Chairman Mickey Mikitani (pictured) noted net additions of 405,000 in Q3, despite the quarter typically being a weak period. Coupled with declining churn, he said it is in a good position to reach the subscriber goal.

He suggested in a macroeconomic environment with “persistent inflation, we believe the relative attractiveness of our plan has improved”.

Operating loss in the period dropped by JPY13.4 billion ($86.6 million) to JPY37 billion, and EBITDA continued to improve, hitting JPY7.8 billion compared with a loss of JPY10 billion a year earlier.

Mobile segment revenue rose 31.2 per cent to JPY95.2 billion, driven by mobile services increasing 24.7 per cent to JPY53.9 billion and devices growing 30.3 per cent to JPY17 billion. Its MVNO unit’s sales dropped 36.2 per cent to JPY1.2 billion.

Data ARPU improved 3.6 per cent year-on-year to JPY1,781; average usage rose 9.8 per cent to 33.5GB a month.

Total mobile users hit 8.1 million in early November 2024.

Mikitani said it added 4,600 base stations in 2025. It closed 2024 with about 100,000 4G and 5G base stations.

He argued AI is changing the fundamentals of the business and a major factor in reducing costs, giving the example of the technology being used to improve efficiency of external advertising. “Using data and AI and is becoming increasingly important.”

Rakuten Symphony secured six new customers across North America, Africa and Asia. Revenue grew 33.6 per cent to JPY20.1 million.

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During our Digital Unwrapped week Sasha spoke to Geoff Hollingworth, CMO, Rakuten Symphony about How open can 5G go?

The post Unwrapped Keynote: Rakuten Symphony appeared first on Mobile World Live.

Vivek Murthy, president of OSS at Rakuten Symphony, explained the company is excited to join TIP as the group and its board recommit to goals it also is pursuing, namely delivering better connectivity at lower costs with a broader ecosystem of suppliers than what is available today.

He added it will first engage with TIP in three areas: data observability, data management and service assurance. “The more we can align between existing and new best practices, the less the friction of change and solution fragmentation that appears later.”

TIP executive director Kristian Toivo added Rakuten Mobile is a pioneering telecoms operator in Japan, and Rakuten Symphony “brings that deep expertise with proven solutions to the telecoms landscape”.

With experience in data-driven, cloud-native and AI-first systems, Toivo noted Rakuten Symphony will strengthen TIP’s collaborative efforts to accelerate innovation, validate new technologies and drive commercial readiness.

Rakuten Symphony was set up to export Rakuten Mobile’s software-based model to markets outside Japan.

Rakuten Mobile joined TIP in November 2019, while rival KDDI became a TIP member in 2020, when it opened the first community lab in Japan.

TIP was founded in 2016 by Facebook, Nokia, Intel, Deutsche Telekom, EE and a number of other mobile operators. It now has more than 180 members.

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In a statement, Partha Seetala, president of Rakuten Symphony’s cloud business, noted as demand for cloud and edge data centres continues to grow across the country, systems that are built in India and keep data there are essential.

The platforms are designed to manage distributed AI workloads, modernise legacy IT environments and deliver localised support across key industries, including defence, healthcare, finance and manufacturing, the statement added.

Polystack co-founder and CEO Pawan Verma said with Rakuten Symphony’s software, it can enable public and private organisations to “securely adopt next-generation cloud and AI technologies, with solutions built and supported in India”.

Its made-in-India cloud infrastructure platforms supported by Rakuten Cloud software include IronCore, a full-stack, cloud-native platform optimised for hybrid, private and public cloud environments.

Rakuten Symphony was set up to export Rakuten Mobile’s software-based model to markets outside Japan.

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The pilot will utilise both 4G and NSA (non-Standalone) 5G sites and will pave the way for a potential nationwide open RAN rollout. According to the operators, the move will position Grameenphone, which has over 86 million subscribers, as one of the first operators in South Asia to implement the technology.

Under the agreement, Rakuten Symphony will supply its open RAN hardware and software, including Centralised Units (CUs), Distributed Units (DUs), 4G/5G radio units and OSS solutions. It will also work with partners to support deployment and bring in technical expertise throughout the pilot.

Sharad Sriwastawa, president of Rakuten Symphony, said the company is “committed to supporting Grameenphone to fully realise the advantages of open RAN, including greater operational flexibility, optimised network capabilities, and accelerated network innovation”.

Meanwhile, Jai Prakash, CTO at Grameenphone, stated the pilot “marks a significant step in our journey toward building a more agile, efficient, and future-ready network infrastructure”. He noted that “by embracing open RAN, we aim to unlock new possibilities for innovation and deliver enhanced connectivity experiences to our millions of subscribers”.

Rakuten Symphony noted that the project builds on its ongoing R&D work with Rakuten Mobile in Japan to develop modernised networks, accelerate open RAN adoption and diversify the vendor ecosystem.

The announcement comes shortly after Rakuten Symphony recently tied up with Tejas Networks to deliver integrated open RAN solutions for India and international markets.

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The ministry stated the company failed to report the breach within 30 days and issued an administrative guidance as Rakuten was obliged to immediately report the incident to authorities, the news agency wrote.

Rakuten took nearly four months to report the breach.

Jiji Press explained the case related to a leak of personal information including call histories of about 7,000 Rakuten Mobile customers earlier this year.

Rakuten is the smallest mobile player in Japan by subscriptions, with almost 9 million at end-June.

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Chairman Mickey Mikitani (pictured) reiterated in an earnings call it is “making steady progress” towards achieving full-year EBITDA profitability this year.

Standalone EBITDA improved by JPY19.1 billion ($129.7 million) year-on-year to JPY5.6 billion.

Segment revenue grew 33.5 per cent to JPY90.6 billion. Mobile service increased 26.9 per cent to JPY47.7 billion, aided by a 3.8 per cent rise in data ARPU to JPY1,773.

The operator neared 9 million subscribers at end-June, up from 7.7 million a year earlier.

As part of a plan to add more than 10,000 new base stations this year to address coverage holes and increase capacity, Mikitani said it installed 2,930 sites in Q2 and will accelerate the pace in the second half of the year, aiming to improve network quality.

He claimed it made “significant improvements in network stability”.

Rakuten Symphony revenue increased 53.8 per cent to JPY18.1 billion. In the quarter it closed contracts with six companies, including AT&T.

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In a statement, the operator highlighted the deployment will “significantly enhance” network capabilities and simplify operations using AI-driven systems.

Rakuten is set to deploy Cisco’s mobile packet core portfolio, which the operator claims will enable it to streamline operations and improve network performance.

Nokia will deliver cloud-native network functions, covering authentication, user data management, signalling analytics and IMS voice. Enabled by multi-cloud capabilities, the gear will be deployed on Rakuten Symphony’s cloud-native platform and storage.

F5, a partner for Rakuten since 2019, will supply updated API security and traffic management capabilities, and cloud-native network functions, which it said are crucial for ensuring the reliability and performance of the SA 5G network core.

The operator launched LTE services in 2019 and closed Q1 with 8.6 million mobile subscribers. It ended March with 94,000 base stations, including 21,600 5G sites.

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Its initial rollout of Rakuten AI integrates into its mobile app Rakuten Link AI, launched in October 2024, and offers the service as a web app (beta version).

Users can input queries via text, voice-to-text conversion and image search and choose from multiple AI-generated prompts for follow-up questions, the operator explained.

The service is an upgrade of its initial AI offering.

Ting Cai, Rakuten Group’s chief AI and data officer, noted the offering transforms the way users interact with services, which is a “key element in realising our vision for an agentic ecosystem, where AI agents drive deeper engagement and create even greater value for our customers and partners”.

Rakuten AI is a gateway integrated with the group’s ecosystem, covering sectors such as shopping, lifestyle, fintech, travel, education, work, wellness and entertainment, it added.

The operator claimed its Japanese context awareness is a key differentiator, enabling integration with local services.

In January, Rakuten Mobile unveiled a generative AI service for enterprises.

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The company is set to commence R&D into an open AI foundation model integrating fresh approaches to hike the memory capabilities, which Rakuten stated would effectively increase information available to generate responses.

Rakuten is handling the research in the third round of the Generative AI Accelerator Challenge, a project promoted by the country’s Ministry of Economy, Trade and Industry along with the New Energy and Industrial Technology Development Organisation.

The company explained the project “primarily provides support for computing resources necessary for generative AI development”, along with promoting knowledge sharing based on the “latest technology and developer community trends”.

Rakuten explained the first phase of the project commenced in February 2024, the second in October 2025 and the upcoming edition is scheduled to begin next month.

It noted it had been “actively developing and releasing Japanese language-optimised AI models to the open-source community since March 2024”. Its focus has been on “smaller, highly efficient models”.

Rakuten intends to use the expanded capabilities developed for the Japanese project to “overcome current limitations in generative AI memory”.

Enabling large language models to recall past interactions could pave the way to moving beyond current transformer architectures, which the company stated “struggle with extended context windows”.

Rakuten is also seeking further efficiency gains “through better training and inference algorithms” to open fresh potential for personalised AI services.

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The operator is using Rakuten Site Management to streamline operations and replace the legacy systems, allowing AT&T to optimise productivity for its open RAN build.

After announcing a $14 billion open RAN deal with Ericsson in 2023, AT&T’s goal is to move 70 per cent of its 5G network traffic across open hardware by late 2026.

The plan includes scaling its open RAN environment this year.

To move to an open and cloud RAN infrastructure, AT&T’s network simplification transformation project aims to streamline operations by consolidating legacy systems for cell site functions.

“It is all internal tooling from the last 30 years, ranging from spreadsheets shared via email through web apps,” Rakuten Symphony CMO Geoff Hollingworth told Mobile World Live. “Nobody in the industry focused on this, so it is all bespoke and home grown and has become messy.”

Rakuten Site Management provides a workflow driven end-to-end process orchestrator for site planning, design, compliance and construction.

It is currently in use by more than 10,000 registered users within AT&T and its contractors.

The operator is also using Rakuten Site Management to orchestrate its fibre expansion plans. 

Financial terms and the length of the multi-year contract were not disclosed.

Rakuten Symphony first inked a contract with AT&T in 2022.

The post AT&T, Rakuten Symphony extend open RAN work appeared first on Mobile World Live.

The pair, which signed an agreement to run a pilot project, noted in a joint release the deployment will make the operator one of the first in Southeast Asia to use open RAN.

As part of the deal, Rakuten Symphony will supply its open RAN kit and work with partners to support the installation throughout the pilot phase, the companies stated.

Vinh Tuan Bao, deputy general director at MobiFone, explained it identified open RAN as “a strategic pathway to gradually establish technological autonomy in next-generation mobile networks”. He added the collaboration will extend beyond a proof-of-concept, paving the way for “deeper, more comprehensive partnerships in the near future”.

Rakuten Symphony president Sharad Sriwastawa noted its team looks forward to sharing its “success in Japan with Vietnam by showcasing the transformational benefits of open RAN”, including increased deployment flexibility, network performance and security.

Last week, Zain Kuwait reached a deal to use Japan-based Rakuten Symphony’s open RAN and cloud platform to deliver standalone 5G service.

Rakuten Symphony was set up to export Rakuten Mobile’s software-based model to markets outside Japan.

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Mikitani said a net lower loss has continued since last year, “demonstrating steady progress toward full-year EBITDA profitability”. He added improvements in network quality and customer acquisition strategies are showing results, and “we expect further growth going forward”.

He suggested reciprocal tariffs with the US will have no direct impact on the procurement or supply of equipment for the operator.

Mobile segment revenue increased 10.9 per cent year-on-year to JPY100.7 billion, and non-GAAP operating loss improved by JPY14.3 billion to JPY51.3 billion.

Mobile services revenue grew 31.9 per cent to JPY47.7 billion, with data ARPU rising 5.3 per cent to JPY1,734. Device sales increased 29.5 per cent to JPY17.5 billion.

The operator added 181,000 subscribers in the opening quarter, increasing its user base 26.4 per cent from a year earlier to 8.6 million.

According to GSMA Intelligence the greenfield open RAN operator is by far the smallest in Japan, behind market leader NTT Docomo, KDDI and SoftBank, with a 4 per cent market share.

It plans to deploy more than 10,000 new base stations by end-2025 to reduce coverage holes. It closed Q1 with 94,000 base stations.

Its Rakuten Symphony software business saw sales fall 17.1 per cent to JPY13.6 billion due to the timing of deliveries to its main customers, but signed contracts with 13 new customers, mainly in cloud and OSS businesses.

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During the test, a signal was sent from Rakuten Mobile’s gateway earth station in Fukushima to a BlueBird satellite, which relayed it to a standard smartphone in Tokyo using a standard communications app.

The call was enabled by AST SpaceMobile’s BlueBird Block 1 satellite and marks a step toward the launch of Rakuten’s Saikyo Satellite Service, scheduled for commercial rollout in Q4 2026. The service is designed to extend coverage to mountainous areas, remote islands and disaster-affected zones across the country.

The Japanese operator noted the trial was carried out under an initial experimental licence granted by authorities, adding it plans to secure a full experimental licence to continue testing ahead of commercial deployment.

While AST SpaceMobile launched its first commercial LEO satellites in September 2024, it partnered with Rakuten Mobile in March 2020 with the goal of delivering direct-to-device satellite connectivity without specialised hardware.

Rakuten – alongside AT&T, Google, Verizon, Vodafone, Bell Canada and American Tower – is an investor in AST.

Rakuten follows other operators (ATT and Verizon, and Vodafone) in showcasing direct to device satellite video calls with AST SpaceMobile.

Rakuten Group chairman and CEO Mickey Mikitani hailed the breakthrough, emphasising the operator’s commitment to expanding coverage. He noted that extending service to Japan’s remote and mountainous regions remains a challenge due to the complexity of building base stations in such areas, highlighting the value of satellite-based solutions.

“Japan offers fertile ground for satellite technology,” wrote CCS Insight senior analyst Luke Pearce in a recent report. “Despite the country’s extensive terrestrial coverage, the Japanese market has a high average revenue per user and strong demand for connectivity thanks to a great reliance on connectivity and a varied topography. Demand may be particularly high in areas susceptible to earthquakes or tsunamis.”

Rakuten rival KDDI meanwhile is working with Starlink on a D2D satellite service in Japan, expected to be up and running in early 2025.

The post Rakuten, AST SpaceMobile make Japan’s first satellite video call appeared first on Mobile World Live.

The operator’s EBITDA in December hit JPY2.3 billion ($15.1 million). The figure for the full-year dropped by JPY98.7 billion from a year ago to a loss of JPY53.8 billion.

Mikitani attributed the move to profit to strong subscriber acquisition and increased ARPU due to improved network quality, as well as ongoing cost control and rising ad revenue.

He added Rakuten Mobile will be “a driving force” for the group’s future growth, accounting for 34.4 per cent of consolidated revenue growth in 2024.

Mikitani noted it covered annual capital needs without relying on new debt for the group. Capex fell from JPY169 billion in 2023 to JPY81 billion last year. The company noted some investments were postponed to 2025, with the outlay forecast to climb to JPY150 billion.

Service revenue in Q4 grew 40.3 per cent to JPY46.6 billion, with its operating loss declining to JPY46 billion from JPY62 billion a year earlier.

The operator added 1.6 million subscriber to take its total to 8.3 million at end-2024. Core ARPU increased 2.6 per cent to JPY1,770.

The company outlined its three-pronged approach to executing on its AI ambition, with 2025 to be the year of scaling after launching Rakuten AI for Business last month and its consumer AI offering in October 2024.

Chief AI and data officer Ting Chi noted the company plans to scale its AI foundation by adding useful deep learning applications across the Rakuten ecosystem.

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Co-CEO Kazuhiro Suzuki explained on an online briefing most users of AI features are large entities, with the operator looking to bring the power of AI of more companies in Japan.

Suzuki added Rakuten AI for Business overcomes a number of challenges slowing implementation, such as a lack of a secure environment and technical support designed for business, leading to underutilisation.

He claimed its AI offering is easy to implement, has no upfront or setup costs and offers clients training and support via a consulting team. It gives companies a free one-month trial, with a monthly fee of JPY1,000 ($6.45) for 100,000 characters, and JPY10 for each additional 1,000 characters.

A recent Rakuten Group survey found only one in six small and medium-sized enterprises in Japan use AI, with 40 per cent of non-users unaware of AI benefits. Among the SMEs surveyed, 16 per cent use AI, indicating adoption of the technology is still in its early stages with significant potential for growth, the company stated.

Customised model
Rakuten AI for Business uses its own large language model to meet different customers’ needs. By customising the model and integrating its enterprise knowledge, Suzuki noted it can provide more tailored services for business customers, Suzuki said.

The operator will target the new service at its existing base of 18,000 enterprise clients as well as the group’s 630,000 corporate customers.

Rakuten Group partnered with OpenAI in 2023. Rakuten Mobile launched its AI chat assistant for consumers in December 2024.

Chair Mickey Mikitani last week told Bloomberg it is not competing against OpenAI or Google but is building a more vertically integrated, specialised AI model, adding it sees an opportunity in Japan, which has been slow to adopt AI-powered technologies.

He noted during the briefing the operator aims to reduce energy usage at its base stations and data centres by 20 per cent this year, part of the group’s Triple 20 goal to improve marketing, operational efficiency and client efficiency by 20 per cent. 

Mikitani said the group reached half of those targets, or 10 per cent, in 2024.

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The framework, which went into effect 1 December, adds SoftBank Corp and Rakuten Mobile to the existing Connect to Change project led by NTT Group and KDDI.

The move is aimed at speeding up the restoration of mobile base station backhaul links in disaster-affected areas. The companies will share assets such as base station-equipped ships, network facilities, storage sites and refuelling stations, a joint statement noted.

NTT Group and KDDI previously developed a system for using their cable-laying ships to transport relief supplies and deploy ship-based base stations.

The mobile and fixed-line operators also agreed to share crucial information needed to assess damage and restore networks, including identifying issues in fixed-line networks that disrupt networks at critical locations such as municipal facilities and hospitals.

NTT Group is made up of NTT Corp, NTT East, NTT West, NTT Docomo and NTT Communications.

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Vodafone Group’s head of open RAN Francisco Martin Pignatelli (pictured) and Geoff Hollingworth, CMO, Rakuten Symphony, agreed the primary challenge for moving to open RAN networks is not technical, but cultural.

“It’s a skill set development organisation process problem, and you can actually move much faster than feels comfortable,” Hollingworth said.

He stated the industry learned to accelerate innovation during the Covid-19 (coronavirus) crisis.

“A two-year project in Covid became a six-month project when we moved customer support,” Hollingworth explained. “We don’t have a problem when we have no choice. But if we have a choice, it feels safer, perhaps, to move slower. My argument would be that we have to move as quickly as possible.”

Pignatelli said mobile operators need to find the right partners for their open RAN journeys. Part of that process is motivating vendors to achieve specific KPI goals in a timely manner to avoid potential finger pointing.

Additionally, he said if multiple suppliers are working on rigid R&D cycle projects, they run the risk of falling behind if one of them is delayed.

“We have had to add on for some more flexibility than what we were using in the past, but that’s certainly happening,” he said.

Both executives said that as open RAN matures with deployments by large operators, there needs to be blueprints of best practices for smaller companies for network deployments that are still open, flexible and programmable.

“In the past, those operators would call a traditional supplier, and everything is done for them,” Pignatelli said. “But today in open RAN, who do you call? There are different models to do it. I think that’s what we need to nail in the next few months and make it easy for smaller operators.”

He continued: “Then when they join, we will be speeding up the adoption cycle.”

Replays of all Unwrapped interviews this week will be available at: https://www.mobileworldlive.com/unwrapped/the-5g-evolution/

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Speaking in an analyst and media roundtable, Sriwastawa asserted word was spreading about the operator among heavy data users in Japan, particularly among those aged between 20-years and 35-years old, a segment where it claims a penetration of around 10 per cent in urban areas.

He acknowledged challenges remain on the network side and it is working to address coverage gaps in subways and indoors by sharing more base stations and deploying small cells. It is also increasing capacity in dense areas by deploying more 5G sites.

The operator closed Q3 with 65,000 4G base stations and 34,000 5G.

In its earnings documents, it stated total mobile users hit 8.1 million earlier this month.

Sriwastawa noted seasonality plays a part in subscriber gains, with net additions peaking in the second quarter. He expects it will add around 370,000 in the current quarter, noting since it is limiting spending on marketing it expects the same pattern in 2025.

“We’re on the right trend. We want to growth to 10 million, then to 12 million or 15 million.”

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Mickey Mikitani, Rakuten Group chair and CEO (pictured), argued in a statement improved network quality and the simplicity of its unlimited mobile offering were key to fuelling subscriber growth. He added the group’s ecosystem is also a key factor through cross- and up-selling opportunities, along with advertising.

He noted although it is still in the investment phase to acquire new subscribers, its pre-marketing cashflow turned positive.

Revenue grew 29.9 per cent to JPY67.9 billion, aided by a 44.2 per cent increase in subscribers to 6.9 million.

Data ARPU was flat at JPY1,704.

Mikitani stated net additions of 610,000 were its highest ever in a quarter.

It added 500,000 users in Q1 and hit 7.7 million as of early August.

Non-GAAP operating losses fell to JPY59.5 billion from JPY79 billion.  

H1 capex fell by more than half to JPY46 billion. The outlay for the full year is forecast to come in under JPY100 billion, down from JPY167 billion in 2023.

The chair pointed out a deal yesterday (8 August) to sell part of its network to a consortium of investors to raise between JPY150 billion and JPY300 billion tremendously improves the financial situation by allowing it to reduce interest baring debt.

Rakuten Symphony sales dropped 18 per cent to $85 billion.

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Rakuten to sell, lease network in up to $2B deal

What happened: Rakuten Mobile agreed a ten-year sale and leaseback agreement for part of its network with a group of investors led by Macquarie Asset Management, a transaction which will give the Japanese operator funding worth between $1 billion to $2 billion.

Why it matters: Funding from the deal will enable Rakuten Mobile to solidify its financial foundation and raise capital to expand its network in the country, while remaining in control of the assets. Rakuten Mobile CEO Mickey Mikitani said the company is “already well on its way to profitability, and with our new initiative, we will continue to build on this momentum as we aim to reach profitability even faster and become the top mobile carrier in Japan”.

Major investor cool on AI, claims Nvidia in a bubble

What happened: Activist investor Elliott Management expressed skepticism about the deployment of AI in the long term and claimed trailblazer Nvidia was in a bubble, a warning which came shortly before technology shares were hit by poor earnings.

Why it matters: Elliott Management questioned if big technology companies will continue buying Nvidia’s GPUs in bulk, arguing many AI applications are not yet fit for commercial use and are “never going to be cost-efficient”. Elliott is renowned for being outspoken about the telecoms and technology sector, having picked battles in the past with companies including AT&T and X.

FCC approves AST SpaceMobile licence for D2D service

What happened: The US Federal Communications Commission issued an initial licence for AST SpaceMobile to launch five of its low earth orbit (LEO) satellites in September as the company readies plans to offer direct device-to-device (D2D) services.

Why it matters: The move marks a major milestone in AST SpaceMobile’s D2D push, in what is becoming an increasingly competitive segment. AST SpaceMobile claimed it already has agreements in place with more than 45 mobile operators, and is in the process of moving the first five satellites to a launch site owned by SpaceX, which is also planning to deploy commercial services in the coming months.

The post The Friday File: Rakuten lines up funding, investor dampens AI hype appeared first on Mobile World Live.

The consortium is led by Macquarie Asset Management and includes British Columbia Investment Management Corp, through the Macquarie Asia-Pacific Infrastructure Fund 3.

Through the ten-year deal, Rakuten Mobile secured working capital and funds to support its network expansion: it will to continue to manage and operate the assets.

The operator’s parent Rakuten Group said it will announce the final amount and other conditions in due course.

Rakuten Group chair and CEO Mickey Mikitani noted in a statement Macquarie Asset Management believes in its vision, adding “together we’ve made our financial foundation even stronger”.

The company stated the deal will enable Rakuten Mobile to meet its immediate funding needs and also contributes to diversifying its financing methods and expanding its investor base.

Mikitani said in February it aims for monthly EBITDA break even by end-2024 and maintained a target to achieve this on an annual basis in 2025.

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The latest gain comes after the operator added 500,000 users in Q1. It signed up 1.5 million new users in 2023, following a decline in 2022. 

The net addition rate over the past two quarters is more than double the quarterly average of 200,000 in 2023 and 2022.

In July 2023, the operator introduced lower-cost Un-Limit VII plans, which range from JPY980 ($6.22) to JPY2,980 a month. 

Chair Mickey Mikitani previously said the company aims to capture 4 per cent of the overall Japanese market, with 8 million subs by end-2024 and 10 million by end-2025.

GSMA Intelligence data shows Japan ended March with 190.5 million mobile connections. With 8 million subscribers, Rakuten Mobile would have a 4.2 per cent share.

NTT Docomo had 71.8 million, KDDI had 66.7 million and SoftBank Corp had 44 million.

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On its Q1 earnings call, Mikitani claimed “smooth progress” in turning around the group’s loss-making mobile unit, noting profitability is just around the corner, with a target of EBITDA turning positive by December 2024.

He noted it is now in the third phase of its launch, which is telling customers about its improved network quality. It is working to a target of 10 million subscribers by end-2025.

The operator’s revenue grew 7.1 per cent year-on-year to JPY62 billion ($396.3 million), with mobile service sales expanding 36 per cent to JPY36.1 billion. Its operating loss was JPY66 billion compared to JPY92 billion a year earlier.

Looking at the group’s broader mobile segment, which includes subsidiaries such as Rakuten Symphony, its operating loss dropped 30 per cent to JPY71.9 billion, while revenue increased 3.6 per cent to JPY99.8 billion. Symphony revenue jumped 55.3 per cent to $118 million.

In early April the operator said it added 1.5 million subscribers within a year, taking its total to 6.5 million at end-March.

ARPU was up marginally to JPY2,024. Mikitani noted it targets increasing that to JPY2,500 by charging more for a higher-quality service. He also highlighted that since the operator doesn’t do business on a standalone basis, the wider Rakuten ecosystem gives users access to value-added services and loyalty rewards, which can drive ARPU gains.

Capex in the first quarter dropped 47 per cent to JPY33 billion from a year earlier.

The operator is targeting commercial launch of service on the 700MHz band in June, which will help take population coverage to 99.9 per cent.

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In a statement, Rakuten Mobile explained an MoU with Stage X and Rakuten Symphony aims to establish a “comprehensive framework for strategic collaboration in technology and business exchange”, without specifying what services it will provide to the newcomer.

The agreement includes sharing industry knowledge and expertise with Rakuten Mobile and the delivery of services from Rakuten Symphony. 

The three companies will also explore expanding into mid-band frequencies and developing a 6G-based national network.

In April, Stage X announced it will provide free 5G data to all registered customers until its service ecosystem is established.

The operator, owned by a South Korean-based consortium led by messaging giant Kakao, won a bid for 5G spectrum in the 28GHz band in February 2024, paying more than twice as much than each of the three incumbents shelled out in 2018.

The Stage X consortium, made up of Kakao unit Stage Five and other local companies, paid KRW430.1 billion ($312.5 million) for 800MHz in the band. Stage Five, parent of Stage X, runs MVNO services in South Korea.

The Ministry of Science and ICT held an auction after cancelling the five-year spectrum licences of SK Telecom, KT and LG Uplus for failing to reach a mandated base station deployment target in the 28GHz band. The operators met the government’s base station deployment target in the 3.5GHz band, which carries ten-year licences.

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In a statement, the operator noted it is preparing to launch operations on the 700MHz band, adding it will use its expertise gained deploying Japan’s first fully virtualised cloud-native mobile network based on open RAN standards in the 1.7GHz band. Once radio frequency testing is completed, the company aims for the early roll out of commercial service using the band.

Marc Einstein, chief analyst at research company ITR, told Mobile World Live the lower-band spectrum delivers better signal quality and covers a larger area with less infrastructure, enabling the operator to lower capex. In addition, it offers better indoor penetration.

He added that’s why the band in Japan is referred to as the platinum band.

The loss-making operator said in November 2023 it would improve coverage and optimise its network by launching service on the 700MHz band early in 2024. A month earlier, Japan’s Ministry of Internal Affairs and Communications approved the operator’s proposal to expand mobile services into the band using more than 10,500 base stations, currently running on 1.7GHz spectrum.

Its parent Rakuten Group recorded a net loss of JPY339.4 billion ($2.2 billion) in 2023, its second-largest annual loss, following heavy investment into its mobile unit since 2020.

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The relative newcomer and open RAN pioneer added 500,000 users in Q1 to take its total to 6.5 million. It signed up 1.5 million new users in 2023, following a decline in 2022. 

At the current quarterly addition rate the operator will reach 8 million users by end-2024 and 10 million at end-2025. The question is can it sustain the Q1 growth rate: over the past two years, net additions rose an average of just 200,000 a quarter.

Chair Mickey Mikitani previously cited the range as the level needed to stem its losses, stating in February – following sharp cost cutting – it aims for monthly EBITDA break even by end-2024 and to achieve this on an annual basis in 2025. He also emphasised that with population coverage above 99 per cent, capex this year will fall 44 per cent to JPY100 billion ($652.7 billion).

Marc Einstein, chief analyst at research company ITR, expressed scepticism the company can break even by 2025 as a standalone domestic operator, estimating it needs at least 10 million to 15 million subscribers to achieve this, as in the long term it is difficult to survive with such a small market share.

Raising questions about the nature of the recent jump in subs growth, the operator noted a “dramatic increase in B2B subscribers” in Q4, which diluted ARPU. Einstein told Mobile World Live the company appears to include IoT connections, under the B2B category, in its subscriber figures.

He argued if the operator can address spotty coverage issues, it’s possible to continue to add users at a brisk rate but noted this “requires more capex, and the company is keen on limiting the outflow of capital at the moment”.

The operator ended 2023 with nearly 61,000 LTE base stations and 11,600 5G sites, far behind NTT Docomo with more than 261,000 and nearly 31,000, respectively. KDDI’s 4G sites totaled 195,000, while SoftBank Corp had 175,000.

Ecosystem synergies 
Mikitani insists its cost-cutting programme, combined with an increase in subscriber additions, will set it on the path to profitability. 

He has long touted the advantages of the e-commerce giant’s wider ecosystem, which in effect boosts ARPU via supplementary purchases, such as advertising and miscellaneous B2B income.  He also highlighted the contribution its mobile unit makes to the group’s overall services, claiming an impact of JPY10 billion on revenue and JPY6 billion EBITDA, as well as an “ecosystem ARPU uplift” of JPY764 per user.

There’s also its software platform Rakuten Symphony, long hyped as a growth engine for the group, working with mobile operators around the world to deploy end-to-end virtualised infrastructure using open RAN equipment. But revenue there in 2023 actually fell 15 per cent year-on-year to JPY398 billion.

The chair pointed to continued progress in deliveries to existing global customers, but with more focus on anchor clients, noting revenue tends to be uneven on a quarterly basis due to seasonality and hardware and software deliveries.

Last year the operator’s MVNO revenue dropped 37 per cent to JPY56.9 billion – it stopped signing up new users when it launched MNO service in 2020.

Einstein believes the operator’s success depends on how it can perform as a vendor and in the enterprise space. “It has some interesting new solutions in the telecoms management software space using AI, and if these are adopted overseas this would greatly improve its prospects.”

Four is a crowd
As its sub growth picks up, competition is intensifying. The operator is battling three formidable rivals: Docomo with nearly 90 million subscribers, KDDI 67 million and SoftBank Corp 30 million.

And the industry track record for a fourth entrant in the region isn’t encouraging. 

Australia had four players with licences beginning in 2014, when TPG Telecom, previously an MVNO, acquired spectrum and introduced its own service. Then it merged with Vodafone Hutchison Australia in 2020 and now has about a 17 per cent market share in a three-player market.

In Singapore, TPG Telecom launched 4G service in 2020 and rebranded Simba Telecom in 2022 with a focus on prepaid users in a predominately post-paid market. GSMA Intelligence data showed it has less than a 10 per cent share, with 966,000 mobile connections at end-March.

India is down to three major players, having once accommodated as many as 12 in 2018, including two state-owned entities, with Vodafone Idea currently struggling with subscriber losses and a huge debt.

Bizarrely, South Korea, one of the most connected countries in the world, soon will have a fourth player after local consortium Stage X acquired 28GHz spectrum in an auction. The Korean government, as also witnessed in Singapore and Australia, continues to call for more competition to spur lower prices for mobile and broadband connectivity.

The push often seems unfounded. Chetan Sharma Consulting back in 2011 expounded the Rule of Three, a theory that in a mature market three top players will dominate, or a market typically settles down to three major operators after inefficiencies are worked out.

After four years of heavy investment in Rakuten Mobile, its parent is looking to increase collaboration and likely reduce costs as well, unveiling plans to combine its fintech subsidiaries and listed banking unit into a single business. The group booked a net loss of JPY339.4 billion in 2023, its second-largest annual loss.

The question is how long will Rakuten Group allow its mobile unit to weigh on its bottom-line? If breakeven is again pushed back, the appetite for further investment and losses will likely evaporate. 

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

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Chair and CEO Mickey Mikitani explained in a statement the companies signed an MoU agreeing to initiate discussions aimed at reorganising its fintech business and Rakuten Bank.

It’s fintech unit covers everything from credit cards and online payments, to securities and insurance.

The reorganisation is expected to take effect in October, but the company noted the timing is subject to change depending on the discussions, approvals and licences from regulatory authorities.

Rakuten Bank is 49.3 per owned by the group and will proceed with “further examination and discussions” on a reorganisation, the company stated, adding better data integration and AI use are “crucial for providing innovative financial services and adding more value to customers”.

Rakuten Mobile’s operating loss in Q4 2023 fell 35.8 per cent year-on-year to JPY68 billion ($448.5 million), as it added 1.5 million subscribers to take its total to 6 million.

Its parent booked a net loss of JPY339.4 billion in 2023, its second-largest annual loss.

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Mickey Mikitani, Rakuten Mobile chair, stated it is committed to expanding mobile connectivity across Japan, where remote islands and mountainous regions present one-off challenges.

He said such hurdles “require innovative solutions”, adding the threat of natural disasters and effects of climate change had heightened public awareness of the importance of mobile connectivity for daily life.

The operator said the actual timing and scope of the launch “is uncertain and is subject to a number of factors, including those that are outside of the control of Rakuten and AST SpaceMobile”.

Rakuten Mobile secured preliminary experimental test station licences from Japanese authorities to trial the service with AST SpaceMobile in 2022, and completed two-way voice calls between Japan and the US using standard smartphones in 2023.

Its rivals have all worked out satellite broadband service deals with various providers.

NTT Docomo and its parent signed a deal with Project Kuiper in 2023 for the provision of broadband services.

KDDI has an agreement with SpaceX’s Starlink and SoftBank Corp reached a deal to use Eutelsat OneWeb’s LEO satellites to deliver space-based communications.

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Full-year capex of JPY177.6 billion came in 11.2 per cent lower than its initial guidance, with the outlay in the current year forecast to drop below JPY100 billion. He tipped roaming costs to continue to decline.

Mikitani said it aims for monthly EBITDA breakeven by end-2024 and maintained a target to achieve this on an annual basis in 2025.

Operating loss in Q4 2023 fell 35.8 per cent year-on-year to JPY68 billion.

Sales increased 11.3 per cent to JPY59.1 billion, with MNO service revenue rising 34.8 per cent to JPY33 billion.

The operator added 1.5 million subscribers to end-2023 with 6 million, reversing a slight decrease in 2022.

ARPU including consumer and business users rose 9.5 per cent to JPY1,986.

The number of LTE base stations increased 16.5 per cent to 60,940 and 5G sites 64.2 per cent to nearly 11,600.

Its retail footprint dropped to 853 outlets from 1,200. 

Revenue from software platform Rakuten Symphony grew 91.5 per cent from the previous quarter to JPY21.5 billion, with Mikitani noting continued progress in deliveries to existing global customers, but with more focus on anchor clients.

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