Samsung looks to benefit from Huawei 5G woes

Samsung is reportedly increasing efforts to establish itself as a top-tier 5G equipment supplier by pouring resources into its networks business, as it looks to capitalise on security fears surrounding rival Huawei.

Reuters reported, citing Samsung sources, the company is placing additional focus on the networks unit and has moved high-performing managers and other employees to the division from its handset unit.

As Huawei continues to face global scrutiny over the security of its kit, fears the vendor has always said are completely unfounded, Samsung is looking to use the situation to its advantage and bridge the gap to its rival along with European heavyweight vendors Ericsson and Nokia.

Samsung’s efforts have already caught the attention of potential customers: an Orange executive told Reuters the company’s CTO Mari-Noelle Jego-Laveissiere was impressed with the equipment being developed by Samsung and other alternative suppliers during a visit to Japan, where 5G testing is at an advanced stage.

Orange is planning to run tests in France in partnership with Samsung this year. The company operates in 27 markets in total and is a big customer of Huawei.

Jumping in
Huawei’s issues have opened up an opportunity for Samsung. The Chinese vendor has been effectively banned from participating in 5G rollouts in the US, Australia and New Zealand, while several countries in Europe are considering similar action.

It was expected that operators would stick with their network equipment vendors used for 4G.

Huawei held a 28 per cent share of the global infrastructure market at end-September 2018, ranking it as the world’s leading vendor ahead of Nokia, Ericsson, Cisco and ZTE (respectively), figures from Dell’Oro Group showed. Samsung’s share at the same point was 3 per cent.

A Samsung source told Reuters: “We’re bolstering our network business to seize market opportunities arising at a time when Huawei is the subject of warnings about security.”

The vendor is also reportedly in talks with Indian operator Reliance Jio to upgrade its 4G network to 5G: “We don’t think 5G is far away in India,” added a Samsung source.

Samsung currently counts US operators AT&T, Verizon and Sprint as 5G customers, although it is unclear how extensive those contracts are. It is also involved in a variety of trials with operators in South Korea and Japan.