Rakuten Mobile's Financial Struggles Continue Amid High Infrastructure Costs

Despite significant losses, the company remains hopeful for a turnaround in 2024, backed by its robust e-commerce and financial services units.

Rakuten Mobile, launched in 2020 with the promise to disrupt Japan's telecoms market, has instead caused significant financial damage to its parent company, with 13 straight quarters of operating losses amounting to roughly $5.5 billion.
Rakuten's ambitious plan of a low-cost network using cloud-based software and cheap hardware did not pan out as infrastructure costs spiraled and a rushed rollout earned the company a reputation for spotty coverage.
Despite the financial strain, Rakuten is set for another challenging year in 2024, with investors keen to see if it can achieve its goal of having the mobile unit break even.
Rakuten has managed to withstand the damage so far due to the robustness of its other businesses, including its core e-commerce business and online financial services units.
To shore up its finances, Rakuten has issued new shares to strategic investors and the public, sold down its holding in Rakuten Securities, listed Rakuten Bank, and offloaded other assets, raising some 800 billion yen ($5.4 billion).