MIC advisory panel gives green light to Rakuten’s mobile bid

9 Apr 2018

A Ministry of Internal Affairs and Communications (MIC) advisory panel last Friday gave the thumbs up to online shopping operator Rakuten’s bid to become Japan’s fourth mobile network operator (MNO), suggesting the move would be ‘appropriate’ in the current climate. Local press reports quote officials working for the e-tailer as saying that it hopes to launch the new mobile service in October 2019, and aims to sign up ten million subscribers by the end of fiscal 2028 by offering cheaper fee plans than those offered by the three incumbent MNOs – NTT DOCOMO, KDDI and SoftBank. Rakuten, which already operates an MVNO service, said it is considering monthly service fees of between JPY2,000 and JPY4,000 (USD18.7 and USD37.4), comparable with low-cost resellers and roughly half the JPY6,000-JPY7,000 charged by major carriers.

It is understood that the new entrant’s green light is dependent on Rakuten securing sufficient funds to roll out a nationwide network capable of offering a resilient and stable service, and maintaining its financial viability to enter the market. The MIC is expected to give the firm official approval as early as this week and, if realised, the official OK will likely result in the e-commerce firm kick-starting a plan to invest around JPY600 billion (USD5.6 billion) to build its own wireless network, while simultaneously planning to locate network bases at utility facilities including those of Tokyo Electric Power Co (Tepco), Chubu Electric Power Co, and Kansai Electric Power Co. Rakuten hopes to cover 96% of the Japanese population by the end of fiscal 2025. Until it establishes its own network throughout the country, Rakuten will lease network capacity from NTT DOCOMO and other major carriers.

As previously reported by TeleGeography’s CommsUpdate, on 26 February 2018 Rakuten applied to the MIC for 4G-suitable 1.7-GHz and 3.4GHz cellular frequencies, with the stated aim of launching the new service in 2019, offering tariff plans linked to its online shopping platform in a bid to lure in customers. Rakuten – whose MVNO service with host network operator NTT DOCOMO has amassed around 1.4 million customers – established a new wireless venture, Rakuten Mobile Network, in January 2018, with Rakuten’s chairman and CEO Hiroshi Mikitani at the helm. Rakuten also acquired Japan’s sixth largest smartphone maker Freetel in September last year.