As Rakuten follows its 5G aspirations in telecoms and SoftBank fortifies its holdings in ecommerce, a clash between Japanese tech titans is afoot.
Son Masayoshi and Mikitani Hiroshi have each blazed their own trails as brilliant tech entrepreneurs and investors. Mikitani heads Rakuten, Japan’s biggest ecommerce platform and a technology conglomerate worth $14 billion. Son founded SoftBank, a vast holding company known worldwide for its $100 billion Vision Fund, the world’s biggest technology-focused venture capital fund. Its domestic telecoms unit, SoftBank Corp., is on the verge of launching one of the biggest IPOs ever.
As their respective business and technological interests continue to evolve and intersect, Son and Mikitani are increasingly becoming rivals. Son was thought to have the advantage until recently, thanks to huge cash reserves from the Vision Fund. Mikitani is gaining on him, however. His company’s new developments in mobile technology, if successful, could have global impact.
Over the past two years, Mikitani has poured $8 billion into building a fourth- and fifth-generation (5G) mobile network in Japan. The market is dominated by three giants: SoftBank, along with NTT Docomo and KDDI. Mikitani’s approach differs, because rather than investing in hardware, Rakuten is developing what it calls the first fully commercial virtualised network. The goal is to offer a low-cost yet high-quality alternative with OpenRAN (Open Radio Access Network or O-RAN) at the core of its 5G architecture.
Tareq Amin, Chief Technology Officer of Rakuten Mobile, has become an outspoken proponent of OpenRAN. Under his leadership, Rakuten’s mobile arm is moving rapidly in this direction. In September the company formed a partnership with Spanish telecoms group Telefónica to further develop the technology. The firm started a similar collaboration with Saudi Telecom Company (STC) in October. OpenRAN is getting a further boost as telephone companies seek alternatives to Huawei, the world’s biggest 5G equipment supplier.
Rakuten may be moving into SoftBank’s telecoms territory, but SoftBank has made similar manoeuvers to enter Rakuten’s ecommerce domain by way of its massive stake in Yahoo Japan. This accelerated last year when SoftBank negotiated a merger between Yahoo Japan, now 100% owned by SoftBank’s Z Holdings, and messaging app Line Corp. to create Japan’s biggest online services firm.
On the subject of both men’s legacies, The Economist points out that Son “may have broken the mould for investing in snazzy startups”, and become one of Japan’s great entrepreneurs, but “he has never pioneered a new technology.” Mikitani does not share Son’s global renown, but if his 5G aspirations come to fruition, he could ultimately solve a global technological problem.
