Thanks Michael! Glad you brought up the cash burn, I hadn't gone through it much here but it's an important concern. I think they might burn through another 700-800b before breaking even on mobile. Core business CF and cash on hand are not enough which is why they're listing the Bank, and also trying to accelerate the pace of business dev on the Rakuten Symphony side to obtain additional source of cash. With this I think it should be sufficient but if capex intensity turns out higher than expected, or slower than expected sub growth then that's where the company risks more funding trouble. Will have to watch closely.
Not familiar enough with DISH to comment on its individual prospect. But DISH has listed Rakuten on its list of suppliers. For most of these aspiring players globally, Rakuten has become the new industry benchmark it seems.
Rakuten has acquired a software player called Altiostar which supplies to both Dish and Rakuten. Maybe that’s the reason. I compare Rakuten growth to Jio for the first 18 month after launch and find that the trajectories are very different. India market has a lot of white space when Jio was launched. Dish and Rakuten need to replace other networks which seem to be much harder. One other company Parallel Wireless is quite interesting in this space. But it is private at the moment.
Great analysis. Will probably work out but, Seems too dependent on complex execution on the start up telco branch to make a compelling buy thesis though, with that expected return.
I really enjoyed this write-up. Any accumulated cash burn on the mobile side until break-even? High base in e-commerce due to COVID-19?
Thanks Michael! Glad you brought up the cash burn, I hadn't gone through it much here but it's an important concern. I think they might burn through another 700-800b before breaking even on mobile. Core business CF and cash on hand are not enough which is why they're listing the Bank, and also trying to accelerate the pace of business dev on the Rakuten Symphony side to obtain additional source of cash. With this I think it should be sufficient but if capex intensity turns out higher than expected, or slower than expected sub growth then that's where the company risks more funding trouble. Will have to watch closely.
What do you think of DISH doing the same thing in the US?
Not familiar enough with DISH to comment on its individual prospect. But DISH has listed Rakuten on its list of suppliers. For most of these aspiring players globally, Rakuten has become the new industry benchmark it seems.
Rakuten has acquired a software player called Altiostar which supplies to both Dish and Rakuten. Maybe that’s the reason. I compare Rakuten growth to Jio for the first 18 month after launch and find that the trajectories are very different. India market has a lot of white space when Jio was launched. Dish and Rakuten need to replace other networks which seem to be much harder. One other company Parallel Wireless is quite interesting in this space. But it is private at the moment.
This is very good analysis; definitely a value play
Good blend of information and common sense - Just loved it.
Great analysis. Will probably work out but, Seems too dependent on complex execution on the start up telco branch to make a compelling buy thesis though, with that expected return.
Great writeup!
Thanks for sharing - interesting write-up with a lot of detailed insights!
Appreciate it glad you enjoyed it!