Rakuten and AST SpaceMobile announced a joint venture to build a direct-to-device (D2D) communications network in Japan using low-Earth orbit (LEO) satellites.

The firms won a tender from Japan’s Ministry of Internal Affairs and Communications (MIC) to form Rakuten AST as part of the Japan Low Earth Orbit Satellite Communications Project (J-LEO). The joint venture is expected to receive around $1 billion from MIC to support deployment of a Japanese-flagged mid-band satellite constellation, with domestic operations due to begin in early 2029.

The non-terrestrial network (NTN) will see Rakuten leverage AST SpaceMobile's satellites to enable high-speed internet connectivity for smartphone users in the country. Rakuten AST also plans to work with the U.S. satellite giant to provide the same services to AST SpaceMobile's global customers.

AST SpaceMobile, Japan, and SpaceX: Rakuten the outlier

Rakuten’s relationship with AST dates back to 2020, when the firms signed a commercial agreement to develop connectivity compatible with Rakuten’s Japanese mobile network. The same year saw it join Vodafone as a lead investor in what was then known as AST & Science, bringing its total capital to $128 million.

Rakuten remains the sole major Japanese operator to work with AST, with KDDI, SoftBank, and NTT DoCoMo favoring SpaceX for their D2D efforts.

Rakuten Mobile will also work with AST SpaceMobile to advance the use of AI edge computing in the stars, as well as developing AI-driven spectrum management technology. According to Rakuten, this research will explore their applications for faster data communications and industry-specific solutions like IoT to pitch to verticals including logistics, infrastructure monitoring, and construction.

At this year’s London edition of the Xcelerated Compute Show, David Anderson, chief product officer (CPO) of non-terrestrial infra player Ramon Space, told this title that IoT is 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.

Anderson also claimed space-based edge computing makes sense considering the amount of data that already exists not only from IoT connectivity, but also communications, radar, and D2D connections.

“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.