Samsung Betting On 5G Orders From Europe For Growth In Its Network Equipment Business

With the widening of 5G networks and the industry leader Huawei Technologies of China now focused on its domestic market, Samsung Electronics is depending on its business opportunities of Europe for maintaining its growth momentum of its network equipment business, according to a senior executive of the South Korean company.

According to market research firm Dell’Oro Group and based on the latest four quarters, in the 5G network equipment industry the South Korean tech company ranks fifth and is preceded by Huawei, Ericsson, Nokia and ZTE and had a market share of 10-15 per cent in the first quarter of 2021. Samsung Electronics is however the global leader in the manufacturing of memory chips and smartphones.

But according to Woojune Kim, executive vice president of Samsung’s networks business, the “impressions (about Samsung) have changed” because of the South Korean firm securing a deal with the United States telecoms company Verizon in September in a deal worth $6.6 billion and another similar one with Japan’s NTT Docomo in March this year.

Kim said that currently 5G trials with European telecom companies such as Deutsche Telekom in the Czech Republic, Play Communications in Poland and another major European firm were being held by Samsung.

He added that other market apart from that of Europe – including the likes of India, Australia and Southeast Asian countries, are also being targeted for its telecom equipment bueinsss by the company. 

Compared to the overall revenues of the Samsung Group, the revenues generated by its network equipment business is small which generated revenue of 236.8 trillion won ($212.50 billion) in 2020. The company does not any separate numbers for its network equipment business and most of analysts do not have any estimates for it.

Samsung has witnessed an increase in the number of new clients for its 5G equipment and systems which has increased by about 35 per cent on the average since various countries started to toll out 5G networks in 2019, Samsung said.

The pressure put on its allies by the United States to not include Huawei in their 5G networks has also benefitted the competitors of the Chinese companies as they can now expand their market share.

The virtualised RAN (radio access network) technology or software of Samsung that can be used by telecom companies to easily make use of off-the-shelf network equipment in various combinations for connecting their users to their networks is being touted by the South Korean company. This helps telecom companies to save costs and gain flexibility. ,

Samsung said that while all operators’ 5G core networks in South Korea are virtualised, Verizon has adopted this technology for 5G RAN. For South Korea, the benchmark is the very heavy use of online services in the country such as for e-commerce and food delivery compared to the total population of the country.

Kim said that Samsung has set a target of becoming the top-three players in the 5G network equipment business but did not [provide any timeline set by the company.

“It took us about a decade to win the Verizon deal, since forming early relationships… It takes persistence,” he said.

(Adapted from NDTV.com)

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