Bloomberg News

Samsung Wins U.S. 4G Deals as It Seeks Expansion in Network Gear

February 28, 2012

Feb. 21 (Bloomberg) -- Samsung Electronics Co., the world’s second-largest mobile-phone maker, won two contracts to sell gear for fourth-generation wireless service in the U.S. as it seeks to gain share in the market for network equipment.

The company gained orders from “top” and “mid”-tier U.S. mobile-phone operators, I.P. Hong, head of the marketing group at Samsung’s network-equipment business, said today in an interview in Seoul, declining to provide further details. An official announcement will be made around May, he said.

The deals would boost Samsung’s presence as an equipment provider in one of the world’s most advanced 4G markets. The maker of Galaxy smartphones is vying for a larger share of the network-gear industry led by Ericsson AB, Huawei Technologies Co. and Nokia Siemens Networks.

Samsung is counting on sales of products using the so- called long-term evolution, or LTE, technology, as carriers around the world race to build 4G networks using the standard to offer faster Web browsing and downloads on phones. The new U.S. orders are also for LTE service, Hong said.

Samsung, which aims to be one of top three makers of telecommunications gear such as routers and switches by 2015, was set to overtake Ericsson as the largest vendor of LTE base stations in Asia last year, researcher NPD In-Stat said in November. The company seeks to be among the world’s three largest LTE equipment vendors globally this year, Hong said.

India Contract

Samsung is in competition to win an LTE contract from a leading carrier in India and expects the negotiations to conclude in the first half, he said. The company is also in discussions with Clearwire Corp. in the U.S. for a possible contract, he said.

Suwon, South Korea-based Samsung said in June it won an order from KDDI Corp. in Japan to supply LTE equipment. The company was among three vendors picked by Sprint Nextel Corp. in 2010 for a project worth as much as $5 billion to upgrade networks.

Before last year, Samsung’s focus had been on developing products using WiMax technology, an alternative 4G standard supported by Intel Corp. Growth of the WiMax market is slowing as operators’ switch to LTE. Samsung will continue supporting existing WiMax customers, Hong said.

The market for LTE equipment may grow 45 percent annually over the next five years, according to Dell’Oro Group. The global wireless equipment market grew 15 percent in the third quarter, with LTE gear sales accounting for almost half the increase, according to the Redwood City, California-based researcher.

--Editors: Robert Fenner, Terje Langeland

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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