Following the footsteps of United States, New Zealand, UK, and Australia, the Japanese government has started to pressurize companies operating in its region to impose a ban on the use of Huawei’s 5G Network equipment in their respective day to day operations and service renderings. The move comes after a few days of the government’s judgment to restrict the public sector from procuring Chinese Communications Equipment.
And as a part of this new business strategy, Japanese Mobile Carrier Softbank has decided to replace Huawei Technologies equipment in its 4G communication network infrastructure with the equipment supplied by Nokia and Ericson.
Although the company did not take a claim directly on the issue, it did give a hint to the media that it has to be bow down to the business laws prevailing in the region.
Softbank has taken the decision to ban the equipment supply from the Chinese manufacturer for 5G network upgrade also, despite risks to its Chinese operations.
Japan-based Softbank’s decision reflects the mounting security concerns over the use of Huawei’s equipment by telecommunication service providers. As reports suggest that the equipment have the ability to potential leak sensitive info, shutdown systems and exhibit other espionage-related risks, most of the western nations have decided to impose a ban on usage.
Now, Softbank which was the only equipment user of Huawei in Japan has followed the same- based on the pressure from the government authorities.
Softbank released a statement yesterday saying that the hardware will be replaced on a gradual note over the next few months and further stated that two European Companies will be supplying the equipment for its 5G network upgrade.
News is out that 2 other mobile carriers from Japan, NTT Docomo and KDDI have also decided to not use Chinese equipment in their 5G network upgrade. Rakuten which is about to upgrade its entire users to the 4G network has also placed an order to Nokia instead of Huawei.
Note 1- Softbank’s, parent company SoftBank Group happens to own 29% of shares in the Chinese e-commerce giant Alibaba Group Holding and is also having more than half of holdings in Didi Chuxing. So, its latest decision will surely have some implications on its business being done in the Chinese region from now on.
Note 2- Sources say that Huawei sold about 15 billion yen worth of equipment for base stations to Softbank till March this year. And in Huawei’s perspective, the latest decision of Softbank could entail a loss of 20 billion yen in annual sales.