Rakuten Mobile Launch Has Clues for USA: Jeff Kagan

Jeff Kagan  |

All over the world, the mobile industry has been going through enormous changes. New competitors are moving in. Only some are doing strong business. Rakuten Mobile is getting ready to launch wireless service next month in Japan. Then they will come to the USA. So, we should watch their launch closely and see how they do. Here are a few thoughts about what I expect from this newcomer to the wireless industry.

Rakuten Mobile is a wireless company which is part of Rakuten, operator of Japan's largest e-commerce site, with notable travel, fintech and digital content businesses. They have now started to take customer requests to join their mobile service, which will launch next month in Japan.

Rakuten CEO Hiroshi (Mickey) Mikitani at Qualcomm 5G event

Chairman and CEO Hiroshi (Mickey) Mikitani described how customers can sign up for their new service with its "UN-LIMIT" Data Plan. While they are excited, and they should be, that does not guarantee success.

Remember how Amazon.com Fire Phone, Facebook, Comcast, Cox and others tried and failed in their wireless attempt years ago? These are all successful companies; however, they simply could not crack the wireless success code at that time.

However, Mikitani was at the Qualcomm 5G event last week in San Diego and so far, it sounds like he has all his bases covered. All we can do is wait and see how well they do with their upcoming launch.

They are launching with a killer promotion. I expect this is to get media attention and potentially translate into customer excitement. It will also help them to quickly build their brand in the mobile marketplace as a lower cost provider.

Rakuten Mobile offers free Unlimited Data Plan for first 12 months for first 3 million users

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This is the promotion: Rakuten Mobile will launch with a single unlimited data plan and give free service for 12 months for the first three million customers.

They also say, after the first year, the monthly cost will be equivalent to $27.50 in the USA. While this is an attractive price point, there are quite a few competitors in the same ballpark. And each of them has their own limits of which users should be aware.

I still have so many questions. Like, what is the typical data speed? What does the speed slow down to after reaching 2GB? Will there be a way for users to buy additional GBs of high-speed service or are they stuck until the next month comes?

Understand your usage compared to Rakuten Mobile's offering

How much data do you use monthly? Some users are under 2 GB. That means they could consider this service.

Others use far more than 2 GB. They will not be happy when they suddenly cross over the line and their speeds get throttled down. Unless they can buy additional high-speed GB of wireless data usage.

There are several of these kinds of low-cost deals from many different competitors in countries all over the world. Each has their own limits. So, it’s important to really understand the offering before you jump in.

These limitations are something they do not discuss in advertising and marketing, of course. This is something you must ask about, so you are not caught by surprise, unable to use your smartphone.

Rakuten says there are no cancellation fees or contracts, but there is an administration fee.

Quality of Rakuten Mobile phone call

Reselling can be funny. We won’t know the quality of the actual call until we have the chance to test it real-time. Some competitors are very high quality, while others are not. In fact, some are absolutely terrible.

Rakuten Mobile says they are building their own network but will re-sell KDDI wireless services as a roaming partner in Japan in areas where they do not yet have network capability.

How well will Rakuten Mobile work with KDDI where it does not have network access? Will it be a smooth hand off or will the call be dropped?

Rakuten Mobile sees USA as next wireless market

Rakuten Mobile also sees the USA as a potential next step. That’s why it’s important to see how well they do in their home region. When they launch in the United States, whose service will they resell? Will it be AT&T Mobility, Verizon Wireless or T-Mobile / Sprint?

As you can see, there are many questions about this new service. Being a Rakuten service and having the billionaire Mickey Mikitani heading the organization, this could be a home run in Japan and in the USA when it launches here.

So, will Rakuten Mobile be a success in Japan and in the USA? Only time will tell. Let’s keep our eyes on this because they will come to the US marketplace.

Good luck to Mickey Mikitani and to Rakuten Mobile. Now may be the right time for lightning to strike!


Jeff Kagan is an Equities News columnist. Kagan is an Industry Analyst, Key Opinion Leader and Influencer focused on Wireless, Telecom, Pay TV, Cloud, AI, IoT, Tele Health, Healthcare, Automotive and Self-Driving cars. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and LinkedIn at linkedin.com/in/jeff-kagan.

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Equities Columnist: Jeff Kagan

Source: Equities News


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