Rakuten Mobile crawls past the five million subscriber mark

Japanese greenfield MNO Rakuten Mobile has reached a subscriber milestone but is still a long way from where it needs to be.

The five million mark was hit yesterday, we’re told, which isn’t a bad effort for a company that entered a very mature mobile market from scratch in April 2020. But just a bit of additional context reveals that market leader NTT Docom has over 80 million subscribers, while KDDI and Softbank both have over 40 million.

Following Rakuten’s last earnings update, Light Reading reported that Rakuten needs around twice its current number of subscribers just to break even – a target that is clearly still years away at the current customer acquisition rate of around 100,000 per month. In the meantime the mobile arm continues to lose hundreds of millions of dollars per quarter despite increasingly severe cost cutting.

As you might expect, today’s announcement doesn’t dwell on how far Rakuten Mobile still has to go. So long as the parent company can continue to underwrite those losses, some kind of finishing line is in sight. Rakuten doesn’t necessarily need to make large profits from its mobile arm since it is ultimately hoping it will be complementary to its other digital businesses but, surely, it at least needs to break even.

You have to wonder how consistent the current rate of progress is with assumptions made when Rakuten decided to get into the mobile game. It’s initial go-to-market strategy was a classic disruptor play, seeking to undercut the incumbents on price. But it seems likely that the Japanese consumer appetite for novelty is less than hoped and also that the savings from the use of cutting-edge technology from day one are perhaps also lower than expected.

You can hear more analysis of the current state of play at Rakuten Mobile on the latest edition of the podcast.


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