Samsung Electronics and Huawei are expected to have a two-runner race in the competition to supply 5G network equipment to Korean mobile service providers.
The three Korean mobile carriers – SK Telecom, KT and LG U+ -- are set to select equipment suppliers as they are preparing to launch the world’s first commercial 5G service in March next year.
The competition to land equipment orders from the Korean carriers is fierce as the winner can secure an advantageous position in the competition for global leadership.
According to the telecommunication industry on July 15, the three Korean mobile operators are considering Samsung Electronics and Huawei as the most favorite candidates.
Samsung Electronics accounts for 40% of the Korean telecom equipment market, while Huawei from China is making a foray into the Korean market based on its price competitiveness.
The Korean telecom companies are aiming to finish their preparations for 5G services by December 1. To this end, they are currently negotiating with equipment providers on supply volume and delivery schedules.
Samsung Electronics and Huawei have been developing 5G technology since 10 years ago. Huawei showcased its technology at the Shanghai MWC last month. The Chinese company has been actively publicizing its technological prowess. The company’s executives visited the Korean Ministry of Science and ICT to explain its technology this year. Huawei’s biggest weapon is price competitiveness. The company’s 5G equipment is known to be cheaper than that from any other company. This appeals to telecom operators as building 5G networks is highly costly.
However, security issues undermine Huawei’s strengths. Recently, the trade disputes between the US and China have escalated, making it difficult for Korean telecom companies to purchase Huawei equipment.
Samsung Electronics is seeking to keep Huawei in check by highlighting its strengths. On July 13, Samsung Electronics unveiled its 5G equipment under development at its Suwon Digital Center.
Even though Samsung began its telecommunication equipment business in the 1980s, the company’s network equipment business has not accounted for a large portion of its total sales. But as far as 5G is concerned, Samsung Electronics is in a different situation. Although US and European equipment makers enjoyed technology leadership in the WCDMA and LTE markets, the 5G equipment market has no dominant player. Therefore, Samsung believes that if it establishes leadership in the early 5G equipment market, it will be able to ramp up its global market share to 20% by 2020.
An early atmosphere has been played out in favor of Samsung Electronics. The company fired the first salvo by saying that it would supply telecommunication equipment using the 28GHz band to the US market within this year. "In the 5G era, a bandwidth will become enormously wide,” said Kim Young-ki, head of Samsung's network division. “As our products for the 28GHz band have been successfully verified in the US, we will be able to have strong competitiveness in the frequency bands which are less than 6GHz such as 3.5GHz."
In addition, Kim expressed strong confidence, saying "Samsung's facilities producing 5G equipment will be able to handle even 20% of global demand."