Samsung's 4G Breakthrough

10:40 AM -- While Samsung Corp. was dealt some bad news on Friday with regards to its patent battle with Apple Inc. (Nasdaq: AAPL), the South Korean company also had some good news in Europe. (See Jury: Apple Guilty, But Samsung Much Guiltier, Apple vs. Samsung: Who Is the Biggest Loser?, Apple Patent Win Puts Carriers in Driver’s Seat and OS Watch: Apple, Samsung Both Guilty in Korea.)

Samsung won its first contract in Europe to supply Long Term Evolution (LTE) base stations and core network. The customer is the U.K.'s smallest mobile operator Three UK , which is part of 3 Group owned by Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY).

In Europe, Hutchison's 3G operations had a total of 22.2 million customers at the end of June this year across Austria, Denmark, Ireland, Italy, Sweden and the U.K.

Such news is understandably overshadowed by developments in the smartphone patent court cases in the U.S. as well as South Korea, but I think that this contract is a milestone for Samsung. The company has been rattling its saber about breaking into the European LTE infrastructure market for more than a year. And that means, at the very least, I can cross off my list of stories to chase the one that goes along the lines, "So Where's That Samsung Euro LTE Deal Anyway?" (See Samsung Puts Ericsson & NSN on Notice, Samsung's Grand Plans for Euro LTE and Samsung Expands Euro Activities .)

Samsung will supply the LTE radio access network equipment as well as core network gear to 3 for a trial this year in the U.K. with plans for commercial network launch in 2013, according to the press statement.

The vendor already supplies LTE network equipment to Sprint Corp. (NYSE: S) and MetroPCS Inc. (NYSE: PCS) in the U.S.; KDDI Corp. in Japan; SK Telecom (Nasdaq: SKM), KT Corp. and LG Telecom (U+) in South Korea; as well as Etihad Etisalat Co. (Mobily) in Saudi Arabia. (See SK Telecom Deploys Samsung LTE Network , LG U+ Launches Samsung LTE, KDDI Selects Samsung for Japanese LTE Build.)

Granted, 3 UK is no Vodafone Group plc (NYSE: VOD) or Deutsche Telekom AG (NYSE: DT) in terms of the weight of this contract, but it's certainly a start. The new U.K. deal does leave Ericsson AB (Nasdaq: ERIC), 3's existing 3G equipment supplier in the U.K., licking its wounds and perhaps a bit worried, along with Nokia Networks , Huawei Technologies Co. Ltd. , ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) and Alcatel-Lucent (NYSE: ALU), who all now face a new challenger in Europe.

— Michelle Donegan, European Editor, Light Reading Mobile

186k 12/5/2012 | 5:22:38 PM
re: Samsung's 4G Breakthrough

interesting announcement. I wonder whether 3 will actually build much access network with Samsung. It might be that they are going to buld in dense urban areas only or alternatively the deal with Samsung could be part of a pre-deal dance with Everything Everywhere prior to extending their existing JV from 3G to 4G


I would be surprised if Three are actually going to build a full 4g network as their economics would always be inferior to EE and the likely future shared network of o2 & vodafone


outbackwifi 12/5/2012 | 5:22:32 PM
re: Samsung's 4G Breakthrough

I read this article on LR India dated 25 July (http://www.lightreading.in/doc... saying "Samsung gets the coveted RIL's LTE deal".

How come theres no mention of this in the "other wins for samsung" section of your article?

pdonegan67 12/5/2012 | 5:22:29 PM
re: Samsung's 4G Breakthrough

If anyone doubted Samsung's commitment to growing its LTE infrastructure business world-wide, this should put paid to those doubts. "3" takes no prisoners on infrastructure pricing and for a break-in deal of this kind, Samsung's finance guys will likely have had to swallow pretty hard at the terms. Vendors that are open to pulling out of a product line within 2 years rarely, if ever, make strategic account investments of this kind.

So where does Samsung go from here? How do they go to the next level ? Take on the big incumbents elsewhere just as they have in "3"? Region by region? Country by country? Account by account? Trench by trench? Bare knuckle fight by bare knuckle fight? Sure they can pull off another "3", maybe a handful more here and there on their own but I can't see them making really significant headway against Ericsson and Huawei with that approach.

As I suggested in a recent Heavy Reading column, the obvious strategy that takes Samsung to the next level is acquiring NSN. I don't want to labor the case for that all over again, or the barriers to it, or indeed the merits of other credible candidate bidders. Except to say that this major new win probably makes a successful bid for NSN more rather than less likely.

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