Samsung Banking on Europe 5G Market to Grow Network Gear Business

Samsung's Executive VP of networks business said that the company is banking on Europe to maintain growth momentum in its network equipment business.

Samsung Looking to Expand in Europe

On Friday, Woojune Kim, Executive VP, Samsung's network business, told Reuters that Samsung landed a $6.6 billion deal with US telco Verizon in September, followed by a deal with Japan's NTT Docomo in March. He said that, "impressions have changed", due to these deals.

Notably, 5G rollout is widening and industry leader Huawei has its focus on the domestic market in China. Although the South Korean tech company is the top phonemaker, in 5G network equipment it ranks fifth, behind companies like Huawei, Ericsson, Nokia and ZTE. According to market research firm Dell'Oro Group, it had a 10-15% market share in the first quarter of 2021.

Right now, in Europe, the company is currently conducting 5G trials with multiple European telcos. These include Deutsche Telekom in the Czech Republic, Play Communications in Poland and so on. Kim also added  that the company is also targeting markets such as India, Australia and Southeast Asia. With all its size, the network gear business is relatively small for Samsung. The business had a revenue of 236.8 trillion won ($212.50 billion) for 2020. However, since the 5G rollouts began in 2019, the company has gotten a lot of clients for 5G gear and has seen a rise of 35% Y-o-Y.

For 5G, Samsung is pitching its virtualized RAN technology. It is basically a software that allows telcos to freely use off-the-shelf network equipment in various combinations to connect users to networks. This lets the telcos save costs and provide flexibility to them. Telcos such as Verizon has adopted this tech as well. Moreover, in South Korea, all operators' 5G core networks are virtualized, Samsung said.

Kim said that Samsung wants to become the top-three in the network gear business, Kim said. However, he did not give a timeframe. "It took us about a decade to win the Verizon deal, since forming early relationships... It takes persistence," he said.