Samsung Electronics is considering selling its wireless networks unit, according to a Light Reading report, which cites unnamed industry sources.
Samsung has always been a smaller player in the network gear market, especially when compared to giants like Ericsson (NASDAQ: ERIC), Huawei, Nokia (NYSE:NOK), Alcatel-Lucent (NYSE: ALU) and ZTE. Still, Samsung does count several large carriers as its customers for wireless network equipment, including SK Telecom, Sprint (NYSE: S), Verizon (NYSE: VZ) and Vodafone.
However, the report said Samsung is now considering strategic options for its networks division and might sell it to a larger rival. A Samsung spokesman declined to comment.
Samsung does not break out the financials of its networks division as a standalone unit. However, it does give a hint as to its size. Samsung's IT & Mobile (IM) Communications division is comprised of its handset and tablet business as well as its networking unit. In the third quarter, the overall IM unit had sales of around $23.16 billion (26.61 trillion South Korean Won), and the "mobile" component of that -- i.e. mobile device sales -- made up around $22.57 billion of those sales.
Meanwhile, the industry is consolidating. Nokia will soon complete its deal to purchase Alcatel-Lucent to put itself in a better position to challenge Ericsson and Huawei. And Ericsson and Cisco have agreed to cross-sell each other's products and services and develop new ones together to attack the wireless and enterprise markets.
If a larger rival were to buy Samsung, they could get a stronger foothold in South Korea just as the country's operators are gearing up to invest in 5G and showcase advanced network technologies at the 2018 Winter Olympics.
Ovum analyst (and FierceWireless contributor) Daryl Schoolar said on Twitter that he would rank possible buyers of Samsung's network gear business, given its U.S. business, as Ericsson, then Nokia and then a venture capital firm. Huawei and ZTE would likely be excluded from bidding because of a de facto U.S. government restriction on the Chinese vendors winning contracts with Tier 1 U.S. carriers over security concerns, which the companies have said are unfounded and without merit.
- see this Light Reading article
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