Rain subscribers continue to struggle with poor network speeds and a lack of support which can cost the operator dearly unless it fixes the problem soon.
Rain launched its first commercial fixed-LTE products in June 2017 and followed that up with numerous uncapped data products between 2018 and 2020.
The operator positioned itself as a consumer champion which offered affordable, uncapped mobile and fixed data products.
Consumers initially praised Rain for its innovative offerings, but things started to turn sour after network problems struck.
Rain stopped the sale of its fixed-LTE products in November 2018 to protect the network against congestion, but this solution was short-lived.
Rain’s network performance continued to deteriorate as more clients signed up for uncapped products and consumed large amounts of data.
And then the lockdown hit.
Rain experienced a spike in new subscriptions as people had to find a quick way to get a fast and affordable broadband service.
Rain was not prepared for this sudden increase in users, and both its support systems and network buckled under the load.
Load-shedding added to Rain’s woes. Its 5G network was not equipped with batteries to protect against load-shedding which resulted in serious connectivity problems.
Rain users’ complaints fell on deaf ears. The operator could not cope with the influx of traffic and it failed to respond adequately to the problems.
The company put up a brave face – and even claimed its network was performing well – but all data pointed to serious issues.
MyBroadband’s mobile network performance tests showed that speeds on Rain’s network plummeted after the lockdown came into effect.
Rain also dropped to last place in MyBroadband’s Internet service provider and mobile operator customer satisfaction indexes.
These findings were substantiated by BrandsEye and Deloitte Africa’s Telco Sentiment Index which showed Rain was the worst mobile operator in South Africa.
The index revealed that Rain’s support and network quality plummeted when the lockdown hit. It resulted in the largest ever month-on-month Net Sentiment decline.
The graph below shows the decline in Rain’s network speed over the last three years.
Rain’s claim that its network was performing well – apart from a few isolated incidents – was clearly not true.
All evidence pointed to widespread problems affecting thousands of subscribers. A cursory glance at article comments and social media posts is all that was needed to see what was really happening.
African Rainbow Capital Investments (ARC) co-CEO Johan van Zyl has now admitted that Rain’s network quality is not good enough and that coverage is lacking in some areas.
Rain has developed a three-pronged approach to address the problems – improve coverage, protect against load-shedding outages, and employ more support staff.
It is expanding its 4G and 5G networks to ensure good coverage in areas where it sells services and improve service levels to subscribers.
Rain is also investing in high-end batteries to ensure the network stays up during load-shedding.
The company has further increased its staff complement from 120 to 800 to address poor customer support.
These measures are desperately needed to ensure Rain’s performance does not deteriorate further and leave it with a permanent perception of a “cheap and nasty” provider.
The next phase in Rain’s journey will be extremely important. It will need to prove its business case that offering uncapped mobile data using licensed spectrum is possible.
It has been tried in the past, but to date no South African company was successful.
A good example is Sentech MyWireless. It launched uncapped wireless products in 2005 which were an instant hit.
MyWireless enjoyed rapid uptake, but it soon ran into network congestion problems which required a large network investment to resolve.
Sentech did not have enough money and suffered severe reputational damage. It pulled the plug on MyWireless in 2009.
Rain has far deeper pockets than Sentech, but the same challenge is emerging. It was even warned it would happen.
Vodacom CEO Shameel Joosub predicted that Rain would face network capacity constraints if it continued to offer large data bundles.
“It is easy when you have an empty network, but when you offer aggressive deals it quickly fills up,” Joosub said.
To create additional capacity is expensive. You either need more spectrum – which is not easy to come by – or need to roll out more sites.
Rain’s network will be severely tested as it signs up more subscribers in its quest to meet financial targets.
The company plans to increase its LTE subscribers to 2 million SIMs and grow its 5G subscriber base to 350,000.
This is a big increase from its 260,000 4G SIMs and 25,000 5G customers reported in June 2020.
It is not difficult sell more SIMs. Rain has a unique uncapped offering which consumers love.
Rain also has low churn rates – people rather complain than leave because of the exceptional value proposition.
This can, however, change quickly.
If a competitor launches a similar offering and Rain’s network quality is not up to scratch, subscribers will quickly jump ship.
At this stage Rain’s only value proposition is price. It is therefore vulnerable to affordable fibre products like Vuma Reach or new 5G products from Vodacom, MTN, or Telkom.
Rain has raised R500 million from shareholders and increased its debt facilities from banks to R1.5 billion to support its network growth.
Whether this will be enough to address its network problems and support its rapid growth remains to be seen.
This is an opinion piece.