Samsung continues to believe in India story despite subdued telco capex

South Korean gearmaker Samsung hopes that India's unyielding increase in data consumption will drive its growth in the country.

Gagandeep Kaur, Contributing Editor

July 9, 2024

4 Min Read
Samsung logo on a building
(SOURCE: CHRIS WILLSON/ALAMY STOCK PHOTO)

One of the telecom gear makers to grow its customer list in the Indian 5G market is South Korea's Samsung, which is now working with Bharti Airtel and Vodafone Idea. This is in addition to its marquee customer Reliance Jio, which has, however, moved from using only Samsung in 4G to having Ericsson, Nokia and Samsung in 5G.

The company believes that, over the last few years, it has gained the capability to handle massive data, which is one reason for its success in India. "Samsung has been successfully collaborating with global tier-1 operators in high-traffic markets like Korea, Japan, the UK and the US. All of these countries require exponential data handline and high-quality services. This accomplishment has allowed us to gain technological capabilities and know-how that we believe will be key factors to our success in the Indian market," Seungil Kim, vice president and head of Southwest Asia and Korea business development, networks business at Samsung Electronics, said in an emailed statement to Light Reading.

Indians, on average, consume 24.1GB of data every month. This is largely fuelled by extensive 4G deployments by the telcos coupled with one of the lowest data and voice tariffs in the world. "Aggressive 4G deployments have completely reshaped India's mobile landscape from 2G voice to 4G multimedia services. I am very proud of Samsung's contribution to this change," Kim said.

Another factor driving Samsung's growth in India was the unofficial departure of Chinese vendors Huawei and ZTE from the country. Geopolitical factors and growing security concerns about the Chinese vendors meant they were not included in 5G trials and, later, were unable to get "trusted source" certification, required for telcos to do business with vendors. In addition, Indian operators were keen to work with a diverse set of vendors, and Samsung, which until then had an exclusive agreement with Reliance Jio for 4G Radio Access Network (RAN), emerged as a perfect option.

What does subdued capex by Indian telcos mean for Samsung?   

Telecom gear vendors are facing a somewhat tough year in India with the major telcos, Bharti Airtel and Reliance Jio, focusing on reducing capex. After investing heavily in acquiring 5G spectrum and deploying the network, Indian telcos are not planning major investments this year.

"Between the mix of 4G LTE and 5G solutions and advanced data-centric feature strategies, and developing new customers as well as expanding our existing customer portfolio, our business remains healthy despite the recent RAN market contraction. We believe that our customers will be addressing their RAN inventories, adding capacity and expanding 5G coverage soon," said Kim.

Like other vendors, Samsung would also be looking for business from India's third-largest service provider, Vodafone Idea. Although the telco has yet to name its 5G vendors, it is planning to launch 5G services later this year.

5G in India has witnessed muted traction with the two telcos (Airtel and Jio) reporting just 172 million 5G subscribers. This means that 5G network expansion plans of the service providers are likely to be delayed.

Even so, the company is gung-ho about the potential of fixed wireless access (FWA) in India. "We believe that 5G FWA will be a beneficial use case and growing area for Indian operators and their customers over the next couple of years. It will serve as an alternative to fiber broadband services in terms of coverage (such as in large territories and remote areas), capacity (meeting the exponential growth of mobile data), and fulfilling social responsibilities to bridge the digital divide as part of ESG efforts," said Kim.

Lure of India 

While revenues in India have fallen for other vendors like Ericsson, Samsung continues to believe in the potential of the market. "As the world's second-largest telecom market, India represents a significant growth opportunity, and we continue to search for such opportunities to expand our network market presence," said Kim. 

It believes that India's mobile data consumption will continue to drive its growth. "We expect that India will experience a further increase in mobile data consumption as the country has a large population of younger people. Therefore, operators will continuously need to manage their network resources with more flexibility and scalability," adds Kim.

Much like in other regions, vendors are grappling with a reduction in the RAN market as operator spending drops. "This shift has meant securing new customers and collaborating with existing customers on new feature needs – both are critical to drive growth. Through collaboration with India's operators, we hope to help them find new ways to adopt advanced features and solutions to address the increase in capacity and deliver enhanced 4G/5G mobile experiences for end-users," said Kim.

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About the Author(s)

Gagandeep Kaur

Contributing Editor

With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.

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