What's Happening?
Rakuten Mobile, a division of Japan's leading ecommerce company, has reported a significant reduction in its financial losses and an increase in revenue for the third quarter. The company narrowed its loss to
38.6 billion Japanese yen (approximately $250 million), down from 48.7 billion yen ($310 million) a year ago. This improvement is attributed to a 12% growth in revenue, with earnings before interest, tax, depreciation, and amortization turning positive for the first time in the second quarter. Rakuten Mobile's revenue reached 118.7 billion yen ($770 million), accounting for 17% of Rakuten Group's total revenues. The company has also seen an increase in its subscriber base, now totaling 9.33 million, with plans to reach 10 million by the end of the year.
Why It's Important?
Rakuten Mobile's progress towards profitability is significant in the context of Japan's competitive telecommunications market. The company's ability to reduce losses and grow its subscriber base indicates a strong strategic position, potentially influencing market dynamics and competition. As Rakuten Mobile continues to expand its network and enhance its offerings, it could drive innovation and service improvements within the industry. The company's focus on integrating mobile and AI technologies as central pillars of its growth strategy may also set a precedent for other telecom operators seeking to leverage technology for competitive advantage.
What's Next?
Rakuten Mobile plans to expand its mobile network, particularly in the 700MHz band, and enhance its device lineups and corporate solutions. The company aims to continue acquiring customers at its current rate, with a target of reaching 10 million subscribers by year-end. CEO Hiroshi Mikitani has expressed confidence in the company's trajectory towards profitability, although a specific timeline has not been announced. The ongoing integration of mobile and AI technologies will likely play a crucial role in achieving these goals.
