Rakuten to build mobile network for 1&1

Rakuten announced partnership with 1&1 to build “Europe’s first fully virtualised mobile network” for the German greenfield operator. The company also set up a separate unit to drive global expansion.

Rakuten’s PR and comms team had a busy day. In addition to announcing the acquisition of its long-term OpenRAN partner Altiostar, the company also shared the story of its partnership with Germany’s greenfield operator 1&1. In essence, the partnership will have Rakuten assume the role of general contractor for 1&1 to build what it calls “Europe’s first fully virtualized mobile network based on new OpenRAN technology” from ground up. Construction will start in Q4 this year.

“We are honored to have been selected by 1&1 as their partner to build the first fully virtualized mobile network in Europe,” Mickey Mikitani, Chairman and CEO of Rakuten Group, was quoted in the press release. “Like 1&1, we launched our mobile network in Japan with a vision to transform the industry. Through technological innovation, we have been able to offer high quality services at an affordable price that challenge the market. We are very excited to now have the opportunity to share this experience and know-how with 1&1 through the Rakuten Communications Platform and to jointly create a next generation network that will set new standards for future mobile communications in Germany and across Europe.”

Meanwhile, Ralph Dommermuth, CEO of 1&1, went uncharacteristically hyperbolic. “With Rakuten, we have the world’s only OpenRAN expert on our side who really has extensive practical experience with this new technology,” he was quoted in the press release. The “world’s only” moniker could raise eyebrows in certain offices, from Telefonica to Dish, from Parallel Wireless to Mavenir, to name but a few.

But it is hard to argue that there is plenty of similarity between the two parties. Both are challenger operators, both are greenfielder with no legacy networks to worry about, and both have strong internet background.

OpenRAN is at the heart of the partnership. “Together we are building a high-performance mobile network that has extensive automation and agility to fully exploit the potential of 5G,” Dommermuth continued. “Through complete virtualization and the use of standard hardware, we can flexibly combine the best products. This will make us a manufacturer-independent innovation driver in the German and European mobile market.”

When it comes to the details the partnership includes, Rakuten will build the active network equipment and be responsible for the overall performance of 1&1’s mobile network. 1&1 will have access to a whole suite of Rakuten solutions, including the Rakuten Communications Platform (RCP) stack (running access, core, cloud, and operations) as well as customised orchestration software for 1&1 to operate the network “in a highly automated manner”.

There is synergy between the two. As Dommermuth put it, “Rakuten ideally complements our know-how in telecommunications networks, data centers and cloud applications.” This makes it natural that 1&1, or rather its sister company 1&1 Versatel, will deliver the datacentres and fibre optic connections needed to build the network.

There was even more news coming out of Rakuten on the same day. The company has set up a new business unit, called Rakuten Symphony, to pool all the resources to support its global expansion ambition. It incorporates Rakuten Communications Platform (RCP) (“including Open RAN software, network automation and orchestration, Rakuten cloud infrastructure and Innoeye, Rakuten’s existing research and development”, the press release detailed), but supersedes RCP by also taking under its wing sales, marketing, and delivery resources.

Tareq Amin, Rakuten Mobile’s CTO, is now CEO of Rakuten Symphony. “With Rakuten Symphony, we’re more than excited to empower greenfield and brownfield telco operators, enterprises and governments around the world to easily build and deploy cloud-native network services,” Amin was quoted in the press release. “Building on our experience and learning from one of the most competitive markets in the world, we will be relentlessly focused on offering customers high security, quality network performance, cost transparency and the flexibility of open standards.”

It reads to us that, by consolidating the global expansion functions into a separate business organisation tasked to sell its expertise to CSPs and private network customers in the global market, considering the 1&1 partnership is done through Rakuten Group rather than the mobile operator, Rakuten Mobile’s stature in the future may be somewhat relegated to building and operating its domestic market only.

Rakuten Symphony’s “unique business opportunities” are summarised in this chart: