KDDI and Softbank mull expanding shared 5G network in bid to save $1.5 billion

Japanese operators KDDI and Softbank are in talks to broaden the scope of their 5G network sharing partnership, eyeing new coverage targets and areas of cooperation.

Nick Wood

May 9, 2024

2 Min Read

Currently being discussed is a proposal to extend the scope of their joint venture, 5G Japan, to include the whole country. When it was formally established in 2020, it was concerned only with rural deployments.

Achieving nationwide coverage naturally requires rolling out more shared sites – 62,000 per operator by the end of 2030, to be precise. Hitting this target would leave KDDI and Softbank with a grand total of 100,000 shared sites each.

As with all network-sharing deals, capex savings are the order of the day. KDDI and Softbank have already each saved JPY45 billion ($288.8 million) between 2020 and 2023 thanks to 5G Japan. If the new plan goes ahead, they hope to save a further JPY75 billion each, making for a cumulative grand total of JPY240 billion ($1.54 billion) by the end of the decade.

KDDI and Softbank are also discussing the possibility of folding their respective 4G networks into 5G Japan.

On top of that, they might use their venture to cooperate in other areas, including standardised cell site construction specifications, and the joint procurement of equipment. They are also mulling joint technology trials with the aim of further strengthening their partnership in fiscal 2026.

"Softbank and KDDI are aiming to enhance Japan's international competitiveness by establishing 5G networks that empower all industries, thereby contributing to its industrial development, regional revitalisation, and national resilience," the operators said in a joint statement.

The establishment of 5G Japan ushered in the country's first multi-operator radio access network (MORAN), using equipment from both Ericsson and Nokia, among others.

It was perceived as a defensive measure against newcomer Rakuten Mobile, which aimed to upend the mobile market by deploying a fully virtualised Open RAN network, and undercutting KDDI, Softbank, and incumbent DoCoMo on price.

But Rakuten Mobile is taking time to turn a profit.

In 2023, it recorded a loss of JPY337.5 billion ($2.2 billion), less than the JPY479.3 billion it lost in 2022, but a big chunk of change nonetheless. It led to parent company Rakuten Group cancelling its dividend and recording a group-wide annual net loss of JPY339.4 billion.

Rakuten is under pressure to deploy its network as cost-effectively as possible.

As part of this effort, it has been making use of neutral host provider JTower's shared indoor and outdoor infrastructure. In 2021, Rakuten even bought a stake in the company, establishing a capital alliance with it.

This week, Rakuten shared news that it has reached the milestone of using JTower's shared network solutions at more than 100 facilities and buildings across Japan, enabling it to reduce costs and accelerate deployment. Like KDDI and Softbank, they have also committed to strengthening their partnership.

As KDDI, Softbank and also Rakuten are demonstrating, close collaboration is proving an essential ingredient when it comes to competing sustainably.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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