Rakuten wesentlich besser als Rocket

Japan: the next opportunity

June 2024

Thomas Patchett, Japanese Equity Specialist
Donald Farquharson, Head of Japanese Equities

From paper to platforms: a domestic digitalisation story

Whether it's due to the limited supply of labour, rising wages, or the need for productivity gains and scale advantages, Japan is slowly but surely shifting online.

Having lagged other developed markets across most areas of digitalisation, such as ecommerce, cashless payments, software-as-a-service, and general enterprise IT investment, Japan has now recognised the critical need to develop these labour-saving solutions. This shift opens up significant long-term growth opportunities. Although this opportunity is still in its infancy – and is therefore far less prominent than in other developed markets – it is often accessible at little to no premium to the broader market.

Rakuten's ecosystem of services

Rakuten is home to Japan’s largest points-based ecosystem with over 100 million users accessing upwards of 70 online services (from hotel bookings to brokerage and banking). Despite consistently growing its top line for 27 years since inception, the company trades at a mere 0.6x sales, which is half that of the market average, because of the capital-intensive decision it made to develop its mobile phone network. Although this new venture required significant outlay, an accelerating pick-up in paying subscribers could soon see the network become profitable by year-end. As a standalone, we believe it could double the enterprise value of the group. Beyond that, we think it has the potential to add value to the entire ecosystem. By adding another customer touchpoint, it is improving its access to data and raising the potential to cross-sell more of its services.

https://www.bailliegifford.com/en/ireland/...xt-opportunity-10048027/
 

 

Since migrating to Rakuten Advertising and its fully affiliate managed service – our programme has gone from strength to strength. Rakuten Advertising’s strategies have helped grow the programme and we have been able to really move the dial. Our account management team have felt like a true extension of our team and have led to the affiliate channel becoming our strongest growing channel!

Simon Porter
Digital Marketing Manager, Ann Summers

https://rakutenadvertising.com/en-uk/affiliate/
 

On its Q1 earnings call, Mikitani claimed “smooth progress” in turning around the group’s loss-making mobile unit, noting profitability is just around the corner, with a target of EBITDA turning positive by December 2024.

He noted it is now in the third phase of its launch, which is telling customers about its improved network quality. It is working to a target of 10 million subscribers by end-2025.

Symphony revenue jumped 55.3 per cent in Q1/2024 to $118 million.

https://www.mobileworldlive.com/rakuten/...ils-network-quality-gains/
 

Rakuten Mobile, Cisco Complete SRv6 uSID IP Transport Network Migrations

1 month ago
Ray Sharma

Rakuten Mobile and Cisco announced a major milestone for network infrastructure in support of efforts to build a better, more inclusive internet for the future.

The two companies have collaborated to successfully complete one of the world's largest Segment Routing over IPv6 Micro Segment ID (SRv6 uSID) IP transport network migrations, unlocking a new era of unprecedented speed, agility and on-demand services*2 for Japanese businesses nationwide.

Rakuten Mobile has already adopted SRv6 in its IP transport network, which connects base stations to its core network. In traditional networks adopting IPv6, the standard for IP addresses, priority is given to packet processing via the shortest possible route. SRv6 assigns Segment IDs to packets, enabling scalability for networks and other functions. By adopting uSID, Rakuten Mobile now has access to more refined and efficient methods of packet processing.

Utilizing a robust foundation built on SRv6 uSID-based IP transport networks, Rakuten Mobile launched its ultra-high-speed internet connection service 'KOSOKU Access' in January 2024 as a fixed network service for enterprise customers. This enables customers to access fast, low-latency on-demand services in a secure and reliable business infrastructure with a 24/7 network maintenance system. This enables KOSOKU Access customers across Japan to effectively scale their connectivity usage depending on their evolving business demands.

https://www.thefastmode.com/technology-solutions/...etwork-migrations
 

Revenues of Rakuten Symphony was $ 203 million in first half of 2024

Symphony revenue jumped 55.3 per cent in Q1/2024 to $118 million.
https://www.mobileworldlive.com/rakuten/...ils-network-quality-gains/

Rakuten Symphony sales dropped 18 per cent to $85 billion in Q2/2024.
https://www.mobileworldlive.com/rakuten/...criber-growth-accelerates/
 

Market-share of Rakuten Symphony is more than 20%

The $ 203 million revenue of Rakuten Symphony in the first half of 2024 are $ 406 million on a yearly base in 2024 (and Q4 was the strongest quarter of Rakuten Symphony in the past).

If you take a look at the market volume from Juniper Research of $ 2 billion, the market-cap of Rakuten Symphony is more than 20%.

“Juniper Research release a press release to promote its new Global Operator O-RAN Strategies, 2024-2029 report. The headline data point is that ‘annual operator investment into O-RAN (Open Radio Access Networks) will reach $11 billion in 2029; rising from $2 billion in 2024.’ So that’s 5.5x growth over five years at a CAGR of over 40%.”

https://www.telecoms.com/open-ran/...ng-will-increase-over-5x-by-2029
 

Rakuten Viber can help brands maximize the upcoming shopping festivals - LionhearTV

https://www.lionheartv.net/2024/09/...he-upcoming-shopping-festivals/
 

How Does Rakuten Make Money? Dissecting Its Business Model (2024)

by Viktor Hendelmann

https://productmint.com/how-does-rakuten-make-money/