How is Rakuten disrupting the Telecom Sector in Japan

Rakuten is disrupting the Telecom sector in Japan, acquiring users with filthy discounts and points on Rakuten wallet.

Ever wondered why Japan’s mobile and internet bills are filthy expensive as compared to other countries like India, when internet services are supposed to be the one of the cheapest commodities in the world?

The Japanese Telecom has been spending some hefty amounts of money in user acquisition. Rakuten logged $590m half-year misfortune on overwhelming telecom investing last financial year (Jan-June) It disturbed the industry by advertising boundless data when associated to the R. Mobile network and boundless domestic calls in spite of the fact that communications app ‘Rakuten Link’, with a single arrangement named “Rakuten UN-LIMIT.”

With a compelling cost point of only 2,980 JPY per month ( US$22), Rakuten Mobile moreover advertised 3 million endorsers free benefit for the first 12 months.

Rakuten Icon

With a compelling price point of only 2,980 JPY per month (roughly US$28), Rakuten Mobile also offered 3 million subscribers free service for the first 12 months. These prices are 50-70% less than what other services offer.

Within a little period of 4 years, Rakuten has been able to connect Japan with its 4G and 5G network. Surely Rakuten Mobile is giving a run for money for companies like Softbank and Docomo and is expected to rock the international scene too.

It has been following JIO’s strategy in acquiring the users. Its CTO Mr. Tareq Amin was the senior VP at JIO when he left for Rakuten and since then has led the position of leader at Rakuten.

What they are doing for the industry is creating the need for customers to use the internet more. Once they have the users, they have the numbers, they know they can control the market and turn it into their favour.

With all the losses on cards, Rakuten Mobile is expected to gain some revenues from the 2nd quarter of 2022 and it is very exciting to see Rakuten Mobile do wonders.

Issues with Rakuten in the Telelcom

Even though the prospects are exiciting, there is long a way to go for the Japanese Telecom.

Iliad did this decades ago in France with free. It is basically the inspiration behind R. Mobile. Jio experience and the bet on technology definitely helps.

According to some of the consumers, the current experience is horrendous, slow internet at peak times, no coverage and definitely a terrible customer support / app experience. Everything is made to lock you and at the end it is definitely not that much cheaper when you factor in all the issues.

Free delivers a much better value but again it is harshly regulated by European and French customers protection/telecom laws. Japan market in general is built on oligopolies. Very hard to shake deals and poor competition/challengers presence.

R. Mobile and Symphony are some much needed fresh air in the local ecosystem but there is much to do to match global standards (US-UK-Canada excluded, things are even worse there).

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