Japanese e-commerce and fintech giant Rakuten Group on Friday posted an operating loss of US$564.24 million for the first three months of 2023, dragged down by its money-losing mobile phone business.

Rakuten posted a January-March loss of $762 million for the mobile business – though that was narrower than in the same period a year earlier.

Rakuten founder and CEO Hiroshi “Mickey” Mikitani originally outlined plans to becoming Japan’s fourth major carrier, promising to create a low-cost nationwide mobile network by using cloud-based software and commoditised hardware.

However, the company has burned cash funding the build-out, with analysts flagging Rakuten’s struggle to take market share from cash-rich incumbents known for high-quality networks.

Mikitani has offloaded stakes in core businesses, selling shares in Rakuten and moving to float the group’s securities and banking units. Such “parent-child” listings are often frowned on in other economies but common in Japan.

On Friday Rakuten said it will sell its stake in supermarket chain Seiyu to US private equity firm KKR & Co Inc just three years after agreeing to buy the shares from Walmart Inc.

Rakuten has also taken on debt.

The group has almost 400 billion yen in bonds due by 2024 and a further $3.1 billion in 2025, Refinitiv data showed.

US dollar-denominated bonds issued in January have an annual interest rate of over 10 per cent.

• Reporting by Sam Nussey; Editing by Christopher Cushing, of Reuters.