In the 1990s, when Japanese entrepreneur and young son Masayoshi was looking for advice from a banker Mikitani Hiroshi, who was eight years younger than him. They have a lot in common: they all studied in the United States (Mr. Sun studied at UC Berkeley, Hiroshi Mikitani studied at Harvard Business School); they share a common interest in the Internet; they are all baseball fans.
In the decades since then, both of them have surpassed the suffocating corporate hierarchy and become two leading billionaires in Japan's tech industry. Hiroshi Mikitani said in an interview that he didn't even know the word "entrepreneur" when he entered Harvard. Hiroshi Mikitani started Japan's e-commerce through Rakuten. Lotte is currently a huge technology conglomerate with a market value of US$14 billion. After making impressive investments in early Internet stocks, Son's SoftBank forced into the Japanese telecom industry. They all invest heavily in Silicon Valley. They also each own a baseball team named after the Raptors; SoftBank Hawks and Rakuten Golden Eagles.
Now, it is a competition, not a common past, which better defines their relationship. In Japan, SoftBank and Rakuten are squeezing each other's territory. They each had a disagreement with their respective overseas investments in two ride-hailing companies, Uber and Lyft. Even the eagle and the eagle are old enemies. Until recently, Son (known to Son) still seemed to have an advantage. His wallet is bigger than Hiroshi Mikitani and he is more well-known, thanks to his bold investment in the $100 billion Vision Fund. The fund supports large-scale tech startups worldwide. However, as Hiroshi Mikitani knows, Mickey made a relatively low-key bet in the field of mobile communications, even bold, despite the different ways. If successful, it will trigger a revolution not only in Japan, but also in the world.
Hiroshi Mikitani discusses the issue through Zoom at his home in Tokyo, and he is keen to emphasize the boldness of this bet and the difficulty of achieving it. Since 2018, he has committed $8 billion to build fourth-generation and fifth-generation (5G) mobile networks from scratch in Japan. In Japan, three major industry giants, including SoftBank, dominate. Instead of replicating their huge investment in hardware, he used low-cost base stations, cloud-based architectures and software to create what Rakuten calls the world's first fully commercial virtual network suitable for a new modular technology called Openran. Essentially, what Hiroshi Mikitani is trying to show is that Internet companies like him with a geeky software engineering culture can use Openran as the core of the 5g architecture and provide high-quality and low-cost products to replace hardware-obsessed telecom giants. The work is still underway, but luckily got a geopolitical tailwind. Telephone companies and governments have begun to look for alternatives in a hurry due to concerns about the Chinese government's influence on Huawei, the world's largest supplier of 5G equipment. Openranis has attracted a lot of attention. Everyone is paying attention to Rakuten's network features.
Hiroshi Mikitani and his deputy were optimistic. Although people have been saying to him: "Good luck, Mickey, you will fail." But he said his CEO friends told him that the company has advanced plans to cover almost all regions of Japan until 2021. . Low cost attracted more than 1 million customers, although the coverage is still incomplete. Globally, Tareq Amin, the mobile technology guru of Rakuten, has become one of the most famous open evangelists. In September, he reached an agreement with the Madrid-based telecom group Telefonica to further develop the technology. Hiroshi Mikitani said one of the advantages of the Openran model is that it can be updated with software rather than replacing outdated devices with each generation of mobile technology. He likens it to Tesla's ability to upgrade electric cars with software.
Long before Hiroshi Mikitani began to invade his telecommunications field, he used SoftBank's large stake in Yahoo Japan to challenge Rakuten in the e-commerce field. Last year, SoftBank increased its stake in Yahoo Japan by curating the merger of Yahoo Japan, now known as z Holdings, and instant messaging app Line, creating Japan's largest online service company. Kirk Boodry of Asian equity research firm Redex Research said Rakuten's recent profit margin for e-commerce operations has dropped in half as it spends money to defend against Yahoo and Amazon on e-commerce. This may ultimately limit Rakuten's ambitions in the telecommunications sector. As he said: they don't have enough money to create the chaos they hope for.
Hiroshi Mikitani was polite to his former clients. He praised Son for his keen investment vision and cleverly did not mention Vision Fund's crushing defeat at office leasing company WeWork. WeWork was on the verge of bankruptcy last year. He insists that SoftBank and Yahoo are my competitors, not enemies.
He went on to say that ironically, although he was once an investment banker for Sun Zhengxin, now, as one of the two companies, he is more of an operator.
Mr. Sun may have broken the model of investing in fashionable startups, making him on the cover of global magazines (including this magazine). Although he is well qualified to be one of the great entrepreneurs in Japan, he has never pioneered a new technology. Hiroshi Mikitani has never gained such a high global reputation. The reason why he is more famous outside of Japan than Lotte himself is probably because he made English a common language for the company. However, if Hiroshi Mikitani's 5G dream comes true, he will help not only design a solution to a global technical problem, but also a solution to a pressing geopolitical problem. This will be a more profound achievement in the technological world.
