Japanese telecoms company Nippon Telegraph and Telephone (NTT) said on Thursday that they will invest JPY 64 billion in NEC Corp to beef up efforts to develop fifth-generation (5G) wireless technologies.
The capital alliance will give NTT a 5 percent stake in NEC as its main network equipment supplier hopes to crack the dominance of Huawei Technologies, Ericsson, and Nokia in 5G network infrastructure.
Previously state-owned NTT, which has wireless carrier NTT DoCoMo under its wing, has a strong preference for domestic suppliers for core networks, as it is involved in government projects.
Japan has completely banned government purchases of equipment from Huawei in efforts to boost national security.
Japanese network equipment companies, such as Fujitsu and NEC, have limited global presence, with little cost competitiveness compared to overseas rivals.
NTT is actively seeking capital alliances globally in key areas of technology, such as self-driving and smart cities.
The company and Mitsubishi have mutually taken a stake of 30 percent in Dutch digital mapping company HERE Technologies.
NTT and NEC also announced that they plan to work together on post-5G technologies, including all-photonics networking and computing technologies being developed by NTT.