African Rainbow Capital (ARC) has released its results for the year ended 30 June 2019, which include a valuation of R12.2 billion for mobile operator Rain.
ARC said the value of its investment in Rain increased from R2.144 billion at 30 June 2018 to R2.508 billion at 30 June 2019.
The increase in Rain’s valuation, ARC said in its financial report, was mainly the result of a fair value write-up of R364 million.
ARC holds a 20.6% shareholding in Rain, which puts the mobile operator’s valuation at R12.17 billion.
How Rain makes money and its prospects
ARC explained that Rain has three main income streams from which it generates revenue:
- Roaming income through its agreement with Vodacom.
- Mobile data products which Rain sells directly to the market.
- Fixed-LTE which Rain sells to the market through ISPs.
ARC said while Rain fixed-LTE resellers’ income remained healthy, the business would be wound down and no new clients are currently being accepted.
“This segment [fixed-LTE] will be replaced by the soon-to-be-launched access to 5G,” ARC said.
Rain CEO Willem Roos, however, told MyBroadband that there are no immediate plans to move current fixed-LTE subscribers to 5G when the service goes live.
Good future for Rain
According to ARC, Rain is tracking well against the timelines to extend its footprint and the development of the business.
It added that the prospects for Rain remain very good with encouraging revenue growth, and that it is well-positioned to become a major player in the 5G data market.
Rain CEO Willem Roos previously told MyBroadband that the company’s strong revenue growth emanated both from its roaming agreement with Vodacom and its own retail efforts.
“We are pleased with the sales of our mobile data offering, and in particular the popularity of the unlimited off-peak offering,” Roos said.