NTT and NEC established an alliance to jointly research and develop next-generation network technologies, with the operator investing to take nearly a 5 per cent stake in the equipment supplier.
In a joint statement issued today (25 June), the companies said the initiative will focus on optical and wireless technologies with the aim of “enhancing industrial competitiveness of Japan and further ensuring safe and reliable communication infrastructure”.
NTT will acquire a litte more than 13 million shares of NEC common stock, representing 4.8 per cent of its outstanding shares after a third-party allotment. Nikkei Asian Review valued the stake at JPY60 billion ($560 million).
The companies stated the alliance will promote architectures including open RAN and push NTT’s Innovative Optical and Wireless Network (IOWN) programme.
NTT is the parent company of NTT Docomo, one of the largest mobile operators in Japan.
NEC’s fortunes in 5G have improved since Rakuten Mobile, Japan’s fourth full MNO, selected it as an equipment supplier in June 2019. Last month, the newcomer also named NEC as the supplier of its 5G mobile core, with the companies agreeing to develop a standalone (SA) network platform which the operator plans to sell to third-parties.
NTT’s investment aims to reduce reliance on non-domestic equipment at a time of rising trade friction between the US and China, which is complicating global supply chains.
Marc Einstein, chief analyst at Japan-based research company ITR, told Mobile World Live the move its hugely positive for NEC, as it will ensure business from NTT Docomo for some time and provide the vendor with a leg up on early 6G R&D efforts.