Rakuten and AST SpaceMobile Win $1 Billion Japan D2D Tender

Rakuten and AST SpaceMobile will receive roughly $1 billion from Japan's Ministry of Internal Affairs and Communications to build a direct-to-device satellite network, with domestic service due to start in early 2029.

The two companies won the tender as part of the Japan Low Earth Orbit Satellite Communications Project, known as J-LEO. Their new joint venture, Rakuten AST, will deploy a Japanese-flagged constellation of mid-band satellites in low-Earth orbit. The award makes Rakuten the only major Japanese operator backing AST SpaceMobile, and it positions the venture against three larger rivals that have chosen SpaceX.

What will the network actually do?

The non-terrestrial network will let Rakuten use AST SpaceMobile's LEO satellites to deliver high-speed internet directly to standard smartphones across Japan. Rakuten AST also plans to extend the same services to AST SpaceMobile's global customers, giving the venture a path beyond the domestic market.

The commercial roots of the partnership go back to 2020, when the companies signed an agreement to develop connectivity compatible with Rakuten's Japanese mobile network. That same year, Rakuten joined Vodafone as a lead investor in the company then known as AST & Science, bringing its total capital committed to $128 million.

The competitive split in Japan is now sharply defined. KDDI, SoftBank, and NTT DoCoMo are all working with SpaceX on their direct-to-device efforts. Rakuten stands alone with AST SpaceMobile, and the MIC funding effectively underwrites that bet with public money through the J-LEO programme.

What is the edge computing angle?

Beyond basic connectivity, Rakuten Mobile will work with AST SpaceMobile on AI edge computing in orbit and on AI-driven spectrum management technology. According to Rakuten, the research will explore applications for faster data communications and industry-specific solutions built around IoT. The companies intend to pitch these to verticals including logistics, infrastructure monitoring, and construction.

Supporters of orbital compute argue the case is practical rather than speculative. At this year's London edition of the Xcelerated Compute Show, David Anderson, chief product officer of non-terrestrial infrastructure company Ramon Space, said IoT is already a leading use case for space-based compute.

"Our cell phones today can actually start talking to satellites directly, so having that compute truly at the edge is very advantageous, and that plants the business case and the seed to say there's demand today that has nothing to do with the power and regulatory constraints of terrestrial data centers," Anderson said.

He argued that space-based edge computing makes sense given the volume of data already generated by IoT connectivity, communications, radar, and D2D links.

"People are trying to solve the communications bottleneck of how you get all this data down, and (edge computing) is a great way to solve the communication bottleneck," Anderson said.

How large is the opportunity?

The venture's commercial logic rests on two pillars: government-subsidised domestic coverage and access to AST SpaceMobile's wider customer base. The roughly $1 billion from MIC reduces the deployment risk for a mid-band constellation that would otherwise sit entirely on Rakuten's balance sheet.

For AST SpaceMobile, the Japanese contract adds a national market to a portfolio anchored by Vodafone and other partner operators. For Rakuten, which spent heavily to build its terrestrial mobile network from scratch, satellite direct-to-device offers a way to reach users where its ground infrastructure does not.

The next milestones are concrete. Rakuten AST must stand up the joint venture, coordinate the Japanese-flagged constellation build, and prepare for domestic operations beginning in early 2029, while the parallel work on AI edge computing and spectrum management determines whether the venture sells capacity alone or a broader portfolio of orbital services.

By Elena Vasquez