Rakuten’s Tareq Amin says Symphony has solved the DU problem

LAS VEGAS – A couple of years ago, Tareq Amin, CEO of Rakuten Mobile and Rakuten Symphony, said there was a problem with the distributed unit (DU) appliance in wireless networks, which was holding back the progress of open RAN.

Today, Amin says that Symphony has now solved this problem with a new device — the Symware next-generation distributed unit (DU).

Amin said the DU is the brain and the most complicated thing in running open RAN software. “I had two problems: It was too expensive, and it didn’t scale up to meet the capacity requirements.”

The new DU also integrates other functions that used to require separate boxes – such as the cell-site routing function and the function to convert from CPRI to eCPRI.

Over the last 12-14 months, Symphony worked with Intel to create a new DU. “This is our answer to the industry for a low-cost, ultra-reliable DU product,” said Amin. “There is nothing proprietary about this hardware. It doesn’t have cabinets. We have now miniaturized the entire RAN deployment.”

The new DU is now in production, being built by Foxconn. “This is completely commoditized,” said Amin. “It runs mostly on Intel platforms; there’s no proprietary hardware.”

True to the goal of open RAN, the new DU can run software from any vendor such as Ericsson, Nokia, Mavenir or Symphony, among others.

Rakuten Mobile has built 50,000 4G sites in the last two years — of which 12,000 sites have been upgraded to 5G. Amin said that over time he will “look opportunistically” at refreshing all DUs with the updated hardware.

But to begin with, Rakuten Mobile plans to deploy the new DUs across 13,000 new 5G sites and 10,000 new 4G sites in Japan within the next 10 months.

Rakuten Mobile economic outlook

Although Rakuten Mobile and Rakuten Symphony have done admirable things with telecom technology, Wall Street analysts have not been kind to Rakuten Mobile.

In late August New Street Research analyst Chris Hoare wrote, “We hear many clients suggesting that if Rakuten saw an increase in customer adds this might make them viable. This is true, but how likely is it? Rakuten reported negative net adds in Q2. The company needs 20 million+ subscribers to break even. Even without a slowdown, this is likely to take 7-8 years, with multi-billion losses annually in the meantime.”

Amin said, “We are sitting at about 5.5 million customers two years into operation. My view is we are still getting net adds daily.”

He said analysts are giving the company a hard time because they want it to cut back on capex, sacrificing full coverage across Japan. “You have to have coverage,” said Amin. “We are almost done with dependencies on roaming; 5% is carried on our roaming partner.” He said Rakuten Mobile will reach 99.2% of Japan population coverage this year.

“We have always been consistent that we will break-even in calendar year 2023,” said Amin. “If we really break even in 2023, I think this really addresses everything. Construction is a capex investment, and 2023 we will be pretty much done with our build.”

In related financial news, Amin said he’s asking for permission to report specific Symphony financial results in Rakuten’s next earnings call.