Rain’s storming 2024

Rain had a storming year in 2024, reaching a valuation of almost R25 billion — an increase of roughly R3 billion year-on-year — and launching a range of new products.

Rain shareholder African Rainbow Capital Investments (ARCI) held a 21% share of the mobile operator as of August 2024, and its share of the company’s value had reached R5.2 billion just two months earlier.

This means Rain was valued at just under R25 billion at the time. The investment firm attributed part of its growth to its RainOne product, which launched in May 2023, and the launch of its standalone 4G mobile service in July this year.

“The introduction of RainOne, along with the 101 5G router, has significantly boosted Rain’s growth,” Arc said.

“In July 2024, Rain launched its standalone 4G mobile service and it continues to expand its coverage in various towns and major metros nationwide and achieved its budgeted EBITDA for the year ended February 2024.”

“Rain has solidified its position as an affordable data and mobile service provider and continues to experience substantial subscriber growth,” it added.

Rain’s previous valuation of R23.08 billion already meant it was significantly higher valued than state-owned mobile network operator Telkom, which has a market cap of R14 billion.

However, comparing the two has made many investors question the reliability of Rain’s valuation, as Rain’s valuation is almost double Telkom’s market cap.

ARCI has also been reluctant to reveal any meaningful information on Rain’s profitability, which could cause investors to speculate on its performance.

Rain’s valuation is out of sync with the rest of the telecommunications sector, growing by R7 billion — from R17.95 billion to R24.95 billion — over the past year and a half.

Rain’s price-to-EBITDA ratio is significantly higher than that of the market’s highest-valued players, MTN and Vodacom.

Its ratio is at 9.98 based on its latest valuation, while Vodacom’s is 4.14, and MTN’s is 1.96.

Analysts and journalists have asked for more detailed performance figures from the company in the past. However, ARC co-CEO Johan van Zyl aggressively dismissed questions.

The mobile network operator’s RainOne packages combine its fixed-5G plans with two Rain 4G mobile SIMs and fixed-5G plans with speeds of 30Mbps, 60Mbps, or 100Mbps.

The RainOne launch also saw the company launch a fully-fledged 4G network, bringing South Africa’s number of national mobile network operators back to four — after Vodacom, MTN, and Telkom.

While the combination may eliminate the potential to gain customers who already have fast and uncapped fixed Internet services like fibre, Rain told MyBroadband that it had seen consistent growth within its first year on the market.

It said it had seen a marked increase in customer demand and positive feedback, particularly since introducing the 101 5G smart router in November 2023.

Rain didn’t say whether it would offer separate 4G and 5G products again.

However, in late August 2024, the mobile operator launched a standalone 4G mobile service in the form of a month-to-month 4G SIM with 2GB of data, 60 minutes, and 100 SMS messages for R165 per month.

It also launched a business uncapped 5G product in June 2024, with unlimited 5G data and five 4G SIMs.

Rain’s Nvidia GeForce Now product sold out since launch

Rain launched its locally-hosted Nvidia GeForce Now service in December 2023 after successfully testing it in beta for several months.

However, registrations have been closed since the day after its launch, with plans selling out on day one.

In March 2024, the mobile network operator told MyBroadband that it would expand access to the service later this year.

“The Nvidia GeForce Now subscriptions were sold out on the first day, due to much anticipation in the South African gaming community,” said Rain.

“We realise there is increased demand for the service, and we are planning to be able to expand the service offering and capacity later in the year and will keep you posted on the developments.”

It added that it limits registrations to provide the best possible experience for those who have signed up.

“To date, we have offered 3.6 million minutes of Nvidia GeForce Now Cloud gaming, since the launch,” it said.

However, the mobile operator has been quiet about its expansion plans since then. In early October 2024, it provided similar feedback, adding that it saw sign-ups from both Rain and non-Rain customers at launch.

It noted that the most popular games on the service include Fortnite, Genshin Impact, and Rocket League.