Rakuten Mobile said 2.5 million people have applied for one year of free mobile service. The company has expanded this offer to up to 3 million people, but they seem to be having a hard time realizing that there are a lot of tenants.
In its fourth earnings published yesterday, Rakuten Mobile reported that its losses rose, reaching $ 686 million (¥ 72.5 billion) and annualized at $ 2.76 billion (¥ 290 billion ).
The company launched their 4G mobile service in April 2020, followed by 5G service in September 2020.
Rakuten Mobile has accelerated their network build by five years and says it will serve 96% of Japan’s population by mid-summer. There are currently around 11,000 base stations online, and by mid-summer it aims to have 27,000 base stations.
Accelerated construction costs a lot of money, obviously.
Mobile capex hit $ 920 million (¥ 96.6 billion) in the fourth quarter, up from $ 765 million (¥ 80.3 billion) in the third quarter.
Rakuten has recently claimed that the capex budget for its green wireless network is $ 7.7 billion. But earned, he said he was raising capex for its 4G network from $ 5.72 billion (¥ 600 billion) by 30% -40%. This is in addition to the $ 1.91 billion (¥ 200 billion) for the 5G network.
In the news of their earnings, the company said, “With the expansion of the Rakuten network area and an increase in subscribers, costs associated with the construction of a base station and domestic relocation outside the Rakuten network area have increased. also. ”
“Such losses are likely to increase as subscriber costs increase and network scales,” wrote analysts at New Street Research.
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Speaking to reporters recently, Rakuten Mobile CTO Tareq Amin said, “Of course we are spending. We could have taken a reservation and taken eight years, but we are taking two years. We are loading up all our capital. ”
In response to criticism about their business model, the company has also launched a new communications strategy. He says wireless service is fast growing as a product with low margins. However, Rakuten Mobile serves Rakuten’s much larger e-commerce business – where the real money comes from. And this is something that the other mobile carriers in Japan do not have.