Samsung hopes to gain from Huawei’s pain

Samsung 5G
Samsung is making moves to boost its chances in the 5G equipment market. (Monica Alleven/FierceWireless)

Samsung is investing heavily in its network equipment business and trying to capitalize on the myriad issues impacting Huawei of late, according to Reuters. The Korean company sees an opening for growth and has determined that a potential ban on Huawei equipment in the United States and other countries could leave many operators clamoring for new 5G equipment suppliers.

According to unnamed sources that spoke with Reuters, Samsung has shuffled some managers and employees from its handset business to the network division to boost its efforts. The company, which is scheduled to reveal its latest flagship smartphone next week, is making a big push in Europe, where Huawei enjoys a significant share of the telecom equipment market.

While most operators tend to stick with the same vendor as they shift from one generation of cellular technology to the next, many of Huawei’s customers are under political pressure to switch. Carriers that operate in countries that have imposed bans on Huawei equipment or are considering an outright ban are effectively left with no choice but to find other vendors.

The controversies swirling around Huawei, which has repeatedly denied allegations of working at the behest of the Chinese government, come at a particularly opportune time for the company’s competitors. Operators around the world are in the process of or preparing to make the transition from 4G to 5G, and they need to make decisions soon about the equipment vendors they will rely on for that effort.

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Samsung plans to invest up to $22 billion in 5G technology and other new technologies during the next three years, according to Reuters. “Samsung is focused on building trust with our partners and leading the global 5G markets, regardless of other companies,” it said in a statement emailed to Reuters.

While Samsung is increasing staff and other resources in its network equipment business, the total headcount dedicated to wireless networking equipment pales in comparison to those of Huawei and other leading telecom vendors Ericsson and Nokia. At most, Samsung’s networking division has just 5% as many employees as Ericsson or Nokia, and even less when compared to Huawei’s headcount, according to Reuters.