Japan's government will provide 150 billion yen ($926 million) in subsidies to a Rakuten Group-led consortium with AST SpaceMobile to develop a domestic satellite communications network. The three-year funding will support equipment procurement, ground facilities, and systems needed to launch and control low Earth orbit satellites. Japan views the project as an economic security priority aimed at reducing reliance on foreign networks such as SpaceX's Starlink. The announcement drove AST SpaceMobile stock 21% higher on Monday to $86.77, marking its best single-day performance in nearly two years.
Japan Approves $926M Subsidy for Rakuten-AST Satellite Network
According to Nikkei, Japan's Ministry of Internal Affairs and Communications is expected to formally approve the 150 billion yen subsidy. The funding will be distributed over three years to help Rakuten and AST SpaceMobile build a constellation of low Earth orbit satellites capable of direct-to-mobile communications. The network will allow ordinary smartphones to connect directly to satellites without specialized hardware.
Rakuten Chairman and CEO Hiroshi Mikitani told Nikkei that the company plans to form a new joint venture for satellite operations with AST SpaceMobile in 2026. The two sides are expected to hold equal stakes, with Rakuten leading management. Rakuten Mobile has targeted limited-service use of AST satellites in 2026, with broader nationwide coverage expected in fiscal 2027.
Japan Targets Reduced Starlink Dependence Through Domestic Network
Japan identified the project as an economic security priority at a time when foreign players dominate the satellite communications market. The need for a domestically operated network became clearer after the 2024 Noto Peninsula earthquake, when Starlink was used to restore communications until cable connections were repaired.
Direct-to-mobile satellite service could connect mountainous regions, remote islands, and disaster zones where ground-based infrastructure is difficult to build or may be damaged. Rakuten is partnering with AST SpaceMobile because it has not been allocated the 2 GHz band used by Starlink.
Ministry Prepares 700 MHz Band Regulatory Framework
Japan's communications ministry indicated last week that it would allow direct satellite communications in the 700 MHz band. Related rules are expected to be revised in September. Rakuten already uses the 700 MHz band for ground-based mobile service. The band could now support direct links between ordinary smartphones and low-Earth-orbit satellites.
FAQ
What is Japan providing to Rakuten and AST SpaceMobile?
Japan's government will provide 150 billion yen ($926 million) in subsidies over three years to a Rakuten-led consortium with AST SpaceMobile for developing a domestic satellite communications network.
When will the Rakuten-AST SpaceMobile joint venture be formed?
Rakuten plans to form a new joint venture for satellite operations with AST SpaceMobile in 2026, with both sides holding equal stakes and Rakuten leading management.
Why is Japan funding this satellite network project?
Japan views the project as an economic security priority to reduce reliance on foreign networks such as SpaceX's Starlink, particularly after the 2024 Noto Peninsula earthquake highlighted the need for domestically operated communications infrastructure.
