Samsung’s 5G network grab gets boost with Huawei, ZTE under firehttps://indianexpress.com/article/technology/tech-news-technology/samsungs-5g-network-gets-boost-with-huawei-zte-under-fire-5507150/

Samsung’s 5G network grab gets boost with Huawei, ZTE under fire

Mounting concerns in Europe and elsewhere about letting China’s ZTE Corp. and Huawei Technologies Co. provide vital components for fifth-generation cellular networks have coincided with Samsung’s ambition to capture 20 percent of the global market by 2020.

Samsung, Samsung Galaxy A10, Galaxy A10 leaks, Galaxy A10 launch, Galaxy A10 specifications, Galaxy A10 price in India, Galaxy A10 features
In the US, where Chinese vendors are already banned, Samsung has won deals for 5G gear from three of four major carriers. (File photo)

Written by Niclas Rolander and Sam Kim

Samsung Electronics Co. is making a new push in the market for wireless network infrastructure. This time, the South Korean electronics giant’s timing may be just right.

Mounting concerns in Europe and elsewhere about letting China’s ZTE Corp. and Huawei Technologies Co. provide vital components for fifth-generation cellular networks have coincided with Samsung’s ambition to capture 20 percent of the global market by 2020. In the US, where Chinese vendors are already banned, Samsung has won deals for 5G gear from three of four major carriers.

“There are certainly concerns that are spreading beyond the US markets into areas where those vendors may have greater share or more customer wins with large operators,” Alok Shah, a vice president of networks strategy at Samsung, said of the company’s Chinese rivals in a phone interview.

Advertising

5G is one of several emerging technologies that the conglomerate singled out in August as a target for 25 trillion won ($22 billion) in investments. It represents a new avenue to growth as Samsung’s smartphone sales continue to sag, the lucrative semiconductor business shows signs of a downturn and Chinese competition in the display market stiffens.

Chips, Smartphones

The Korean company, which leads the world in memory chips as well as smartphones, believes a key selling point is a more integrated and tightly policed production chain, which both lessens its reliance on external suppliers and enhances the overall security of its offering. Like Huawei, Samsung is vying for a seat at the table as 5G rolls out across the world, a technology that will shape the mobile internet and power up a plethora of gadgets from home appliances to cars.

After a decade of consolidation reduced the number of major wireless equipment vendors to a handful, carriers in countries that shut the door on Chinese providers could be facing a similar situation as in the US, with only two large suppliers — Sweden’s Ericsson AB and Finland’s Nokia Oyj — and one challenger — Samsung — left to turn to.

“There really are very few options when it comes to large scale radio-access network vendors in the US market, so certainly the operators are looking for options,” Shah said. “They’re looking for competitiveness and companies that are bringing innovation to them.”

Samsung’s immediate goal is to secure initial deals in countries like the US, Japan, and South Korea where 5G service is imminent, according to an outline of its strategy released in June. The company boasts that it leads in Europe for the most patents registered with the European Telecommunications Standards Institute, expressing confidence in being a major part of the global 5G spread.

Samsung also has a strong position in technology that several US operators are using to bring wireless broadband connections to remote areas using 5G and sees potential for those products in western Europe too, Shah said.

It’s not the first time Samsung has unveiled ambitions to grab a significant slab of the mobile network business. An earlier push to challenge Ericsson and Nokia stalled after the South Korean company backed CDMA and WiMax wireless technologies that didn’t catch on globally.

Bengt Nordstrom, head of telecom consultancy Northstream, believes Samsung will struggle to gain the global position needed to support the hefty costs to research and develop the tech that drives 5G networks — despite its technological prowess and financial firepower.

Nordstrom argues that Samsung is chasing a mature market with little growth, where global scale and presence is the only way to reap acceptable returns. Even in a high tech industry that promises all kinds of automation and artificial intelligence, human beings are still key.

100,000 Employees

“The reason why Ericsson and Nokia each have about 100,000 employees, and Huawei even more, is that that’s what it takes to be present in every market,” Nordstrom said. “To scale up from Samsung’s presence in only a few countries, you need to hire tens of thousands of people. I don’t think that’s doable.”

Shah is less concerned, saying that Samsung’s networks business is gearing up aggressively and rapidly hiring competent staff, including from competitors. Having been tapped to supply 5G gear for AT&T Inc., Verizon Communications Inc. and Sprint Corp., the executive says that ramping up as markets grow and opportunities arise is a familiar exercise for Samsung’s Electronics, whose 100,000 employees work on everything from chip manufacturing to designing smartphones.

Advertising

“Next year is really about execution for us,” Shah said. “We have to prove that our customers made the right decision in making commitments to us. We’ll see how it all plays out but we do feel that a number of trends are lining up in our favor right now.”