Johannesburg - African Rainbow Capital (ARC), a South African financial-services firm started by Patrice Motsepe, on Friday announced that it had invested 20 percent of fixed and mobile data network operator, Rain.
This as ARC gears up to list on the JSE later this year in an initial public offering of its investment-holding unit said to be roughly R3 billion, according to news reports.
Johan van Zyl, ARC’s co-chief executive, said: “We focus on South African and African businesses that deliver exceptional returns on equity, and it is exciting to invest in a company that is at the start of its growth trajectory.”
“There is great demand in our country for fast, reliable and affordable data coverage and Rain promises to deliver just that,” said Van Zyl.
Read also: Motsepe on expansion drive
Duncan Simpson-Craib, chief executive of Rain, formerly Wireless Business Solutions, said: “The additional equity capital raised from ARC, over and above the funding already in place, ensures that we have the capital to achieve our aggressive roll-out targets over the next three years”.
Rain has recently entered into an agreement whereby Internet Solutions and its partners would provide clients with wireless broadband services powered by the Rain network.
The LTE Advanced network, referred to as “fibre-in-the-sky’” was ideally positioned to be a pioneer in the future roll-outs of 5G networks, according to the company. Simpson-Craib said: “Our deal with the ARC, plus its existing funding, already secured, allows Rain to roll out our 4G+ network across South Africa.”
“Our intention is to build a next generation network and a next generation business and provide affordable and reliable connectivity for all,” he said.
Rain has rolled out more than 1000 sites and 1500 base stations. It was on track to meet its target of 2000 sites by the end of the year, he said.
Bigger networks
Rain competes with mobile networks Vodacom and MTN. According to Tech Central, Rain recently signed a co-operation agreement with Vodacom, which may be planning to offer LTE-A (also known as 4G+) services on the back of the Rain network. Vodacom and other operators had not been able to deploy widespread 4G+ infrastructure, because they had not been granted access to new spectrum resources, it said.
Simpson-Craib said Rain aimed to connect South Africans to the “limitless possibilities of the digital world”. Data prices in South Africa were high and this was often a result of the cost of infrastructure to roll-out a network, he said.
Paul Harris, the chairperson of Rain, said the partnership would also enhance Rain’s already significant black economic empowerment ownership credentials.