Rakuten Delays Launch of Cloud-Native Network

Robert Clark
News Analysis
Robert Clark
9/6/2019
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Rakuten Mobile today confirmed what has long been expected -- the launch of its cloud-native 4G network will be delayed.

Its challenge to the status quo in the Japanese mobile market, originally scheduled to start in October, will have to wait until late this year or early next, Chairman and CEO Hiroshi Mikitani acknowledged today.

He said full service would begin as soon as the company is confident of "stable operation" of the new network.

"It could be within a month or maybe three months -- today it's not [yet] decided. It's not going to be six months off," he told a Tokyo press conference on Friday.

He denied media reports that the rollout had been delayed by the difficulty in acquiring cell sites. The biggest challenge had been technology, he said.

The company will select 5,000 customers for a free trial on its limited network in metropolitan Tokyo and several other cities, starting on October 1.

It has struck a roaming deal with KDDI to provide national coverage.

The ecommerce giant has accumulated 2.2 million customers at its MVNO business since 2014, making it the biggest MVNO by market share.

It is banking on shaking up the MNO market as it did the MVNO business by attacking on price and leveraging its large customer base, including its 100 million club members.

Mikitani today said the new offerings would impose "no restrictions" on customers, such as contracts or cancellation fees.

He also unveiled a service called Link that he said would integrate voice, data and other applications and be the core of Rakuten's offerings on the new network.


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Despite the delay, Rakuten's entry into the MNO business has captured the attention of both competitors and consumers.

Analysts say its pending debut has slowed subscription sales for other carriers as consumers wait to see what it will offer. Rival operators are watching for it to show its hand on price.

Mikitani and his team are also selling the idea that their new network will deliver lower costs and better performance.

They have assembled a small army of suppliers to build a virtualized network built on x86 hardware.

Rakuten has no dedicated hardware except in its antennas, ensuring the upgrade to 5G will be straightforward, Mikitani said.

Chief Architecture Officer Tareq Amin said the network has "virtualized everything," including radio access, core, transport, IP, billing and operational support systems.

The virtual radio access network would save up to 30% on capex and up to 40% on opex, he said.

Rakuten has deployed 182 virtual network functions and 200 "far-edge data centers" to support VR, AR and cloud gaming.

Marc Einstein, chief telecommunications and digital services analyst at ITR Corp Japan, said the delay was not a surprise.

"Rakuten hasn't unveiled the official pricing yet but there is a lot of speculation that it will be free or at least heavily subsidized by their other businesses," he added.

— Robert Clark, contributing editor, special to Light Reading

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mobylanalyst
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mobylanalyst,
User Rank: Light Beer
9/6/2019 | 1:50:13 PM
It's the "technology?"
This article says the CEO blamed delays on "technology," not site acquisition.

But today the Nikkei Asian Review says, "Progress has been slowed by trouble connecting the stations to existing fiber-optic and other networks, an industry source said." Does anyone have a transcript of the press conference, or the original quote on this aspect from Rakuten?