Samsung today said its sales from LTE network business decreased on quarter-on-quarter basis due to weak seasonality. It does not have any new strategy. Nokia networks business today announced that its mobile broadband business reported flat growth.
The Korean device vendor has limited 4G LTE network exposure. It is one of the suppliers to Reliance Jio Infocomm, which is looking for a pan-India LTE network.
Samsung Networks remains focused exclusively on the LTE opportunity, including expanding its customer base, adding densification contracts and providing LTE-Advanced solutions such as carrier aggregation.
“Samsung continued to post year-to-year revenue growth in telecom network infrastructure in 1Q14, although growth is slowing as revenue in South Korea and Japan declines and the Sprint Network Vision contract is post-peak,” said Michael Soper, networking & mobility analyst at Technology Business Research.
To offset these declines, Samsung is growing revenue in Europe and Latin America as it carries out LTE builds for MTS in Russia and Telefonica in Chile. TBR believes new small cell contracts, the Sprint Spark TD-LTE deployment, and modernization activity with Vodafone will lead to double-digit growth for the remainder of 2014.
In Europe, Samsung is scaling up its resources and customer base to become a more credible threat to incumbents
Samsung is investing to grow its organization, customer base, and resources in Europe to become a more credible threat to incumbent network equipment providers on the continent.
Samsung hired former NSN executive Giuseppe Donagemma to preside over its Samsung Networks Europe organization in February, presumably for his longstanding relationships with operators. Donagemma’s appointment comes just five months after Samsung hired former NSN CEO Simon Beresford-Wylie as its executive adviser.
Donagemma will oversee an already-growing business that has seen significant customer wins and successful LTE network launches in 4Q13 and 1Q14. MTS in Russia turned on commercial service of its Samsung-supplied LTE network in November 2013, while Vodafone selected Samsung as a supplier for its Project Spring network revitalization initiative in February.
The MTS launch marks an important milestone that Samsung can reference when bidding for contracts from other mobile operators. Vodafone agreement will translate to multimode base station deployments in select markets as Vodafone will most likely pursue network modernization rather than an LTE overlay strategy. Samsung has ample experience deploying multimode due to its involvement in Sprint’s Network Vision project.
Samsung’s small cell business will be bolstered by VoLTE launches and the need for increased LTE network capacity, said Michael Soper.
Samsung is capitalizing on the small cell opportunity in its top markets, which include the U.S., Japan, and South Korea. The company has publicly announced contracts with Sprint, Verizon, and KDDI, and most likely supplies LTE small cells to operators in its home market. Samsung is positioned to win additional business as the need for capacity increases and VoLTE becomes an operator priority.
Operators will need to supplement macro network coverage with small cells to ensure a seamless VoLTE user experience. TBR believes Samsung’s participation in the first commercial VoLTE launch in South Korea in 3Q12 and early small cell wins in advanced telecom markets indicate future success in these and laggard LTE markets as small cells gain traction in the next two years.
In 2014, Samsung will actively respond to rapid demand growth in China’s LTE market by leveraging its LTE technology leadership, while further strengthening its product line-up across various price points.
Additionally, as the wearable device market is expected to grow, the company will reinforce its market leadership to gradually increase the wearable device business’ contribution to entire earnings.
picture source: .fotopolis.pl
Baburajan K
editor@telecomlead.com
