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Rakuten Mobile closes one in five retail outlets in scramble to reach profitability

23 Jan 2023

Struggling mobile network operator (MNO) Rakuten Mobile has announced plans to close one-fifth of all its mobile phone stores as it desperately strives to meet its profitability targets for its current fiscal year (ending 31 March 2023). The MNO’s parent, Rakuten Group, announced the closure plan that will reduce the number of stores from 1,261 to 1,000 adding that instead, it will be urging would-be new users to sign up online. ‘We aim to increase points of contact with consumers and further improve recognition,’ a Rakuten representative said.

The announcement comes as Rakuten Mobile scrambles to reach its profitability goals, even calling on its own employees to sign up friends and family as new customers. However, Rakuten may have bitten off more than it can chew. Capital expenditure costs related to mobile phone business have piled up, with the company’s consolidated net loss for the January-September 2022 period reaching JPY258 billion (USD2 billion). Further, its subscription base dropped to 4.55 million at end-September 2022, from over five million the previous April, and Rakuten Mobile has gained an unwelcome reputation for dropped connections frustrating its ability to gain users. Despite coverage having reached 98% of the Japanese population, the Nikkei notes that Rakuten does not have access to so-called ‘platinum bands’ – the more reliable high-frequency bands used by the country’s three major carriers NTT DOCOMO, KDDI and SoftBank Corp. To redress this, Rakuten is actively pushing for a reassignment of bands and the Ministry of Internal Affairs and Communications (MIC) is expected to finalise a policy this spring based on a proposal by DOCOMO in November 2022 to allocate unused bands.

Japan, Rakuten Inc., Rakuten Mobile

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