Why Rakuten’s mobile experience is set to challenge Japan and the world

Rakuten is a new challenger operator in Japan that launched on April 8, competing with NTT DoCoMo, KDDI’s au and SoftBank. Rakuten has started with aggressive launch pricing, including its Un-Limit plan which offers unlimited data when customers use its own radio network, but a cap of 5GB when roaming in areas where Rakuten has not yet built out its own network and is relying for now on KDDI. 

The company’s CTO, Tareq Amin, has marketed Rakuten’s network technology approach to the mobile industry worldwide. It has focused on building an innovative new network architecture using an unusual mix of vendors. Unlike most existing networks, the company aims to make extensive use of virtualization and containerization throughout its network as well as embrace OpenRAN in its base stations. Rakuten may even become a telecom supplier as well as an operator. Previously, Rakuten was a mobile virtual network operator (MVNO) that exclusively used other operator’s networks in order to offer its customers connectivity. Now, Rakuten is building its own network having acquired wireless spectrum.

For the first time, Opensignal has analyzed the experience of Rakuten’s users across six measures of mobile experience. Rakuten’s delayed launch came too late to feature in our recent Japan Mobile Network Experience report.

Unusually for a new operator, Rakuten’s users experience much faster upload speeds than users on the three established operators. The speed of 12.1 Mbps is 33% faster. This difference allows Rakuten to market its offering as more suited to sharing photos, videos, or for social media to appeal to a younger and more urban audience.

Rakuten’s users see similar Games and Voice App Experience to users on Japan’s three existing mobile networks. Likewise, the time users spend connected to 4G — or 4G Availability — is near identical.

On Video and Download Speed Experience, Rakuten users see a worse experience with download speed 46.9% slower than the average of au, DoCoMo and SoftBank users. On Video Experience, Rakuten users’ score of 66.5 just places the operator in the Very Good category, compared with an average score of 78.3 for the other operators which rates as Excellent.

Initially, Rakuten has focused its initial network on three cities: Tokyo, Nagoya and Osaka. Where its own network is not yet available, Rakuten users roam onto KDDI’s network. Typically, these kinds of arrangements increase costs for an operator which likely explains the lower data limit Rakuten users experience when roaming.

Opensignal’s analysis indicates that nationally, Rakuten users spend more time roaming (54.7%) than on Rakuten’s own network (45.3%). But the difference varies by city. In Nagoya, 95.5% of time is on Rakuten’s network, while in Osaka, Tokyo and Saitama it is over 80%. This is important because users typically have a better mobile experience on their home network and the cost to Rakuten is lower too. 

Both download and upload speeds are more than twice as fast when users connect on Rakuten’s network instead of roaming on KDDI. Rakuten’s “on-net” upload speed of 19.8 Mbps is also more than twice as fast as the average Upload Speed Experience of users on au, NTT DoCoMo and SoftBank.

Strikingly, when Rakuten users are using Rakuten’s network the Download Speed Experience is much closer to users’ experience on the established networks. From an overall average download speed of 24.8 Mbps, Rakuten’s users speeds jump to 35.3 Mbps when exclusively using its own network.

These high speeds indicate the potential of Rakuten’s network to enable a tremendous mobile network experience even at this early stage. Once Rakuten resolves teething problems and expands the reach of its network to more of Japan, Rakuten’s mobile experience will be even more competitive with Japan’s current market leaders.

However, Opensignal can also see the impact of Rakuten’s commercial launch on the experience of its existing users. Before April 8, Rakuten ran a trial service with a few tens of thousands of users. Since the launch, as more customers have become subscribers, we can see the average experience has declined for download and upload speeds as well as for video, although Games Experience has remained consistent. This is normal for a new network because more users mean more usage, more network data traffic, and greater strain on network infrastructure.

At the moment it is too early to see if Rakuten’s network experience is better than its rivals. Or, to see with certainty how well the company’s new network technology design will cope with more customers and rising data traffic. Plus, Rakuten is still to launch 5G. A major driver for Rakuten’s technology choices was to enable 5G-specific services and here Rakuten’s network approach could prove superior to its established rivals.

For now, Rakuten users see a slower download speed than the existing operators, and a slightly worse Video Experience, while Games and Voice App Experience are similar. Rakuten users have a faster Upload Speed Experience overall. While when users connect on Rakuten’s own network both upload speeds and download speeds are much faster than when roaming on their partner network.

The real test of all of Rakuten’s consumer marketing and industry hype is to see what real-world mobile network experience Rakuten offers now and in the future.