Sept. 30, 2020

LightCounting releases its Japan Update Report: The Rakuten Mobile effect or lack thereof...

As a result of the Japanese government’s decision to introduce a fourth mobile player to stimulate competition and lower the price of mobile communications in a dormant saturated market, Rakuten Mobile is building the world’s first large scale virtual open RAN network.

At the same time, the Japanese government is following the U.S. lead and pushing the open RAN agenda with a series of initiatives, prompting the 3 dominant mobile operators NTT DOCOMO, KDDI and Softbank to actively test open RAN and adopt the novel architecture in the next phase of their 5G rollouts.

A close look at the history and these developments lead to the conclusion that the Rakuten Mobile story looks like an RCom/Jio combo. Like the Ambani billionaire family behind the Reliance saga, Mikitani-san is a billionaire throwing money at a disruptive mobile business who has hired Tareq Amin as CTO. He is the one who built Mukesh Ambani’s Reliance Jio mobile network, launched VoLTE service for free to get off the ground and successfully built in 3 years a low ARPU subscriber base that has created chaos in the Indian market. On the other hand, Mukesh’s brother Anil Ambani Reliance Infocomm (RCom) was not as lucky due to his choice of starting with a CDMA network, a U.S. technology, then replacing it with GSM to catch up with competitors until filing for bankruptcy in 2019, at a time Jio became India’s largest mobile operator.

This is just food for thought. Rakuten Mobile is moving forward and building its network with a predominance of U.S. vendors and open vRAN as its key differentiating architecture. The 4 mobile operators are following Japan’s Ministry of Internal Affairs and Communications’ (MIC) playbook that mandates a slow and gradual 5G roadmap. As a result, capex is capped and even the addition of Rakuten Mobile to the mix won’t move the needle, neither will its BTS footprint.

Consequently, LightCounting’s Japan Update Report: The Rakuten Mobile effect or lack thereof…indicates 5G rollouts are putting the Japanese RAN market back to growth territory but its peak will not be as high as the 4G revenue peak seen in 2014 when Softbank spent aggressively. Based on the MIC’s roadmap, outdoor 5G deployment will remain above 80% of total throughout 2025 and open RAN has the potential to account for 2/3 of the total RAN market by 2025. And finally, the Japanese government’s initiative will strengthen Fujitsu’s and NEC’s domestic market position.

About the report:

This report focuses on Japan’s mobile market and analyzes the implications of the introduction of Rakuten Mobile and the Japanese government’s open RAN push. The publication date is scheduled a few weeks after the 4 services providers (e.g., KDDI, NTT DOCOMO, Rakuten Mobile, and Softbank) provide their interim report so that we can gather many details about 1H20 and provide a 2H20 outlook, a 5-year RAN forecast, and a 3-year capex outlook. This report also includes subscriber and base station (BTS) numbers and RAN vendor market shares and analysis.

More information on the report is available at:

http://lightcounting.com/products/japan/