Known as an open RAN advocate, Tareq Amin has stood down as CEO of Rakuten Mobile and Rakuten Symphony with immediate effect, for personal reasons. This came as a surprise and unfortunate timing, as the two Rakuten Group subsidiaries have yet to reach their targets.
Rakuten Symphony saw its revenues for the first half of 2023 drop by 5% year-over-year, to $148 million, and further decline by 18% for the second quarter alone.
Rakuten attributed the inferior YoY performance to Symphony's concentration on its current global customers, which implied a lack of new clients on board. Nevertheless, the company anticipates an improvement in performance during the latter half of the year.
Symphony made waves when it planted its first flag in Europe, winning a landmark deal to supply 1&1 with open RAN-based network solutions. However, the rollout is running way behind schedule due to tower-related issues.
1&1 slashed its site target this year to 1,000 from 1,200 previously. It was originally supposed to have 1,000 up and running in December but had only a handful in service at the beginning of the year.
Despite further expanding its presence in Europe with new offices and a UK-based Open RAN hub, Symphony has yet to score another deal that could put it back into the spotlight.
While sales are growing fast at Symphony, they came to just $143 million for the first half of the current fiscal year. This looks insubstantial in an addressable market. In April, Symphony reported the deployment of approximately 300,000 cell sites globally, but this figure encompasses roughly 200,000 at Rakuten Mobile.
On the other hand, Rakuten Mobile has been making slight progress, though insignificant compared to its rivals.
In Q2 2023, the telco’s revenue jumped 13.3% compared to last year, amounting to JPY52.2 billion, and its operating loss narrowed to JPY79 billion from JPY116 billion. Additionally, it foresees a CAPEX reduction of JPY300 billion between fiscal years 2023 and 2025.
Its subscriber base still has a long way to go, but it is moving in the right direction after hitting 5 million subscribers by August 2023.
With group net losses amounting to about $5.5 billion over the last four-and-a-half years, there were speculations that Rakuten might quit some of its telco activities.
It is undeniable that Rakuten faces some of the most technically advanced network companies on the planet in Japan, where consumers are willing to spend heavily on technology.
According to an industry analyst, Amin’s resignation comes at a time when the industry is witnessing growing pessimism at the slow rate of Open RAN progress due to growing concerns around security and energy efficiency.
Tareq Amin played a pivotal role within Rakuten, where he conceived and spearheaded the initial stage of the Japanese company's telecom strategy. Now, all eyes are on Mickey Mikitani, chairman and CEO of Rakuten Group, who has taken over Rakuten Symphony’s leadership position.
Rakuten Symphony is still tasked with convincing the sector that it can become a reliable telecom equipment vendor and systems integrator for brownfield networks. Amin previously admitted that gaps in its 4G portfolio had hindered progress with brownfield telcos.
A fresh agreement between Symphony and VEON has the potential to boost the Japanese supplier. However, the challenge for Rakuten is that Ukraine's rebuilding efforts won't commence any time soon while the Russian invasion is still ongoing.
Only time will tell if Rakuten Symphony can move forward towards a positive trajectory under new leadership. With the ICT landscape having mixed opinions in the open RAN movement, it is yet to prove dominance in an unstable market.
In 2023, Salam, Zain KSA and Axiata Enterprise also announced collaborations with Rakuten Symphony for their network operations.