Rakuten the 'unvendor' has a lot to prove

Possibly inspired by T-Mobile's "uncarrier" unconventionality, Rakuten has been styling itself the "unvendor" as it bowls into the market for telco cloud products.

T-Mobile wanted to distance itself from AT&T and Verizon, rivals that John Legere, T-Mobile's former CEO, mocked as "Dumb and Dumber" while he ran off with millions of their smartphone customers.

For Rakuten, the equivalent targets include the companies that sell applications, software and technology platforms to the world's telcos – think IBM, Nokia and Google, to name but a few.

Rakuten thinks it can outfox these giants in a market it values at between $280 billion and $380 billion.

It has packaged up the cloud and software tools used for its own network deployment in Japan and started marketing these to other service providers as the Rakuten Communications Platform (RCP).

No quick wins
But RCP has not had an explosive start.

Dish in the US had always seemed likely to become the flagship customer.

Much like Rakuten, it is building a fourth mobile network based on the latest cloud and software technologies, including open RAN, an in-vogue system promising more competition in the radio access network.

It has looked to Rakuten for guidance.

"Dish came to Japan many times before as they were assessing what is the technology architecture they want to do in the US," said Tareq Amin, the chief technology officer of Rakuten Mobile, during a call with reporters this week.

"If you see the decisions Dish is making, they have similarities to what we are doing, and the vendor choices are common to what we have done and deployed in our network."

Not all that similar, though.

Earlier this week, Dish revealed Nokia as its 5G core network provider in a deal that does not appear to leave much room for other suppliers, including Rakuten.

Gabriel Brown, a principal analyst with Heavy Reading, questions the appetite among larger operators, especially brownfield ones, for Rakuten's offer.

"If you are an operator prepared to do open RAN, do you want to take a core as a service from another operator?" he asks.

"Honestly, it is hard to imagine. It might work for smaller and greenfield players."

Small and greenfield are not words that describe Rakuten's latest partner.

Earlier this week, it signed a memorandum of understanding (MoU) with Spain's Telefónica for an open RAN partnership.

That MoU covers open RAN research, proposals, ecosystem development and joint procurement – but not RCP.

Rakuten managed to squeeze in a mention of that at the end of its press release, like a Japanese train-pusher cramming the last passenger on board.

Squashed above the about-company blurb, it reads: "In addition, the companies will also jointly work on 4G/5G core and OSS [operational support systems] technology utilized by Rakuten Mobile in Japan and its Rakuten Communications Platform."

Vampire strategy
Telefónica, evidently, has yet to be convinced.

"We have been working a lot to understand the platform of Rakuten, so we will consider," Enrique Blanco, Telefónica's chief technology officer, told reporters on the same call that featured Amin.

"We have been working with Tareq and we do not discard."

At least Blanco did not reject RCP outright. But he was hardly dancing the rumba about it, as Rakuten would have hoped.

Operators are right to be wary, according to Franck Spinelli, the CEO of a network startup called Amarisoft that France's Orange previously said it would support (although Amarisoft remains wholly owned by Spinelli and Fabrice Bellard, its chief technology officer).

In a June article published on LinkedIn, Spinelli said that Rakuten's plan would reduce operators "to marketing companies and frequency landlords, just renting out their property."

"It could work for some of them, but this vampire strategy can't be sustainable," he said.

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Rakuten has been in talks with as many as 70 service providers and governments worldwide, says James Crawshaw, a principal analyst with Omdia, in a recently published report about the OSS landscape.

Crawshaw thinks some of these organizations will like what Rakuten Mobile's technology boss has to say.

"Tareq Amin is a pretty convincing guy, so I can see other operators signing up for RCP and at least doing some trials," said Crawshaw in his own recent LinkedIn update.

Neither Dish nor Telefónica has ruled it out.

If Telefónica does opt for some RCP applications, it is likely to be in one of its smaller markets, says Brown.

Dish could see a need for some of Rakuten's automation tools, having not yet chosen its providers.

"Where there is more work to be done is in the automation layers, the customer slice and orchestration capabilities," Marc Rouanne, Dish's chief networks officer, told Light Reading this week.

"We have tested all the elements and now have what it takes to do calls and a small number of slices," he said.

"It is when we scale it to thousands of slices in an instant manner that we will need more automation."

Amin's sales pitch is undeniably persuasive.

"We are marching toward something we call Level 4 Autonomous Network," he said this week.

"This is within grasp, a network that can truly self-manage and self-heal and self-organize without intervention.

"This is the secret sauce of what future cloud-native telco networks will bring to traditional or even greenfield networks."

Rakuten has already been an important catalyst for open RAN, convincing many analysts to adopt a more bullish outlook for the nascent technology.

If it can do the same thing for automation, RCP may stand a much better chance.

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— Iain Morris, International Editor, Light Reading