With its Altiostar Ownership, Rakuten Group Sets the Beginning of a New CSP Era: the Cost-efficient Vertically Integrated Cloud Connectivity Provider for All
With the August 4, 2021 announcement titled “Rakuten Group to Acquire Mobile Industry Innovator Altiostar,” Rakuten is taking full ownership of the open virtualized RAN (vRAN) pure-play market leader Altiostar. This deal does not come as a surprise because it is just a logical step forward to deliver on Rakuten Group’s vision of becoming the world’s first cost-efficient vertically integrated cloud connectivity provider for all, including communications service providers (CSPs), enterprises, governments, and consumers. In addition, Rakuten was already a lead investor in Altiostar along with Cisco, Excelestar Ventures, and Tech Mahindra; other investors included Qualcomm, Fidelity, and Telefónica. Now, technically Altiostar is set to come under the larger Rakuten Group umbrella as a wholly owned subsidiary with the purchase of the remaining Altiostar shares by Rakuten Americas—the North American division of Rakuten Group. Let’s look at the birth of the Cost-efficient Vertically Integrated Cloud Connectivity Provider. After all, Altiostar is Rakuten’s biggest innovative technologies asset to start with and with open vRAN shaping up as a big opportunity, they have decided that it is better to bring it in house and capitalize.
COST-EFFICIENT IS STRAIGHT FORWARD
Since Day 1, Rakuten Mobile made it clear it had no appetite to build a mobile network the old traditional way and truly embraced the concepts of virtualization, cloudification, and openness in a multi-vendor approach that chooses from and mixes the best of breed specialists available in the marketplace. As the RAN piece typically accounts for more than 70% of the total cost of building a mobile network, Altiostar’s open vRAN approach was a the obvious choice. In our July 2021 White Paper produced in association with Altiostar (https://www.altiostar.com/news-events/blog/), we found that Rakuten Mobile’s total open vRAN network build-out capex was 40% lower than that of a traditional RAN, and its opex is 30% lower.
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