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August 11, 2023
Japanese e-commerce giant Rakuten’s mobile operation is slowly heading in the right direction, but the same can’t be said for its network solutions arm.
Rakuten Symphony has attracted close scrutiny following the surprise departure on Monday of its CEO and general Open RAN evangelist Tareq Amin, which has left people wondering whether all is well at the unit.
The second quarter financial report published by Rakuten on Thursday showed that Symphony turned over $72 million in the three months to 30 June, representing an 18.5 percent year-on-year decline, and down 5.6 percent from Q1. So essentially, all is not particularly fine and dandy.
Rakuten attributed the YoY performance to Symphony’s focus on existing global customers and anchor clients. That seems to be a tactful way of saying it hasn’t been winning much in the way of new business lately. However, it does expect performance to pick up in the second half of the year.
A slide deck accompanying the report highlights more than 25 proof-of-concepts (PoCs) and field trials around the world, which is encouraging. However, 1&1 in Germany remains the only operator other than Rakuten Mobile that is currently pushing on with a commercial deployment of Open RAN infrastructure based on Symphony’s solutions.
Rakuten also said there’s a massive brownfield opportunity ready to be tapped once Open RAN reaches performance parity with legacy RAN, which is expected to happen in Q3. However, as we have previously reported, compared to greenfield deployments, brownfield is an altogether more challenging prospect.
While the slides don’t prove anything definitive when it comes to explaining the surprise ‘leadership transition’ as Rakuten calls it, the report doesn’t do much to address concerns about Symphony’s lack of progress over the last 12 months either.
And there’s no escaping the suggestion that all is not going swimmingly when the CEO of the group – in this case Mickey Mikitani – steps in to fill an unexpected void in senior leadership.
Meanwhile, for Rakuten Mobile, things are looking up, albeit slightly.
Second quarter revenue jumped 13.3 percent on last year to JPY52.2 billion ($363 million), and its operating loss narrowed to JPY79 billion from JPY116 billion. It expects to reduce capex by JYP300 billion from fiscal 2023-25.
Its subscriber base still has a long way to go before Rakuten Mobile gives the likes of DoCoMo, KDDI and Softbank anything to worry about. Nonetheless, it is moving in the right direction, adding nearly 240,000 customers in the quarter, leaving it with 4.81 million in total. Preliminary figures show it added another 100,000 in July alone.
Churn has fallen sharply in the last 12 months too, from around 8 percent last June, to 1.93 percent this June.
Rakuten seems to be steering its mobile operation onto the right path, and now all eyes will be on Mikitani to see if he personally can do the same with Symphony.
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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