Business

Japanese government grants Rakuten's entry into cellphone market

Kyodo

The government has formally approved Rakuten Inc.’s entry into the country’s mobile telecommunications sector with its own wireless network, potentially sparking a price war in an already saturated market.

Internal Affairs and Communications Minister Seiko Noda issued the certificate Monday. The e-commerce giant will start its service in October 2019 in a market currently dominated by NTT Docomo Inc., KDDI Corp. and SoftBank Group Corp.

“I am very happy, and at the same time, am feeling the responsibility (for our latest action),” Rakuten Chairman and CEO Hiroshi Mikitani told reporters after the certificate ceremony.

Mikitani also said he is considering providing a new mobile phone service that would favor users of its online shopping site. “I plan to integrate our service, as there are many (Rakuten) members,” he said.

It is the first entry into the market since SoftBank’s low-cost mobile unit took flight around 13 years ago.

Rakuten currently operates a low-cost wireless communication service, Rakuten Mobile, by leasing network capacity from NTT Docomo. According to a plan submitted to the ministry, the company is considering service fees comparable with those of its low-cost carrier business, ranging from around ¥1,980 to ¥4,980 a month.

The e-commerce company will also consider offering large-volume data communication as well as services for corporations.

Rakuten is eyeing raising around ¥520 billion to build its own wireless network and is planning to locate network bases at utility facilities, including those of Tokyo Electric Power Company Holdings Inc.

The company will aim for more than 10 million subscribers by the end of March 2029.

On Friday, an advisory panel to the internal affairs and communications minister agreed that it would be appropriate to allocate radio spectrum to Rakuten after the company filed a request with the ministry.

The presidents of NTT Docomo, KDDI and SoftBank Group, who were allocated additional wireless spectrum along with Rakuten, also attended the ceremony at the ministry.

SoftBank President Ken Miyauchi welcomed Rakuten’s entry into the market, saying that while it is a “threat,” it is also “good for the industry’s growth.”

An additional player means that competition in the market will intensify, said NTT Docomo President Kazuhiro Yoshizawa.

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