Japan’s fourth MNO Rakuten Mobile has announced that it breached the five million mobile subscriptions barrier on 28 August 2023, a little over three years after the greenfield operator launched in April 2020. However, the company and its parent, Rakuten Inc., have a long way to go in a market dominated by three entrenched heavyweights – NTT DOCOMO, KDDI and SoftBank Corp – and the owner is bleeding money as it races to deploy its mobile infrastructure nationwide at considerable cost.
As previously reported by TeleGeography’s CommsUpdate Rakuten Mobile, including its Open RAN unit Rakuten Symphony, booked revenues of JPY52.238 billion (USD364.2 million) in Q2 2023, up 13.3% from JPY46.093 billion in the previous year, as operating income (loss) of JPY78.919 billion narrowed 37.2% from the loss of JPY116.127 billion booked in Q2 2022. At the time Rakuten Inc. noted that the unit ‘delivered continued loss improvement with cost reduction (optimisation) initiatives’, while adding that subscriptions and ARPU both grew, while the launch of its new SAIKYO plan helped Rakuten Mobile’s churn rate improve ‘dramatically’. However, despite noting 240,000 MNO net additions in the second quarter of this year, when combined with the operator’s MVNO base (430,000, down 31.8% y-o-y), Rakuten’s mobile total fell 2.8% on an annualised basis to 5.24 million. In short, Rakuten Mobile is adding roughly 100,000 net additions per month but by its own calculations needs to double its current subscription base just to break even. The parent group is lining up a new shares issuance as it seeks to raise around JPY300 billion to redeem bonds and improve its mobile network, while in May this year the MNO secured a new agreement with rival KDDI (au) for mutual network roaming which will reduce the need for Rakuten to build out its own base stations – which is creating a massive investment burden on Rakuten Inc. – and focus instead on improving its financial position.