Samsung said its revenue from LTE network declined in Q2 2013 quarter-on-quarter due to delay in investments for LTE 4G network by some telecom service providers (telecoms).
It was widely reported in India that Reliance Jio Infocomm, the 4G venture of Reliance Industries (RIL), may not be buying handsets and 4G network equipments from Samsung.
Reliance Jio Infocomm is in the process of rolling out 4G services across the country. It has committed to invest $10 billion over a period of time. The huge Capex will enable Reliance Jio Infocomm to take on Airtel, the #1 telecoms in the country.
Samsung does not share specific details on its LTE networking business.
According to earlier reports, Samsung is most active in Japan, South Korea and the United States, but won deal from 3 U.K. in H2 2012.
Also, the company did not share outlook for its LTE business for the coming quarters.
For comparison, Nokia Siemens, while announcing the second quarter result, said it did well in mobile broadband sequentially. Mobile Broadband represented 46 percent of Nokia Siemens Networks net sales, compared to 43 percent.
Ericsson benefited from LTE deals in Q2 2013. Growing sales of LTE infrastructure and services in North America (up 17.2 percent year-to-year) more than offset the declines in Ericsson’s North East Asia region (down 21.8 percent year-to-year) as the Sprint and T-Mobile USA LTE build outs reached their peak.
The Sprint Network Vision contract and T-Mobile LTE rollout will continue to drive revenue growth in 2H13 and 2014, while AT&T will continue investing in Project VIP and Softbank will boost Sprint’s capex, analysts noted earlier.
The Korean consumer electronics giant is betting big on LTE smartphones. The company says LTE smartphone replacement demand will continue in developed markets. Samsung expects competition for year-end promotions.
Samsung is losing market share to Ericsson and Nokia Siemens Networks in the LTE space.
Top telecom vendors in mobile broadband
Nokia Siemens, in which Nokia will have 100 percent stake, is one of the aggressive players in 4G.
Recently, Chris Nicoll, principal analyst, Analysys Mason, said Nokia, Huawei and Samsung boast the end-to-end ecosystem of devices and RAN/networking solutions.
The Chinese telecom vendor Huawei is beginning to leverage its device business, while Samsung’s is obviously well-matured.
Nokia Siemens already underwent its operation to pare down its wireless business (dropping WiMax), as well as fixed BB, BSS and IPTV. The resulting focus on its GSM/UMTS base and path to upgrade to LTE, as well as Single RAN base stations puts the new Nokia in a good position assuming it can capture the business from its existing customers.
Wi-Fi remains a weak area for the company in the face of growing strength of Cisco in both the licensed and unlicensed Small Cell area.
Alcatel-Lucent, which will announce quarterly result in the next few days, is still trying to find its market position and is rationalizing its own product lines, in refocusing on core market areas.
Ericsson is still a strong player in LTE, but needs to beef-up its small cell/Wi-Fi strategy to keep up with the findings from our surveys with operators that show Wi-Fi is an important element in their customer satisfaction/retention strategies.
Where’s 4G growth
4G Americas said the U.S. and Canada added 58 million HSPA and LTE mobile broadband connections annually in the first quarter, which translates to mobile broadband now comprising 49 percent of all mobile connections in the region.
Worldwide, LTE racked up an annual growth rate higher than 400 percent at the end of March 2013, ending the quarter with more than 90 million connections, and that number grew by May to more than 100 million connections.
There are 178 commercial LTE networks in 72 countries compared to about 74 commercial networks in 40 countries one year ago – more than 100 newly launched LTE networks in 12 months.
LTE subscriptions surpassed 49 million in the U.S. and Canada. The North American region represents 54 percent of all global LTE connections as of March 2013.
HSPA and LTE mobile broadband had an annual addition of 348 million subscriptions worldwide, representing 87 percent of the 400 million new global 3GPP technology connections.
Future of LTE RAN market
Dell’Oro Group says the mobile Radio Access Network (RAN) LTE equipment market is forecast to grow at a compounded annual growth rate (CAGR) of more than 20 percent over the next five years.
“Even though commercial LTE networks are deployed in more than 70 countries, it is important to keep in mind that in excess of 80 percent of the worldwide LTE subscription installed base resides in just three countries,” said Stefan Pongratz, RAN Analyst at Dell’Oro Group.
Total RAN revenues in Europe and Asia Pacific are expected to generate the highest CAGRs over the next five years while the North America RAN market is expected to have the most negative CAGR.
Samsung’s LTE strategies are not widely known. It has the reach as the Korean works with several telecom operators to sell their 4G handsets. But network business is a different game.
Samsung Smart LTE Networks
Samsung Electronics’ Smart LTE Networks has won the Best Mobile Infrastructure and Outstanding Overall Mobile Technology – The CTO’s choice at the Global Mobile Awards 2013 held by the GSMA at the annual Mobile World Congress.
Samsung’s Smart LTE Networks was first commercialized in 2012 and is already proving its performance in Seoul, Korea, one of the densest urban areas in the world, with national carriers Korea Telecom and SK Telecom.
In addition, the solution has also been proven in the European market with a field trial with Deutsche Telekom AG in Prague, Czech Republic. The Prague trial yielded results that demonstrated a significant increase of throughput capacity at the cell edge of up to 120 percent, and an overall average network throughput increase of 30 percent, dramatically improving the customer experience while simultaneously reducing operator Capex.
Baburajan K
editor@telecomlead.com
