Rakuten receives confirmation for MNO launch

Japanese e-commerce giant Rakuten has secured government approval to deploy 4G mobile services in the 1.7-GHz frequency band, and now plans to launch as the nation’s fourth mobile operator in October.

New subsidiary Rakuten Mobile Network plans to raise up to 600 billion yen ($5.6 billion) to pursue its mobile business, including through an up to 200 billion yen investment by its parent company.

Rakuten announced its intention of entering the mobile market in December last year. Last month, the company signed agreements  with Chubu Electric Power, TEPCO Group and Kansai Electric Power Co to use the utility companies’ telecoms and transmissions towers and other infrastructure for the planned 4G deployment.

The company is considering similar tie-ups with other electric utilities to support its goal of achieving nationwide service coverage.

When announcing its intention to enter the mobile market, Rakuten said household spending on telecoms services in Japan is rising every year and reducing telecoms expenses is considered a major social issue.

The current mobile market – which is dominated by NTT Docomo, KDDI and SoftBank – is also often criticized as a “coordinated oligopoly”, and the government is in the middle of a thorough industry review aimed at ensuring fair competition, the company added.

Rakuten has been providing MVNO services under the Rakuten Mobile brand since October 2014, using NTT Docomo’s mobile network, and has racked up around 1.5 million customers.

The company is targeting at least 15 million subscribers with its mobile operations, which compares to 39 million for third-ranked SoftBank. Rakuten’s foray into the mobile market was contingent on it securing 4G spectrum from the ministry of internal affairs and communications (MIC), which has now granted approval for Rakuten’s plan.