Rakuten delays network launch to work out the bugs

Japan’s fourth mobile operator has said it will delay its launch, originally set for October 1, in favour of a limited trial for 5,000 users.

The announcement will put a dampener on the spirits of those who are closely watching developments in Japan. With the barriers set so high on entering the mobile connectivity game for new-comers, cash-rich technology companies will be looking for tips and tricks to develop their own game-plans, though this was not supposed to be part of the story.

“In order to ensure the stability and quality of its service for customers and continue to improve the network based on customer feedback and requests, the company will initially open applications to 5,000 subscribers free of charge through the Free Supporter Program,” the firm said in a statement.

The official launch of the service will now be at some point before 31 March 2020, with the Free Support Program set to conclude at that point. Those subscribers who are assisting with the network trial will continue to get free services through to 31 March however.

The trial will focus on Tokyo, Osaka, Nagoya City and Kobe City, with KDDI and Okinawa Cellular to provide roaming services outside of these regions. Those on the trial will receive unlimited calls and data services through the period, in exchange for providing regular feedback to the telco.

The launch of Rakuten has caught the attention of many inside and outside of Japan for several reasons. In the country, consumers have had to deal with three providers to date and the introduction of a fourth player will provide additional competition, as well as a potential disruption to create a new status-quo when it comes to pricing. Just look at the impact Reliance Jio had on India to see the potential a new player can inspire.

Outside of Japan, there will of course be vendors rubbing their hands together in anticipation of a genuine greenfield project, though those who have an interest in muscling in on the connectivity game.

Starting with the vendors, this is a potential gold mine. If Rakuten is going to be competitive, it will have to get its network up-and-running very quickly. Aggressive network deployment and expansion to reduce the reliance on roaming requires some serious investment. The more success Rakuten can generate in the early days, the more quickly it will be able to mobilise investment to fuel further expansion.

And now for the disruptors. There will be several companies which will be keeping an eye on developments here, hoping to understand what works and what doesn’t when deploying a new network.

Dish is one company which falls into this category. Should the T-Mobile US and Sprint merger survive the legal challenges it is facing, Dish will become the fourth MNO in the US through acquiring the Boost prepaid brand from Sprint. It will then have to try and build its own network as quickly as possible.

There are of course other companies who have already declared their interest in the mobile connectivity game, 1&1 Drillisch in Germany for example, however internet companies have also been rumoured to be getting involved.

Amazon is the company which immediately comes to mind, a rumour about Amazon mobile is never too far away, however this is applicable to any internet firm which has a lot of money. Owning and managing a network is one way to make money, another opportunity to collect valuable data on consumers and a chance to own the relationship with the consumer end-to-end.

If Rakuten can prove an internet company can deploy an end-to-end fully virtualized, cloud-native network cost-effectively and in a timely manner, as well as attract the right people to manage the network to meet customer expectations, why wouldn’t others believe they can do the same.

Amazon has buckets of cash, as does Google, Facebook, Alibaba, Baidu or Microsoft. If Rakuten can do it, why couldn’t they? Or how about investment companies and venture capitalists who are always looking for a way to make money?