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Rakuten to cooperate with NEC to expand into overseas markets

  • June 4, 2020
  • , Nikkei , p. 13
  • JMH Translation

Rakuten will sell its 5G next-generation communications systems in overseas markets starting in 2021. On June 3, Rakuten announced that it will jointly develop technology for the system’s core control device with NEC. Rakuten aims to improve the quality of its service by expanding its business alliances, and then to market the technology to overseas telecommunications companies. Telecommunications is an area in which Huawei has an advantage. The confrontation between the U.S. and China, however, has given rise to an unfavorable situation for Huawei and an opportunity for Rakuten. An issue for Rakuten is the stable provision of services in the domestic Japanese market.

 

At a June 3 press conference, Rakuten Chairman and CEO Hiroshi Mikitani boasted about his company’s technology, saying that Rakuten will provide “Japanese-quality platforms to the global communications industry.” Several overseas telecommunications companies have already shown interest in Rakuten’s products, he continued.

 

When it entered the mobile communications business in April 2020, Rakuten was the first in the world to adopt virtualization technology for telecommunications networks. With virtualization, operating costs can be reduced through the use of the cloud. Rakuten aims to use the same system in its 5G network.

 

5G networks are comprised of core networks and radio access networks. In the past, Rakuten collaborated with NEC to develop wireless core networks. Rakuten will now move to develop technology for core networks that will control communications lines. Rakuten expects that such technology will simplify the control of communications speed and lead to improved 5G systems.

 

Huawei has a large presence in 5G core network technology. Mistrust in China is increasing in the U.S. and Europe, however, due to its confrontation with the U.S. and the new coronavirus outbreak. This situation represents a business opportunity for Rakuten.

 

Rakuten also announced in May that it will postpone the launch of its 5G service, originally scheduled for June, by three months because of the coronavirus pandemic. It will be important for Rakuten to put its domestic service on track quickly in order to expand to overseas markets.

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