Japan’s top 3 telcos to exclude Huawei, ZTE network equipment, according to Japanese news reports

Japan’s big three telecommuniucations operators plan not to use current equipment and upcoming 5G mobile network gear from China’s Huawei Technologies and ZTE Corp, Kyodo News reported on Monday.

The news, for which Kyodo did not cite sources, comes at a time of heightened scrutiny of Chinese tech firms by Washington and some prominent allies over ties to the Chinese government, driven by concerns they could be used by Beijing for spying.

Last week, sources told Reuters that Japan planned to ban government purchases of equipment from Huawei and ZTE to ensure strength in its defences against intelligence leaks and cyberattacks.

A SoftBank Group Corp spokesman said Japan’s third-largest telelecoms services provider was closely watching government policy and is continuing to consider its options. The amount of equipment in use from Chinese makers “is relatively small”, he said.

Japan’s top two telecommunications operators, NTT Docomo and KDDI Corp, said the firms had not made any decision yet.

Docomo does not use either Huawei or ZTE network equipment, but it has partnered with Huawei on 5G trials. KDDI also does not use Huawei equipment in its “core” network, a spokeswoman said, adding it does not use any ZTE network equipment.

Huawei did not respond to Reuters’ request for comment, while ZTE declined to comment.

Japan latest country to exclude Huawei, ZTE from 5G roll-out

Huawei has already been locked out of the US market, and Australia and New Zealand have blocked it from building 5G networks amid concerns of its possible links with China’s government. Huawei has said Beijing has no influence over it.

Japan’s decision to keep it out would be another setback for Huawei, whose chief financial officer was recently arrested by Canadian officials for extradition to the United States.

Chinese Foreign Ministry spokesman Lu Kang said China has already had “communication” with Japan about the issue.

China has all along been asking Japan to provide an open, fair and non-discriminatory environment for Chinese companies operating in the country, and Beijing will continue to pay close attention to this issue, Lu told a daily news briefing.

“We believe that Chinese companies’ normal operating activities should not be treated in a discriminatory way,” he said.

Australia should reverse its Huawei 5G ban

World financial markets have been roiled since news of the arrest, on worries it could reignite a China-US trade row that was only just showing signs of easing.

Industry sources said SoftBank would find it difficult to replace pre-existing Huawei network equipment that is designed for the company and not easily interchangeable.