2023 in review: Is Rakuten still on a roll?

Rakuten, Japan's fourth mobile operator, started 2023 dealing with large losses and desperately needing to grow its customer base. A startup with a virtualized, cloud-native network, the company was racing to improve coverage, when Tareq Amin, CEO of the Mobile and Symphony units, abruptly announced his departure in August.

Amin's decision to leave – which he attributed to family reasons – was one of the biggest stories from Rakuten this year. As Light Reading's Iain Morris wrote at the time, Amin was integral to the company's vision and left some big shoes to fill. 

Even so, Rakuten managed to recover and post a surge in customer numbers at the end of October. The company said it is on track to reach 8 million customers next year – a number it estimates might help it break even.

Yet, this is still a relatively low base in a country of over 120 million. And with analysts skeptical about its cost projections, the company is not out of the woods yet.

Merger speculation

One of the issues plaguing Rakuten's network has been a lack of spectrum, particularly in the sub-1GHz range, which is key to providing services indoors. While the company extended its roaming deal with KDDI to cover lowband spectrum this year, it has also received approval to offer services in the 700MHz band.

However, this may not help the company's financial situation, given the investment that would likely be needed to expand the network. It reportedly has set aside 54.4 billion Japanese yen (US$375 million) for new basestations.

Meanwhile, one analyst firm has predicted that the fate of Rakuten's mobile network may be a merger with KDDI.

On top of challenges in the mobile business, Rakuten Symphony, the unit tasked with selling software and services to telcos in other markets, has struggled to make inroads with brownfield operators. One partnership it has struck is a memorandum of understanding with Ukraine's Kyivstar, owned by Veon, which may see Rakuten take part in Ukraine's reconstruction. But this may not happen soon, given that the war is still raging on.

Here are Light Reading's top stories about Rakuten from 2023: