SoftBank’s Not Taking the Huawei

SoftBank’s Japanese telecom unit is tapping Nokia and Ericsson, Nos. 2 and 3 in telco gear manufacturing, to build its 5G in the latest blow dealt by a longtime client to top dog Huawei.

What happened? SoftBank chief Masayoshi Son said in February that all 5G vendor options were on the table, and it’d cost about $46 million to replace its existing Huawei gear. And since SoftBank will pay more for the Nordic suppliers’ radio antennas and base stations, its decision was likely influenced more by the current geopolitical brouhaha than balance sheet concerns.

What’s next?

Huawei filed a motion in U.S. courts to block its blacklist. In Beijing, party officials may retaliate by severing U.S. access to China’s reserves of the strategic rare earth materials found in many tech products.

Bottom line: Washington has lobbied allies for months to ban Huawei from next-gen networks...with mixed results. But recent moves targeting foreign software and hardware used by Huawei seem to be doing the trick with SoftBank and other carriers in U.S.-allied countries.