SoftBank and rival KDDI Corporation announced a deal to share base station for building 5G networks in rural areas of Japan.
SoftBank and KDDI believe that they need to set up several thousands of 5G base stations since 5G networks use the 28GHz and 3.7GHz high-frequency bands. Setting up of 5G base stations will require long-term construction and large investment.
SoftBank has already selected Nokia for building its 5G network in Japan. SoftBank did not consider Huawei due to security concerns.
SoftBank and KDDI will set up a joint construction management company that will manage construction work to utilize the base station assets of both companies.
SoftBank and KDDI will conduct joint 5G trials in Asahikawa City in Hokkaido, Narita City in Chiba Prefecture and Fukuyama City in Hiroshima Prefecture.
NTT Docomo, KDDI and SoftBank — along with new entrant Rakuten received 5G spectrum from the telecoms ministry of Japan In April, 2019.
The four companies will spend nearly $15 billion over five years building their 5G networks, according to earlier media reports.
The increasing financial burden on the telcos comes as they face government pressure to lower carrier fees, with the start of 4G services by Rakuten in October expected to increase price competition.