NEC sees Huawei’s woes as chance to crack 5G market - Financial Times

doro.indah.link

Mounting pressure on Huawei has handed NEC and its new partner NTT a “final chance” to compete in the global race to supply 5G equipment as the Japanese alliance eyes a land grab in the US and UK, according to NEC’s chief executive.

Takashi Niino said Japan Inc has an opportunity to revive its fading presence on the back of a rise in protectionism and Washington’s pressure on countries including Britain to cut Chinese supplier Huawei out of their telecoms networks.

NEC has significant ambitions, aiming to boost its share of the global market for base stations from 0.7 per cent now to 20 per cent by 2030.

Outside of Japan, NEC’s primary target is the US. But the supplier of wireless telecommunication equipment also hopes to regain its footing in the UK, which has placed a 35 per cent cap on the use of Huawei equipment on national security grounds and is reviewing that limit in light of new sanctions.

On Tuesday the US designated Huawei a national security threat, citing its close ties to China’s military and ruling Communist party.

“In the wake of the Huawei issue, governments worldwide are considering what options are out there,” Mr Niino told the Financial Times. “There is a chance for NEC to be part of those options, a possibility that hardly existed in the past.”

Mr Niino said the UK government had recently reached out as part of a strategy to consider alternatives to Huawei equipment as Britain’s four mobile groups roll out 5G networks.

Recommended

Last week NEC sealed a capital tie-up with Japan’s largest telecoms operator NTT — an unusual move, as carriers rarely invest in equipment suppliers beyond the start-up phase.

Rakuten, Japan’s fourth-largest carrier, in June chose NEC as a partner for its 5G network, providing the supplier a significant contract to prove its mettle.

The partnership with NTT, which paid ¥64.5bn ($598m) for a 4.8 per cent stake, has offered NEC a route back into the market. It was wiped out in the 4G era, when Huawei, Sweden’s Ericsson and Finland’s Nokia grew to dominance, controlling 80 per cent of the global market, according to research group Omdia.

Japanese manufacturers including NEC, Fujitsu and Sony have a long history in telecoms equipment but have struggled to compete against Huawei, which has built a vertically integrated supply chain giving it an edge in pricing and range of goods.

NEC and NTT aim to challenge Huawei’s pricing advantage by promoting an open source network, which would allow providers to supply hardware to carriers that can use standardised software from smaller suppliers.

Rakuten has tested a 5G network using equipment from NEC and Altiostar, for example, while Dish, the US satellite company making a push into mobile, signed a deal this week to use Fujitsu radio units.

Carriers have largely backed the push towards open-source radio equipment, and Mr Niino was confident that the move to an open system would erode the advantage of the largest player in the market over time.

“It is true that Huawei offers pricing that is 20 per cent lower than other manufacturers,” he said, but added: “The cost structure will change and we . . . will need to offer competitive pricing.”

However, Mr Niino acknowledged that the group faces an uphill battle to compete globally: “Whether we can win now that [non-Huawei] options have widened is unknown.” 

July 01, 2020 at 11:26AM
https://ift.tt/2Vzg0fW

NEC sees Huawei’s woes as chance to crack 5G market - Financial Times

https://ift.tt/2NcqjCg