Japan's Satellite Communications Revolution: A $100B+ Infrastructure Opportunity

Japan's archipelago, spanning 6,852 islands, faces a dual challenge: geographic fragmentation and vulnerability to natural disasters. Earthquakes, typhoons, and volcanic eruptions routinely disrupt terrestrial networks, leaving millions without connectivity during crises. Yet this vulnerability is becoming a catalyst for innovation. A strategic convergence of Rakuten, AST SpaceMobile, and Amazon is reshaping Japan's satellite communications landscape, creating a $100B+ infrastructure opportunity. With government support, technological breakthroughs, and a race to dominate the satellite-to-smartphone market, now is the time to position for this next-generation connectivity revolution.

The Rakuten-AST SpaceMobile Partnership: Bridging the Connectivity Gap

Rakuten Mobile and AST SpaceMobile have forged a partnership that could redefine mobile broadband in Japan. Their joint venture, the Rakuten Saikyo Satellite Service, aims to deliver voice, video, and data via low-Earth-orbit (LEO) satellites directly to unmodified smartphones. In April 2025, the duo achieved a historic milestone: the first-ever broadband video call between unmodified smartphones using a LEO satellite. This test, conducted between a gateway in Fukushima and a device in Tokyo, proved the viability of AST's BlueBird constellation, which uses proprietary ASICs to amplify throughput by tenfold compared to earlier models.

AST SpaceMobile's satellite manufacturing has accelerated, with production capacity set to hit six satellites per month by late 2025. The company plans to launch 60 satellites by 2026, enabling continuous coverage in Japan and expanding to global markets. Rakuten's terrestrial network will integrate seamlessly with AST's satellite infrastructure, ensuring 100% geographical coverage—a critical goal for a country where 10% of the population lives in remote areas.

Amazon's Strategic Interest: A Potential Game Changer

While no formal Amazon partnership has materialized, speculation is mounting. Jeff Bezos, Amazon's founder and a key Blue Origin investor, has publicly engaged with AST SpaceMobile CEO Abel Avellan. A May 2025 Instagram post featuring Bezos, Avellan, and AST board member Adriana Cisneros—captioned “Amazing things are happening at AST & Science + Blue Origin”—sparked a 14% surge in AST SpaceMobile's stock. Analysts suggest Amazon could acquire AST for up to $80 billion, leveraging its direct-to-device technology to accelerate Project Kuiper's deployment.

Amazon's Project Kuiper, which aims to launch 3,236 satellites for global broadband, currently focuses on fixed internet. AST's ability to deliver 5G signals to smartphones fills a critical gap. With AST already partnered with AT&T, Verizon, and Vodafone Idea (India), Amazon could gain access to 450 million potential subscribers. A strategic stake in AST would also align with Amazon's cloud ambitions, as Rakuten Symphony's cloud-native telecom solutions and Open RAN expertise could integrate with AWS infrastructure.

Government Support and Market Dynamics

Japan's Ministry of Internal Affairs and Communications has prioritized satellite connectivity as part of its Digital Transformation (DX) 2025 initiative. The government has allocated ¥1.2 trillion ($8.5 billion) to expand rural broadband and disaster resilience, creating a fertile environment for Rakuten and AST. Regulatory approvals for AST's BlueWalker 3 satellite tests in Japan have already been secured, with Rakuten Mobile leading trials.

The market dynamics are compelling. Japan's satellite broadband market is projected to grow at 18% CAGR through 2030, driven by aging infrastructure and climate risks. Rakuten's 2026 launch could capture 30% of this market, while AST's global partnerships position it to dominate the $1.2 trillion satellite communications sector. Amazon's potential entry would further accelerate adoption, creating a flywheel effect.

Investment Case: Timing the Satellite-to-Smartphone Ecosystem

The convergence of Rakuten, AST SpaceMobile, and Amazon represents a rare alignment of technology, capital, and regulatory tailwinds. For investors, the key is to position early in the ecosystem's critical components:
1. AST SpaceMobile (ASTS): The core enabler of satellite-to-smartphone technology. With 60 satellites to be launched by 2026 and potential Amazon backing, ASTS offers high-growth exposure.
2. Rakuten Group (4753.T): Japan's telecom innovator, leveraging AST's satellites to expand its DX footprint. Rakuten's AI-driven network optimization and cloud-native solutions (via Rakuten Symphony) position it as a global telecom leader.
3. Amazon (AMZN): While not directly involved yet, Amazon's Project Kuiper and AWS infrastructure could integrate AST's technology, creating a $100B+ market opportunity.

Why Now?

The window to invest is narrowing. Rakuten's 2026 commercial launch is a catalyst, while AST's satellite production ramp and Amazon's speculative interest create near-term volatility. Japan's government support and the urgency of disaster resilience ensure demand will outpace supply. For investors, this is a high-conviction opportunity to capitalize on a $100B+ infrastructure shift—one that could redefine global connectivity.

Investment Advice: Allocate 5–10% of a growth portfolio to ASTS and 4753.T, with a watch on AMZN for potential strategic moves. The satellite-to-smartphone ecosystem is not just a tech play—it's a structural shift driven by necessity, innovation, and scale.