Bells and whistles: Rakuten CEO sees massive upside for Symphony, software and services

News Analysis Phil Harvey, Editor-in-Chief, Light Reading 8/5/2021

Rakuten Group CEO Mickey (Hiroshi) Mikitani said on Wednesday that he sees the entire addressable market for its new Rakuten Symphony business as exceeding $100 billion a year, worldwide, as the company aims to offer its network and software as a service to telecom operators, enterprises and governments.

That's a tall order for a company that has yet to break even on its own network yet, but the company believes in its ability to turn its network and e-commerce smarts into products that would benefit telecom carriers and businesses of all kinds.

Mikitani, speaking on a conference call with journalists and analysts, reiterated that Rakuten Symphony, announced Wednesday, brings together all of the software and services that made up the company's 4G and 5G infrastructure and platform solutions, including its Rakuten Communications Platform (RCP).

Rakuten's Mickey Mikitani, in a company file photo, glowing with optimism.

The promise of dominance

Rakuten's Global CTO, Tareq Amin, said the Symphony business unit included its unified cloud (cloud infrastructure and orchestration), network functions (the RAN, the core and the edge), intelligent operations (OSS and network orchestration), digital experience (the BSS and digital marketplace), as well as "the larger ecosystem of Rakuten itself," referring to its e-commerce properties, Internet services, gaming platforms and payment and finance consumer businesses.

Rakuten's vast collection of network operations and consumer-facing Internet services is now available as individual software subscriptions or as part of a larger network-as-a-service offering, the executives said.

"I think when you look at the potential opportunity, we think it's substantial. And we are certainly not entering this platform business to be a secondary supplier," Amin said to Light Reading on the call. "We want to really compete, and do a good job for our future customers to dominate this market."

It's not entirely clear which suppliers and partners Rakuten is using in its telco cloud, network functions and operations. The company did acquire operational support system (OSS) provider Innoeye last year and it announced on Wednesday that it has bought open RAN champion Altiostar.

Rakuten already owned a majority share of Altiostar, but now it can fully integrate the company's technology into RCP and offer its various RAN and edge solutions as part of its Symphony suite. Altiostar just announced a multi-year agreement with Dish to deliver that company's open RAN solutions for its 5G network buildout in the US.

A cloudy future of CSPs

"I have always been skeptical of the concept of an operator being a significant network vendor to other operators. But, as the network becomes software, Rakuten is clearly challenging that notion," said Omdia's practice leader for fixed and mobile infrastructure, Daryl Schoolar, in a message exchange with Light Reading.

Rakuten's Symphony business unit does indeed vault the company into a different competitive stratosphere. "As a traditional operator, given Rakuten's background as a cloud service provider, I would be concerned as Rakuten is certainly setting itself up to enable more cloud providers to move into the CSP space," Schoolar said.

Rakuten Symphony will be at the forefront of the company's just-announced contract to design, maintain and operate a new mobile network for 1&1 Drillisch AG in Germany. But Rakuten's ambitions for its technologies and platforms go far beyond the telecom space, according to Mikitani.

5G network operators today "are looking for a new business model because, as the network becomes faster, the connectivity itself will be kind of commoditized," Mikitani said.

Carriers asked Rakuten to provide its ecosystem as a service to them, including the membership and loyalty platforms, e-commerce, payment and financial services capabilities, and so on, he said. That gives carriers a way to both provide connectivity and monetize several of the dozens of things that consumers do with that connectivity. For Rakuten, it provides a recurring revenue business in the cloud.

Add in the fact that some of the company's process management, operational management and other IT functions could be applicable to other industries, Rakuten seems determined to have its Symphony heard outside of the world of telecom. "Obviously, it's step by step," Mikitani said. "But in the future, we are envisioning going even beyond just providing, you know, basically platform for mobile companies."

Related stories and posts:

Sign up for our daily and weekly newsletters to get telecom service provider and vendor coverage, in-depth reporting and Light Reading interviews.

— Phil Harvey, Editor-in-Chief, Light Reading