Rakuten Mobile launches 5G service, but only in a few areas

Chairman and CEO of Rakuten Mobile Mickey Mikitani. (screenshot of Rakuten press conference)

Rakuten Mobile today launched its 5G service in parts of six prefectures in Japan, and in conjunction it announced a new Rakuten 5G smartphone. The 5G launch was originally planned for June, but the company delayed it due to Covid-19.

The 5G service, called Rakuten Un-Limit V, will be available for the same $28.22 monthly fee as the operator’s existing 4G wireless service. Similar to 5G rollouts in the United States, subscribers of Rakuten’s 4G service will be able to use the 5G services for no additional cost. 

In addition, Rakuten is offering a promotion of free 4G/5G service for one year to the first three million subscribers who sign up.

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Mickey Mikitani, Chairman and CEO of Rakuten Mobile, said, “Today Rakuten Mobile takes another step forward to transform the mobile industry: We're offering customers 4G and 5G combined in one simple plan – Rakuten Un-Limit V – at the same low price as 4G.”

The company also today unveiled its new 5G smartphone “Rakuten Big.” Customers who want to access the company’s 5G network can use the Rakuten Big or the Sharp Aquos R5G smartphone that went on sale in June.

Its 5G customers can expect to get 870 Mbps on the downlink, and Rakuten expects that speed to reach 2.8 Gbps in the near future.

Of Rakuten’s 5G entrance in the Japanese competitive landscape, analysts at New Street Research wrote, “Given Japanese incumbents charging a small premium for 5G, this represents a slight intensification of Rakuten’s competitive presence. The company has also announced the launch of their own 5G handset, Rakuten Big for $650. There is only one other 5G handset supported. Given Rakuten’s lack of high-end smartphones we think the impact on the incumbents will be limited.”

Coverage

Yoshi Yamada, president of Rakuten Mobile, said in a press conference today that the 5G service is available “in parts of six prefectures.” The company plans to continuously expand the coverage area and to have 5G in at least parts of all 47 prefectures in Japan by March 2021.

The roadmap calls for 5G standalone (SA) by the middle of 2021, meaning that 5G services won't rely on the 4G core network.

The 5G roll-out comes less than six months since Rakuten’s commercial launch of its 4G service in April 2020.

Rakuten said in late June that it had garnered one million subscribers, and it did not update that number today. But its offer of free service to the next three million subscribers gives an indication that it’s strongly motivated to sign people up.

RELATED: Rakuten touts 1M mobile signups, expands RCP reach with international HQ

The network

Rakuten Mobile built a greenfield fully virtualized mobile network. And the company says the network architecture allows for substantial reductions in capital investment and operating costs. But some analysts have expressed concern about Rakuten’s prospects for profitability.

The New Street Analysts wrote in August that they don’t expect Rakuten Mobile to generate meaningful revenues until at least the third quarter of 2021. “The only rationale for mobile losses to come down is for opex to fall,” wrote the analysts. “But by the end of 2021 Rakuten must more than double the size of the network, roughly triple the customer base, sign a deal with Apple for the iPhone and launch 5G. It would therefore be surprising if opex were to decline.”

Rakuten Mobile’s CTO Tareq Amin didn’t address any financial concerns in today’s press conference. But he is super excited about the network’s technology. He said, “5G is about radio. And this has become the hottest, most debated topic in the industry. We must take a bit of credit about what we’ve done. We have innovated an architecture that was proprietary, that was closed and absolutely unwilling to evolve into an open RAN platform. We have driven a discussion in the world about the necessity of open RAN architecture.”

RELATED: Rakuten is building a 3.7 GHz massive MIMO 5G radio with NEC

Rakuten worked with NEC to develop a massive MIMO 5G radio, manufactured by NEC at its facilities in Japan.

Amin said the partners “unlocked the mystery around radio,” and that Rakuten’s radio “is not a proprietary box.” The massive MIMO radio is deployed in production in Rakuten’s network. He said the Sub-6 GHz radio is built in partnership with NEC and Intel.

The company's mmWave radio is built in partnership with Airspan and Qualcomm.

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