A legal battle between two of Japan's highest-profile tech entrepreneurs potentially looms following the arrest of a Rakuten Mobile employee over the alleged theft of sensitive SoftBank data.

Tokyo police arrested 45-year-old Kuniaki Aiba on Tuesday, under suspicion of breaching the Unfair Competition Prevention Law.

Aiba, who had worked for SoftBank Corp. for 15 years prior to joining Rakuten, is alleged to have illegally taken files relating to SoftBank's 5G, 4G and backhaul networks, Japan News reports.

In a statement, SoftBank Corp. said it believed Rakuten Mobile was in possession of its network data and "is likely to have already used our trade secrets in some way."

It said it would file a lawsuit to ensure the disposal of the data "so that our trade secrets will not be used in Rakuten Mobile's business."

SoftBank said the information allegedly stolen was "technical information about base station equipment for 4G and 5G networks and fixed communication networks that connect base stations to each other and between base stations and exchanges."

Aiba had worked on SoftBank network construction, the company said.

The former employee is accused of having accessed a SoftBank server on December 31, 2019, his last day of employment by the company, and allegedly emailed data to himself.

Police are investigating how the information was used.

Rakuten Mobile has denied that Aiba had brought any 5G technical data to the company.

It said an internal investigation had found "sales information obtained from his previous employment," but it had not been used in Rakuten's business.

The legal threat underlines the escalation in competition between Japan's operators since Rakuten's debut in September.

The new entrant has attracted worldwide attention with its ambitious deployment of a ground-breaking cloud-native network.

Its aggressive pricing, along with pressure from the government over high data rates, has driven SoftBank and NTT DoCoMo into steep price reductions, with KDDI reportedly planning to unveil its own discounts later this month.

It's early days, but SoftBank's legal threat, and Rakuten's different version of events, raise the possibility of a courtroom clash between two of Japan's richest men – SoftBank's Masayoshi Son and Rakuten's Hiroshi Mikitani.

Mikitani, who made his fortune from building Japan's biggest e-commerce platform, promised to shake up the cozy mobile industry. Japan telecoms is in for a lively 2021.

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— Robert Clark, contributing editor, special to Light Reading