Samsung Electronics is banking on Europe to maintain growth momentum in its network equipment business, as 5G rollout widens and industry leader Huawei Technologies of China focuses on its domestic market.
The world added 385.5 million 5G subscribers between Q4 2019 and Q4 2020 to reach 401 million 5G connections globally. The number of 5G connections is expected to reach 619 million globally by the end of 2021, according to data provided by Omdia.
The South Korean technology company is global No. 1 in memory chips and smartphones. Samsung, in 5G network equipment, ranks fifth behind Huawei, Ericsson, Nokia and ZTE, with a 10-15 percent market share in the first quarter of 2021, according to market research firm Dell’Oro Group.
Samsung landed a $6.6 billion deal with U.S. telecoms company Verizon in September, followed by a deal with Japan’s NTT Docomo in March.
Samsung is conducting 5G trials with European telecoms such as Deutsche Telekom in the Czech Republic, Play Communications in Poland and another major European firm.
Besides Europe, Samsung is also looking to expand in markets such as India, Australia and Southeast Asia, Woojune Kim, executive vice president of Samsung’s networks business, told Reuters in an interview on Friday.
The network equipment business is small currently for Samsung, which had a revenue of 236.8 trillion won ($212.50 billion) for 2020. It does not announce separate numbers for the business and most analysts don’t have estimates for it.
Samsung said since the 5G network rollouts began in 2019 in various countries, it has seen the number of new clients for its 5G equipments and systems rise by 35 percent a year on average.
In addition to 5G rollouts, U.S. pressure on its allies to exclude Huawei from 5G systems has provided opportunities for its competitors to expand market share.
Samsung is touting its virtualised RAN (radio access network) technology, or software that allows telecom companies to freely use off-the-shelf network equipment in various combinations to connect users to networks, saving costs and providing flexibility.
Verizon has adopted this technology for 5G RAN, while in South Korea, all operators’ 5G core networks are virtualised, Samsung said, with the country’s very heavy use of online services like e-commerce and food delivery compared to population size serving as a benchmark.
Samsung’s goal is to become top-three in the network equipment business from seventh now in the total telecom equipment market according to Dell’Oro. However, Kim did not give a timeframe, citing the industry’s long incubation time.
