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| Samsung Electronics building at Seocho, southern Seoul / Yonhap |
By Baek Byung-yeul
Samsung Electronics is apparently benefiting from the U.S. government's crackdown on Chinese network equipment maker Huawei Technologies as the Korean tech giant is improving its market share in the global fifth-generation (5G) network equipment sector, industry analysts said Tuesday.
They said Samsung, the world's fourth-largest 5G equipment supplier, will likely win more contracts to supply its 5G equipment because Huawei is facing further scrutiny in the U.S. and Europe over diplomatic and security concerns.
According to recent data provided by U.S.-based market tracker Dell'Oro, Samsung's share in the 5G network equipment market in the first quarter of 2020 was 13.2 percent, up 2.8 percentage points from the previous quarter.
During the same period, Huawei had the largest share with 35.7 percent, up 0.4 percentage points from the fourth quarter of 2019. The Chinese maker was followed by Ericsson with 24.6 percent and Nokia with 15.8 percent. Industry analysts said Huawei could retain the top position as mobile carriers in China have expanded investment in 5G networks in the wake of the COVID-19 pandemic.
Samsung is expected to win additional contracts in the U.S. as the Federal Communications Commission is scheduled to hold a frequency auction for 5G networks on July 23. The agency said the high-end 5G network frequency bands of 3.5 gigahertz will be up for sale at the auction.
According to the FCC's announcement, top mobile carriers Verizon, AT&T and T-Mobile have registered their interest in participating in the auction, which industry analysts say is a strong driving force to improve Samsung's market share.
Amid mobile carriers' shift toward expanding 5G mobile lineups, the company is increasingly winning network equipment supply deals in the U.S. and allied countries.
Last month, the company announced it was chosen as a 5G networks infrastructure supplier for Canadian carrier TELUS. This is Samsung's second contract win in the North American country, following a supply deal to Canadian vendor Videotron in December 2019.
It is still unknown whether or not Samsung's recent contract was because of Huawei's dispute with Canada after the December 2018 arrest of then Huawei Chief Financial Officer Meng Wanzhou in Vancouver at the request of the U.S. Justice Department, which wanted her to face charges of fraud. In apparent retaliation, China arrested two Canadians there on espionage charges.
Following Washington's expulsion of Huawei, its chief rival Samsung is increasingly expanding its influence in the market. In the last seven months, the company has secured four new 5G contracts including ones with Videotron in December, U.S. Cellular in February and New Zealand telecommunications firm Spark in March.
Samsung seems confident it can boost its shares in the network equipment business.
"Samsung is increasingly inking 5G network equipment supply deals with mobile carriers across the world thanks to the company's technological leadership in the super-fast network sector," a Samsung official said. "It has been more than 10 years since Samsung started to develop 5G-related technologies. It could win trust from mobile carriers in India, the U.S. and other countries for its capability to successfully establish large-scale communications networks."
"Samsung is expected to deliver more details about winning additional contracts in the U.S. within the third quarter of 2020. When Samsung starts to increase its equipment supply to the U.S. market starting the third quarter of 2020, the company will be able to increase its global market share in the telecom parts sector," said Jeong Ji-soo, an analyst at Meritz Securities.
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