Key facts
- Rakuten Group and AST SpaceMobile are partnering to launch a satellite-to-cell service in Japan.
- The Japanese government is providing up to $912 million in subsidies for the project.
- The service aims to compete with SpaceX's Starlink by allowing ordinary smartphones to connect directly to satellites.
- Japan's communications ministry is expected to allow satellite communications in the 700 MHz band, which Rakuten holds licenses for.
- AST SpaceMobile shares rose 21% on the news.
Japan's Rakuten Group is set to launch a direct-to-mobile satellite communications service as early as this year through a partnership with U.S.-based AST SpaceMobile. This initiative aims to establish a domestic alternative to SpaceX's Starlink system, bolstering Japan's economic security and communication resilience.
The Japanese government is backing the venture with up to 148 billion yen ($912 million) in subsidies over three years. This funding will support the procurement of low Earth orbit satellites, ground facilities, and control systems. Rakuten and AST SpaceMobile are in advanced discussions to form a joint venture, expected to be established in 2026 with equal stakes, and Rakuten will lead its management.
This move is partly driven by the need for a robust communication network, especially in disaster-prone areas, as highlighted by the 2024 Noto Peninsula earthquake where Starlink was deployed for temporary communication restoration. The government aims to secure a critical communications backbone independent of foreign infrastructure.
Regulatory support is also crucial, with Japan's communications ministry expected to permit satellite communications in the 700 MHz band soon. This spectrum is significant as Rakuten already holds licenses for it for its terrestrial mobile services, potentially allowing ordinary smartphones to connect directly to satellites without specialized hardware.
Rakuten Mobile targets limited service use of AST satellites in 2026, with a broader nationwide rollout planned for fiscal 2027. The news of the substantial government subsidy and partnership led to a significant market reaction, with AST SpaceMobile shares surging 21%.