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Rakuten Telecom's losses decrease after significant cost cuts


Rakuten Telecom's losses decrease after significant cost cuts

In order to reach its goal of at least 8 million consumers, Rakuten Mobile has already drastically reduced operating expenses and plans to further reduce capital expenditures this year.

Rakuten Mobile is a telecom subsidiary that experienced a significant client growth quarter in Q4 2023, attracting 840,000 new users and bringing its subscriber base to nearly 6 million. The telecom unit's quarterly operational losses decreased to $68 billion from JPY106 billion ($700 million) the previous year, partly due to cost-cutting measures and the launch of new plans and a roaming deal with rival KDDI's network.

Compared to the 350,000 customers Rakuten added between July and September and the 200,000 it added in the second quarter, the company's current rate of customer growth is a significant improvement. It has bolstered Hiroshi Mikitani, CEO of Rakuten’s optimism that he can end the year with 8–10 million users, which is the threshold he claims Rakuten Mobile needs to, break even in December.

In a nation of about 126 million people, Rakuten would still be far behind market leader NTT Docomo, which has more than 80 million mobile clients. In order to break even, Rakuten is also cutting both operating and capital expenses. From JPY39 billion ($260 million) in September 2022 to just JPY23 billion ($150 million) at this point, monthly network costs have decreased. In a call with reporters, Mikitani stated that "further cost improvement" is expected, with a drop of 10% to 15% anticipated this year.

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