Samsung has been listed alongside Nokia and Ericsson as a primary supplier for LTE and 5G equipment at some of the nation’s leading wireless network operators, which analysts agree indicates momentum for the Korean vendor’s global network ambitions.
Specifically, Verizon announced that Samsung will join Ericsson and Nokia as one of its LTE equipment vendors via Verizon’s push to “open RAN” technology. Verizon’s network is currently split between Ericson and Nokia, and Samsung’s new deal with the nation’s largest wireless carrier is certainly a feather in the Korean vendor’s hat.
And, although Verizon hasn’t officially named its 5G network vendors yet, Samsung is now positioned to potentially win some of that business.
Separately, Sprint said that its ongoing nationwide 5G network buildout will be divided evenly among Samsung, Ericsson and Nokia.
“Yes, they [Samsung] have made a push on 5G. It makes sense; insurgent players will always use a break in technology to try to gain share,” noted Peter Jarich, chief analyst in telecom and IT for research and consulting firm GlobalData, and a FierceWireless contributor. “However, I think the LTE part [with Verizon] is more important. That will be generating revenue in the nearer term and it shows that Samsung isn't just a player being trialed as a way to push the market on a new tech. Competing on a new tech that everyone is figuring out is one thing. Competing on a tech that's mature is more impressive.”
That’s also important considering Samsung didn’t make good on the goals it set roughly six years ago for its RAN business; namely, to be a top three global supplier of LTE networks in 2013 and a top three supplier of mobile networks in 2015.
“We view our leadership in 5G as an opportunity to grow our business with existing customers and win over new operators as well. But it’s not 5G alone that has created a unique opening for Samsung Networks—there is also the impact of supplier consolidation, the move to vRAN and ORAN architectures, Samsung’s portfolio breadth across semiconductor/mobile devices/IoT/networks/consumer electronics, etc,” Samsung wrote in a statement to FierceWireless.
(As for T-Mobile and AT&T, Samsung has been named as a vendor for AT&T’s 5G trials, but Ericsson and Nokia remain T-Mobile’s main 5G suppliers.)
Stefan Pongratz, an analyst with research and consulting firm Dell’Oro Group, said that Samsung’s objective to grow its network business by a factor of five—from roughly 2 trillion Korean won ($1.8 billion) to 10 trillion Korean won ($9.4 billion) by 2022—hinges on its position in the U.S. market. And Pongratz attributed Samsung’s recent momentum in the LTE/5G market in the United States to a handful of key factors:
- Samsung’s equipment for millimeter wave spectrum transmissions
- Samsung’s baseband and Massive MIMO offerings in the sub-6 GHz bands
- And the fact that the company isn’t based in China, like Huawei or ZTE
Indeed, the U.S. wireless network equipment market is somewhat unique in that Chinese equipment vendors like Huawei and ZTE have been largely banned from the space due to U.S. government concerns over Chinese espionage. Although Huawei and ZTE have strongly argued that their equipment can’t be used for international spying, the situation has nonetheless shut them out of the U.S. market—thereby paving the entry for other vendors.
That all may be why Samsung continues to hold high hopes for its network equipment business. Although the company acknowledged its earnings in the space remained weak in the fourth quarter, the company said it expects to expand supply of next-generation network solutions for 5G “to major markets including South Korea/U.S./Japan, etc.” throughout the remainder of 2018.