Speaking at an event in Sandton, Johannesburg, Rain CEO Willem Roos outlined the state of the mobile operator’s business and its plans going forward.
He said that the company currently has around 100,000 4G mobile data subscribers, with the majority of the business’s revenue coming from its roaming agreement with Vodacom.
“The biggest portion of our business is our wholesale roaming services,” Roos said. “That’s where we get the majority of our revenue.”
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.
He added that Rain intends for its 5G offering to compete directly with fibre and comprise a larger portion of its revenue in the future. This strategy will be enabled by the accelerated growth of the network’s coverage.
“Currently Rain has 3,200 4G sites, and we have 250 5G sites,” Roos said. “In terms of 4G sites, the Rain network is probably larger than Cell C’s, and probably approaching the size of Telkom’s network – the scale is significant.”
He said that by the end of 2020, Rain plans 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 were reaching speeds of 700Mbps, with the average speed being just above 200Mbps.
The company has not launched a public 5G product yet, but Roos said South Africans should expect to see a public 5G offering soon.
“It will be a matter of weeks rather than months,” he said.
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.”
When asked how Rain expects its roaming agreement with Vodacom might be affected by the allocation of additional spectrum to mobile operators, Roos said that in their view, there will always be a need for additional spectrum.
“We certainly support that the spectrum must be made available. We’ve always assumed that would be the case,” he said.
He added that the roaming agreement with Vodacom has fixed terms, and he believes the economic interests of both parties are aligned in the implementation of a roaming agreement.