NTT will acquire a 4.8 per cent stake in NEC for 64.4 billion yen ($600 million). NTT CORP
Tokyo-based firms NTT Corp and NEC Corp on Thursday officially announced a capital and business partnership for the purpose of jointly developing fifth-generation large-capacity, ultrahigh-speed mobile communications services, or 5G.
NTT will acquire a 4.8 per cent stake in NEC for 64.4 billion yen ($600 million). This alliance will allow the companies to catch up in the 5G market where foreign companies have taken a great lead.
NEC will allocate new shares to NTT next month and transfer a portion of its own shares to the company. By doing so, NTT will become the third-largest shareholder of NEC.
NEC will use the newly raised funds for joint research endeavours with NTT, such as for facilities related to 5G base stations. Both companies will also collaborate to develop sixth-generation technology that will achieve communication speeds as much as 10 times faster than 5G, and the Innovative Optical and Wireless Network (IOWN), the new network concept using optical technology advocated by NTT.
5G is said to be the core technology for areas of technology such as self-driving cars and remote medicinal practice. However, 80 per cent of the market for 5G base stations is dominated by the top three foreign companies, including Huawei Technologies Co Ltd of China. Given the risks involved, such as theft of information, the development of domestic highly secure technologies has been long-awaited.
NTT and NEC held a joint online press conference on Thursday. “We will develop Japanese technologies with high added value,” NTT president Jun Sawada said, while NEC President Takashi Niino said: “We will globally expand our communications infrastructure to ensure transparency and security.”
In March, NTT announced that it and Toyota Motor Corp would acquire shares of each other’s companies and cooperate in the development of smart city businesses that connects various technologies such as self-driving cars and energy-saving homes by utilising 5G technology. NTT is also accelerating efforts to form connections with domestic companies.
THE YOMIURI SHIMBUN (JAPAN)/ASIA NEWS NETWORK
