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Rakuten acquires OpenRAN partner Altiostar

Rakuten announced that it has completed the acquisition of the software company Altiostar, which it had already partly owned and has collaborated closely on OpenRAN.

Rakuten Group, the Japanese e-commerce heavyweight and parent company of Rakuten Mobile, announced that it has completed the acquisition of the US-based software company Altiostar Networks, Inc. The means of transaction or the price was not disclosed though the company claimed the deal would give Altiostar a valuation of more than $1 billion. This represents a sizeable premium, considering that less than a year ago Altiostar’s management implied the company was worth about $600 million.

“We’re delighted to welcome the Altiostar team to the Rakuten family as we share a common passion for empowering mobile networks through disruptive innovation, offering mobile operators around the world secure, cost-effective and highly agile technology.” Mickey Mikitani, Rakuten Group CEO, was quoted in the press release. “We’re entering a new era where mobile network operators can choose how to build and deploy a network by working with the world’s most innovative software companies to create open and interoperable solutions.”

“Becoming a Rakuten Group company will allow us to build on our foundation and accelerate our technology development to help operators to innovate, explore new business models and bring affordable broadband to the masses through web-scale mobile networks.” Ashraf Dahod, Altiostar’s CEO, concurred. “Open RAN architecture and virtualization are key to building software-centric networks that can scale and adapt to meet an explosion of devices and applications driving service velocity and profits.”

Rakuten first invested in Altiostar in 2019 and became its majority shareholder last year when it purchased all the shares owned by Tech Mahindra by $45 million, a stake that Tech Mahindra paid $15 million two years earlier. That deal indicated a fast appreciation of the private company’s value, not to mention that Altiostar executives claimed that Tech Mahindra’s shares had already been diluted during that period.

The close relationship between Rakuten Mobile and Altiostar through the hitherto partial ownership, which has already made Altiostar more equal than other OpenRAN suppliers in Rakuten’s calculation, will only get closer. Altiostar has always been an integral part of Rakuten’s RCP (Rakuten Communications Platform) proposition. A cloud-native platform combining “the latest technology in virtualization and automation, including containers and microservices”, RCP has been developed as a solution Rakuten can sell to CSPs in markets outside of Japan to “develop open networks”.

Late last year at an analyst call, when answering Telecoms.com’s question on the potential conflict of interest in the preferential treatment given to Altiostar in RCP, Tareq Amin, Rakuten Mobile’s CTO, claimed Altiostar’s technology capabilities are superior. Meanwhile, Amin stressed, RCP customers will be able to decide whether they want to use Altiostar or they prefer other vendors. The full acquisition will raise an interesting question if potential RCP customers still have the option to not choose Altiostar.

  • Open RAN Ecosystem


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