Rakuten: Huge Losses in the Mobile Business Q1/21 results

Rakuten has published their Q1/21 results and some astonishing losses showing in the Mobile business.

Japan’s newest mobile operator is just one year old and in its latest results reported a 94.1 billion yen (US$860 million) operating loss for the first quarter of 2021, almost three times the loss it posted in the year-ago quarter and a significant increase on the previous quarter. The worrying aspect for Rakuten is that it appears revenues are plateauing and are certainly not growing at the same rate losses are increasing. Meaning they may have reached a short term ceiling (or maybe long term?) in their addressable market.

Still quite perplexed by the reporting of subscriber ‘applications’ and not active subscribers. This feels like a way to show higher numbers than actuals.

There is a lot of talk coming out of Rakuten about the Rakuten Mobile platform offering. I think the paradox that Rakuten Mobile face here is that the platform and underlying open/ecosystem strategy has not yet been proven in its home market, and I’d suggest prospective customers would like to see this before committing.