Business / Corporate

In latest snub for Huawei, Japan's SoftBank chooses Nokia and Ericsson for 5G network

Bloomberg

SoftBank Group Corp.’s Japanese telecom unit has selected Nokia Oyj and Ericsson AB as vendors for its next-generation wireless network, excluding longtime supplier Huawei Technologies Co.

SoftBank Corp. named Nokia as a strategic partner for its 5G rollout and Ericsson as a supplier of radio access network equipment, the companies said in separate releases. Huawei, which together with ZTE Corp. was a 4G vendor for the Japanese company, wasn’t selected despite participating in earlier 5G trials. SoftBank declined to make comment further.

U.S. President Donald Trump’s administration has targeted Huawei for months, first encouraging allies to ban the Chinese company’s equipment from their networks and then putting Huawei on an export blacklist that prohibits it from buying American software and components.

Australia and New Zealand have prohibited Chinese-made gear in their networks, while Japan has said it will exclude equipment with security risks without making an official decision on Huawei.

Local media have reported that the country’s top three carriers — NTT Docomo Inc., SoftBank and KDDI Corp. — will shun both Huawei and ZTE.

“You can also expect Docomo and KDDI to follow suit,” said Masahiko Ishino, an analyst at Tokai Tokyo Research Center. “So SoftBank isn’t going to be at a cost disadvantage.”

The phone companies are also scrapping plans to sell Huawei handsets as the impact of the U.S. supply ban spreads. The Chinese company didn’t immediately respond to a request for comment.

The U.K.’s BT Group PLC announced plans to remove Huawei gear from the core of its mobile network soon after the head of the country’s foreign intelligence agency, MI6, warned about the risks of using Chinese equipment. Taiwan already bans Chinese telecom equipment.

At an earnings briefing in February, SoftBank Group Chief Executive Officer Masayoshi Son said it would cost about ¥5 billion ($46 million) to replace existing Huawei gear in its network. At the time, Son said the company was considering all options for 5G equipment.