Rain to sell Broadlink to CipherWave

Rain will sell its Broadlink telecommunications business to Internet and cloud service provider CipherWave, TechCentral has learnt.

Rain CEO Willem Roos confirmed on Wednesday that the parties have reached an agreement, though they’re not disclosing the value of the deal.

Approval for the transaction will be sought from communications regulator Icasa. “It is our current understanding that Competition Commission approval is not required,” Roos said.

All Broadlink staff will remain in the employ of the company following the conclusion of the deal, he said. No spectrum licences owned by Rain form part of the transaction.

Multisource, a company backed by former top bankers Paul Harris and Michael Jordaan, acquired Wireless Business Solutions (WBS) in 2015 for an undisclosed sum. WBS’s assets included iBurst and Broadlink. WBS was then rebranded as Rain.

Following the deal, the iBurst network was shut down and its spectrum repurposed for the launch of Rain’s 4G/LTE consumer mobile data offerings, while Broadlink continued to operate, focusing on business clients.

‘In discussions’

CipherWave CEO Jonathan Mason declined to comment on his company’s acquisition of Broadlink, referring TechCentral to Roos. Asked for comment on the developments, former Broadlink CEO Mike Brown — who retains a 30% shareholding in the company — said he is “in discussions” with Rain about the CipherWave transaction and is “awaiting more details pertaining to the deal”. He declined to comment further.

It’s not clear which spectrum CipherWave plans to use to continue serving Broadlink clients given that Broadlink’s spectrum licences do not form part of the deal. (Roos said Rain is likely to retain these licences rather than returning them to Icasa.)

Broadlink historically provided services to its clients using spectrum in the 3.6GHz and 10.5GHz bands. TechCentral understands that Rain has actively been migrating Broadlink clients who were using the 3.6GHz spectrum to the 10.5GHz band to allow it to roll out its 5G fixed-wireless network, which was launched last year.

On Tuesday, Broadlink CEO Owen Rodgers sent an e-mail to the company’s clients and partners saying it had been through a “difficult and uncertain year in 2019” but that the new year would bring “new development and growth plans tailored to meet the needs of our customers and partners”.

Rodgers said in the e-mail, which TechCentral has seen, that following the acquisition by CipherWave, Broadlink will “migrate all customers away from the existing fixed-wireless network (managed and owned by Rain) onto a new, more resilient and stable fixed-wireless and fibre network”.

This move will take place between January and May 2020. “As part of this migration, we will be offering better pricing, better network services and a new, fresh customer service experience,” Rodger said.

He said Broadlink’s fibre backhaul network, core network and associated infrastructure will also be moved away from Rain to a network provided by CipherWave.

“For those customers on our WDSL (wireless digital subscriber line) and MetroNet services, we will be migrating these services to new MetroNet, BroadNet and fibre services (subject to availability). There will be no cost associated with the migration and we are confident that the commercial offers available to you will make the process extremely compelling and straightforward.”

Rodgers said Broadlink will refresh its entire product range with new packages built around connectivity, voice and security, with a software-defined wide-area networking, or SD-WAN, proposition to be launched later in the year.

“With this refresh will come new pricing and channel initiatives,” he said. The company will continue to work with direct customers while renewing its channel partnerships. The distribution channel will form Broadlink’s “primary focus and, as such, we are introducing a highly competitive wholesale business model, with new and revised products.”  — (c) 2020 NewsCentral Media