Rain says the delay in SA's spectrum auction process is working in its favour, as it capitalises on the opportunity to aggressively rollout its 5G marketing strategy. The data-only mobile network operator, which in September 2019 was Africa's first telco to deploy a commercial 5G network, currently has the widest 5G coverage in the country, with plans to extensively expand its standalone 5G services that are already available in certain parts of Johannesburg, Tshwane, Cape Town and Durban.

Rain also competes with Vox, Telkom's OpenServe and Vumatel in the lucrative fixed-line broadband market, offering unlimited 4G and 5G services via WiFi routers. Since WBS rebranded as Rain, the business has seen massive growth over the last two to three years and it has reached profitability, as it moves to become a full-service mobile network operator, focusing on data as a primary offering, said Van Zyl.

The lockdown period resulted in a more than 50% increase in traffic and a spike in demand in sign-ups for Rain's 4G and 5G services, with 5G customers consisting of about 20% of its total customers. Rain has a lease agreement with Vodacom to use its network towers, while Vodacom has a roaming agreement to use Rain's 4G network. While this agreement has, in the past, played an important role in increasing the telco's revenues, a big part of the company's R17.1 billion valuations is based on the scope of future growth, which is more of a "discounted cash flow type of arrangement", which comes from selling the business capacity going forward, according to Van Zyl.

"From now on, we expect to do quite well and start generating cash and move forward with positive growth and use a more tried and tested methodology to value the business, like cash flow, dividends, etc. Vodacom was our biggest partner when we were established however, as we move forward, a bigger chunk of our business value comes from the efforts of the business itself to create traction and our own retail footprint, particularly as we move more into 5G."

Rain has set its sights on racking up two million local customers over the next two to three years. As it nears a one million customer base, the operator is largely focusing on expanding its retail footprint and its network.

The company collaborated with logistics company Pargo, to make SIM cards available at over 100 pick-up points in select Clicks stores, and it has a partnership with ARC subsidiary TymeBank, to make it easier for customers to sign up at TymeBank kiosks at Pick n Pay and Boxer stores across SA.

While it has the widest 5G coverage in the country, some of Rain's customers have taken to social media in recent months to express disappointment at its network quality.

Responding to questions about the company's perceived poor network quality and below-standard customer service, Van Zyl acknowledged the operator had received a lot of criticism on this however, it has put structures in place to improve its service.

"Overall, it's a work in progress. If a business grows from 100 000 customers to five-, six- or seven-fold, that amount in a very quick period, you will have some issues. Our biggest issue doesn't come from client service but our network wasn't wide enough and also the fact that the network coverage isn't consistent enough - that's why we've moved fairly quickly, particularly in the 4G and 5G space, by trying to get the coverage up. "We've also grown the staff complement from about 120 people to 800 people and most of these people in the customer services division focus solely on servicing clients' needs."

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Question 5 (20 Marks)

The basis of the product life cycle (PLC) is that products move through a number of stages from their introduction to their final withdrawal from the market. Identify and discuss the stages of the product life cycle.