Dec 14, 2020 (Nikkei) - Suspicions that Huawei Technologies telecom gear could serve as back door for Chinese spying have helped breathe new life into a Japanese tech ecosystem long thought moribund.
A number of companies that flourished under the wing Japan's former domestic telecom monopoly, Nippon Telegraph and Telephone Public Corp. -- which was later privatized and split up to form the NTT group -- is attempting to gain a foothold in global markets.
In Europe, the U.K. government's move to bar Huawei from its 5G wireless network is a hopeful sign for a group of tightly linked Japanese manufacturers that once supplied NTT's forerunner. In November, London unveiled a plan to remove high-risk vendors -- read Huawei -- from its 5G network and offered financial support to Japanese electronics maker NEC to help build up 5G networks in Britain.
NEC has taken a number of steps to boost its share in the global market for telecom equipment. In June, it forged a capital and business tie-up with NTT to develop products for telecom networks around the world.
The U.S. government, meanwhile, is working to limit the reach of Huawei, arguing the Chinese telecom company poses a national security threat. Washington argues the Chinese government could use Huawei's networking technology to gain access to sensitive data around the world. Australia, the U.K. and France are also leery of the Chinese, which may give NEC an opening.
But seizing that opportunity will be a tough challenge for NEC, whose less than 1% share of the global telecom market is dwarfed by rivals such as Ericsson of Sweden and Finland's Nokia, which are especially competitive in Western countries.
The main fight for 5G supremacy is thus likely to unfold in emerging economies that lack their own telecom equipment makers.
NTT, Japan's former telecom monopoly, was known for working hand in glove with suppliers, including NEC, to develop equipment. This arrangement became obsolete when procurement in Japan was opened up to foreign manufacturers. But the old alliance with Japanese manufacturers has taken on a new incarnation.
