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Japan’s Rakuten Mobile making gains with Open RAN

Rakuten Mobile, Japan’s upstart mobile telecom network operator, sees light at the end of the financial tunnel as subscriber growth heads toward breakeven on an operating cash flow basis in 2024.

Breakeven will be a milestone for the Open RAN (Radio Access Network) standard that allows for various companies to supply different parts of a telecommunications network.

Open RAN gives telecom service providers more flexibility and independence from large suppliers of complete proprietary systems such as China’s Huawei, Sweden’s Ericsson and Finland’s Nokia, and smaller national champions like South Korea’s Samsung and Japan’s NEC and Fujitsu.

US telecom software company Mavenir calculates that a cloud-based Open RAN network can deliver a 37% reduction in deployment and operational costs over five years compared with proprietary architectures.

This comes amid accusations that Open RAN is being co-opted by the dominant telecom equipment makers, particularly Ericsson, and its open promotion as a “Huawei killer” in Washington, DC. But for Rakuten and other Open RAN corporate proponents, it is a matter of establishing the technology as a commercially viable business.

Exclusively dedicated to Open RAN, Rakuten Mobile had nearly 6.5 million subscribers at the end of December 2023. If the growth rate reported so far in 2024 is maintained, the company should hit its target of 8-10 million subscribers by year’s end.

That lags Japanese market leaders NTT Docomo, KDDI (au) and Softbank, which had 89.2 million, 66.9 million and 40.1 million subscribers respectively at the end of 2023. But it does show that the low-cost Open RAN business model combined with discount pricing can give customers better deals.

Cheaper mobile phone service was,