Africa being just one potential customer.

At the same time, they are hoping to drive down the price of 5G CPEs.

Leigh said RainX has partnered with MediaTek, which dominates the 5G chipset market, to develop high-quality routers that provide customers with a good Internet experience.

This includes improving the in-home Wi-Fi experience with devices like the101 Xtender mesh system.

Asked why they chose to incorporate RainX in Singapore, Leigh said it all came down to logistics.

He explained that South Africa was too far from chipmakers and other component manufacturers.

With RainX’s global ambitions, Singapore made more sense as it would allow the company to better serve the burgeoning Southeast Asian and European markets.

“Singapore just made sense as a — for of a lack of better word — ‘neutral’ place,” Leigh said.

“With China and the US… you don’t really know what’s coming.”