Rakuten announces plan to become Japan’s 4th mobile carrier

December 15, 2017

Tokyo- Rakuten Inc. said Thursday that it aims to become Japan's fourth mobile carrier with its own communications infrastructure, hoping to launch the services in 2019.

The major cybermall operator will apply for frequency band allocation for the fourth-generation mobile communications service with the communications ministry as early as next month.

The existing three carriers are NTT Docomo Inc., KDDI Corp., which offers mobile services under the "au" brand, and Softbank Group Corp.

Rakuten plans to invest up to 600 billion yen to establish its wireless communications infrastructure, including base stations, hoping to win more than 15 million subscribers.

Previously, Softbank led industry competition chiefly through fee discounts. The market is now dominated by the three carriers, and the momentum of competition has waned, informed sources said.

Rakuten's expected entry into the market is highly likely to trigger further cuts in mobile service fees, the sources also said.

Rakuten started its Rakuten Mobile low-cost smartphone service in 2014 as a mobile virtual network operator, or MVNO, using networks leased from NTT Docomo.

Last month, Rakuten acquired the Freetel-brand low-cost smartphone service from Plus One Marketing Ltd., becoming a major player in the market segment with 1.4 million subscribers.

Although MVNOs do not shoulder massive costs for capital expenditures on infrastructure, their profit margins tend to be narrow as they need to pay network usage fees.

Rakuten has apparently switched to acquiring its own networks in a bid to expand its mobile communications operations, the sources said.

The government intends to allocate radio spectrum currently allotted public organizations to the private sector. The ministry is preparing for such allocation. Jiji Press