Japanese giant e-commerce Rakuten is preparing to become a mobile operator - the government has issued the company all necessary permits.
Rakuten is not just the largest online retailer in Japan, says The Economist. This is a huge conglomerate that deals with more than 70 business lines - for example, by issuing credit cards, tourism activities, insurance, and even weddings. In addition, Rakuten has a popular Viber messenger and a significant part in the Lyhat rendering service.
Now all Rakuten's mobile services work in other telecom carrier networks, but soon this situation will change. On April 9, the Japanese government officially allowed the company to build its own cellular network.
Representatives of companies claim that this way will build a real "ecosystem" by combining on a single technology platform of 95 million registered Japanese users. But it seems more like Rakuten is a forced act aimed at protecting against overseas competitors.
One of them - Amazon, who has the resources to engage in a protracted price war in the Rakuten region and is already ahead of Japanese companies in the e-commerce market in the country (20.2% of the market against 20.1%). The second is Yahoo Japan, which can temporarily boast a simpler market share (8.9%), but is willing to sacrifice profits for its rise.
Trying to defend their territory, Rakuten has approved a partnership with US retailer Walmart, with whom he plans to launch an online store product, and with online Japanese electronics retailer Bic Camera, who has agreed to sell its products through Rakuten. In addition, Rakuten intends to create its own logistics system - now the delivery of goods from its website is handled by the seller who placed it.
Building your mobile network closely matches this strategy - as a rule, customers are differentiated by operator's high loyalty, which means they are more likely to use other Rakuten services.
However, applying this idea may not be that simple. First, the amount Rakuten plans to invest in making the network (600 billion yen, or $ 5.6 billion), looks somewhat underestimated - it is likely that it should be revised.
Secondly, the rate of penetration of mobile communications in Japan is very high, which means Rakuten may have problems attracting new users.
The easiest way to do this is by offering customers a more favorable rate than a competitor. And this means that in the Japanese mobile market, the price war might break.
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