ZTE is reportedly preparing to capture a portion of the Japanese 5G market and it is now testing 5G infrastructure equipment with one of the country's three largest network operators, SoftBank. According to recent reports from Nikkei Asian Review, ZTE Japan's CTO was sent to the Land of the Rising Sun to ensure that competitors such as Ericsson, Nokia, Samsung and others won't secure all of the 5G contracts in the country. According to Chen, Japan aims to launch 5G technologies commercially in 2020, with the three top mobile carriers being expected to make large investments in 5G before the 2020 Tokyo Olympics.
ZTE will inevitably meet strong competition in the Japanese 5G market from tech giants including Samsung, who earlier in December of last year had conducted joint 5G tests with KDDI. Nokia also entered a partnership with Japan's NTT DOCOMO earlier this year in January, for the development of 5G equipment, and with that in mind, recent reports suggest that ZTE will primarily focus on developing and testing 5G solutions with SoftBank. However ZTE is facing some difficulties in that, as yet, the company doesn't have enough space in Japan in order to conduct too many 5G tests. The OEM had opened a new R&D center in Tokyo last year for the cost of 1 billion yen, or the rough equivalent of $9.34 million, but according to CTO Chen Liangwen, this facility still doesn't provide enough room for the purpose of testing 5G technologies. As a result of the company now aims to acquire a larger office in Tokyo where anywhere between 500 to 600 engineers would be able to spend more than half a year testing 5G network technologies for local network providers.
Reports also suggest that ZTE aims to succeed in the Japanese 5G market by undercutting its competitors from Japan and Europe and offering networking solutions for roughly one-fifth of the cost of its rivals. Apparently, Japan represents a key market for ZTE not only because Japan is expected to become one of the earlier adopters of 5G technology, but also due to the fact that ZTE's business ventures are more limited in the United States. It remains to be seen how ZTE will perform against an increasing competition in Japan over the next couple of years, and how the company will go about acquiring new offices in Tokyo for the purpose of 5G R&D.