What's Happening?
Rakuten USA's mobile network has faced skepticism due to its reliance on bespoke interfaces rather than open RAN specifications. The company integrated RAN software from the US-based Altiostar and radio units from Japan's NEC for its 5G deployment. Despite these unconventional choices, Rakuten's network has struggled to gain traction, with competitors like NTT Docomo expressing doubts. Rakuten's approach involved using cloud and software technologies to streamline operations, but the network has not achieved the expected market disruption. The company has faced significant financial losses, with a small customer base and ongoing challenges in spectrum availability.
Why It's Important?
Rakuten's experience highlights the challenges of disrupting established telecom markets with new technologies. The company's financial struggles and limited customer base underscore the difficulties of competing against entrenched players like NTT Docomo. Rakuten's reliance on bespoke interfaces rather than industry-standard open RAN specifications may have hindered its ability to scale effectively. The situation illustrates the complexities of integrating new technologies in a highly competitive market and the importance of strategic planning and execution in achieving market success.
What's Next?
Rakuten may need to reassess its strategy and consider aligning more closely with industry standards to improve its competitive position. The company could explore partnerships or collaborations to enhance its network capabilities and expand its customer base. Additionally, addressing spectrum limitations and improving service quality will be crucial for Rakuten to gain a stronger foothold in the market. The telecom industry will be watching closely to see how Rakuten navigates these challenges and whether it can achieve its goal of becoming a significant player in the market.
Beyond the Headlines
Rakuten's challenges also raise questions about the viability of open RAN as a disruptive force in the telecom industry. While open RAN promises cost savings and innovation, Rakuten's experience suggests that successful implementation requires careful planning and execution. The company's struggles may prompt other telecom operators to reconsider their approach to open RAN and evaluate the potential risks and benefits of adopting new technologies.
