Rakuten shows MWC how to build a 5G network, you’re welcome

rakuten 5G MWC
"We’re just software." – Rakuten founder, CEO and chairman Mickey Mikitani onstage at MWC19. Image credit: GSMA / MWC 2019

Rakuten’s chief showcased plans for its upcoming new mobile network at MWC19 on Wednesday – and if nothing else, it was a masterclass in how to build a cheap cloud-native 5G network that incumbent cellcos aspire to become one day.

During the morning keynotes, Rakuten founder, CEO and chairman Mickey Mikitani presented his company’s mobile network strategy to shift from its current MVNO model to a full-fledged network operator. Rakuten has said in the past it plans to launch in October this year, and will spend just eight months rolling out the entire 4G network, which can be upgraded to 5G with a software update.

While Mikitani acknowledged that industry watchers questioned the wisdom of investing tens of billions of dollars in mobile infrastructure in an era where all the innovation is happening over the top – a space where Rakuten already plays as an e-commerce platform providing a range of microservices.

The secret, he said, is that Rakuten’s mobile network is an “end-to-end fully virtualized cloud native network” with an open multi-vendor architecture. “[That means] that from antenna head to antenna head, we do not have so much specialized hardware. Everything is software-based and virtualized and put on the cloud.”

Mikitani also dismissed claims from other operators that they will also have a cloud core like Rakuten’s as they upgrade their networks to 5G, saying that Rakuten Mobile’s greenfield cloud-native architecture makes a huge difference.

“From Day 1, we are 5G-ready. Other operators need to build an extra 5G network or need to consider how they can connect the 5G network to the 4G network,” he said. “We’re just software – inside our cloud is just an IPv6 network. So it’s really easy to manage – everything is automated, and the costs are very small costs to modify our network to adopt 5G.”

Which brings up another key advantage, he added – Rakuten’s capex and opex investments will be far lower than the incumbents.

“For a start, Rakuten will only require about 100 maintenance people, whereas traditional telcos may employ up to 10,000 maintenance people maintaining base stations and specialized hardware,” he said.

Mikitani estimated that Rakuten’s mobile network will require half the investment of traditional telcos just to build the 4G part of the network. When you factor in the 5G upgrades, he said, “we’re talking about 70 to 80% reduction [in investment].”

Moreover – and, arguably, more to the point – building a cloud-native mobile network running IPv6 means that Rakuten can easily migrate all of its online services onto its network, Mikitani said. Its cloud-native status also enables partners to develop new services, test them in the cloud, and deploy the ones that work.

“We can just deploy it and make it available to the users – as simple as that.”

“A new way of thinking about architecture”

If all this sounds familiar, it’s because this is exactly the model that traditional cellcos are pushing towards. A key element of the digital transformation paradigm is leveraging technologies like cloud, virtualization and automation to give operators the agility to keep up with OTTs in terms of innovative and fast service creation. But as many operators have learned, transforming legacy networks is time-consuming, hard work.

Chuck Robbins, CEO of Cisco (one of Rakuten’s suppliers), made that very point in his keynote preceding Mikitani’s, saying that 5G is far more than faster RANs – it requires a new way of thinking about network architectures.

“The technology you put in the network is going to be different than anything we’ve ever built,” he said. “We have built networks over the years, and we kept adding to them and adding to them, and many of you now are actually trying to take those historical networks that have become incredibly complicated, and we’re trying to simplify them … because we need to cut down the operational complexity, we need to give ourselves the ability to move with greater speed.”

The challenge is that initial 5G services will be launched on those existing complex networks, and they won’t hold for long, he said, using a traffic analogy to make his point.

“What if we made every highway coming into New York City 40 lanes, and we didn’t do anything to the center of Manhattan? It might get a little congested,” Robbins said. “We need to build next-generation, fast, secure scalable networks to accommodate this.”

Then Mickey Mikitani comes on stage and shows that Rakuten Mobile is doing just that – and purportedly for half the price.

Obviously Rakuten still has a lot to prove – it’s still competing against three strong and entrenched mobile incumbents, and it has to demonstrate that owning and operating a network will generate more revenue, growth and synergy than if it had stuck with the MVNO model. Also, despite Mikitani’s claims that Rakuten can scale easily, it’s unclear how that claim will hold up under the levels of densification that 5G will ultimately require.

But at the very least Rakuten will be a fascinating test case to see what happens when a webscale giant builds a webscale mobile network. And if it works, it could set the benchmark for incumbent cellcos trying to transform themselves to compete with the webscale players. Either way, next year’s Rakuten keynote will be worth watching.

Likes
Please feel free to share

Be the first to comment

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.