• Japanese firm has strong base on which to build MNO business
• 4G service launch planned for April, 5G to follow in June
• Pricing announcement due within the month...
• All eyes on the market's big three

Rakuten Mobile reported revenue in excess of US$1 billion last year and its mobile network hasn't even launched yet.

The Japanese e-commerce giant on Thursday revealed that its mobile unit – which includes its MVNO operation and fast-growing voice and messaging platform Viber, as well as its forthcoming MNO venture – turned over 119.8 billion yen (US$1.1 billion) in 2019, up by one third on the previous year. The growth came on the back of an increase in subscribers for both the MVNO and Viber, it said. The network build is, understandably, taking its toll on profitability though. Rakuten Mobile increased its loss to JPY60 billion last year.

Rakuten's existing MVNO business is a minnow in comparison with the rest of the market. The firm ended 2019 with 2.3 million customers, an increase of just over half a million over 12 months. By contrast, market leader NTT DoCoMo, whose network Rakuten currently uses, has close to 80 million.

However, Viber boasted 1.15 billion unique IDs at the same date. The combination of a small existing mobile operation and an internationally well-known brand like Viber – not to mention the Rakuten's broader assets; the group as a whole posted revenues of JPY1.26 trillion ($11.5 billion) last year – makes a strong base on which to build a business as a mobile network operator.

And Rakuten will be able to call itself an MNO in just two months.

The company says it is on track to launch full commercial services on 4G in April and will follow up with a 5G launch in June. It began building out base stations at the end of 2018 and this time last year talked up successful end-to-end testing in a fully virtualised cloud native mobile network. The first phase of the network build is ahead of schedule; Rakuten has to date deployed over 3,300 base stations and expects to increase this to 4,400 next month, against a Ministry of Internal Affairs and Communications target of 3,432.

Rakuten soft-launched its mobile network in October, giving free access to 5,000 customers in return for feedback. It opened it up to a further 20,000 users in January, also adding in a beta version of its RCS-based Rakuten Link dialling app that supports voice calls and messaging.

Mobile prices are coming down in Japan following governmental pressure on the operators, but Rakuten's launch is likely to be the real catalyst for change there.

The firm will unveil its mobile pricing plans on 3 March. And then all eyes will be on DoCoMo, KDDI and Softbank to see how they react.