The pieces are coming together at Rakuten Mobile for the Japanese mobile phone business to improve its roaming costs and increase the number of subscribers on its own network.
That was one of the messages from Rakuten’s latest earnings release. Less roaming will occur in coming months, and free service offerings from Rakuten are coming to an end, so it finally will have a larger contingent of actual paying customers.
Rakuten’s mobile net adds in the first quarter were only 410,000 in the quarter, implying around 0.2% share gain, and its mobile loss has grown from ¥119bn (about $920 million) to ¥135bn (around $1 billion) sequentially, noted New Street Research analysts. However, that should be the peak, they added.
Rivals NTT DoCoMo and SoftBank both “had very strong net adds (+900k and +800k respectively), which suggests the fight for customers is hotting up,” wrote New Street’s Chris Hoare. “Rakuten needs to grow customers much faster than it is currently, which probably explains their new price plan.”
Rakuten Mobile just announced a new service plan called Rakuten UN-LIMIT VII that will offer unlimited data for a monthly fee of 2,980 yen (less than $25 U.S.) and add new discounts to select Rakuten Group services.
Rakuten, which launched its fully virtualized 4G LTE mobile service in April 2020, said the mobile segment profitability is expected to improve as planned in the second fiscal quarter of 2022 and beyond as roaming expenses decrease, its own network area expands and the number of chargeable subscribers increases.
Here are some take-aways on Rakuten’s mobile segment in Q1 2022:
- The total number of subscriptions for the MNO and MVNO services totaled more than 5.68 million as of March 2022.
- Rakuten Mobile reached 97% population coverage for the Rakuten 4G network area as of the end of March 2022.
- The total number of outdoor 4G base stations surpassed 44,000 as of the end of April 2022, and indoor coverage has expanded as the number of "Rakuten Casa” compact antennas (femtocells) for indoor use nationwide reached 40,000 units as of March 2022.
- Revenue for the mobile segment rose to 80.4 billion yen (around $621 million) in the first quarter of 2022, an increase of 44% year over year. Factors contributing to increased revenue include the increased number of users who have started paying for mobile service and increased device sales.