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1&1:5G Infrastracture: Difference between revisions
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Our major concern with Rakuten is that if its mobile division continues making losses, the group's financial position will be severely impacted. This will impact the construction of 1&1's network. Our asssesment is based on the current situation of its balance sheet and that of Bloomberg analysts. Due to the mobile losses and capex, Bloomberg Intelligence expected its non-financial segment cash burn to exceed 500 billion yen in 2022<ref>https://www.bloomberg.com/news/videos/2022-07-21/not-all-asia-telecom-bonds-are-safe-havens-in-stormy-2h-video</ref>. This could affect its credit rating, which is already on the downward trend. In December 2022, Rakuten's long-term credit rating was lowered to BB from BB+ by S&P Global Ratings<ref>https://www.bnnbloomberg.ca/japan-e-commerce-giant-rakuten-cut-further-into-junk-by-s-p-1.1862071</ref>. Bloomberg Intelligence Strategist Sharon Chen, believes that Rakuten needs to repair its balance sheet by Q4 2023 when $2.2 billion of bonds come due<ref>https://www.bloomberg.com/news/articles/2023-01-11/rakuten-more-than-doubles-bond-offering-s-size-to-450-million</ref>. However, we believe that even if the group were to go bankrupt, the business will be sold to another company or big investor who will see to it that the group's partnership obligations are honored. | Our major concern with Rakuten is that if its mobile division continues making losses, the group's financial position will be severely impacted. This will impact the construction of 1&1's network. Our asssesment is based on the current situation of its balance sheet and that of Bloomberg analysts. Due to the mobile losses and capex, Bloomberg Intelligence expected its non-financial segment cash burn to exceed 500 billion yen in 2022<ref>https://www.bloomberg.com/news/videos/2022-07-21/not-all-asia-telecom-bonds-are-safe-havens-in-stormy-2h-video</ref>. This could affect its credit rating, which is already on the downward trend. In December 2022, Rakuten's long-term credit rating was lowered to BB from BB+ by S&P Global Ratings<ref>https://www.bnnbloomberg.ca/japan-e-commerce-giant-rakuten-cut-further-into-junk-by-s-p-1.1862071</ref>. Bloomberg Intelligence Strategist Sharon Chen, believes that Rakuten needs to repair its balance sheet by Q4 2023 when $2.2 billion of bonds come due<ref>https://www.bloomberg.com/news/articles/2023-01-11/rakuten-more-than-doubles-bond-offering-s-size-to-450-million</ref>. However, we believe that even if the group were to go bankrupt, the business will be sold to another company or big investor who will see to it that the group's partnership obligations are honored. | ||
=== Its contract with 1&1 === | ==== Its contract with 1&1 ==== | ||
Rakuten is a pioneer in OpenRAN technology. In August 2021, it entered into a partnership with 1&1 for the construction of German's fourth MNO 5G network based on Open RAN architecture. Rakuten will use its own playbook in Japan to implement this project. According to the contract, Rakuten 1&1's Open RAN equipment as well as oversee its performance. The contract notes, " 1&1 will have access to the Rakuten Communications Platform (RCP) stack of access, core, cloud and operations solutions as well as to its partner network. In this context, Rakuten will also provide its specially developed orchestration software so that the 1&1 network can be operated in a highly automated manner." <ref>http://88.217.133.43/link.php?isin=DE0005545503&typ=corporate&von=19970101&a=10&sprache=en&id=1468451</ref> | Rakuten is a pioneer in OpenRAN technology. In August 2021, it entered into a partnership with 1&1 for the construction of German's fourth MNO 5G network based on Open RAN architecture. Rakuten will use its own playbook in Japan to implement this project. According to the contract, Rakuten 1&1's Open RAN equipment as well as oversee its performance. The contract notes, " 1&1 will have access to the Rakuten Communications Platform (RCP) stack of access, core, cloud and operations solutions as well as to its partner network. In this context, Rakuten will also provide its specially developed orchestration software so that the 1&1 network can be operated in a highly automated manner." <ref>http://88.217.133.43/link.php?isin=DE0005545503&typ=corporate&von=19970101&a=10&sprache=en&id=1468451</ref> | ||