Japan, handed a 5G lifeline by Trump’s crackdown on China’s Huawei, races to catch up

Japan lost its lead in consumer-facing handsets over the years and has fallen behind Nokia, Ericsson and Huawei in the buildout of 5G infrastructure

But with a US-led crackdown on China’s Huawei, Japanese firms suddenly seem a lot more attractive to carriers around the world racing to upgrade their networks

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Japanese firms have been handed an unexpected lifeline by the US-led crackdown on Huawei, the Chinese company that was at the forefront of the technology’s roll-out. Photo: Reuters

Published: 10:12am, 11 Dec 2020Updated: 10:04pm, 11 Dec 2020

When Japan invented the world’s first camera-equipped mobile phone two decades ago, it signalled an early but crucial step in the transformation of the phone into a sophisticated high-speed wireless information terminal.

Two decades later, as the world develops 5G networks that are tens of thousands of times faster, the nation that pioneered many of these technologies has been almost entirely absent. Having lost the lead in consumer-facing handsets after missing the shift to smartphones, Japanese brands have also fallen behind Nokia, Ericsson and above all Huawei Technologies Co. in the buildout of 5G infrastructure.

Those three manufacturers control almost 80 per cent of 5G base-station market share, according to research company TrendForce. But Japanese firms have been handed an unexpected lifeline by the US-led crackdown on Huawei, the Chinese company that was at the forefront of the technology’s roll-out. With US partners seeking out suppliers from friendlier nations, vendors in close US ally Japan suddenly seem a lot more attractive to carriers around the world racing to upgrade their networks.

“It’s given us a chance,” Jun Sawada, chief executive officer of Japan’s telecommunications behemoth Nippon Telegraph & Telephone, also known as NTT, said of the US steps to remove Huawei.

The 5G opportunity could help the likes of NEC, Fujitsu and other network equipment makers make fresh inroads in a global supply chain that is only set to grow. Recognising this, the government has also thrown its weight behind the effort, offering hundreds of millions of dollars in support earlier this year to the nation’s few remaining suppliers to build 5G and post-5G technologies.

Since coming to power in September, Prime Minister Yoshihide Suga’s administration has furthered this charge, jumping on the sector as one of its pillars for growth.