The telecommunications landscape recently witnessed a significant event as Rakuten Mobile achieved its first-ever quarterly EBITDA profit, excluding property taxes. Despite a larger net loss year-over-year and declining shares, the latest figures on Rakuten Group’s Q1 2025 earnings reveal a positive momentum in its telecom segment. This development provides insights into the potential of adopting greenfield mobile strategies, Open RAN deployments, and subscriber growth through ecosystem collaborations.
Rakuten Group reported a consolidated revenue of ¥562.7 billion (~$3.63 billion) for the quarter ending March 31, 2025, reflecting a 9.6% increase from the previous year. The IFRS operating loss significantly reduced from ¥33.3 billion (~$215 million) in Q1 2024 to ¥15.4 billion (~$99.5 million) in Q1 2025. Unfortunately, the net loss expanded to ¥73.5 billion (~$474 million) from ¥42.4 billion (~$274 million) the previous year, mainly due to non-operational factors such as unrealized losses on hedging instruments linked to currency fluctuations.
Encouragingly, EBITDA climbed to ¥79.9 billion (~$515 million), marking a 51.4% year-over-year increase. During Rakuten’s earnings call, CFO Kenji Hirose noted that the expanded net loss was driven by technical hedging impacts, not by a deterioration of core business operations.
Rakuten Mobile remains the company’s most significant investment, albeit also a major financial drain. This segment recorded ¥110.7 billion (~$714 million) in revenue, a 10.9% YoY rise, reducing its losses from ¥65.6 billion (~$423 million) in Q1 2024 to ¥51.3 billion (~$331 million) in Q1 2025.
Importantly, Rakuten Mobile’s EBITDA turned positive, exceeding 100 million yen, a milestone that suggests a potential turning point. CEO Hiroshi Mikitani emphasized the aim of enhancing Rakuten Mobile’s network quality, with plans to install an additional 10,000 base stations this year. The subscriber base grew to approximately 8.63 million lines, encompassing MNO, MVNO, and MVNE customers. The rise in average revenue per user (ARPU) was driven by increased data usage, optional service uptake, and advertising revenue from Rakuten Link.
As one of the pioneers in constructing a fully virtualized, cloud-native network from the ground up, Rakuten Mobile has earned a reputation as a telecom innovator. This ambitious approach is now showing signs of yielding results.
