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HomeLatestThe payments are piling up for Rakuten's cellular misadventure

The payments are piling up for Rakuten’s cellular misadventure

A decade in the past, the conclusion that cellular telecommunications networks are a capital-intensive, low-margin, mature, congested and sticky enterprise led SoftBank Group’s Masayoshi Son to shift path and embark on an formidable, although now foundering, international funding spree in startup e-commerce platforms with restricted exhausting belongings, resembling WeWork.

In ironic symmetry, realizing that competing with e-commerce behemoth Amazon.com on its house turf in Japan, a lot much less globally, was failing, Rakuten’s Hiroshi Mikitani shifted technique two years in the past, making an enormous funding to launch Japan’s fourth cellular telecommunications service in head-to-head competitors with incumbents NTT Docomo, KDDI and SoftBank.

Son’s pivot away from the bruising world of constructing and managing successive new generations of transponders and fiber optic networks, the bodily pipelines that carry digital content material, ought to have given Mikitani purpose to pause.

In explicit, SoftBank’s struggles because the perennial No. 3 in Japan behind NTT Docomo and KDDI, and the ugly losses incurred with the acquisition of U.S. No. 3 Sprint within the face of its uphill battle to compete in opposition to the duopoly of AT&T and Verizon, ought to have been a transparent warning that the cellular market is unkind to newcomers and small fry.
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