Japanese e-tailer Rakuten submits application for mobile frequencies

27 Feb 2018

Japan’s biggest e-commerce company Rakuten yesterday (Monday 26 February) submitted an application for cellular frequencies to the Ministry of Internal Affairs and Communications (MIC), as it takes the next big step in its quest to become the country’s fourth major mobile network operator (MNO). The e-tailer is aiming to launch the new service in 2019, offering tariff plans linked to its online shopping platform in a bid to lure in customers. Rakuten – which has some experience of the market already via its MVNO venture with host network operator NTT DOCOMO that has amassed around 1.4 million customers – is targeting signing up around 15 million customers by the end of year ten, by throwing down the gauntlet to Japan’s dominant ‘big three’, DOCOMO, KDDI (au) and SoftBank. To help realise this, the group established a new wireless venture, Rakuten Mobile Network, last month, with Rakuten’s chairman and CEO, Hiroshi Mikitani, at the helm. The company will invest JPY600 billion (USD5.61 billion) to deploy base stations and ancillary infrastructure, it said.

The MIC will consider Rakuten’s application over the coming weeks, with a decision expected by end-March. Local industry watchers note that the government usually views applications for spectrum from new players more favourably than those submitted by existing carriers, given it is keen to nurture competition in the market. Rakuten’s decision to shift from MVNO to full-blown MNO is based in part on its calculation that having its own mobile network would be more economical than paying connection fees to its host carrier if its customer base expands. ‘Considering the cost and other hassles [of renting the lines], it’s hard to generate a lot of revenue,’ Rakuten chairman, president and CEO Hiroshi Mikitani explained.

The communications ministry plans to free up the 1700MHz and 3.4GHz bands (currently being used by the Defence Ministry and others), and confirmed that the big three also applied for the spectrum on Monday. Should Rakuten Mobile Network prove successful in its application, it would mark the first new player in the market since eAccess secured frequencies back in 2005 and launched two years later under the branding eMobile. Despite signing up around four million users though, it struggled to make headway and was bought out by SoftBank in 2013.