Nokia and Ericsson have secured a major 5G contract with Japan’s SoftBank, edging out Chinese suppliers Huawei and ZTE.
SoftBank already maintains longstanding partnerships with both Nokia and Ericsson, so the decision aligns with existing commercial ties. Nevertheless, Huawei and ZTE had participated in earlier trials, making their exclusion notable.
Against the backdrop of US-led security concerns about equipment from Chinese telecom vendors, Japan’s Ministry of Internal Affairs and Communications introduced measures that effectively bar Huawei and ZTE from participating in 5G networks. All four of Japan’s primary carriers—NTT DoCoMo, SoftBank, Rakuten, and KDDI—agreed to follow the new restrictions, but SoftBank was particularly impacted because it is in the process of removing Huawei components from its 4G infrastructure.
Ericsson will supply Radio Access Network (RAN) equipment for SoftBank’s 5G rollout in mid and high frequency bands. Chris Houghton, Senior Vice President of North East Asia at Ericsson, said the companies’ collaboration stretches back to the 2G era and expressed enthusiasm for supporting SoftBank’s latest technology initiatives. He highlighted Ericsson’s advanced product portfolio as a means for SoftBank to realize the full potential of 5G for Japanese society and emphasized the company’s commitment to deepening their long-standing partnership.
Nokia will deploy its AirScale solution in both distributed and centralized RAN configurations to help SoftBank meet rising consumer and industrial demand for 5G services. John Harrington, Head of Nokia Japan, described the award as an important milestone in SoftBank’s transformation to 5G and reiterated Nokia’s role as a trusted end-to-end partner committed to supporting SoftBank’s commercial network launch.
On the commercial front, Nokia reports 38 commercial 5G contracts, including 20 with named customers, though the company experienced disappointing financial results in the first quarter of 2019. By contrast, Ericsson returned to operating profitability in the second quarter of 2018 after seven consecutive quarters without operating profit.
Some industry analysts have argued that Nokia has not sufficiently capitalized on the global shift away from Huawei equipment. The SoftBank contract, however, could signal a turnaround and indicate growing momentum for alternative vendors in markets moving to diversify their supply chains.
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