Telecom Lead Asia: Telecom analyst firm TBR said the emerging LTE equipment maker Samsung is weak in services, particularly high-value services such as consulting and systems integration.
High-value services such as consulting and systems integration are strong areas for LTE equipment makers such as Ericsson, Alcatel-Lucent, and Nokia Siemens Networks.
TBR said network infrastructure companies will lean more heavily on the value proposition of their services businesses to pull through equipment.
Last week Samsung said sales of LTE wireless broadband technology equipment picked up in the third quarter but tougher price competition has dampened profit margins.
The IT & Mobile Communications division, comprising Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging, ended the third quarter with operating profits of 5.63 trillion won on 29.92 trillion won in revenue.
TBR sees Samsung as a credible provider of 4G technology that rivals gear from incumbent NEPs.
Chris Antlitz, analyst in TBR’s Networking and Mobility Practice, said: “Investments in Europe are starting to pay off and will help Samsung accelerate its presence in the region and challenge incumbents.”
Samsung’s focus on Europe as a key market for driving LTE sales is starting to pay off, evident from the 3 UK win in August.
Samsung is challenging incumbents like Ericsson, Alcatel-Lucent, and NSN by offering LTE solutions that feature cutting edge technologies like small cells and cloud. Samsung is willing to compete on price to get its foot in the door with new customers, but the company’s primary strategy is to focus on the value of its technology.
TBR said Reliance Industries win makes Samsung a credible TD-LTE provider, which will help win LTE deals in China, India, and parts of Europe.
Samsung’s contract win from Reliance in India underscores the vendor’s ability to compete against leading NEPs and that it is a credible vendor for delivering both FDD-LTE and TD-LTE equipment.
Having a competitive TD-LTE solution opens new doors for Samsung because most of the operators in China, India, and parts of Europe will be using that version of LTE instead of FDD-LTE, which is what most operators in the West are using. This crucial win with Reliance positions Samsung favorably for winning more TD-LTE deals in the future.