Industry Trend Analysis - Rakuten's Mobile Plans Are Ambitious But Capital Intensive - FEB 2018
BMI View: A fourth mobile operator in Japan will drive service innovation and bring further competition, but will not make significant additions of subscribers to the mobile market. Rakuten will add to its already large debt pile in order to fund its mobile business, and must differentiate on a basis other than price to capture subscribers from other operators.
Rakuten will apply for 4G spectrum in Japan in a bid to launch as a mobile operator by 2019. The company currently operates a mobile virtual network operator (MVNO) under the RMobile brand, leasing network infrastructure from market leader NTT Docomo to provide its services. We believe Rakuten's entrance as a full mobile operator will push prices lower, bring more competition and stimulate service innovation, but will not contribute meaningfully to additions in a saturated Japanese mobile market, forecasted to have a 135% penetration rate by 2021.
Differentiation Is Key
|Rakuten Will Take Existing Subscribers, Drive Down Prices|
|Japan Mobile Market Growth and ARPU Trends|
|f = BMI forecast. Source: BMI/national sources|