Reuters reports that Rakuten, the parent of Japan’s would-be fourth mobile network operator (MNO), Rakuten Mobile, is actively considering a ‘radical model for wannabe telecom disruptors’. Ahead of Rakuten Mobile’s planned launch in October this year, the USD15 billion Japanese e-commerce firm is said to be planning to use simpler, off-the-shelf telecoms equipment and expand faster. The newcomer claims to have government backing too, given that politicians are keen to get mobile bills down to allow consumers to spend more elsewhere.
Nonetheless, Rakuten Mobile’s commitment to invest some USD5.4 billion by 2025 on its new 4G LTE network is seen as ‘conservative’ by industry watchers who consider Rakuten’s cloud-based model still requires significant infrastructure which will require high levels of CAPEX and exert stress on operating costs. Reuters claims that Rakuten aims to shake up local telecoms in Japan as Reliance Industries has done in India – thanks to a USD40 billion investment there – but while it can cause a dent in the fortunes of Japanese incumbents NTT DOCOMO, Softbank Mobile and KDDI (au), sceptics note that the group lacks the financial clout of billionaire Mukesh Ambani’s highly cash-generative core business, which helped bankroll a sustained attack in India.