Samsung Electronics Getting Upper Hand in 5G Network Equipment Market

Samsung Electronics is taking the lead in the 5G network equipment market as AT&T and SK Telecom have chosen its equipment. In contrast, a growing number of countries are shunning equipment from Huawei, which accounts for 28% of the global communications equipment market, for security reasons.
 

SK Telecom announced on Sept. 14 that it has formed a partnership with Samsung Electronics while excluding Huawei. This is expected to have a significant impact on the South Korean 5G equipment market as SK Telecom accounts for 40 percent of the local mobile market.

Samsung Electronics, along with Nokia and Ericsson, is planned to supply its 5G mobile equipment to AT&T, too. The second-largest mobile carrier in the United States is already installing 3GPP Release 15 compliant equipment in some cities. Also, AT&T already completed its demonstrations for 5G communications between individuals and large-scale data transfer by means of Samsung’s equipment. In addition, Samsung already supplied Verizon with fixed wireless access (FWA) equipment, which can be used for high-speed Internet and IPTV services for households.

Despite Samsung’s favorable start in the 5G equipment market, competition is likely to heat up over time. This is because Huawei has a large share in the global communications equipment market. In the early stage of 5G communications, mobile carriers will build their networks in a way that ensures compatibility with existing LTE networks. This means mobile carriers already using Huawei’s LTE equipment are likely to continue to use Huawei equipment. According to the Global Mobile Suppliers Association (GSA), 634 mobile carriers are currently providing LTE services worldwide with 45.4% of them using Huawei’s LTE equipment, whereas only 11 out of them are using Samsung’s equipment.
 

Still, security issues related to equipment supplied from China have emerged as a significant variable ahead of commercial 5G services. Chinese equipment has been ruled out by the governments of the United States, Australia, and India so far.

“Standalone-based international standardization is currently underway for data transfer based solely on 5G networks and without interworking with LTE networks, and this is totally different from LTE in terms of 5G Core as well as 5G NR,” said an industry insider, adding, “Therefore, market competition can become completely different down the road.”

KT is unlikely to adopt Huawei’s equipment in that it is using Samsung’s equipment. However, LG U+ is using Huawei’s LTE equipment in Seoul and its vicinity. The mobile carrier is likely to adopt Huawei’s 5G equipment to ensure compatibility with its LTE equipment.