Rakuten limits scope of mobile launch amid delays – report

Base station installation delays may cause Japanese e-commerce giant Rakuten to scale back the launch of its new mobile network and service slated for October, according to Nikkei Asian Review.

Rakuten has been working with a host of partners, including U.S. vendors Altiostar, Cisco and Intel, to build a fully 4G mobile network in Japan with the goal of constructing 3,432 base stations by fiscal year-end. However, at the end of June Rakuten Mobile was more than 50% behind on its goal, prompting the Japanese Ministry of Communications in July to order the company to modify plans and accelerate efforts, according to Nikkei.

RELATED: Cisco installs 4,000 edge nodes for Rakuten’s wireless network

An unnamed source from Rakuten Mobile told Nikkei Asian Review there was difficulty with wiring and efforts have been hampered by construction labor shortages ahead of the Tokyo Olympic and Paralympic Games in 2020.

The more limited Oct. 1 launch will generally cover Tokyo, Nagoya, and Osaka, the source said, but added Rakuten doesn’t “have enough bases in city centers that have a high concentration of users.”

"We will absolutely have the bases ready in time for October," Rakuten Chairman and CEO Hiroshi Mikitani told reporters last week, the news outlet reported, adding Rakuten could start with a “small launch” limiting the number of initial users and services.

The carrier’s network will initially be 4G LTE, but adopt a 5G systems architecture, with the operator previously anticipating 5G access in 2020. While its network is still under construction, Rakuten will also deliver service using KDDI’s network via an MVNO agreement.

Rakuten was authorized in April 2018 to become a fourth mobile operator in Japan, but already offered mobile services since 2014 as a virtual operator using Docomo’s network, according to the Japan Times.

RELATED: Rakuten builds a greenfield wireless network in Japan

Dish Network may be paying attention to Rakuten’s woes, as the U.S. operator has used Rakuten’s greenfield 4G mobile network build as an analogy for its own 5G network ambitions. Dish is poised to acquire spectrum and prepaid assets from Sprint and T-Mobile if the pair can close their pending merger, which a group of state attorneys general have sued to block.

The deal with Dish is part of a series of agreements reached between the companies and the U.S. Department of Justice meant to set up a fourth national carrier and preserve competition in the wake of the proposed $26.5 billion merger.

In related commitments, Dish promised to build a facilities-based 5G network capable of serving 70% of the U.S. population by June 2023. On Dish’s second-quarter earnings call company chairman Charlie Ergen said Dish is fortunate that Rakuten is blazing the path, but that the satellite TV provider will go even farther with virtualization.

“It’s a difficult engineering challenge for the first company to do it and we are going to benefit, as are others, by learning the lessons from them [Rakuten],” Ergen said, according to a transcript of the call.

RELATED: Rakuten is building a 3.7 GHz massive MIMO 5G radio with NEC

Ergen also pointed to Rakuten’s work with U.S. vendors. Cisco, for example, is helping build Rakuten’s network functions virtualization infrastructure with 4,000 edge nodes, while Altiostar has been tapped for work on RAN virtualization.

“What I think is really exciting about it is, we don’t have American hardware providers today in the existing networks in terms of radios and things,” Ergen said. “We get a chance to do that in the future…So I think Rakuten is a good one to watch.”

Dish will utilize T-Mobile’s network for several years through an MVNO agreement, and coverage will initially be more of a priority than capacity for Dish’s 5G build because not as many customers will be on the network.

"We’re not going to have to worry about capacity in the short term so small cells are less important and macro towers are more important," Tom Cullen, Dish EVP for corporate development told FierceWireless in an August interview.