Rakuten Symphony Inc. to provide 4G and 5G infrastructure and platform solutions to the global market
Japan’s Rakuten Group today announced that they have resolved to incorporate Rakuten Symphony, a business organization of the Company, and start considering a capital and business alliance (in other words, investments).
As announced on August 4, 2021 in “Rakuten launches Rakuten Symphony to accelerate adoption of cloud-native, open RAN-based mobile networks worldwide,” alongside Rakuten Communications Platform (hereafter “RCP“), Rakuten Symphony, a new business organization, was newly launched by consolidating the products and services to be implemented.
Rakuten Symphony aims to provide a future-proof, cost-effective, communication cloud platform for carriers, businesses and government agencies around the world.
Rakuten Symphony is a global business organization that develops solution businesses in Japan, the United States, Singapore, India, Europe, and the Middle East / Africa. Through this incorporation, accountability (duties) will be clarified, flexible decision-making and business execution will be possible, and products, services, and solutions for telecommunications carriers will be consolidated across the board.
“We will be ready to provide 4G and 5G infrastructure and platform solutions to the global market.”
In addition, as announced in “1&1 and Rakuten agree far-reaching partnership to build Europe’s first fully virtualized mobile network based on new Open RAN technology” also on August 4, 1&1 has agreed to comprehensively adopt RCP. This business has been steadily accumulating its achievements. In order to further accelerate the global expansion of innovative mobile network solutions, Rakuten Symphony, Inc., a newly established corporation, will consider accepting capital, etc. in addition to business partnerships with strategic partners.
The Company will establish its position as a global leader in cloud-centric and virtualized Open RAN-based mobile networks, by expanding its communication platform business overseas, as well as its track record of expanding its mobile carrier business in Japan.
Mike Dano of Light Reading wrote:
It’s no surprise that Rakuten is pulling out all the stops to make Symphony a success. The operation’s Symphony contract with flagship customer 1&1 in Germany is worth between $2.3 billion and $2.7 billion over a ten-year period, reports Nikkei Asia. By contrast, Rakuten made about $1.8 billion in revenues at its Japanese mobile business in the last year.
“This business has been steadily accumulating its achievements,” Rakuten wrote this week, pointing specifically to its 1&1 deal.
Light Reading reported in March 2020 of Rakuten’s plans to sell a networking platform internationally. The offering was initially dubbed Rakuten Mobile Platform (RMP), and then Rakuten Communications Platform (RCP), but the company in August named it Symphony and said the operation targeted an addressable market of up to $100 billion.
Symphony is essentially the portfolio of technologies Rakuten uses in its Japanese mobile network – alongside other offerings from its partners – that it is now pitching to other service providers and networking hopefuls worldwide. According to Rakuten, companies can purchase all or parts of Symphony in order to quickly and easily roll out their own open RAN 5G networks.
Thus, Symphony is now on a collision course with a wide range of other players selling similar offerings. Ericsson, Amazon, Google and Mavenir are among the many providers hoping to assemble a product portfolio stretching across core networking, radio hardware and associated software and services, and then to rope in deals with customers ranging from enterprises to government agencies.
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As reported on August 5th by Nikkei Asia:
Rakuten Group has agreed to export its low-cost virtual 5G telecommunications technology to German wireless carrier 1&1, the Japanese tech conglomerate said Wednesday, in a deal believed to be worth more than $2 billion.
1&1, a relative newcomer in the telecom industry, represents the first client to fully adopt Rakuten’s virtual network tech, which will support 5G communication. Rakuten won contracts to design, maintain and operate the network.
Rakuten will receive between 250 billion yen and 300 billion yen ($2.29 billion and $2.74 billion) over the next 10 years through the deal, according to a source familiar with the matter.
Subsidiary Rakuten Mobile has been researching and developing virtualized network technology, which is expected to reduce maintenance and operation costs by approximately 40%. The carrier views the technology as its trump card for succeeding in the wireless business that launched last year.
Not only is Rakuten planning to adopt the technology in its domestic network, the group looks to provide the tech to overseas carriers.
1&1 is a mobile virtual network operator that borrows connectivity from infrastructure built by other providers. The company holds over 10 million contracts in Germany alone.
Moving forward, 1&1 plans to launch its own independent network and become the fourth-largest carrier in Germany behind leaders like Deutsche Telekom.
A virtualized network locates data processing in cloud software, as opposed to dedicated equipment. The diminished need for hardware lowers the costs of maintaining a network. In the U.S., Dish Network will roll out its own virtualized wireless network this year.
Rakuten’s novel 5G tech was given an award at the MWC, or Mobile World Congress, in Barcelona this year. The group plans to expand its roster of clients and reap over 1 trillion yen in sales from providing the technology.
Rakuten’s mainstay e-commerce business and its financial arm have been performing well. The mobile business remains in the red, however, due to capital expenditures toward network building and sales promotions.
The investments in the mobile business caused Rakuten as a group to record net losses in both 2019 and 2020. As it stands, the mobile segment faces difficulties boosting profits because monthly wireless fees are low, ranging from 2,980 yen to free of charge. Exporting telecommunications tech has become necessary for Rakuten to quickly turn a profit at its mobile business.
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