Hiroshi Mikitani, Chairman and President, from the archived video of the financial results briefing for the third quarter of fiscal 2022.
2023 is likely to be a “critical moment” for Rakuten Mobile (although I say it every year).
The company has set a goal of becoming profitable in 2023, and has only one year left.
I would like to think about the future of the company based on the materials of the financial results for the third quarter of fiscal year 2022 held by the Rakuten Group on November 11 and related interviews.
“360,000 line cancellations” due to the abolition of 0 yen, while income will increase
Rakuten Mobile has been canceling users since May, but “currently, the number of cancellations has stabilized.”
Rakuten Mobile announced a new rate plan “Rakuten UN-LIMIT VII” that abolished 0 yen for 1 GB or less in May. Since then, the mass exodus of users has been unstoppable.
In fact, about 4.91 million contracts were acquired in the first quarter, but the most recent data (third quarter) is about 4.55 million. In other words, he looks like he lost about 360,000 contracts.
As Rakuten Mobile, it seems that it was a speculation that “I want to cut users who are aiming for zero yen that does not lead to profits.”In fact, not only zero-yen users but also users for main lines using data communication and telephone may have leaked considerablyis high.
A certain MVNO (virtual mobile telecommunications operator that provides cheap SIM) executives talks about user movements related to Rakuten Mobile as follows.
“I thought that there would be an increase in price plans that are close to zero yen for the purpose of maintaining the line,Unexpectedly, Rakuten mobile users who want a plan with voice came.
The number of users has been steadily increasing not only immediately after Rakuten Mobile announced in May, but also since October.”
Also, NTT Docomo President Motoyuki Ii“When I thought economy MVNOs would grow, the number of users of ahamo unexpectedly increased.”commented.
The loss of 360,000 subscribers, including users who pay money, is a considerable loss for Rakuten Mobile, but it can only be interpreted as “the pus has been drained”.
ARPU is also changing.
According to the latest data, the cancellation rush has calmed down, and the net additions have been picking up in November.
As a matter of fact, the campaign for the transition to the new rate plan, such as cashback and point granting, has ended, and all users are charged.
This willEarnings structure improved at a stretch as users began to pay at least 1078 yen per monthdo.
Looking at the ARPU (average unit revenue per subscriber), which was actually released for the first time this time, it was 453 yen in the third quarter of 2021, but has risen to 1472 yen in the third quarter of 2022. .
Now that the Zero Yen Plan has finally come to an end, ARPU is likely to improve all at once.
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Roaming connection charges to KDDI tend to shrink
Looking at the earnings of the entire group, it seems that the mobile business is holding back.
Looking at the Rakuten Group as a whole, the consolidated financial results for the period from January to September 2022 show a net loss of 258 billion yen (a loss of 103.9 billion yen in the same period of the previous year), and Rakuten Mobile, which is in the red due to the increase in capital investment, is a foothold. There is no doubt that it is pulling the
Another reason for the deficit as Rakuten Mobile is the payment of roaming connection charges to KDDI, but it seems that this is also shrinking as the company’s area expands.
President Shunsuke Yazawa”If you look at the area map, you can see that roaming is concentrated in the suburbs. We expect 10,000 stations to be on air in the future.”Shows confidence in expanding its own area.
Roaming charges paid to KDDI are decreasing.
In fact, by September 2022, the installation of 50,000 base stations nationwide will be completed. The population coverage rate has achieved 97.9%.
According to Rakuten Mobile, the application rate for Rakuten Mobile has reached 10.1% in Tokyo’s 23 wards, which have a high population coverage rate.
It seems that the higher the population coverage rate, the better the user acquisition situation, and it is essential to improve the population coverage rate in terms of acquiring new subscribers.
“Platinum Band” and “5G” to save Rakuten Mobile
Rakuten aims to introduce platinum bands after 2024.
Under such circumstances, a task force in the Ministry of Internal Affairs and Communications has made it possible to acquire the platinum band, which was a long-cherished wish for Rakuten Mobile.
Owned by NTT Docomo, KDDI, and SoftbankThe plan to reassign part of the platinum band to Rakuten Mobile is about to be decided.
As a result, Rakuten Mobile will be able to provide platinum band services from March 2024.
In fact, the penetration of radio waves is quite weak inside a building. In addition, the 1.7 GHz band alone is not efficient for deployment in areas such as mountainous areas, and the platinum band is essential because it can travel well over long distances and penetrate into buildings.
After discussion by the task force, Rakuten Mobile will be able to start platinum band services from March 2024 without paying any costs.
In the discussion, the time span was “it will take 10 years (for nationwide deployment),” but the Ministry of Internal Affairs and Communications report indicated a “five-year period.”
Rakuten Mobile will not bear the construction costs.
Nationwide expansion in less than five years is also possible if Rakuten Mobile bears the construction costs.
Platinum band is Rakuten Mobile’s “complete victory”
However, President Shunsuke Yazawa said, “We will not use such measures,” making it possible to gradually expand nationwide over five years without Rakuten Mobile bearing the construction costs.
Although resistance from the existing three companies is inevitable, it can be said that Rakuten Mobile is a complete victory.
We need to wait about a year and four months for the platinum band to start, but what Rakuten Mobile can do in the meantime is to expand the 5G area.
Currently, users in the 4G area use an average of 15.3GB of data, and communication fee revenue is 1,612 yen.
but,Looking at the Osaka area where 5G is abundant, data usage is 21.3 GB, communication fee income is 2013 yenJump up.
Growth rate of ARPU in Osaka area.
In other words, expanding the 5G area will directly lead to an increase in income.That’s why.
Currently, the number of 4G base stations has exceeded 50,000, but there are only 6,440 5G-compatible base stations (as of September 2022). For Rakuten Mobile, the key to securing revenue is how to expand 5G base stations.
How Rakuten fights in an era without killer devices
In the past, when Softbank acquired Vodafone, it struggled with an overwhelmingly cheap rate plan called the “White Plan.”
After that, we were able to beat NTT DoCoMo and KDDI by exclusively handling the killer device, the iPhone, and by getting a platinum band.
There’s no such thing as a “change carrier because I want this device” killer device like the old iPhone.
As Rakuten Mobile does not have a featured device to acquire users from other companies, it seems that the only option is to steadily expand the 5G area in order to become profitable by the end of 2023.
(Written by Atsushi Ishikawa, edited by Yutaro Kobayashi)
Source: BusinessInsider
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