Samsung Networks is leveraging new investment in LTE networks from existing customers outside of its domestic South Korean market to maintain momentum. TBR believes Samsung’s contracts with Vodafone for Project Spring, India-based Reliance Jio and Russia’s MTS fueled low single-digit year-to-year revenue growth in 3Q15. Sprint Spark is also contributing to revenue, but the contract is post-peak. Samsung has largely been unable to expand upon its LTE install base in the past year.
As recent high-volume contracts wind down by 2017, it will be difficult for Samsung Networks to replace the revenue. While Samsung is investing and winning customers in NFV and small cells, the company is unlikely to reach the scale necessary in these areas to maintain growth without new LTE wins.
Samsung’s advanced portfolio enabled it to win consideration in Verizon’s next stage of densification
Samsung's solutions and technological prowess continue to lead to customer engagements in developed markets, particularly the U.S. As part of Verizon’s small cell trials, Samsung is deploying femtocells configured for LTE-unlicensed (LTE-U). LTE-U improves cellular coverage by leveraging higher bands, such as 5 GHz, generally reserved for Wi-Fi. Verizon is trialing the femtocells in 2H15 with commercial deployment expected in 2016. TBR believes Samsung’s previous role in deploying CDMA equipment and LTE femtocells for Verizon will enable it to secure a leading position in the operator’s commercial LTE-U deployments.
Samsung’s limited exposure to the U.S. telecom market is buoyed by its involvement in Sprint's and Verizon’s small cell deployments and Sprint’s TD-LTE deployment. However, a mature LTE deployment cycle in the country will challenge Samsung to expand its revenue base and displace competitors such as Alcatel-Lucent and Ericsson.
Samsung is leveraging a mix of strategic investments and partnerships to make advancements in IoT
Samsung is moving quickly to fine-tune and execute its IoT strategy. The company views its expertise in consumer electronics and networking and a strong R&D organization as integral to engineering open and collaborative IoT solutions. Samsung’s strategy is underpinned by the 2Q14 acquisition of SmartThings which solidified its footprint in smart home technologies and opened up new opportunities in the connected car market.
In the past six months, Samsung announced a number of IoT partnerships and investments including an alliance with Telefonica to integrate Samsung’s network sensors with Telefonica’s Thinking Things Platform, an investment in SIGFOX, an IoT network supplier, and participated in a Series A funding round for Vinli, which specializes in IoT dongles.
While Samsung’s early IoT strategy largely focuses on consumer use-cases, the company is also providing solutions to domestic operators to support IoT initiatives. In early 2015, SK Telecom selected Samsung to supply its AdaptiV Core to enable SK Telecom’s NFV-based IoT network.
Technology Business Research is an independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors. For more information please visit www.tbri.com.
Edited by
Ken Briodagh
