Japan's Rakuten Mobile to avoid grand entrance in October

It has made a noise about its revolutionary network approach, but the Japanese company will make a low-key entry into the mobile market in October.

Iain Morris, International Editor

August 9, 2019

5 Min Read
Japan's Rakuten Mobile to avoid grand entrance in October

There are two ways to arrive at a party. You can rock up in your new soft-top, music blaring, and crash through the front entrance armed with enough booze to fill a small lake. Or you can sidle in through the backdoor, largely unnoticed, and hang out in the kitchen.

Japan's Rakuten seemed likely to be the first kind of partygoer. Living up to its name, the ecommerce giant has spent much of this year making a racket about its plans to gatecrash Japan's cozy, three-player mobile market in October. After updates this week, it looks more like one of those tiptoeing, kitchen-bound types.

Hopes that Rakuten Mobile, as the network venture is called, would make a grand entrance, with some manner of near-nationwide service, were dispelled during Rakuten's earnings call this week. Confirmation that an October launch would be "small" sparked talk of "delay" by equity analysts covering the company.

Figure 1: Under Pressure Rakuten Mobile's Tareq Amin has talked the talk, but can he walk the walk? Rakuten Mobile's Tareq Amin has talked the talk, but can he walk the walk?

"On the call the company has confirmed that they will not be ready for full launch in October," said New Street Research in a note for investors. Instead, said the analyst firm, Rakuten will follow its "small launch" in October with an Internet campaign (whatever this means) and then a full launch. But no dates have been given for these two subsequent steps. "We think a delay is expected by the market, although possibly making this a three-step process suggests the delay may be slightly longer than anticipated," said New Street Research.

In fairness to Rakuten, the company never publicly said it would offer a mass-market service starting in October. Its revolutionary approach to building a new mobile network, and the attention it has drawn to its plans, just seemed to require an equally bold and dramatic service launch. It's as if some avant-garde chef has promised the world a taste sensation and then cooked a meal for his dad.

So has something gone wrong? While that is unknown, comments sent to Light Reading by email do hint at several concerns. "Rakuten Mobile will launch on October 1, but on a small scale," confirmed a spokesperson for the company. "As this is a world-first cloud-native network, our top priorities are security, network stability and user experience. We will gradually expand the service after launch to ensure we offer the best service to our customers."

It was never going to be easy, of course. That much was made clear at the Digital Transformation World event in Nice in May, when Tareq Amin, Rakuten Mobile's chief technology officer, described his network plans to industry executives during a closed-door session. "The easy thing would have been to go the traditional way," he said. "This journey has not been simple because our industry is not disrupting fast enough… The level of automation we have done is something the industry has not seen."

Amin, in short, is building an entirely "greenfield" network using companies and technologies that didn't even exist when Japan's mobile operators first started providing Internet services on phones. Altiostar, a start-up founded in 2011, provides the software for Rakuten's radio access network, for instance. The model Amin admires is Netflix, not NTT DoCoMo.

Want to know more about 5G? Check out our dedicated 5G content channel here on
Light Reading.

Skeptics harbor their doubts. The first is that Rakuten can make its orchestra of suppliers play together harmoniously, and without spending more than an operator using an Ericsson boombox. Made up of old and young companies, that supplier list includes (deep intake of breath) Allot, Altiostar, Ciena, Cisco, Innoeye, Intel, Mavenir, Netcracker, OKI, Qualcomm, Quanta, Red Hat, Tech Mahindra and Viavi. It certainly doesn't sound like the antidote to network complexity. Yet Amin insists his 5G costs will be 50-60% less than a traditional telco's.

The second is that a mishmash of vendors pooling open-source code and web technologies can build a resilient telco network that measures up on all the usual criteria. Amin was eager to answer his critics in Nice. "I guarantee you that some web-scalers have better resiliency," he said. "Netflix does 1,000 software updates a day and I can't recall the last time my service was interrupted. Try to do that in telecom and it is not possible, because operators think they need carrier-grade."

Strong words are not proof, though, and this week's "delay" will not instill confidence. When it does launch a mass-market service, Rakuten will be under pressure to show its new-look network gives it a commercial edge and a level of security at least as good as a traditional rival's. Fail in either respect, and Rakuten may want to keep a low profile at the telco party.

Related posts:

— Iain Morris, International Editor, Light Reading

Read more about:


About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like