【Wen/Observer Net Wang Kaiwen】 With its market share continuously shrinking, Japan's NEC, which once had ambitious plans to enter the 5G market, has quietly exited this field.

According to a report by Nikkei Asia on December 28, NEC will stop developing wireless base stations that meet the 4G and 5G communication standards for smartphones and other devices, withdrawing from a market dominated by Chinese and European companies.

"In principle, we will no longer make development investments in this area in the future," said NEC President Takahiro Mori during an interview with Nikkei News. He added that the company will shift its focus to the software sector.

NEC President Takahiro Mori, screenshot from video

Base stations are the interface devices through which mobile devices access the Internet. According to the report, NEC will stop developing standard base stations for 4G and 5G, but will continue to provide maintenance and support services for related equipment.

In June 2020, NEC and Nippon Telegraph and Telephone Corporation (NTT) announced capital and business cooperation on technologies such as 5G mobile communication systems. NTT would accept a private placement of shares from NEC, investing about 6.44 billion yen (approximately 4.2 billion yuan at the time). Then-NEC President Takashi Nishino said that they would use this mechanism to explore the market, aiming to achieve a global market share of 20% by 2030.

Nikkei Chinese website previously interpreted that behind this cooperation was a competition for global leadership in communication networks. As the United States rallied its allies to jointly exclude Huawei, Japanese companies tried to build an alliance against Huawei.

However, this progress has not been smooth.

The Nikkei Asia reported on the 28th that NEC had taken 5G base station business as a growth pillar of its five-year plan starting from March 2022. However, the capital investment of 5G telecom operators was slower than expected. With continued losses in the 5G base station business, NEC took various restructuring measures, including overseas layoffs.

According to data from the international market research firm Omdia, Huawei of China, Ericsson of Sweden, and Nokia of Finland together control nearly 80% of the global base station market share, while the combined share of Japanese companies NEC and Fujitsu is less than 2%.

In a severe business environment, NEC has narrowed its R&D focus. Fujitsu also separated its communication-related businesses, including base stations, in July this year, establishing a new subsidiary. Kyocera, which had originally planned to enter the 5G base station market in 2027, also gave up the development of 5G base stations.

At the same time, NTT Docomo, Japan's largest mobile communications operator affiliated with NTT, previously prioritized purchasing equipment from Japanese manufacturers such as NEC and Fujitsu. However, in 2024, it changed its strategy and increased procurement from foreign companies such as Ericsson.

According to reports, under the background of economic security concerns, NEC will continue to develop equipment for defense and other purposes, while also promoting R&D related to the next-generation communication standard - 6G.

It is worth mentioning that the Nikkei Asia previously reported that the Global Telecommunications Alliance (GCOT), composed of Japan, Australia, Canada, the UK, and the US, held its first face-to-face meeting in Japan earlier this month to discuss artificial intelligence (AI) and 6G communication standards, aiming to "counter China's influence in the global telecommunications sector."

According to reports, Huawei adopts a single supplier model, while the Western bloc hopes to jointly promote the Open RAN to build a so-called "secure telecommunications network."

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Original: toutiao.com/article/7588709784678597162/

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