"Mobile carriers hold more data than Google, but they are not making proper use of it. They are just sitting on a data 'gold mine.'"
Mikitani Hiroshi (三木谷浩史), chairman of Rakuten, said in a keynote speech at the Mobile World Congress (MWC) in Barcelona, Spain, on the 2nd (local time), "Carriers can seek new revenue generation measures by leveraging subscriber data and customer engagement, not just spectrum resources." He said Rakuten is actively using this to maximize revenue while also cutting operating expense.
Rakuten Mobile is the fourth carrier launched by the Japanese government to break the NTT Docomo, SoftBank, and KDDI 'big three' structure. Rakuten Mobile began service in April 2020. Rakuten's entry into the telecom business was influenced by Masayoshi Son, chairman of SoftBank. Chairman Mikitani has long respected Son as a manager, and before founding Rakuten, he had worked with Son on overseas corporations acquisitions.
Chairman Mikitani mentioned Rakuten's ecosystem. In addition to telecommunications, Rakuten also encompasses online commerce and financial businesses. He explained that Rakuten Mobile users, after subscribing, use 2.43 times more services within the Rakuten ecosystem than before, spend about 50% more on the Rakuten marketplace (Rakuten Ichiba), make 20% more travel bookings (Rakuten Travel), and increase credit card usage by about 30%.
In particular, Rakuten developed Link, an application based on RCS (Rich Communication Service, integrated messenger standard) that drives user interactions based on personalized user data. Through Rakuten Link, users can make domestic and international phone calls to other fixed-line and mobile numbers, as well as send and receive SMS messages inside and outside Japan. It also supports basic communication features such as group chats, and users can exchange photos, videos, and files. If connected to Wi-Fi or a mobile network, all of these communications are available.
Chairman Mikitani said, "We are securing more than 3 trillion data points annually," and noted, "By analyzing data, we can predict and learn consumer behavior." He said that beyond analyzing user habits to convert subscribers into members of the Rakuten ecosystem, Rakuten is also building its own large language model (LLM) and maximizing advertising revenue by harnessing vast datasets. He said, "Based on data obtained from mobile services alone, we are earning about €250 million (428 billion won) in advertising revenue."
However, Chairman Mikitani warned, "In a market where it is difficult to dramatically improve average revenue per user (ARPU), carriers cannot grow merely by increasing user engagement." He said, "Rakuten pursued a strategy of rebuilding the network around software and the cloud to reduce total cost of ownership (TCO)." Total cost of ownership (TCO) is a concept that calculates all expense involved in purchasing and owning a product or system.
Chairman Mikitani proposed, "We aim not only to help carriers tap into software technology, but also to provide know-how on how to convert subscribers into profitable memberships." He said, "I believe it is time for carriers to go beyond merely providing network connectivity and offer richer consumer services," adding, "If the advantages gained from telecom services can be converted into an ecosystem, it will have a very positive impact on the business."