It is urgent to establish infrastructure for the 5G next-generation communications standard, which will become the foundation of the digital age. It is hoped that the spread of Japan-made 5G technology will be promoted from the viewpoint of security.

NTT Corp. and NEC Corp. announced a capital and business tie-up to jointly develop 5G technology. The move is aimed at creating a 5G network with domestic technology, which is important for utilizing diverse data.

The 5G standard enables users to communicate nearly 100 times faster than the current 4G used in smartphones. It is said to be able to shorten to three seconds the time to download a two-hour movie, a process that now takes about five minutes.

As the system can transmit high-definition images instantly, it becomes possible to remotely operate bulldozers at construction sites, or even perform remote surgery. It can monitor traffic and road conditions with numerous sensors to help realize self-driving systems. The potential to change society appears tremendous.

In Japan, 5G services for smartphones started in March, about a year behind the United States, Europe and South Korea. Currently, the installation of base stations necessary to spread 5G is limited to parts of major cities and elsewhere.

The establishment of the 5G network must be accelerated.

The challenge is how Japan’s relevant manufacturers will be able to make up the lost ground.

In 2019, China’s Huawei Technologies Co., as well as Nokia Oyj and Ericsson AB in Northern Europe, accounted for nearly 80% of the global base station market share.

In Japan, NEC and Fujitsu Ltd. have a certain share of the domestic base station market, but the costs to install their base stations are said to be higher than those of foreign companies. If Japan’s 5G network development declines, the domestic market could also be taken over by foreign companies.

The United States has tightened sanctions against Huawei, including an embargo, due to fear of China exfiltrating confidential information through Huawei.

Japan is taking concerted action in that regard together with Australia and other countries.

It is important to strengthen the system to domestically produce 5G devices without relying on foreign manufacturers. The tie-up between NTT and NEC should be one step toward that goal.

The two companies said that they plan to expand cooperation with other companies to aim for an “open strategy” in which multiple manufacturers work on separate parts of the project to reduce costs. Many participants are expected.

The government’s support will be also needed.

The government has set a goal of increasing the number of 5G base stations to more than 210,000 by the end of fiscal 2023. To realize the goal, it is implementing tax breaks for companies and other entities that have started their plans in advance to build 5G facilities. It also intends to subsidize the development of new technologies.

It is essential that effective measures will enhance Japan’s international competitiveness in the 5G sector, using the results to support the growth of the Japanese economy.

With 5G, the possibilities for new services are set to expand endlessly. Efforts by a wide range of companies will be tested concerning how they can create groundbreaking new businesses.

— The original Japanese article appeared in The Yomiuri Shimbun on June 30, 2020.