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| Visitors to the India Mobile Congress 2019 look around at the Samsung Electronics' booth in this Oct. 15, 2019 photo. / Courtesy of Samsung Electronics |
By Baek Byung-yeul
Samsung Electronics is expected to have a small but meaningful benefit from the Indian government's plans to exclude Chinese network equipment makers ― Huawei and ZTE ― from its plan to launch 5G network trials this year, industry analysts said Sunday.
They said the Indian government's possible ban on the Chinese vendors would help improve Samsung's position in the lucrative 5G network equipment business. Samsung is the world's fourth-largest 5G equipment maker behind Huawei, Ericsson of Sweden and Nokia of Finland.
However, they added it is too soon to say whether the Korean tech company will be buoyed by the Huawei ban as the Scandinavian makers are expected to fill the gap, and India has not even kicked off preliminary work such as conducting test operations and holding an auction for 5G network frequencies.
"It remains to be seen whether Samsung Electronics will actually benefit from the Indian government's possible ban on Chinese vendors," an industry official familiar with the matter said. "India has not yet launched its auction process for 5G network frequencies and mighty European suppliers such as Ericsson and Nokia have large market shares."
The Indian authorities were expected to exclude Huawei and ZTE from its 5G operator trials on national security grounds due to prolonged tensions with China, according to media reports. Bloomberg said India's Ministry of Communications was set to restart the approval process for 5G trials with restrictions applied that would block the Chinese companies from competing.
The move comes after an India-China border conflict and is in line with the Indian government's recent decision to ban apps and services made in China including popular video app TikTok. India ordered local telecom operators and internet service providers to block access to these services.
Samsung has been chosen as one of the equipment suppliers for local telecom operators' 5G trials. According to local Indian media the Economic Times, Reliance Jio Infocomm, the largest telecom operator there, has filed a government application to conduct its 5G trials with Samsung.
Samsung provided its 4G or LTE network equipment to Reliance Jio Infocomm, which started its LTE service in 2016. The Indian telecommunications company also reportedly submitted another application to conduct 5G trials independently using its own equipment.
Bharti Airtel is expected to team up with Scandinavian makers Ericsson and Nokia, as the No. 2 telecom operator will run 5G trials in the Kolkata and Bengaluru regions.
While Huawei has had the largest share in the 5G network equipment market, the company is expected to lose its dominance due to the prolonged trade dispute between the U.S. and China. In July, the British government announced it would also phase out Huawei from its 5G network over looming national security concerns.
According to data provided by U.S.-based market tracker Dell'Oro, Huawei had the largest share in the 5G equipment market with 35.7 percent in the first quarter of 2020, followed by Ericsson with 24.8 percent, Nokia with 15.8 percent and Samsung with 13.2 percent.
Samsung has been trying to expand its influence in the market rapidly. In the past several months, the company has secured four new 5G contracts including ones with Videotron in December, U.S. Cellular in February and New Zealand telecom Spark in March.
The Electronics and Telecommunications Research Institute expects the global market size for 5G network equipment to grow to around $37.8 billion this year, and this will keep increasing as 5G is forecast to provide service coverage to more than 40 percent of the world's population by 2024.
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