Tantra Analyst

Disrupting the landscape, Samsung emerges as a global 5G infra leader

As an eventful 2021, which witnessed 5G becoming mainstream despite all the challenges, comes to a close, the analyst part of my mind is reviewing and examining major disruptions in the cellular market brought by 5G. The rise of Samsung, mostly known for its flagship galaxy phones and shiny consumer electronics, as a global 5G infrastructure leader really dawned on me as a key one.

As a keen industry observer, I have been tracking Samsung Networks for a long time. A little more digging and research revealed how systematically it charted a path from its solid home base in Korea to its disruptive debut in the USA, followed by expanding its influence in Europe and other advanced markets. All the while building a comprehensive 5G technology and product portfolio.

In this article, I will try to follow its growth steps in the last two years and explore how it is well-positioned to lead in the upcoming 5G expansion.

Strong presence at home and early success in India built the Samsung foundation

Korean operators like Korea Telecom and SK Telecom have always been at the bleeding edge of cellular technology, even from 3G days. As their key supplier, Samsung’s technology prowess has been a significant enabler for these operators’ leadership, especially in 4G and 5G. That has also helped Samsung to be ahead of the curve.

Samsung’s first major international debut was in India in 2013, supporting Reliance Jio, a new cellular player that turned the Indian cellular and broadband market upside down. Samsung learned valuable lessons there about deploying very large-scale, expansive cellular networks.

The leadership at home combined with the experience in India provided Samsung a solid foundation for the next phase of its global expansion.

Disruptive debut in the USA that changed the infra landscape

U.S. cellular industry observers sulking about the lack of 5G infra vendor diversity were pleasantly surprised when Samsung won a large share of Verizon’s contract to build the world’s first 5G network. That was a major disruption because of two reasons. First, Samsung virtually replaced a well-established player, Nokia. And second, it’s Verizon, for whom the network is not just a differentiation tool but the company’s pride. Verizon entrusting Samsung with the deployment of its high-profile, business-critical, first 5G network, speaks volumes about Samsung’s technical expertise and product superiority.

Over the years, Samsung has scored many key 5G wins in the U.S., including early 5G-ready Massive MIMO deployments for Sprint (now T-Mobile), supplying CBRS-compliant solutions to AT&T and 4G and 5G network solutions for US cellular.

These U.S. wins were the result of a well-planned strategy, executed with surgical precision. Samsung started 5G work in the U.S. as early as 2017 with testing and trials. In fact, Samsung was the first to receive FCC approval for its 5G infra solution, in 2018, quickly followed by outdoor and indoor 5G home routers.

It’s not just the initial contract wins and delivering on the promise. Samsung has been consistently collaborating with operators in demonstrating, trialing and deploying new and advanced 5G features such as 64T64R  Massive MIMO and virtual RAN, c-band support, indoor solutions, small cells and more.

In other words, Samsung has fully established itself as a major infra player in the lucrative and critical U.S. market. The rapid deployment of 5G, even in rural areas, and the impending rip and replace of Chinese infrastructure for national security reasons bode well for Samsung’s growth prospects in the country.

Samsung methodically expands into Europe, Japan and elsewhere

After minting success in the high-stakes U.S. market, Samsung signed a contract with Telus of Canada in 2020. Canada was a simple expansion, and going after other advanced markets, such as Europe and Japan, was a natural next step.

Europe is one of the most competitive and challenging markets to win. Not only it is the home to two well-established infra players–Ericsson and Nokia – but also the biggest market outside China for Huawei and ZTE. Samsung has seen early success with some of the key players in Europe. For example, it successfully completed a trial with Deutsche Telecom in the Czech Republic, potentially giving Samsung access to DT’s extensive footprint in the region. Recently, Vodafone UK  selected Samsung as the vRAN and Open RAN partner for its sizable commercial deployment, and Samsung is collaborating with Orange for Open RAN in France. Getting into these leading operators in the region is a significant accomplishment. In my view, with the other players such as Telefonica being very keen on vRAN and Open RAN, entry there is only a matter of time.

Even with these wins, it is still early. The company’s strategy in Europe is still unfolding. A significant tailwind for Samsung is the heightened national security concern, which has significantly slowed the traction of Chinese players. Additionally, onerous U.S. restrictions have seriously crippled Huawei.

Japan has always been the most advanced market. So far, it is dominated by local players such as NEC and Fujitsu. Expanding its wings there, Samsung has been collaborating with KDDI on 5G since 2019. It also got into the other major operator NTT DoCoMo earlier this year with the contract to supply O-RAN compliant solutions.

Comprehensive technology and product portfolio that fueled all this growth

5G has always been characterized as a race. That means the first to market and the leaders will emerge as winners taking a large share of the value created by 5G. Interestingly, it has played out as such so far. The investments in 5G are so large that once companies establish leadership and ecosystem relationships, it is extremely hard to change or displace them.

Realizing that, Samsung invested big and early in 5G technology development. Being both a network and device supplier, it can utilize that investment over a much broader portfolio. Samsung conducted pioneering 5G testing and field trials as early as 2017 and 2018, in Japan with KDDI. When many in the industry were still debating the ability of mmWave to support mobility, Samsung collaborating with SK Telecom, demonstrated successful 5G video streaming in a race car moving at 130 Mph speed. Samsung was also the industry’s first to introduce mmWave base stations with integrated antennas, significantly simplifying deployment.

In the emerging area such as Edge-Cloud, Samsung is already working with major Cloud providers such as Microsoft and IBM and chipset players such as Marvel.

Currently, Samsung has one of the most comprehensive portfolio of network solutions, software stack and tools, support for all commercial 5G bands, including both Sub-6 GHz and mmWave, with advanced features such as Massive MIMO, for indoor and outdoor deployments, for new architectures such as vRAN and Open RAN, for public or private networks and so on.

One of the major advantages of Samsung, when compared to its infra competitors, is its strong financial strength that comes from being part of a huge industrial conglomerate. In businesses like 5G, where investments are large, risks are high and payback times are long, such financial strength can decide between winning and going out of business.

In closing

Samsung Networks’ journey from its humble beginnings in Korea to a global 5G infrastructure leader is fascinating. It has invested heavily to become a technology leader, and has successfully used that leadership along with meticulous planning and execution to be a global leader in the 5G infra business.

It is still early days for both 5G and Samsung. It will be interesting to watch how Samsung can utilize this early lead to capture even bigger opportunities created by the expanding 5G’s reach and new sectors such as Industrial IoT.

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