Tareq Amin discussed the outlook for Rakuten Symphony software-first market approach
Over the past three-plus years, I’ve interviewed Rakuten Symphony CEO Tareq Amin a number of times in one-on-one and group settings. Based on these interactions, I’m certain of one overarching thing: Amin believes in what he’s doing and is willing to fight an uphill battle to flip the paradigm of building mobile networks from a hardware-centric to disaggregated, software-centric approach.
Speaking last week with media and analysts during the Telecom Infra Project’s FYUZ event in Madrid, Amin gave a broad update on how the learnings from the greenfield construction of Rakuten Mobile’s network in Japan have fed into Rakuten Symphony, the Rakuten Group organization that resells the Rakuten Mobile approach, including hardware, software, managed services and deployment. The company’s marquee win is with new German market entrant 1&1 which, like Rakuten Mobile, is a greenfield build in a hyper-competitive market. Mirroring larger conversations regarding Open RAN, Rakuten Symphony is fighting to win brownfield business. This is seen as a materially different challenge given the required integration with legacy assets and the acute need for delivering feature parity with multi-vendor systems to operators accustomed to using fully-integrated solutions.
Discussing traction with brownfield operators, Amin said, “I’m this close. I’m really, really close…This is not about Rakuten. This is the beginning of a big mind shift toward the idea that, yes, Open RAN works for brownfield.” But, he explained, working to bring feature parity to disaggregated systems was a challenge. “I never realized how complicated it was…I really was naive. I underestimated it.”
Amin gave the example of developing the appropriate protocols to support Cat M1, an LTE-based low-power wide-area network for internet of things devices which Rakuten Mobile didn’t deploy, but is used in markets in Europe, North America and elsewhere. He said his engineering team had to develop the underlying tech “as if you’re creating voice or data…This was not trivial. I had to do it otherwise there is no success to this story of Open RAN if you cannot be at feature parity with what they’re used to with existing vendors.”
Back to those potential brownfield wins: some operators are thinking about Open RAN risk mitigation by standing up these new networks in limited context–indoor, rural or even private networks. That’s not what Amin is talking to operators about; they’re talking about regions and they’re talking about 5G overlays or replacements for existing 4G/5G networks. “Either way, you know, I am more than happy to support both use cases. The ability to interwork…whether it’s through handovers or anything we need to do with a legacy environment, we need to validate” interoperability.
With regard to the replacement scenario, Amin said federal-level moves to bar equipment from Huawei and ZTE has certainly opened a door for Rakuten Symphony. “We think we provide something far more compelling…I know how hard Huawei competes against us in certain regions. [But] the heritage of how we build Symphony is so different…than anything you’d find in any other vendor or platform companies. I don’t invest in this hardware creation. I want to be a software company so that’s the only thing I invest in.”
This dynamic—focusing on software rather than hardware—is key to Rakuten Symphony’s entire ideology and organization. Amin gave the example of a 5G mmWave base station which he said he sells for $1,500. “The business model for me is hardware, I don’t care about. I’m transparent on the cost…all what we care about is to come up with a meaningful software subscription model. The approach we’re thinking about is like data centers have this cycle of hardware refresh…Maybe we sell infrastructure as a service, subscription model, much cheaper than legacy. [We] tell our customers, you never have to worry about 5G, 6G, 7G, 10G, it doesn’t matter to me. I just give you one appliance and this appliance, we will upgrade it.”
Back to the ongoing work with 1&1 in Germany, Amin said this project “really has to go flying colors” to give confidence to other potential customers. But because of the holistic nature of that deal, it gets back to the question of is Rakuten Symphony a full-service, vertically-integrated provider? “I don’t want to build hardware,” Amin said. “Philosophically I’m really against this idea that I should be vertically integrated…We tell operators we’ll warranty everything but on conditions, including on hardware. Don’t pay me inflated margins. If you want me to support hardware, you buy it directly or my overhead is 20%. All contracts have legal language around ‘transparent TCO’…in hardware. I have no interest whatsoever to be in the hardware game…I am willing to be that entire, like in 1&1, we are the complete system integrator, we are the operation company as well. That’s a choice they made.”
