Japan’s largest e-commerce company Rakuten is working on plans to build its own nationwide 4G mobile network, throwing down a challenge to the long-established dominance of the three incumbents, NTT DOCOMO, KDDI (au) and SoftBank. In a statement released today, the company – sometimes described as ‘Japan’s answer to Amazon’ – said it is aiming to launch commercially in 2019, with a view to securing at least 15 million subscribers in the medium-term. Rakuten’s bold move to shake up the Japanese mobile market comes at a time when many telcos across the globe are exploring new revenue streams specifically targeted at growing their digital content businesses. Rakuten launched 20 years ago but has grown into a USD14 billion leviathan employing 14,000 people with a substantial network of internet portals. Its owner meanwhile, Hiroshi Mikitani, has an active interest in other related markets, including video streaming, messaging apps and payment services, and sees entering the mobile network operating sector as a way of giving his company ‘a new engine for further growth, and making it ‘one of the few companies in the world that can provide a comprehensive package of services’ in e-commerce, internet finance, digital content and mobile communications.
Critics note, however, that Rakuten – which has some experience of the market already via its MVNO venture with host network operator DOCOMO that has amassed around 1.4 million customers – faces an uphill task. It will likely need to borrow up to JPY600 billion (USD5.3 billion) via interest-bearing debt to finance its ambitious plan, although it thinks it can make an impact if the government decides to give it a chunk of 4G frequencies in the upcoming auction in January. The last serious attempt by a Japanese firm to muscle into the mobile market came in 2007 when eMobile entered the fray. Despite signing up around four million users, it struggled to make headway and was bought out by SoftBank in 2013.