Rakuten and AST Agree on Satellite Communications Project With Up to ¥148 Billion in Support
Key Facts
Rakuten Group and AST SpaceMobile agreed on November 6, Japan time, to establish a joint venture to build direct satellite communications with smartphones in Japan, according to a Rakuten statement issued on November 9. The project is expected to receive up to ¥148 billion in government funding over about 3 years through the Japanese Telecommunications and Information Network Association under the J-LEO project. The expected maximum value is equivalent to about $1 billion, according to a disclosure AST filed with the U.S. Securities and Exchange Commission in July 2026. The agreement represents a government-backed communications infrastructure project; the company does not describe it as a $1 billion cash order to buy satellites. The announcement comes on the day of AST's third-quarter earnings call, with investors focused on what management may say about the implementation schedule and its commercial implications.
AST said in a July disclosure that discussions on the joint venture and the support grant were still underway, and that completion of the project and securing government funding were not assured at the time. The new agreement gives Rakuten 51% of the voting rights in Rakuten AST, versus 49% for a Japanese subsidiary of AST SpaceMobile. This structure gives Rakuten the largest stake in the entity that will develop the project in Japan. According to Rakuten's statement, AST will work with the joint venture to deploy and manage satellites, equipping them to operate in mid-band frequencies. AST's large antennas are designed to provide high-speed internet to ordinary commercial smartphones without special equipment.
The project aims to build a Japanese network that allows satellites to connect directly to smartphones and extend coverage to mountainous areas and islands outside the reach of mobile networks. It also aims to maintain connectivity during emergencies and disasters, according to Rakuten's statement. Rakuten Chairman and CEO Hiroshi Mikitani said, "This project is an important pillar of Rakuten Mobile's network strategy." AST CEO Abel Avila described the project as "an important milestone that represents a major turning point for AST SpaceMobile." The statements show that the two companies are presenting the initiative as part of their coverage and connectivity strategy, as well as a project to develop a domestic satellite network.
The companies aim to complete construction of the satellite communications network and begin operations in Japan by the end of March 2029. In parallel, Rakuten Mobile plans to begin testing direct satellite communications in a commercial environment during 2026 as part of its strategic partnership with AST. Rakuten's statement distinguishes this test from the new J-LEO project, giving each a separate timeline. Rakuten also said AST's next-generation satellites will use phased-array antennas with an area of about 223 square meters and are designed to achieve a maximum data rate of nearly twice that of BlueBird Block 1 satellites. Rakuten previously reported that a BlueBird Block 1 satellite achieved a peak download speed of 98.9 megabits per second when connected directly to an ordinary smartphone.
Rakuten added that AST has agreements with about 60 mobile network operators representing more than 3 billion subscribers. This reach provides the base of partnerships that Rakuten says AST has built outside the new Japanese project. The current agreement, meanwhile, ties the company to a project based on expected government funding and domestic infrastructure in which Rakuten holds the majority stake. The statement did not include details on AST's expected revenue from manufacturing or managing satellites, or an estimate of the value of contracts that could arise from the project. The announced milestones remain Rakuten Mobile's commercial test during 2026, followed by the targeted start of local network operations by the end of March 2029.