Telecom Lead India: Samsung, the world’s leading
smartphone manufacturer and chipset maker, has increased focus on telecom
network equipment business to fortify its position in the telecom industry.
With technology advancements and rapid 4G LTE network
roll-outs across the globe, the South Korean company is aiming big on the
telecommunication business.
Several telecom service providers are trying to tap
Samsung for LTE roll outs because the Korean consumer electronics giant offers
both devices and network. Signing up with Samsung for LTE phones and network
will benefit telecom service providers.
Samsung is a strong equipment maker considering its
financial position. All telecom equipment vendors are reeling under pressure
due to poor market conditions.
Moreover, Samsung is one of the few telecom equipment
vendors who can supply both LTE phones and equipments. Samsung is the number
two player in tablet market. Tablets are in demand for rolling out LTE
services.
Nokia can also leverage this kind of opportunity since
Nokia has phones, and telecom equipments from Nokia Siemens Networks. But Nokia
is yet to become a strong player in LTE phones market.
Chinese telecom gear makers – ZTE and Huawei – also
utilize the same strategy to tap mobile broadband players.
In February this year, Samsung revealed that it aims # 3
LTE infrastructure vendor spot by the end of 2012.
Samsung has recently got 4G LTE deal from 3 UK to
initiate its telecommunication business in the European market. However, being
a novice player in the European market, it will be a tough nut to crack for the
company to stand among top network equipment vendors.
The European market has already been crowded by the
European and Chinese vendors like Ericsson, Alcatel-Lucent, Nokia
Siemens Networks, Huawei and ZTE Corp.
Samsung is also aiming high on the North American market
with 4G LTE contract from Sprint. In future, the South Korean major could get
more contracts in the market given concerns over Chinese network equipment
makers and high prices of European manufacturers.
The number of contacts awarded to Samsung is low, but the
company is involved in 30 pilot networks around the world, which will help the
company to strengthen its presence in the industry.
Strategy-wise, the company has already expressed that it
will go ahead without acquisitions to expand its telecommunication business
across the globe. Additionally, Samsung’s capability to provide end-to-end LTE
solutions from chipsets to devices through network equipment will help set it
apart from Ericsson and Alcatel-Lucent.
The company’s ability to provide end-to-end solution will
allow network operators for better integration, thus reducing operating costs,
resulting in significant business opportunities for Samsung.
All the European network gear makers are going through a
challenging environment due to ongoing economic uncertainty. Recently, Chinese
telecom gear maker Huawei became the leading telecom equipment vendor in the
world ahead of Ericsson and Nokia Siemens.
The company surpassed its Swedish rival Ericsson in
terms of revenues earned in the first half of 2012.
With Huawei’s success in the global arena, Samsung will
certainly be aiming a decent market share in the coming quarters. Samsung’s
main markets will be its home country (South Korea), Japan, India and the
Middle East.
Samsung is also in talks with Reliance Industries to sign
a major LTE deal. Being a new player in the Indian wireless industry, Samsung
is trying to build its presence through its end-to-end solutions for the
telecommunication business.
Danish Khan
