Rakuten – doing much more than stealing the show at MWC19

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The Rakuten story stole the show at MWC but if you talk to Ed Finegold, Director of Strategy at Netcracker, it is interesting for all sorts of other reasons.

The first is that Rakuten is not burdened by legacy, “so it allows us to see what a digital first, mobile first, omni-channel company really looks like”.

Rakuten’s model is based on tokens and building value by using services and products within a wide and ever deepening ecosystem. “This makes the BSS piece interesting”, says Finegold, “because it is actually about keeping track of the activity and related balances. It is very different from traditional telco billing and must account for a wide range of services, from travel to money to insurance and beyond”.

What is grabbing the imagination is that the company has built the model already and is only now launching their own network as they move from MVNO to MNO. “As the ecosystem grows it throws up some really interesting challenges” says Finegold. “Imagine, for instance, building a centralised product catalogue for Rakuten. That is something we having been planning and discussing for years and now we are doing it”.

What also interests Finegold is that the mobile first approach changes your perspective. “It allows you to think – properly – about Mobile Lifestyle beyond the hype. You can look at everything you need to do through a mobile channel. For a start, if you are a member you are pre-authorised, which has the potential to fundamentally and radically change the customer experience by providing the channel to insurance or mortgages or – frankly – who knows what, with the minimum amount of hassle.

Now they are heading to the next level, where they can manage their own network. Rakuten is the first cloud native network and they are not about ‘speeds and feeds’ in any form. As they said at the recent Netcracker event, ‘this is not about minutes and data and texts’. It is about the ecosystem, based on a platform that could take them anywhere.

You have to wonder where Rakuten will end up. They want to be a B2B provider and provide services for anyone who wants to play. The question is, will they do billing? “That is a good question”, says Finegold. “They need to make money out of this so you are looking at billing-on-behalf-of-others. They certainly have the functionality. Think about charging every time someone hits an API”.

Netcracker is still working out how some pieces of the puzzle will work, whether third parties will come to them and how, but the success so far is based on the company’s Network as a Service model, an ecosystem that links all the VNF players together. The trick will be to make as easy as possible to ‘on-board’ partners.

The communications industry has been talking about telcos as the centre of the universe for many years but this could be the moment when a ‘telco’ actually achieves it. For a long time telcos have done pieces but no-one has done the whole thing.

One challenge is technical and about on-boarding. The trouble with the ecosystem as it stands is that if you want to sign up to TripAdvisor, say, you can do it in one place. Yet, as TripAdvisor themselves pointed out at a conference not so long ago, if you want to sign up telcos, there are probably four in every country you want to get into.

The other challenge is legacy thinking and overcoming that. To deliver a true telco cloud “you need huge business political will” says Finegold. “You can’t let the regulator stop you and to do that you have to create something that has never been done before. This is completely new. It is about really testing digital channels – for instance I should be able to buy my new mobile device from my existing one”.

It is about throwing out the old ways of measuring sales and revenue and targets. Many of them conflict with the overall goals of a company. One example that sticks in the mind was when the then CEO of Telstra called his senior management team and declared that from then on there was only one KPI on which bonuses would be paid – customer experience, specifically Net Promoter Score. Suddenly everyone in the company was getting together to work out ways to make this happen.

With a model as new and as brave as the Rakuten one – and as long as their focus is and remains on the customer experience – it is very possible that great, refreshing and ground breaking things could happen.

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