Samsung to supply 5G gear to Japan's KDDI

KDDI employees test 5G network performance using Samsung Electronics' 5G network equipment at Okinawa Cellular Stadium in Japan on March 26, 2018. The Korean tech giant said Monday it secured a 5G network equipment supply deal with the Japanese mobile carrier. / Courtesy of Samsung Electronics

By Baek Byung-yeul

Samsung Electronics will supply its fifth-generation (5G) network equipment to Japanese mobile carrier KDDI, making a foray into one of the most lucrative network markets in the world, the tech giant said Monday.

The company said it was chosen as one of the suppliers to provide the 5G equipment to the No. 2 mobile carrier in Japan along with Sweden's Ericsson and Finland's Nokia over the next five years from 2019 to 2024.

Though Samsung didn't reveal the exact contract size, industry sources presume the contract will be valued at $2 billion.

"Samsung won a contract to supply its 5G network equipment to KDDI. However, we cannot confirm the contract value," a Samsung official said.

Given the Japanese government decided to exclude China's Huawei Technologies, the world's No. 1 network equipment provider, Samsung was highly expected to secure the supply deal jointly with Ericsson and Nokia.

With the deal, Samsung is expected to boost its market share and move one step closer to its goal to improve its global market share to 20 percent by 2020. As of 2018, Samsung secured about 5 percent share in the global network equipment market to be placed seventh.

Samsung, the only player that can provide both 5G gears and 5G smartphones along with Huawei, has been trying to get an edge on the Chinese competitor, by developing its cutting-edge 5G network technologies.

"The supply deal would be a good signal for the company who has been taking the 5G network equipment market as its new growth engine. As Japan has larger territory compared with Korea, mobile carriers there are required to install more equipment. The company is highly anticipated to win more supply deals," an official from a mobile carrier here said.

With an aim to showcase technology-featured Olympics at the 2020 Tokyo Games, Japan has been accelerating efforts to deploy 5G network early next year.

NTT DOCOMO, the largest mobile carrier there, plans to invest at least 795 billion yen ($7.37 billion) in 5G over the next five years and KDDI, the second-largest carrier, is set to spend 466 billion yen while No. 3 Softbank and No. 4 Rakuten will spend 206 billion yen and 194 billion yen respectively.

KDDI has conducted field trials of its 5G network using Samsung's 5G equipment for years. In March 2018, the two companies completed a 5G field trial at a baseball stadium in Okinawa. They also successfully demonstrated 5G-based 4K video streaming powered at a train station in January.

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