Samsung Electronics has been selected as a supplier of 5G equipment to KDDI, Japan's second-largest telecom company, and will supply $2 billion worth of parts over the next five years.
The deal is very encouraging because it's the first meaningful telecom equipment contract the Korean tech giant has won in Japan. Samsung's feat also draws attention because it comes amid trade tensions between Seoul and Tokyo.
Samsung, in fact, didn't stand out in the global mobile telecom market until last year. Since the beginning of this year, however, the world's largest smartphone maker has flexed its muscles, buoyed by the Trump administration's strong push to exclude China's telecom giant Huawei from the global mobile equipment market.
While Samsung is still behind Huawei in the overall mobile market, the world's largest producer of semiconductors has taken the lead in 5G equipment. According to Dell'Oro, a market research firm, Samsung Electronics ranked first in the 5G equipment market with a 37 percent share in the first quarter of this year, followed by Huawei (28 percent), Ericsson (27 percent) and Nokia (8 percent).
The contract with KDDI will serve as a good occasion for Samsung to make a foray into the Middle East, Europe and elsewhere and team up with other Japanese mobile carriers. Japan is ready to spend about 3 trillion yen on 5G services in the run-up to the 2020 Tokyo Summer Olympics. Samsung, which aims to secure 20 percent of the global network equipment market by 2020, named 5G as one of its four growth engines in August last year.
Despite the successful deal in Japan, it's too early for Samsung to be complacent. If it is to emerge as the global No. 1 for 5G equipment, a head-on clash with Huawei will be inevitable. Samsung should do whatever it can to take the initiative in the lucrative global 5G market.