Business / Corporate

In view of procurement risks, Rakuten spurns foreign providers and opts for NEC tech to build 5G base stations in Japan

Kyodo

Rakuten Mobile Inc. said Wednesday it will use the technology of NEC Corp. in building base stations nationwide for its superfast 5G telecommunications services.

The unit of e-commerce giant Rakuten Inc. and NEC will jointly develop wireless antennas over the next five years to construct a network across the country for 5G services scheduled to start in June 2020.

Rakuten, which plans to invest ¥194.6 billion ($1.8 billion) in the system, aims to install around 16,000 cost-effective base stations nationwide in a bid to attract users away from NTT Docomo Inc., SoftBank Corp. and KDDI Corp., the country’s three major carriers, which together control nearly 90 percent of the market.

Rakuten adopted the technology of Finnish telecommunications equipment-maker Nokia Corp. in building base stations for the 4G services it will offer from October.

But for 5G services, Rakuten apparently picked NEC in view of procurement risks following the recent U.S. blacklisting of Chinese tech giant Huawei Technologies Co., a leader in the field of next-generation wireless services, amid the heightened trade dispute between Washington and Beijing.

Rakuten sources have said it will refrain from using Huawei and ZTE Corp. products after the Japanese government decided in December to effectively exclude the two Chinese firms from public procurement, reflecting U.S. concerns their products may facilitate spying and enable potential disruption to communication networks.

5G services, touted as enabling smartphone users to download a two-hour film in just three seconds, are expected to be used for a wide range of purposes such as autonomous driving and boosting the usage of devices that are connected to the internet.