TowerXchange understands that Rakuten Group and Macquarie Asset Management have signed a sale and leaseback transaction covering a portion of Rakuten's mobile assets in Japan. However, TowerXchange has been unable to verify the structure of the deal or gain further information on the process. What follows is preliminary and subject to change.
On August 8 Macquarie announced that Rakuten Mobile was raising between JPY 150 billion to 300 billion (around US$1-2bn) in funds from the sale and leaseback of a portion of its mobile network assets from a consortium of global leading infrastructure investors, led by Macquarie Asset Management, but also including British Columbia Investment Management Corporation, via the Macquarie Asia-Pacific Infrastructure Fund 3.
However, the press release itself and does not specify the precise mobile network assets which are being acquired. Rakuten Group will promptly announce the final amount and other conditions in due course. The tower model is well established in South Asia and Southeast Asia, and a wave of deals in 2022 and 2023 took the model to the Pacific Rim as Australian and New Zealand operators cashed out their towers at the top of the market. Thus making it likely that Rakuten's telecom towers are the subject of this deal.
The announcement was not clarified in Rakuten's quarterly results call on August 9. However, following deals struck by JTOWER, it was a matter of time before towers started transacting at scale. Rakuten itself owns a small equity stake in JTOWER which has given the conglomerate an understanding of the model. Rival NTT had already agreed tower sale and leasebacks with JTOWER in 2021 and 2022.
If it is not passive telecom infrastructure changing hands, an alternative deal structure could be similar to the failed EQT-Wind Tre deal seen in Italy. In that deal Wind Tre had carved-out its RAN, mobile core network and fixed network to sell to EQT Infrastructure. The deal valued the network (which excluded telecom towers) at EUR3.4bn. The sale was announced in May 2023 but its completion had been complicated by 5G-related third-party agreements with Wind Tre’s competitors Iliad and Fastweb with whom the MNO has existing network sharing agreements.
However, few "netco" deals of this structure have been completed, and given Rakuten's own network technology is deployed on its network it is unlikely it would be subject to a groundbreaking sale and leaseback deal.
Commenting and the deal Mickey Mikitani, Chairman and CEO of Rakuten Group, said, “I am delighted to announce this innovative partnership with Macquarie Asset Management, one of the world's leading infrastructure investors. They strongly believe in our vision for the future, and together, we've made our financial foundation even stronger. Rakuten Mobile is already well on its way to profitability, and with our new initiative, we will continue to build on this momentum as we aim to reach profitability even faster and become the top mobile carrier in Japan.”
While details of the assets being acquired remain vague so too does the price, with a roughly billion dollar range between bottom and top. In the press release published by both parties Verena Lim, Co-Head of Asia-Pacific Macquarie Asset Management Infrastructure and Chief Executive Officer of Macquarie Group in Asia, said, “We believe Japan’s commitment to revitalize its digital economy and accelerate the pace of digital transformation presents significant opportunities to investors in the digital infrastructure sector. The Rakuten Ecosystem and Rakuten Mobile’s network is at the very forefront of this digital evolution, and we are excited to partner with Rakuten Mobile to support and accelerate its business growth."
TowerXchange estimates there are 220,515 towers in Japan of which 5,280 are attributed to Rakuten Mobile. However, it is likely that Rakuten have added to their portfolio of sites since TowerXchange last refreshed its Japanese site estimates, and we will be publishing a new story on this deal as we receive more information.
