Samsung Electronics bets
on 5G to jump-start networks business
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[June 21, 2016]
By Se Young Lee and Miyoung Kim
SUWON, South Korea (Reuters) - Trailing
its rivals after misplaced bets on wireless technology standards,
Samsung Electronics Co Ltd aims to become a global top-three player
in 5G mobile networks by moving quickly in markets like the United
States, an executive said.
The world's top smartphone maker ranks well behind peers such as
Nokia Corp, Huawei Technologies Co Ltd [HWT.UL] and Ericsson in the
networks business, after backing CDMA and WiMax wireless
technologies that never caught on globally.
The South Korean giant now sees an opportunity to catch up by moving
fast and early on 5G, the wireless technology that telecom equipment
makers are rushing to develop as the next-generation standard.
"We plan to move quickly and want to be at least among the top three
with 5G," Kim Young-ky, Samsung's network business chief, told
Reuters in an interview.
"It's important to get in early."
5G wireless networks could offer data speeds tens of times faster
than 4G technology, enabling futuristic products such as
self-driving cars and smart-gadgets that tech firms expect to become
ubiquitous in the homes of tomorrow.
Major network firms are targeting the United States as it moves
rapidly ahead with plans to open spectrum for 5G wireless
applications. Some U.S. officials expect to see the first
large-scale commercial deployments by 2020.
South Korea and Japan are also racing to deploy 5G hoping the
next-generation standard will boost economic activity. South Korean
carrier KT Corp aims to offer trial 5G services during the 2018
Winter Olympics in Pyeongchang.
Samsung is targetting more than 10 trillion won ($8.6 billion) in
annual sales of 5G equipment by 2022, a spokeswoman said.
This would be a big step up for a networks business that generated
less than 3 trillion won in revenue last year, compared with 100.5
trillion won in mobile device sales.
Crucial to its plans is a partnership with New York-based Verizon
Communications Inc to commercialize the technology. Other firms
working with Verizon on 5G include Nokia, Ericsson, Qualcomm and
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The logo of Samsung Electronics is seen at the company's
headquarters in Seoul, South Korea July 6, 2012. REUTERS/Lee Jae-Won/File
Verizon conducts field tests this year and aims to begin deploying
5G trials on home broadband services in 2017 in the United States,
likely the first 5G application commercially available before a
broader mobile network standard is agreed.
Samsung - which was a distant fifth player in the global 4G
infrastructure market in January-March, according to researcher His
- declined to comment on what clients it expected to receive 5G
equipment orders from.
As the industry has yet to decide on a 5G mobile standard, Samsung
plans to start by selling equipment such as base transceiver
stations and home receivers for fixed wireless broadband access.
"Even in Manhattan there are many areas in which it's difficult to
get access to wireline broadband services," Kim said.
The fixed wireless broadband market alone could be worth tens of
billions of dollars, he said.
Yet some analysts said it could be difficult for Samsung to convince
carriers to increase orders at the expense of more established
"The network equipment business is a B2B business where the barrier
to entry is high," Alpha Asset Management fund manager C.J. Heo
(Reporting by Se Young Lee and Miyoung Kim; Editing by Stephen
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