Rakuten’s Satellite Ambition: Japan Funds a Domestic Direct-to-Device Network

Most of Japan is not truly connected all the time. The Tokyo subway is dense with signal. Shibuya, Osaka, Fukuoka and Sapporo feel permanently online. But walk into the mountains, go offshore, cross to a small island, or wait through a major earthquake and the map changes. White spaces still exist. Rakuten’s satellite project is an attempt to redraw that map from above.

On June 30, Reuters reported that the Japanese government will provide Rakuten Group with up to 148 billion yen, about $912 million, to help build a satellite communications network. Rakuten is in talks with U.S.-based AST SpaceMobile to form a joint venture for the project. The goal is direct-to-device connectivity: ordinary smartphones connecting to low Earth orbit satellites when terrestrial base stations cannot reach them or have been knocked out by disaster.

This is not just another telecom subsidy. It sits at the crossroads of mobile competition, space infrastructure, disaster resilience, rural policy and economic security. Japan currently relies heavily on foreign providers, including SpaceX’s Starlink, for low Earth orbit satellite communications. A domestic, Japanese-led path would give the country another layer of communications sovereignty in the sky.

The news in one frame

The simplest way to understand the project is this: Rakuten wants the satellite to become a cell tower in the sky. Instead of asking the user to buy a satellite phone or install a dish, the system aims to let a normal smartphone connect when it is outside the reach of terrestrial networks. That sounds magical, but it is also brutally practical. Japan is a country of mountains, coastlines, offshore fisheries, remote villages and earthquakes. There are many places where a little connectivity is worth more than a lot of speed.

Low Earth orbit satellites circle much closer to Earth than traditional geostationary satellites, which helps reduce latency and makes mobile applications more realistic. Starlink made LEO broadband familiar to the public. The next race is more intimate: not the dish on the roof, but the phone in the pocket.

Rakuten’s satellite story is also a story about how infrastructure ambition returns after pain. Rakuten Mobile entered Japan’s mobile market as a fourth carrier with a cloud-native, virtualized, Open RAN network. It challenged NTT Docomo, KDDI and SoftBank with a cheaper, software-driven model. The vision was bold. The execution was expensive. Base stations cost money. Roaming cost money. Subscribers were hard to win. The mobile unit became a burden on Rakuten’s group finances. Satellite connectivity offers a different narrative: from price challenger to national resilience provider.

The Rakuten-AST relationship began years ago

The June 2026 grant report looks sudden only if one ignores the history. In March 2020, Rakuten and Vodafone announced an investment in AST & Science and a strategic partnership around SpaceMobile, a network intended to connect directly to 4G and future 5G smartphones without requiring special hardware. Rakuten was not merely watching the market. It was placing an early bet on a technology that could extend its mobile ambitions beyond terrestrial towers.

In February 2024, Rakuten Mobile announced plans to provide satellite-to-mobile service in Japan with AST SpaceMobile, targeting a 2026 start. The announcement put a date on a concept. Then, in April 2025, Rakuten Mobile and AST SpaceMobile said they had completed Japan’s first broadband video call between everyday unmodified smartphones using a low Earth orbit satellite. The project also gained a Japanese service name: “Rakuten Saikyo Satellite Service Powered by AST SpaceMobile.”

AST’s own milestones helped make the idea credible. In April 2023, the company announced what it called the first space-based voice call using everyday unmodified smartphones. The call was made from the Midland, Texas area to Rakuten in Japan over AT&T spectrum using a Samsung Galaxy S22. That mattered because it shifted the idea from investor presentation to live demonstration: a regular phone, a satellite, and a real connection.

Why Japan cares

Japan has two reasons to care about this technology. The first is disaster. In the Great East Japan Earthquake of 2011, the Kumamoto earthquakes of 2016, the Noto Peninsula earthquake of 2024, and repeated typhoon and flood events, Japan has seen how quickly roads, power, water and communications can fail together. A mobile base station is physical infrastructure. It needs power, backhaul, access and maintenance. When those systems fail, the network map can collapse just when people need it most.

The second reason is economic security. Starlink’s role in Ukraine made the world understand that satellite connectivity is not merely a consumer service. It is strategic infrastructure. A private satellite network can become a geopolitical asset. Japan does not have to reject foreign providers to want a domestic option. It simply needs more than one layer of dependence.

That is why the Rakuten project is more than a company rescue story. The government is not only subsidizing a telecom operator; it is trying to cultivate a national capability. If the project works, Japan gains a homegrown satellite-to-mobile layer for emergency connectivity, remote coverage and future 5G/6G integration. If it fails, the lesson will be expensive but still instructive: space infrastructure is hard, and sovereignty cannot be bought with headlines alone.

A Japanese answer to Starlink — but not the same thing

It is tempting to call the plan “Japan’s answer to Starlink.” The phrase is useful, but incomplete. Starlink built public awareness through satellite broadband, often using user terminals and dishes. It is also moving into direct-to-cell service with mobile partners. Rakuten and AST, by contrast, are focused on cellular integration from the start: standard phones, mobile operator spectrum, and coverage where terrestrial cellular networks end.

The distinction matters. A rural home may want a broadband dish. A hiker, fisherman, evacuation worker, ferry passenger or isolated village mayor wants the phone already in hand to work. Direct-to-device service will not instantly replace dense urban mobile networks. Capacity is limited. Signal conditions vary. Regulatory approvals, spectrum coordination, satellite launch schedules and device behavior all matter. But for the first message after a disaster, or the first call from a place with no tower, perfection is not the standard. Connectivity is.

Recent technical research frames the industry as a choice between fast-market direct-to-cell systems and more standardized 3GPP non-terrestrial network architectures. Direct-to-cell can move quickly because it works with existing phones and terrestrial spectrum. NTN may offer deeper long-term integration with 5G and 6G. The likely future is hybrid. Japan will need terrestrial 5G, fiber backbones, mobile base stations, satellite broadband, direct-to-device fallback and public disaster systems working together.

Why the geography makes sense

Japan’s geography is unforgiving for communications planners. The country is urban and hyperconnected, but it is also mountainous, maritime and fragmented by islands. A dense base-station grid makes sense in Tokyo. It is harder to justify in sparsely populated mountain valleys, remote fishing ports, forest roads, national parks and small islands. The economics of coverage are not the same as the social value of coverage.

This is where satellite-to-phone service has a natural role. It does not need to turn every valley into a high-speed video zone. It needs to make the “no signal” zone smaller. It needs to support voice, messaging, location, alerts, emergency coordination and essential data. Over time, it may support more ordinary data services, but the first public value is resilience.

For local Japan, the use cases extend beyond emergency calls. Tourism, remote medicine, agriculture, forestry, fisheries, maritime safety, drones, logistics, road maintenance, smart meters and disaster drills all depend on networks. A satellite layer that reaches places terrestrial networks do not can give rural regions a new digital baseline.

Rakuten’s second infrastructure identity

Rakuten began as an internet marketplace. It became an ecosystem: e-commerce, finance, travel, payments, media, advertising and points. Mobile was supposed to complete that loop by giving Rakuten a permanent customer touchpoint. Instead, it became a capital-intensive struggle. The satellite project gives Rakuten a chance to tell a more ambitious story again.

If successful, Rakuten will not just be the cheapest phone plan or the fourth carrier with a difficult balance sheet. It will be one of the companies building Japan’s communications redundancy. That is a very different kind of corporate identity. It also comes with a different standard of accountability. Subsidized infrastructure must perform when conditions are ugly, not only in demonstrations and press events.

The hardest questions will come later. How much service will be available at launch? What will pricing look like? Will emergency use be prioritized? How will traffic be managed when many people in a disaster area try to connect at once? How resilient are the ground gateways? What happens if AST launch schedules slip? Will the system interoperate with public agencies, municipalities and other carriers? These details determine whether a national dream becomes public infrastructure.

The global race

Japan is not alone. Vodafone, AT&T, Verizon, Orange and other carriers are exploring satellite-to-mobile partnerships. SpaceX is moving Starlink into direct-to-cell with T-Mobile. Apple and Android manufacturers have introduced emergency satellite features, though many are more limited than full mobile broadband. Governments are watching because the winner of this race may control the next layer of connectivity.

The lesson is not that every country must build everything alone. The lesson is that connectivity has become strategic. Chips, cloud, AI, submarine cables, satellites, mobile spectrum and data centers now belong to the same national infrastructure conversation. Rakuten’s project sits inside that larger shift. The phone is personal. The network behind it is geopolitical.

Japan.co.jp view

Rakuten’s satellite project is one of those stories that sounds futuristic but is really about old Japanese problems: mountains, islands, earthquakes, typhoons, rural depopulation and infrastructure fragility. The technology is new. The need is not.

The reported ¥148 billion support is large enough to be controversial. It should be. Public money for a private company demands scrutiny. But Japan also has to decide whether “coverage everywhere” is a market luxury or a public necessity. If the answer is necessity, then the market alone may not build it. Rural networks, disaster redundancy and space communications require patient capital and national coordination.

The compelling part of this story is not that Rakuten wants satellites. It is that Japan’s communications future may need multiple skies. One sky for commercial broadband. One sky for emergency fallback. One sky for national security. One sky for rural life. The smartphone has become the modern citizen’s lifeline. Rakuten’s bet is that, when the ground fails, that lifeline should still reach upward.

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