NTT allies with NEC for joint R&D and global ICT deployment

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CEOs agree to deploy optical and wireless technologies; NTT will acquire shares in NEC – a leading supplier to Rakuten Mobile.

Jun Sawada, President and CEO of NTT and Takashi Niino, President and CEO of NEC announced an agreement to form a capital and business alliance for joint R&D and the global rollout of ICT products based on optical and wireless technologies.

NTT was fourth largest telco in the world by revenue at the end of 2019.

The two companies aim to improve their corporate value by expanding sales of products applying jointly developed technologies through this alliance.

In addition, through these initiatives, the companies want to contribute to improving the industrial competitiveness of Japan and ensuring safe and reliable communication infrastructure in the wake of the pandemic. They intend to work with "numerous" communication equipment vendors to achieve their goals.

Open architectures

NTT and NEC said they intend to promote open architectures such as O-RAN and to realise the IOWN initiative (NTT’s strategic plan), will concentrate on setting up an R&D
structure as a priority.

As the joint R&D ranges over various areas and requires medium-to-long-term commitment, NTT and NEC want “an amicable and cooperative relationship by which both companies are able to enjoy  long-term benefits”.

NTT will acquire 13,023,600 shares of NEC's common stock through the issuance of new shares and disposition of treasury stock by way of third-party allotment conducted by NEC (4.8% of its outstanding shares after the third-party allotment).

NEC (and its subsidiary Netcracker) is a leading supplier to Rakuten Mobile, which is hoping to disrupt the Japanese mobile market with the first world’s first telco cloud-native infrastructure.