Japan has decided it does not want to depend on Elon Musk to keep its phones connected from space.

The government is set to provide up to ¥150 billion, roughly $926 million, in subsidies to a consortium led by Rakuten Group to build a homegrown low-Earth-orbit satellite communications network.

A project Tokyo frames explicitly as a matter of economic security rather than commercial convenience.

The money is sizeable and specific. Spread over three years, the subsidy will support the equipment, ground facilities, and control systems needed to launch and operate low-Earth-orbit satellites, the kind that circle close enough to deliver low-latency connectivity directly to ordinary devices.

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It is the sort of capital-intensive infrastructure that rarely gets built without a government willing to underwrite the early, uncertain years.

At the centre of the plan is a partnership with AST SpaceMobile, the American company developing satellites designed to connect directly to standard smartphones without specialised hardware.

Rakuten intends to form a new joint venture with AST in 2026, with the two holding equal stakes and Rakuten leading management.

The technology promise is that an ordinary handset, with no extra equipment, can reach a satellite when it drifts out of range of a ground tower, filling the gaps that terrestrial networks leave.

The motivation behind the spending is geopolitical as much as technological.

Japan sees a domestic satellite network as a way to reduce reliance on foreign systems, Starlink chief among them, whose dominance in space-based connectivity has made governments around the world uneasy about depending on infrastructure they do not control.

Building a homegrown alternative, even one reliant on an American satellite partner, is Tokyo’s attempt to keep a strategic capability closer to home.

That instinct is not unique to Japan. Starlink’s rapid rise has prompted a wave of national and regional efforts to build sovereign satellite capacity, driven by the recognition that connectivity from orbit has become critical infrastructure.

And that leaning on a single private operator carries risks that became vivid as Starlink’s role in conflicts and crises grew.

Europe has been pursuing the same hedge through Eutelsat, its rising rival to Starlink, and Brussels has gone further still, drawing up plans to ringfence two-thirds of EU mobile-satellite spectrum for European operators.

Japan’s grant is one of the larger state commitments to that same logic.

For Rakuten, the project extends an already ambitious bet on mobile. The company built a terrestrial mobile network in Japan at great cost, challenging the country’s entrenched carriers, and a satellite layer would let it cover the territory that towers cannot reach economically, the mountains, islands, and rural stretches where Japan’s geography makes ground coverage expensive.

The AST partnership is the route to filling those gaps from above. The economics matter for a company whose mobile arm has run up heavy losses building that network; satellite coverage offers nationwide reach without a tower on every remote hillside, turning a geographic weakness into a selling point.

The wider context is a global rush of capital into space-based connectivity, where the direct-to-device idea Rakuten is chasing has become one of the most contested frontiers in the industry.

Amazon is racing toward a commercial launch of its own low-Earth-orbit network, Amazon Leo, and the broader scramble reflects a recognition that orbit is the next contested layer of infrastructure.

Connectivity, much like the capital flooding into space defence, is increasingly seen as something a serious country wants to be able to provide for itself rather than rent from a foreign operator.

Rakuten is targeting limited service using AST satellites in 2026, with broader nationwide coverage expected in fiscal 2027, an aggressive schedule for a network still being assembled.

The subsidy lowers the risk of hitting those dates, and signals that Japan intends to be an early mover in sovereign satellite connectivity rather than a customer of someone else’s.

Whether the technology delivers reliable direct-to-device service at scale is the question the next two years will answer, with the government now firmly invested in the outcome.