[ITmedia Mobile] Reasons why users are not leaving Rakuten Mobile even after roaming is reduced.On the other hand, concerns about "secondary line conversion and ARPU decline" are emerging

On October 1st, KDDI and Rakuten Mobile's roaming agreement ended. New contracts have been signed and roaming continues in rural areas (rural areas, depopulated areas, etc.) that are not covered by Rakuten Mobile, so it is unlikely that you will suddenly be "out of service," but traffic patterns in overlapping areas have changed, and some areas that were only covered by the platinum band can no longer be used.

On the other hand, this suggests that the termination of this roaming agreement will not necessarily result in an avalanche of Rakuten Mobile users. It appears that many users continue with their contracts because they offer rate plans that are closely tied to the Rakuten Economic Zone. Here, we will explain what will happen after October 1st, as revealed in the financial results of KDDI and Rakuten Group.

KDDI was able to resolve the issue of packet jams in congested areas, and unexpectedly increased roaming revenue.

Under the new roaming agreement, KDDI will lend out base stations only in areas that are not covered by Rakuten Mobile, and as a general rule, there will be no overlap between KDDI's own areas and roaming areas. Roaming also has a clearer deadline than before, until Rakuten Mobile builds its own area.

Under previous roaming agreements, roaming was provided in urban areas as a measure against traffic, inside buildings, and underground malls, but with the renewal of the agreement, these areas have suddenly shrunk. The deadline was originally until September 30, 2026, and the reason behind not extending it further was KDDI's desire to improve communication quality in urban areas. In some urban areas, Rakuten Mobile users grabbed onto KDDI's 800MHz band, causing a decline in quality.

Since October 1st, roaming in these areas has ended, and traffic trends have changed. Hiroji Matsuda, President and CEO of KDDI, talked about the effects of ending roaming contracts, saying, ``The packet stoppage rate in congested areas, mainly Yokohama and Fukuoka, has improved by 30%.In some places, it has decreased by 40% or 50%.'' The 800MHz band has a higher radio penetration rate, and in urban areas, there were cases in which Rakuten Mobile users ended up roaming in unnecessary places.

In particular, KDDI's 800MHz band has only 15MHz of bandwidth on each side, and the area is wide, making it difficult to gain capacity. Furthermore, Rakuten Mobile's roaming uses this frequency band independently, rather than using carrier aggregation to distribute the load with another frequency band. It can be said that this frequency band is not very suitable for traffic countermeasures. This is why communication quality has improved due to the reduction in Rakuten Mobile's traffic.

On the other hand, even after October 1st, roaming continues in rural areas. Looking at the area maps presented by both KDDI and Rakuten Mobile, we can see that, contrary to the impression given by the phrase "roaming has ended," there is actually a considerable area remaining. It seems that KDDI did not anticipate that roaming would remain this long. As a result, KDDI has recorded an additional 10 billion yen in roaming revenue, which was not expected in the second half of the year's full-year plan.

povo has increased its contract, Rakuten Mobile says ``the impact is minor''

Due to changes in Rakuten Mobile's area, including roaming, there seems to be an active movement to use KDDI's povo 2.0 as a secondary line. Although there was no mention of a specific relationship with the end of roaming, Mr. Matsuda presented data showing a 30% increase in new povo contracts between September and October. ``I hope that there are signs that the second-line culture is spreading,'' he said.

povo has been running TV commercials to strengthen its appeal as a secondary line. KDDI's policy is, ``If you only use one SIM, it will be difficult to compare it with others.In order for you to experience it, we will let you know that you are using a second SIM.'' After having people use it as a secondary line and experiencing its communication quality and low rates, we introduce the service to them and then ask them if they would like to use it as their main line.'' The end of roaming has spurred this movement.

What about Rakuten Mobile, whose area has shrunk? Hiroshi Mikitani, Chairman and President of Rakuten Group, emphasizes that the impact is "very limited." As a temporary effect, ``some users became a little anxious due to the media's excitement'' (said), and as a result, the pace of net increase slowed, but it appears that no user outflow occurred.

According to Rakuten Group, after reducing roaming, traffic via roaming decreased from 5.43% to 3.53% (parameter after reduction was 100.17), while traffic on its own lines has steadily expanded. Furthermore, as of October, the cancellation rate had fallen from 1.47% (adjusted cancellation rate excluding lines that were canceled within the same month as the contract) to 1.42% as of the third quarter, and Kentaro Hyakuno, Representative Director, Senior Vice President and Executive Officer, Rakuten Group, summed it up as ``the impact of the reduction in roaming is minimal.''

There is no doubt that the net increase in numbers was affected by concerns about the area after roaming was drastically reduced. On the other hand, Rakuten Mobile is strongly integrated into the Rakuten ecosystem, and ``the value of the ecosystem created by each customer is expanding, and its contribution to the group is also significant'' (Mr. Mikitani). Simply put, the design is such that there is little motivation to cancel just because the roaming area has shrunk.

Koji Yoshimoto, director of MMD Research Institute, who held a study session on secondary lines in October, said, ``When we surveyed Rakuten Mobile users, unlimited access was a strong attraction.It would be a lie if we said that they are not looking for communication quality, but they are more concerned about data capacity and cost performance.'' If anything, they place more emphasis on economic areas based on low rates and points, and ``communication quality (evaluations) were very lenient.''