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How Huawei’s Woes Could Boost Nokia’s Fortunes in Japan

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Nokia secures deals with Japanese operators

Japan will host the 2020 Olympic games, and the leading mobile operators in the country want to have their 5G networks ready for the event. Nokia (NOK) has been involved in 5G-related works with several Japanese mobile operators in recent times, placing itself in a position to profit from 5G network investments in the country. Earlier this month, Nokia announced that Japan’s e-commerce giant Rakuten has decided to build its new mobile network in the country. Rakuten is one of the Japanese mobile operators working on 5G network development. Nokia and Rakuten last year partnered on 5G network field tests that they said were successful. Nokia also last year won a contract for 5G equipment from NTT Docomo, Japan’s top mobile operator by subscribers.

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SoftBank ditching Huawei

SoftBank (SFTBF), another leading Japanese mobile operator with big 5G plans, is planning to bypass China’s Huawei and place orders for 5G equipment with Nokia and Ericsson (ERIC), according to a report from the Nikkei Asian Review. SoftBank has been buying network equipment from Huawei, but security concerns in Japan and other countries have led to governments prohibiting operators from using technology from Chinese companies like Huawei in their 5G networks. SoftBank spent around $3.6 billion on telecom equipment purchases from Chinese vendors between 2015 and 2017, according to the Nikkei report.

In the United States, leading operators Verizon (VZ) and AT&T (T) have turned to Nokia, Ericsson, and Samsung (SSNLF) for 5G equipment while avoiding Huawei.

Nokia’s revenue rose 3.2% year-over-year in the fourth quarter, which ended in December, driven by early gains in the 5G market.

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