SOFTBANK Group Corp plans to replace 4G network equipment from China's Huawei Technologies Co Ltd with hardware from Nokia and Ericsson, Nikkei reported on Thursday.

The move comes at a time of heightened scrutiny of Chinese tech firms by the United States and some prominent allies over ties to the Chines government, driven by concerns they could be used by Beijing for spying.

SoftBank, Japan's third-largest teleco, will also order equipment for its next generation 5G network from the two European suppliers instead of Huawei, Nikkei reported.

A SoftBank spokesman said the report was ''based on speculation and no decision has been made''.

It also has the longest running relationship with Huawei among Japan's top three telecos, but the firm has previously said that the amount equipment it uses from Chinese makers ''is relatively small''.

Replacing the 4G equipment, which Nikkei reported will be done over several years, is likely to be time-consuming and expensive, industry sources have said.

The Nikkei report on the supplier switch comes as SoftBank is preparing to list the telecoms unit in Tokyo on Dec 19.

This week, SoftBank's telecoms unit priced its IPO at an indicated 1,300 yen [ $13.22] per share and said would sell an extra 160 million shares to meet demand, raising about $23.5 billion in Japan's biggest ever IPO.

The report also comes on the heels of Japan issuing a policy document on maintaining cybersecurity during procurement.

While Huawei was not explicitly named, sources have said the policy document was aimed at preventing government procurement from the company as well as China's ZTE Corp.

Huawei has already been locked out of the US market, and Australia and New Zealand have blocked it from building  5G networks amid concerns of its possible links with China's government.

Huawei has said Beijing has no influence over it.

Japan's decision to keep Huawei out would add to the woes of the firm, whose chief financial officer was recently arrested by Canadian officials for extradition to the United States. [Agencies]


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