TOKYO, Dec 10 (News On Japan) –
Rakuten Mobile continues to attract consideration each earnings season, and whereas its losses have been narrowing, the ache it inflicts on the Rakuten Group’s general efficiency has not essentially modified. Even so, chair Hiroshi Mikitani describes the cellular enterprise as contributing “more than expected,” and insists the corporate will preserve its stance of preserving low-price, limitless knowledge plans at the same time as different carriers transfer to lift charges.
That place prompted SoftBank chief govt Junichi Miyagawa to name Rakuten’s technique “unfair,” elevating questions on what lies behind the comment.
Rakuten Mobile has lengthy been considered as struggling, and debate ceaselessly surfaces on social media over whether or not the unit ought to be minimize free from the group. Looking on the cellular phase’s working outcomes for January to September 2025, the enterprise posted an working lack of 126.8 billion yen. This was an enchancment in contrast with the identical interval a yr earlier, however the division continues to weigh on group earnings.
Rakuten Mobile’s deficit peaked in fiscal 2022 and has steadily narrowed since then. For fiscal 2025, losses additionally seem on monitor to shrink from fiscal 2024. Even so, the group as an entire posted a internet lack of 151.2 billion yen, partly on account of impairment losses linked to the withdrawal of the Rakuten Mart on-line grocery store enterprise from the Kansai area. The firm needed to decrease the valuation of the enterprise after profitability fell far wanting preliminary expectations.
Online supermarkets face important hurdles no matter area. Whether items are shipped from native shops or centralized warehouses, labor prices for choosing and packaging are substantial, and even when robots are launched, funding burdens stay excessive. Grocery margins are skinny, which means profitability requires excessive order volumes, but many shoppers nonetheless choose selecting perishables resembling fish or greens in individual. These structural challenges have made on-line supermarkets troublesome to scale.
Rakuten Mobile’s subscriber base, in the meantime, has exceeded 9.5 million, inserting the ten million mark inside attain. Under the Rakuten ecosystem mannequin, cellular subscribers are typically heavy customers of Rakuten Ichiba, Rakuten Travel and Rakuten Securities, making them precious clients. For this cause, although the cellular unit is loss-making, it’s handled as a strategically necessary enterprise inside the group.
Rakuten additionally allocates to the cellular phase a portion of earnings generated elsewhere within the group below the label of “mobile ecosystem contribution.” While Mikitani argues that the cellular division’s general affect is “beyond expectations,” the strategy has drawn scrutiny, because it successfully shifts income from different web companies onto cellular to spotlight its perceived worth.
As main carriers increase cellular plan costs citing inflation, better use of AI, enhanced safety measures and better gear prices, Rakuten Mobile has intentionally chosen to not observe go well with. Mikitani declared that the corporate would preserve low-priced limitless plans, and subscriber numbers have risen because of this. As a late entrant, Rakuten should differentiate itself from NTT Docomo, KDDI and SoftBank, and its aggressive lever is value. A steep hike would threat undermining the core rationale for coming into the market in 2020, when Mikitani launched the service amid widespread criticism that cellular payments in Japan had been too excessive.
SoftBank’s Miyagawa, nonetheless, argues that Rakuten is just not shouldering its fair proportion of network-building duties. The closing parts of elevating inhabitants protection charges — the final 5 to 10 % — require intensive funding in rural and sparsely populated areas, the place putting in base stations and laying fiber is expensive. Docomo, KDDI and SoftBank have every expanded protection by way of incremental, labor-intensive work, whereas Rakuten has relied closely on KDDI’s roaming community in these areas.
Miyagawa contends {that a} provider allotted spectrum below the nationwide licensing framework ought to construct out its personal community, and that Rakuten’s means to keep up low costs with out enterprise the identical degree of infrastructure funding is “unfair.” The unusually sharp criticism displays rising concern as Rakuten Mobile strikes nearer to surpassing 10 million strains and steadily expands its presence in a subscription-based trade the place scale straight drives income by way of month-to-month charges and value-added companies.
For incumbents, the prospect of Rakuten persevering with to realize floor is an actual menace to their subscriber base. Miyagawa’s comment underscores the aggressive rigidity now rising in a market the place even small shifts in buyer numbers can have important long-term results.
Source: Kyodo