The development will have short term consequences for SoftBank given its relation with Huawei; it will find it hard to replace the pre-existing Huawei network equipment that has been customized to its requirements and thus is not easily interchangeable.
On Monday, Japan’s Kyodo News News reported, the three biggest telecom operators of Japan, do not plan on sourcing network equipment from Huawei Technologies Co and ZTE Corp.
This sourcing strategy relates to curent equipment as well as for upcoming 5G ones.
Japan plans on baning the government purchase of equipment from China’s ZTE and Huawei in order to strengthen its defenses against cyber attacks and intelligence leaks.
Neither NTT Docomo Inc, KDDI Corp or SoftBank Group Corp immediately responded to requests for comment.
The development comes in the wake of New Zealand, Australia and the United States locking out Huawei from building their 5G networks midst concerns that the Chinese tech giant could be linked with China’s communist regime.
Huawei has repeatedly denied these charges saying Beijing has no influence over it.
For Huawei, the development comes at a time when Canadian officials have arrested Huawei’s chief financial officer for extradition to the United States. The arrest has sparked fears that it could prolong the U.S.-China trade war.