Rain is realising that it is tough to be the fifth mobile operator in South Africa. Financial pressures and increasing competition are destroying its value proposition.<\/p>\n\n\n\n
Rain used to be a disruptive force in South Africa\u2019s mobile and broadband market with affordable uncapped products.<\/p>\n\n\n\n
No other mobile operator could touch the value it offered its subscribers. It was unlimited all the way.<\/p>\n\n\n\n
Rain dismissed warnings from industry veterans like Vodacom CEO Shameel Joosub that uncapped mobile products are risky.<\/p>\n\n\n\n
It told South Africans it was committed to continue offering uncapped data products to home and mobile users.<\/p>\n\n\n\n
Fast forward to 2024, and Rain has become just another mobile operator struggling to remain relevant and competitive.<\/p>\n\n\n\n
It replaced its three uncapped 4G packages with a 4G SIM product with 2\u00a0GB of data, 60 minutes, and 100 SMS messages for R165 per month.<\/p>\n\n\n\n
Its value proposition is worse than other products in the market, especially when looking at the growing number of mobile virtual network operators (MVNOs).<\/p>\n\n\n\n
Afrihost\u2019s AirMobile has a 2GB data-only package for R60.00 per month and offers a 10GB package for R150.00 per month. Both are cheaper than Rain.<\/p>\n\n\n\n
People looking for a bundled data and voice package with 2\u00a0GB of data and 60 voice minutes, the same as Rain, will pay R124.40 at AirMobile.<\/p>\n\n\n\n
Telkom is also more affordable. Its FlexOn 2 contract bundle offers 2\u00a0GB of data, 75 minutes, and 500 SMSs for R129 per month.<\/p>\n\n\n\n
For people who call a lot, MTN Superflex offers 10GB of data and unlimited local calls and SMS for R299 per month.<\/p>\n\n\n\n
Some mobile virtual network operators roaming on MTN\u2019s network offer 5GB of data and unlimited calls and SMSes for R199 per month.<\/p>\n\n\n\n
Simply put, Rain\u2019s new mobile product will not attract new users because of its value proposition.<\/p>\n\n\n\n
Another problem is that Rain\u2019s voice-over-LTE calling is not supported on all phones. That means you need a custom dialer to make voice calls.<\/p>\n\n\n\n
MyBroadband Insights\u2019 latest data shows that Rain\u2019s network is significantly worse than those of its competitors.<\/p>\n\n\n\n
Rain\u2019s average download speed of 21Mbps is much lower than MTN\u2019s at 82Mbps and Vodacom\u2019s at 80Mbps. It is also much slower than Cell C and Telkom.<\/p>\n\n\n\n
The table below compares Rain\u2019s new mobile product with other offerings in the market.<\/p>\n\n\n\n Rain is betting the farm on its Rain One products, which bundle a fixed broadband connection with free monthly calls and data for two phones.<\/p>\n\n\n\n Rain One home costs R625 per month, while Rain One business costs R795. The main difference is that the latter comes with calls and data for five phones.<\/p>\n\n\n\n Rain will still have to prove that bundling fixed broadband with a mobile offering is a winning formula.<\/p>\n\n\n\n Many people and businesses have little value for this bundled offering and prefer to use Vodacom and MTN for their mobile needs.<\/p>\n\n\n\n Another challenge for Rain is that going all-in with its Rain One offering diminishes the value proposition of its 5G fixed wireless offering.<\/p>\n\n\n\n Those looking for a home broadband product will compare prices for fixed 5G products, and Rain is falling short.<\/p>\n\n\n\n Telkom has cut the price of its entry-level 5G products to R499 per month, significantly cheaper than Rain\u2019s R625.<\/p>\n\n\n\n Although Rain offers more value through its mobile offering, it will not be a consideration for many consumers. They want an affordable broadband connection, and nothing else.<\/p>\n\n\n\n There is also the issue of Telkom\u2019s 40Mbps speed limitation and its 1TB fair use policy. However, this is enough for most households.<\/p>\n\n\n\n Many Internet service providers offer even cheaper fixed-wireless products, including Supersonic, Axxess, and MTN.<\/p>\n\n\n\n The table below shows how Rain\u2019s 5G home product compares to other fixed wireless products on the market.<\/p>\n\n\n\n Rain is learning the hard way that it is difficult to be the fifth mobile operator, especially if you have to build and maintain a mobile network.<\/p>\n\n\n\n When it launched, Rain had a fantastic deal with Vodacom, where Vodacom built and maintained its 4G network.<\/p>\n\n\n\n Vodacom was spectrum starved and partnered with Rain to get access to its spectrum through a roaming agreement.<\/p>\n\n\n\n Although the networks are separate and have no spectrum pooling, it helped Vodacom gain more capacity in areas with congestion.<\/p>\n\n\n\nProvider<\/strong><\/td> Data<\/strong><\/td> Voice Minutes<\/strong><\/td> Price<\/strong><\/td><\/tr> Afrihost<\/td> 2GB<\/td> 0<\/td> R60<\/td><\/tr> Afrihost<\/td> 5GB<\/td> 0<\/td> R150<\/td><\/tr> Afrihost<\/td> 2GB<\/td> 60<\/td> R124<\/td><\/tr> Telkom<\/td> 2GB<\/td> 75<\/td> R129<\/td><\/tr> Rain Mobile<\/td> 2GB<\/td> 60<\/td> R165<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Rain\u2019s dwindling 5G value proposition<\/strong><\/h2>\n\n\n\n
Provider<\/strong><\/td> Mobile network<\/strong><\/td> Speed<\/strong><\/td> Monthly Price<\/strong><\/td><\/tr> Supersonic<\/td> MTN<\/td> 200Mbps<\/td> R399<\/td><\/tr> Axxess<\/td> MTN<\/td> 500Mbps<\/td> R449<\/td><\/tr> Axxess<\/td> Vodacom<\/td> 500Mbps<\/td> R495<\/td><\/tr> MTN<\/td> MTN<\/td> 35Mbps<\/td> R499<\/td><\/tr> Telkom<\/td> Telkom<\/td> 40Mbps<\/td> R499<\/td><\/tr> Rain<\/td> Rain<\/td> 30Mbps<\/td> R625<\/td><\/tr> Rain<\/td> Rain<\/td> 60Mbps<\/td> R825<\/td><\/tr> Rain<\/td> Rain<\/td> 100Mbps<\/td> R1,025<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n It is tough to be the fifth mobile operator<\/strong><\/h2>\n\n\n\n