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Telecommunication

Rakuten to delay Japan's newest mobile network by 6 months

Bid to disrupt market hampered by slow progress on infrastructure

Rakuten's entry into the wireless market has been closely watched for its potential to inject fresh competition into a field dominated by three carriers. (Photo by Keiichiro Sato)

TOKYO -- Japanese e-commerce group Rakuten will delay the start of full mobile service until spring as it works to become the country's fourth wireless carrier, Nikkei has learned.

Service will be limited to only 5,000 users from Oct. 1, the original start date, owing to slow progress installing base stations and other network infrastructure. These users will not be charged for the service during the preliminary rollout.

Rakuten's entry has been closely watched for its potential to inject fresh competition into a wireless market long dominated by three carriers. The country's high wireless rates prompted a rare verbal intervention by the government's top spokesman last year.

Billionaire Hiroshi Mikitani's company will announce the delay on Friday. Nikkei reported in August that Rakuten was far behind its goal for base station installations.

Rakuten says it aims to build the world's first mobile network based fully on cloud computing. The company will perform further testing to ensure the technology can provide stable service.

As of Oct. 1, Rakuten will have its own network of base stations covering parts of the Tokyo, Nagoya and Osaka metropolitan areas. The company will lease rival KDDI's network infrastructure in other parts of Japan.

Plans call for increasing base stations in urban centers with high concentrations of users.

Rakuten's delays in installing base stations for its new wireless service have prompted three warnings to speed progress from Japan's communications ministry as of August.

According to the ministry, Rakuten had only 532 base stations in place as of Thursday, compared with plans for 3,432 by the end of March 2020.

Progress has been slowed by trouble connecting the stations to existing fiber-optic and other networks, an industry source said. Rakuten has declined to comment on the status of its network construction.

Rakuten is still hammering out its pricing for the full-fledged mobile service now due next spring.

"It's not a good idea to show competitors your hand," Mikitani said in early August.

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