Japanese billionaire Hiroshi Mikitani's Rakuten gets $1 billion state backing for Starlink rival

Rakuten Group Inc., the Japanese internet company founded and run by billionaire Hiroshi Mikitani, has formed a joint venture with AST SpaceMobile Inc. to connect ordinary smartphones directly to satellites across Japan, backed by about $1 billion in government grants.

The venture between Rakuten Mobile and the Texas-based satellite company will use AST's BlueBird low-Earth-orbit network to offer direct-to-smartphone service on midband spectrum, starting in March 2029. Japan's Ministry of Internal Affairs and Communications is supporting the project. Rakuten says the service will strengthen the country's emergency and disaster communications.

Mikitani has pitched the venture as a domestic alternative to foreign networks. "It is important not to rely on a single company and to have an alternative option available domestically," he said in an interview published on Nov. 12.

A challenge to SpaceX in Japan

The venture sets Rakuten against Elon Musk's SpaceX in Japan's market for satellite-to-phone service. KDDI Corp., Japan's second-largest carrier, launched a direct-to-cell service using SpaceX's Starlink network in 2025, and SoftBank Corp. and NTT Docomo Inc. have been following.

Japan's government ran a subsidy program worth about $1 billion for a domestic satellite network that can provide nationwide direct-to-cell coverage by March 2029. A consortium of KDDI and SpaceX and the Rakuten-AST alliance were the leading contenders.

In June, Mikitani said the two partners would hold equal stakes in the venture, with Rakuten leading management, and that it was "extremely critical" for Japan to have a service backed largely by Japanese capital.

A long bet on AST

Rakuten has backed AST since 2020, when it invested in the company alongside Vodafone Group Plc. AST now has more than 60 mobile operator partners, including AT&T Inc., Verizon Communications Inc. and Vodafone.

Mikitani, 61, founded Rakuten in 1997 as an online shopping mall and built it into a group spanning e-commerce, banking, credit cards, travel and mobile phones. Rakuten Mobile, which he launched as Japan's fourth mobile network, has cost the group heavily in losses as it built out its network. Forbes ranks him among Japan's billionaires.