Japanese telecom vendor NEC has decided to cease development of 4G and 5G radio access base stations, effectively exiting a segment now overwhelmingly controlled by only five vendors (Huawei, Ericsson, Nokia, ZTE and Samsung). Huawei, Ericsson, and Nokia collectively hold ~80% of the worldwide 4G/5G base station market, while NEC and Fujitsu together hold under 1.5% global market share.  That leaves Japan’s network equipment vendors structurally disadvantaged on both scale and pricing power. The move underscores structural weaknesses in Japan’s mobile infrastructure ecosystem, particularly its inability to reach scale in a highly globalized, capex‑intensive market.

Fujitsu spun off its communications-related business, including base stations, into a new subsidiary this July. Kyocera, which had planned to enter the 5G base station market in 2027, has also abandoned development of 5G base stations. NTT DoComo, Japan’s largest mobile network operator by subscriber count and market share, previously prioritized procurement from such Japanese companies such as NEC and Fujitsu but changed tack in 2024 and stepped up purchases from Ericsson, Nokia and other foreign companies.

A wireless base station on the roof of a building in Tokyo. (Photo obtained by Nikkei)

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Key points: ​

• NEC will halt new development of 4G and 5G base stations for smartphones and other endpoint devices, while stepping back from a market where its share had already fallen to a marginal level.​

• The decision is widely viewed as a market‑driven outcome, reflecting persistent losses in a business that never achieved the scale or cost structure required to compete with leading global RAN vendors.​

• Contemporary mobile infrastructure is a globalized and capital‑intensive industry, where survival hinges on high volumes to amortize R&D, silicon, software, manufacturing, and go‑to‑market costs across multiple product generations.​

• ​NEC will continue R&D for 6G and “Beyond 5G” systems, aligning with Japan’s national Beyond 5G Promotion Strategy, which targets commercialization of next‑generation services around 2030.

• The company is concentrating research talent in areas such as open and virtualized RAN (v-RAN, Near‑RT RIC, AI-driven network optimization, and integrated terrestrial–non‑terrestrial networks, which are all positioned as building blocks for 6G.​

• However, Japan’s relatively shallow 5G deployment and weak installed base constrain its ability to test dense high‑frequency networks, a prerequisite for 6G architectures that will rely on ultra‑short‑range spectrum and far denser site grids.​

• Japan’s research and IP position in 6G remains modest, with domestic players accounting for roughly 10 percent of global 6G‑related patent filings in recent surveys, trailing several major competitors.​

• Limitations in technology reserves and standards participation raise questions about whether policy roadmaps alone can close the gap without corresponding gains in commercial scale and deployment experience.​

• Japan, along with Australia, Canada, the UK, and the US, has formed the Global Coalition on Telecommunications (GCOT), which is focusing on AI, security, and next‑generation standards, and is widely interpreted as a vehicle to counter China’s growing influence in telecom infrastructure.​

• Attempts to architect future high‑speed networks primarily around geopolitical blocs risk fragmenting markets, inflating development and compliance costs, and undermining interoperability—factors that historically have worked against technically superior but commercially isolated platforms in 4G and 5G.​

• Japan lacks a sufficiently large, unified domestic mobile market to independently sustain globally competitive RAN vendors and generate the economies of scale seen in China, Europe, or the US‑centric ecosystem.​

• Political alignment and industrial policy can provide funding and coordination, but they cannot substitute for large‑scale commercial demand, broad ecosystem participation, and sustained competitiveness across cost, performance, and time‑to‑market

References:

https://asia.nikkei.com/business/telecommunication/nec-ends-4g-and-5g-base-station-development-as-market-share-shrinks

https://www.globaltimes.cn/page/202512/1351697.shtml

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