Africa's 5G pioneer hits over $1 billion valuation

South African mobile network operator, Rain, has released its interim results for the six months that ended in December 2023. The statement shows that the service is now worth over R23 billion (a little over $1 billion).

The valuation is according to African Rainbow Capital Investments (ARCI), an investment holding organization with a portfolio of diversified investments. Its mandate is to build a front-running, black-controlled investment group, which has led it to become an investor in TymeGroup, the parent firm of TymeBank.

According to ARC's financial results, its intrinsic net asset value went up by 4.6% to R16.03 billion ($850,000), while its intrinsic net asset value per share jumped 12.9% to R11.15 ($0.59).

Though ARCI has a shareholding in other companies like GoSolr, Sanlam Trust, Retail Capital, and LifeCheq, its most substantial investment is its 21% stake in Rain, accounting for 27% of the entire Fund with which it backs companies.

On the back of this development, ARC, owned by Patrice Motsepe—a South African billionaire businessman—has pumped an additional R81 million ($4.2 million) into the telecoms service. Its interest in the business has increased by R303 million ($16 million) to R4.8 billion ($254 million) in the under-review period.

Rain, formerly known as Rain 5G, became the first to launch a data-only fourth-generation network in Africa. A year after entering the South African market with SIM cards that can only subscribe to the internet, it went on to unveil the continent's first commercial fifth-generation network connection.

The firm, which teamed up with China's Huawei to make the project a reality, quickly found footing in the local market due to rising demand for faster internet speeds at lower data price points. Not long after, Vodacom and MTN rolled out their own 5G networks.

In May 2023, Rain dropped the data-only tag to become a conventional telecoms operator, as it looked to contest with the market's incumbents. After acquiring Spectrum (in 2022) it launched a traditional 4G service and bundled it with existing offerings to realize rainOne.

RainOne combines mobile and fixed-wireless plans to provide uncapped data subscriptions, no-price monthly calls, internet bundles for phone pairs, and a fixed 5G connection.

The overall move appears to be paying off, as the company's valuation is now more than Cell C and Telkom's--both of whom are currently struggling financially—however to much industry investor controversy.