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Samsung's TeleWorld Acquisition Signals Broader US Ambitions

Samsung this week announced the purchase of TeleWorld Solutions (TWS), which is based in Chantilly, Virginia, and provides many of the logistical and physical services, such as site acquisition and RF testing, involved in-building wireless networks.

The move, according to analysts, is geared toward re-igniting Samsung's sales of networking equipment in the US market, potentially through deals with some of the industry's smaller players.

"I think it [the acquisition] is needed as Samsung expands operations in North America and starts targeting smaller operators like the one they recently announced in Canada," noted Daryl Schoolar, an analyst with research and consulting firm Ovum (which is owned by Light Reading's parent company). Samsung, just a few weeks ago, announced it would supply 4G and 5G equipment to Canada's Videotron. "Those operators do not have the in-house network planning and building resources Tier 1 operators possess. This puts more of the work back on the vendor to support those network builds."

Analyst Stefan Pongratz, from research and consulting firm Dell'Oro Group, noted that Samsung's market share in North American mobile infrastructure grew roughly five percentage points between 2016 and 2018, with Samsung accounting for up to 10% of the market by the end of 2018. However, he noted the firm's growth had shown some signs of slowing in recent months.

An up and comer in 5G
Samsung has enjoyed some significant wins in the US market in recent years, having inked 5G equipment supply agreements with Verizon, AT&T and Sprint. That's noteworthy considering Ericsson and Nokia have long enjoyed a virtual stranglehold on the US market given the US government's tacit ban on operator deals with China's Huawei (the world's biggest supplier of wireless gear).

Samsung's successes in the US market are partly due to the company's willingness to embrace operator initiatives like open RAN technology, explained Samsung's Derek Johnston in comments at a recent trade show. For example, the company was a part of AT&T's recent test of eCPRI technology, which represents an important step along the open RAN road. Open RAN and eCPRI promise to allow operators to mix and match different products from different vendors, rather than having to purchase a full stack of networking equipment from one vendor like Ericsson.

Johnston said Samsung views open RAN as an opening door for newer vendors.

Ovum's Schoolar also pointed out that Samsung has been able to leverage its massive R&D budget -- which spans everything from smartphones to home appliances -- as well as its sprawling chipset business to expand sales of its wireless networking equipment worldwide, including to some of the top carriers in India, South Korea and elsewhere. Schoolar added that Samsung's global revenues in wireless networking grew more in 2018 than they did at other big suppliers like Huawei and Ericsson.

A TeleWorld move
So what is Samsung getting with TeleWorld? The company declined to provide many details about its purchase of the company, including how much it paid for TeleWorld.

Samsung did say though that it is acquiring "hundreds of professionals with various competencies" via the action, including CEO Shervin Gerami. Gerami will report to the general manager of Samsung's US networks business, Mark Louison. While Samsung did not provide an exact headcount for TeleWorld, LinkedIn counts 167 employees at the company.

"The combination of Samsung and TeleWorld Solutions was done to improve our ability to address the growing demand in North America associated with on-going 4G LTE upgrades, initiatives like open RAN and 5G network deployments that are driving the need for services," Samsung wrote in response to questions from Light Reading. "While Samsung has a services business, TWS provides us with additional highly-skilled network professionals across network design, installation, testing and optimization. The TWS team will help us to address the demand from not only our expanding business with existing customers but also our new business customers in North America and additional joint opportunities."

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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