Rakuten is directly challenging Starlink’s dominance in Japan’s satellite internet market through a joint venture with US-based AST SpaceMobile, announced for 2026. This move represents Japan’s strategic attempt to break what amounts to Starlink’s near-monopoly in direct-to-cell satellite services—a shift that could eventually lower prices and expand service options for Japanese consumers and businesses. The competition matters because satellite internet has transitioned from a niche service to a critical infrastructure play, and Japan’s government views domestic alternatives as essential to national security and economic independence. The setup is straightforward: Rakuten and AST SpaceMobile will form an equal-stake joint venture, with Rakuten handling management, to deploy satellite-to-smartphone services across Japan. Limited service is expected to launch by the end of 2026, with nationwide coverage targeted for fiscal year 2027.
The entire J-LEO (Japan Low Earth Orbit) satellite communications initiative is budgeted at approximately 150 billion yen—roughly $1 billion USD. This competitive pressure comes as larger Japanese carriers like NTT Docomo and SoftBank have already signed deals to offer Starlink’s direct-to-cell services, meaning the market is actively consolidating around satellite solutions. Why Rakuten chose AST SpaceMobile reveals the competitive constraints in play. Rakuten was not allocated Japan’s 2GHz spectrum band, which Starlink and its Japanese partners use. This forced Rakuten to partner with AST, whose technology operates on different frequencies. Without this partnership, Rakuten would have no path to independent satellite coverage—illustrating how spectrum allocation by government becomes a competitive advantage or barrier in the satellite era.
Table of Contents
- Why Is Rakuten Taking on Starlink in Japan?
- Technology and Spectrum: Why AST SpaceMobile, Not Starlink?
- Consumer Competition and Market Impact
- Timeline and Service Rollout: What to Expect
- The Security and Sovereignty Play
- What Does This Mean for Starlink and Competition?
- Expected Launch Window and Consumer Readiness
Why Is Rakuten Taking on Starlink in Japan?
Japan’s government identified satellite internet as a strategic priority, launching the J-LEO project to ensure the country isn’t dependent on a single foreign provider. Rakuten CEO Hiroshi Mikitani explicitly called the satellite push “critical” for Japan’s security and sovereignty. This framing goes beyond consumer service—it’s about national resilience. When a single company controls critical telecommunications infrastructure, governments lose negotiating power on pricing, service standards, and data sovereignty.
Japan’s approach reflects a broader global trend where countries are diversifying satellite providers to reduce geopolitical risk. The immediate competitive pressure comes from KDDI, which has partnered with SpaceX on satellite services. that KDDI-SpaceX alliance and the Rakuten-AST SpaceMobile alliance represent Japan’s two competing visions for satellite coverage. Japan’s government was expected to select the winner of the J-LEO project by June 2026, meaning one alliance would likely receive preferential spectrum, funding, or regulatory support. This winner-take-most dynamic explains why both Rakuten and KDDI have committed substantial resources—the satellite market in Japan could follow the pattern of other telecom infrastructure, where early dominance compounds over decades.
Technology and Spectrum: Why AST SpaceMobile, Not Starlink?
Rakuten’s selection of AST SpaceMobile over other potential partners hinges on a fundamental constraint: spectrum allocation. Starlink operates using the 2GHz band in Japan, which is already assigned to existing carriers. Rakuten did not receive 2GHz allocation, closing off the direct Starlink partnership path. Instead, AST SpaceMobile’s satellite-to-smartphone technology operates on different frequencies—a technical difference that matters because it allows Rakuten to build a genuinely independent network rather than becoming a reseller of Starlink capacity.
This spectrum limitation is a real-world example of how government frequency assignments shape competition. A company with allocated spectrum has an enormous advantage; a company without it must find alternative technology or negotiate with carriers that hold spectrum. Rakuten chose the alternative-technology route, accepting the risk that AST’s technology is newer and less proven than Starlink’s. The trade-off is real: AST has fewer satellites deployed than Starlink and less operational history. Japan’s consumers and businesses get competition, but they’re also becoming early adopters of a less mature service—a situation that typically means higher prices initially and potential service disruptions as the network scales.
Consumer Competition and Market Impact
Larger Japanese wireless carriers—NTT Docomo, SoftBank, and KDDI—are already offering direct-to-cell satellite services using Starlink’s network. This pre-existing competition means Rakuten is not entering a green field; instead, it’s entering a market where pricing and service features are already being established. The practical impact for consumers depends on how aggressively Rakuten prices its service and how quickly AST’s network achieves reliable nationwide coverage. Historically, telecom price wars in Japan have been moderate compared to the US, because Japan’s market is more concentrated and regulatory oversight higher.
For consumers in rural areas or those considering satellite backup internet, the Rakuten-AST option becomes relevant only if it offers better pricing, more reliable service, or features that existing Starlink-based options don’t provide. The June 2026 selection deadline is critical—the winner of Japan’s J-LEO project is likely to receive resources and regulatory support that allow it to undercut competitors. If Rakuten wins, its service pricing could drop significantly within 12-18 months. If KDDI’s SpaceX alliance wins, expect Rakuten to launch a slower, more expensive satellite service, potentially limiting its market share and reducing competitive pressure.
Timeline and Service Rollout: What to Expect
Rakuten and AST plan a phased rollout: limited satellite-to-smartphone services are expected to launch at the end of 2026, with nationwide coverage targeted for fiscal year 2027 (likely by March 2027 in Japan’s fiscal calendar). This aggressive timeline is important because it creates a race against KDDI’s SpaceX partnership. Whichever service reaches nationwide coverage first gains network effects—customers, corporate contracts, regulatory favor. For consumers, this means late 2026 is when early reviews and real-world performance data will emerge, allowing informed decisions before widespread rollout. The budget of 150 billion yen ($1 billion USD) allocated to J-LEO is substantial but not unlimited.
It must cover satellite development, launches, ground stations, and customer acquisition. By comparison, Starlink has spent tens of billions across its global constellation. AST is smaller and newer than SpaceX, which means Rakuten’s J-LEO budget must work harder. This can drive efficiency, but it can also mean corners cut on coverage redundancy, latency optimization, or customer support. Consumers signing up for Rakuten’s satellite service in late 2026 or early 2027 should expect a service that’s functional but not yet optimized—similar to early Starlink customers who experienced frequent outages and latency issues in 2020-2021.
The Security and Sovereignty Play
Japan’s emphasis on security and sovereignty reflects a genuine geopolitical concern. Starlink is US-owned, SpaceX is US-owned, and their systems can be subject to US export controls, sanctions, or decisions by the US government. If the US and Japan’s interests diverge—whether on data handling, service prioritization, or national security access—Japan as a country would have limited recourse with Starlink. A domestically led option like Rakuten, even though AST is US-based as a partner, places decision-making authority with Japanese management and board representation.
However, this security rationale has a practical limitation: AST SpaceMobile is a private US company, and Rakuten cannot unilaterally control AST’s technology or business decisions. If AST faces financial pressure or acquisition by another entity, the joint venture could face constraints. This is why several countries—Japan, the EU, India—are simultaneously developing indigenous satellite programs rather than relying solely on commercial partnerships. The Rakuten-AST alliance is described as a business solution, but it’s also a stepping stone: Japan gains some autonomy over satellite services now while potentially developing its own indigenous capacity over the next decade.
What Does This Mean for Starlink and Competition?
Starlink’s dominance in Japan is not guaranteed to persist. The company faces direct government-backed competition from two different alliances, both of which have secured government support and funding. This contrasts with Starlink’s position in many other countries, where it operates without direct domestic competitors. For Starlink, the Japan market remains valuable, but its pricing power is now constrained. It cannot unilaterally raise rates or reduce service investment without risking market share to Rakuten or KDDI.
The competitive dynamic also matters because it determines which technology standards and frequencies Japan develops around. If Rakuten wins J-LEO selection, AST’s technology becomes the standard for future Japanese infrastructure. If KDDI wins, Starlink’s standards become embedded. This matters to equipment manufacturers, telecom operators, and future service providers. Japan’s choice today shapes the market for the next decade.
Expected Launch Window and Consumer Readiness
The end of 2026 marks when early Rakuten satellite service launches, and fiscal year 2027 (ending March 2027) is when nationwide coverage is targeted. This means consumers in urban centers might see service availability by Q4 2026, but rural areas may not have reliable coverage until mid-2027 or later. For anyone considering satellite internet in Japan, waiting until mid-2027 to assess both Rakuten and KDDI’s actual performance and pricing is prudent.
Early-adopter pricing is rarely optimal, and satellite services especially benefit from post-launch refinements that typically occur 6-12 months after initial rollout. By mid-to-late 2027, real-world latency, throughput, and reliability data will be available, allowing informed comparison between Starlink-based services already on market and Rakuten’s new AST-powered alternative. At that point, competition will have driven price clarification, and service quality differences will be measurable rather than speculative.
- —
