Rain proposes merger with Telkom amid MTN overtures

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Rain has made a formal request for a merger with Telkom which is being pursued by rival MTN.

The company says although the terms of such a transaction, such as valuation and structure would still need to be agreed, it believes there is a compelling business case in combining the businesses.It says some consolidation in the industry is both desirable and inevitable as it leads to better utilisation of infrastructure.

Rain points out that Telkom has, in recent years, worked to transform its business, and a combination of the two will enable it to continue to meet these objectives while accelerating its growth. Rain’s investment in its 4G and 5G network has allowed it to grow its own retail customers and provide 4G roaming to Vodacom across its network, the proposal says, adding that the combined data traffic of Rain’s retail customers is now equivalent to that of Vodacom, MTN and Telkom, and more when Vodacom’s roaming traffic is included.that Rain is on track to exceed its budgeted R1 billion earnings before interest, taxes, depreciation and amortisation for the year ended February 2022.

“Consequently, Rain has focused on building 4G and 5G data networks and bypassed older voice technology in the belief that future voice traffic will be carried over data by the likes VoLTE and VoNR .” “We had explosive growth in customers but also significant teething problems with customer service as our call centre was overwhelmed. Whilst we have been increasing our network’s coverage and capacity, we have also been focused on scaling up our customer service team and building modern customer management systems to bring this under control, and we believe can handle the expected future scale,” says Brandon Leigh, the CEO of Rain.

“Our team’s experience and expertise have positioned us at the forefront of the fourth industrial revolution. What is most compelling however is the potential for the merged company to rapidly unlock these growth opportunities.” says Paul Harris, chairman of Rain.

 

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