Tech Insight: Rakuten Communications Platform

In an exclusive one-on-one chat with Rakuten Mobile’s CTO, Tareq Amin, neXt Curve’s Leonard Lee received an update on the state of the much-touted Rakuten Communications Platform (RCP). RCP was formally launched in October of 2020 with the goal of bringing the open technology innovations, integrations and the inventions that make up Rakuten Mobile’s cloud-native infrastructure to the rest of the world.

At Mobile World Congress 2019, a telecom maverick named Tareq Amin stepped up on stage in the innovation hall at the center of the Fira Barcelona Convention Center in front of an army of industry press. He officially announced that Rakuten, Japan’s preeminent digital keiretsu with over 70 business lines, would launch Rakuten Mobile to be the fourth Japanese mobile network operating on top of the world’s first, fully cloud-native and virtualized infrastructure based on open RAN technologies. Yes, I was there in person.

Tareq Amin unveils Rakuten Mobile at MWC 2019.

Since its unveiling, Rakuten Mobile has been a fascinating study for us at neXt Curve. We predicted in our technology horizon study for Ofcom two years ago that hyperscale cloud service providers such as Microsoft Azure and OTT players such as Facebook would begin to make forays into the communications services game of traditional telecom operators and infringe upon the ICT market dominated by the big three telco vendors; Huawei, Ericsson and Nokia. Rakuten Mobile and its RCP (Rakuten Communications Platform) are collectively a classic example of what neXt Curve calls a UTB (Under the Bottom) player; essentially a non-legacy telecom variant of what TM Forum calls a “digital service provider”.

Rakuten Mobile has had some remarkable accomplishments over the past two years, most notably the deployment of its 4G and 5G network. Recently, RCP has taken the back seat as headlines about Rakuten Mobile’s subscriber growth and network performance have taken center stage. In many ways, RCP is the potential industry game changer that is far more interesting than the to-be-expected growing pains of a brand-new national carrier.

It may seem that Rakuten Mobile launched RCP into what appears to be a crowded field of recent telco SaaS plays by Google, Microsoft and AWS. With further examination, it becomes evident that there is more than enough that is different about RCP’s play with its intent on bring an open RAN and cloud-native platform to market that has been articulated and proven with its first commercial deployment in April of 2020 by its first customer, Rakuten Mobile. Indeed, it makes a huge difference that Rakuten implemented the entire stack from the radio up to the BSS, which Tareq admitted was a huge challenge but an investment in innovation and integration that fast-followers will find difficult to replicate.

Over the past few months since RCP’s launch, progress has been made. Rakuten Mobile announced that it has signed 15 RCP deals with service providers around the world. While Tareq did not qualify the details of the agreements, most if not all are early-phase pilots or trials as recent press releases by the company suggest. Tareq did share that a full-stack RCP deal was in the works with a “large” customer to be announced soon.

Regardless, interest in RCP keeps growing as the open RAN movement continues to gather momentum thanks to geopolitics that do not seem poised to change in the near or distant future.

Here are my key takeaways from my first one-on-one with Tareq Amin, CTO of Rakuten Mobile:

  • KEY TAKEAWAY 1: Software-First Approach, But Hardware Matters A Lot
  • KEY TAKEAWAY 2: Making 5G Easy & Cheap for Enterprises
  • KEY TAKEAWAY 3: Tackling the Brownfield Challenge with Integration
  • KEY TAKEAWAY 4: Multi-Layer Business Model for a Multi-Layer Business

KEY TAKEAWAY 1: Software-First Approach, But Hardware Matters A Lot

If you go by Tareq’s architecture diagrams, you get the impression that RCP is mostly about software. It is also about the many hardware innovations that Rakuten Mobile’s network operates on. In fact, hardware is such a big part of Rakuten Mobile’s engineering work, Tareq emphasized that sixty percent of his time is dedicated to driving hardware innovations and integration with Rakuten Mobile’s partners such as Qualcomm, Intel, Altiostar and NEC to make their RAN systems easy and cost-effective to deploy with a minimal footprint.

Why this tremendous investment in the hardware side of the equation? One thing that Tareq learned through the early phases of the Rakuten Mobile journey is that OpenRAN and O-RAN and its ecosystems are works in progress. At the offset of the Rakuten Mobile journey, the open hardware and software for an end-to-end system simply did not exist in the way that Tareq imagined and needed it to be. Available hardware offerings were not optimized to work together and the systems integrators with the know-how to implement a cloud-native infrastructure based on open technologies were lacking if not absent.

According to Tareq, RCP represents what he, his team and their partners have done to make open RAN concepts and technologies work at scale. In essence, it is the packaging of Rakuten Mobile’s journey and the inventions and integrations needed to implement an O-RAN, OpenRAN-compliant stack of hardware and software into a carrier-grade, scalable solution offering for telco operators as well as enterprises.

KEY TAKEAWAY 2: Making 5G Easy & Cheap for Enterprises

The enterprise market is one of great interest for Rakuten Mobile which is uniquely positioned as a UTB player that has what cloud service providers and telco tech vendors lack. Thanks to its parent company, Rakuten Group, Rakuten Mobile has intimate access to deep end market expertise across its 70+ businesses which include retail, financial services, insurance, travel, traditional and social media and much more.

According to Tareq, in order to make inroads into the enterprise market RCP needs to make cellular as cheap and easy to deploy and manage as Wi-Fi. In this regard, Tareq shared that Rakuten Mobile had developed a small cell radio unit in collaboration with Qualcomm with cost on par with a public Wi-Fi access point. He considers this a key tipping point in hardware and technology innovation that puts RCP in an ideal position to approach industry verticals with a compelling and price-competitive enterprise cellular solution. Coincidentally, this also positions Rakuten Mobile well to support the numerous businesses within the Rakuten Group conglomerate as a platform of business and product innovation.

Another interesting point that Tareq brought up was the RCP Marketplace and its role in making the enterprise customer’s experience easy. He envisions that users will be able to compose and configure RCP application services that meet their needs through the Marketplace and subscribe to them as they would services with any PaaS or SaaS platform. In a way, what Tareq described reminded me of packaged software modules of integrated ERP systems.

Tareq also mentioned the importance of being able to offer RCP as a private and on-premise solution for both enterprises and operations who are keen on hosting and operating their own networks and infrastructure.

KEY TAKEAWAY 3: Tackling the Brownfield Challenge with Integration

One of the big question I had for Tareq going into our chat was whether customers of RCP who operate brownfield environments can realize the same operational benefits and capabilities that Tareq claims Rakuten Mobile has realized from their homegrown platform? It is not a secret that Rakuten Mobile’s network is greenfield and is not laden with technical debt that most operators suffer.

Tareq admitted that brownfield operators will face challenges unique to their environment and legacy tech portfolio, but the key to unleashing the benefits of a cloud-native network is orchestration. This requires that operators sufficiently virtualize their bare metal infrastructure while integrating elements of their network portfolio that are difficult and costly to modernize.

According to Tareq, integrating legacy systems is essential to enabling RCP orchestration across a brownfield network. The RCP brownfield implementation approach will rely on interfaces with EMSs (Element Management Systems) in an operator’s environment. These interfaces will provide the FCAPS (Fault, Configuration, Accounting, Performance and Security) telemetry data and network element controls that the RCP orchestrator will need to manage network resources and services across a heterogenous network environment.

KEY TAKEAWAY 4: Multi-Layer Business Model for a Multi-Layer Business

While one might think that the RCP unit will be a business within Rakuten Mobile, it will be a complex business in of itself. Based on my discussion with Tareq, the business of RCP will be a blend of a number of different business models designed to foster a healthy ecosystem and market for RCP while creating monetization opportunities as the platform evolves over time.

As mentioned before, RCP is not only a software play, but also a hardware play. Moreover, the software and hardware sides of RCP come together as a solution play (integrated software, hardware and services). This means significant business model complexity that many companies have struggled with and few have managed to tame and master.

I was surprised by how deeply Tareq has contemplated the business model challenge. Firstly, he acknowledged the challenge, but he also sees the RCP business model evolving over time starting with the more software-based upper layers of the RCP “platform hierarchy”, namely what Tareq calls the “Digital Experience Apps & Services” domain and the “Operations” domain.

Tareq indicated that the business model for the more software-based RCP hierarchy domains will predominantly adopt a SaaS business model. As the RCP business progresses down to the infrastructure hardware level for the RAN, Tareq mentioned the possibility of a tech IP licensing business model. No doubt, a very interesting topic for a future discussion I hope to have with Tareq.

Want to be Disruptive? Just Do It!

An interesting moment in our conversation occurred when we arrived on the topic of industry innovation. Tareq says it quite often; none of what he and his team at Rakuten Mobile has done and aspires to do is easy. Many mistakes were made with a larger share of lessons learned. It has been and continues to be patently difficult. Such is the nature of innovations that seek to change conventional thinking and an entire industry.

Was it a risk to go the open RAN route rather than going with one of the tried-and-true integrated incumbents? According to Tareq, yes, very. However, it was a necessary choice if Rakuten Mobile was to achieve its goal of realizing a network and operating model with a cost structure that traditional operators could not match. Tareq believes that he and the Rakuten Mobile team have achieve this goal with Rakuten Mobile’s cloud-native infrastructure and web scale operations.

Tareq admits that there is still a long way to go to actualize his dream of a level-4 autonomous network in the next few years. However, he believes that most of the grueling work is behind him and the Rakuten Mobile team. Tareq believes he now has the foundation to get Rakuten Mobile to autonomy faster than anyone else.

For the moment, Tareq and team are actively moving to share the disruptive potential of Rakuten Mobile with the rest of the world through RCP. Becoming the Red Hat of the open RAN movement might not be a bad move. It is certainly a bet that Mickey and Tareq hope will pay off in spades.

We will be back with more in the near future so stay tuned.


For more insights on neXt Curve’s 5G technology and end market research themes contact us for a detailed briefing with one of our analysts. Follow our site to get updates and notifications of our research and our 2020 research agenda.

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by

Leonard Lee

Managing Director, neXt Curve

February 26, 2021

This material may not be copied, reproduced, or modified in whole or in part for any purpose except with express written permission or license from an authorized representative of neXCurve. In addition to such written permission or license to copy, reproduce, or modify this document in whole or part, an acknowledgement of the authors of the document and all applicable portions of the copyright notice must be clearly referenced.

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