Samsung to Sell Wireless Networking Unit?
Light Reading is hearing from industry sources that Samsung is considering selling its wireless networking business.
Samsung Corp. is probably best known as a maker of smartphones and tablets, but the giant conglomerate also has a Networks unit, and its customers include SK Telecom (Nasdaq: SKM), Sprint Corp. (NYSE: S), Verizon Wireless and Vodafone Group plc (NYSE: VOD). Samsung is now said to be considering strategic options for the unit, which could mean a sell-off to one of its rivals in the basestation business. (See Samsung Beats Rivals to SK Telecom NFV Deal, Sprint Taps Samsung for More LTE Small Cells, Verizon & Partners to Field Test 5G in 2016 and Vodafone Ups 'Project Spring' Capex to $11B+.)
A senior mobile industry executive, talking on condition of anonymity, confirmed that there is talk in the market that Samsung is looking to offload its wireless business and that this would not come as a surprise given the change in the competitive landscape and Samsung's financial challenges.
Samsung does not break out its network unit's revenue in its financial reports. In the second quarter of 2015, however, the firm did indicate that it was seeing a lack of investment in LTE upgrades from its customers. The unit also appears to have struggled to add new customers in 2015.
Against that background, the entire wireless networking business is consolidating, with Nokia buying Alcatel-Lucent (NYSE: ALU), and Ericsson partnering with Cisco Systems Inc. (Nasdaq: CSCO). Huawei, meanwhile, continues to grow strongly and pressure rivals on network equipment pricing. (See Huawei's H1 Sales Grow 30% to $28.3B, 'Ciscosson' Aims for Future-Proof Partnership and Eurobites: Nokia Enters 'Final Phase' of Alcatel-Lucent Acquisition.)
One of these rivals, however, is also the most likely purchaser of Samsung Networks. Companies that might be interested in buying could include Ericsson AB (Nasdaq: ERIC), Nokia Networks , Huawei Technologies Co. Ltd. or ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).
Buying Samsung Networks would give one of these players a much stronger presence in Samsung's home market, South Korea, which is among the nations with the most advanced wireless networks in the world. (See SK Telecom, Samsung Turn on Tri-Band LTE-A.)
Another future benefit is that Samsung is one of the key networking players developing next-generation 5G wireless technology. The company has a 28GHz network that it has used for indoor and outdoor testing. (See Samsung: Taste the 5G Rainbow! and Getting Massive at DoCoMo's 5G Lab.)
— Dan Jones, Mobile Editor, Light Reading