Rakuten to bid for 4G licence in Japan

Rakuten has announced plans to apply for a 4G mobile licence in Japan. 4G spectrum is being auctioned in January, with the winners due to be announced in March.

Rakuten already acts as an MVNO (Mobile Virtual Network Operator), renting network space from licence holders, and has over 1.4m customers, but having its own licence would represent a significant shift in business operations for the company.

Rakuten has more than 1.2bn customers around the world, and offers a variety of services, including eCommerce, online travel reservations, credit cards, online banking, online securities, messaging applications, and payment services. In Japan, the Group has built a strong ecosystem encompassing both online and offline services, with nearly 100m Rakuten IDs.

Rakuten plans to launch its mobile network in 2019, and is targeting “at least 15m subscribers” though it has given no timeframe in which this number is to be achieved. It said it plans to raise around 200bn yen (£1.3bn) to launch the service, rising to up to 600bn yen by 2025 via interest-bearing debt such as bank borrowing.

Explaining its rationale for the move, Rakuten said in a statement: “If the Group’s application for the above frequency allocation is approved, the Group’s entry into the current MNO market will make the market more competitive and lead to improvements in efficiency. As a result, the Group will be ideally positioned to provide affordable and easy-to-use mobile communications services, as well as maximize the benefits to consumers and society as a whole.”