Rakuten's billionaire founder and Chief Executive Hiroshi
Mikitani is under pressure on multiple fronts as a slide in his
tech bets compounds pain from squeezed margins at the firm's
e-commerce business and a delay to its mobile market entry.
The Japanese firm booked a 103 billion yen ($945 million)
writedown on its 11% stake in Lyft Inc, as bets on the
ride-hailing industry by Rakuten and its rival SoftBank Group
Corp, the largest shareholder in Uber Technologies, sour amid a
market sell-off of money-losing startups.
Mikitani defended Lyft as an "excellent investment" at a news
conference, saying it was making a return for Rakuten.
Rakuten has started its own mobile business, saying it has
radically cut the cost of building its network by using
cloud-based software rather than expensive hardware.
But construction delays led to an embarrassing climbdown in
September when Rakuten said it would offer free services to just
5,000 customers, with no concrete revised date for the launch,
which had been due to take place in October.
Rakuten would have 3,000 base stations built by year-end with
"coverage improving dramatically," the mobile unit's Chief
Technology Officer Tareq Amin said.
Rakuten's mobile network delay relieves potential downward price
pressure on its bigger telco rivals NTT Docomo, KDDI and
Rakuten's operating profit came in at 1.1 billion yen in the
third quarter, versus a profit of 43.9 billion yen a year
earlier. That was better than an average forecast for an
operating loss of 2.5 billion yen from three analysts polled by
Its shares closed up 2% ahead of earnings, compared with a 0.1%
rise in the benchmark index. Rakuten's shares are up 45% this
year but have lost almost 20% since June.
(Reporting by Sam Nussey; Editing by Himani Sarkar and Edmund
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