Samsung Bets Big on Network Gear as Huawei Battles Security Fears

Samsung Bets Big on Network Gear as Huawei Battles Security Fears

Samsung Bets Big on Network Gear as Huawei Battles Security Fears

Comments Off on Samsung Bets Big on Network Gear as Huawei Battles Security Fears
Samsung Bets Big on Network Gear as Huawei Battles Security Fears

Samsung Electronics is pouring resources into its telecom network equipment business, aiming to capitalise on the security fears hobbling China’s Huawei, according to company officials and other industry executives.

Those efforts include moving high-performing managers and numerous employees to the network division from its handset unit, two Samsung sources said.

Potential customers are taking notice of Samsung’s efforts to reinvent itself as a top-tier supplier for 5G wireless networks and bridge a big gap with market leader Huawei and industry heavyweights Ericsson, and Nokia.

French carrier Orange’s chief technology officer, Mari-Noëlle Jégo-Laveissière, visited Japan last year and was impressed with the pace of 5G preparations using alternative equipment makers including Samsung, a company representative told Reuters.

Orange, which operates in 27 markets and counts Huawei as its top equipment supplier, will run its first French 5G tests with Samsung this year.

“Samsung is doing a big push in Europe at the moment,” one industry source said, declining to be identified.

Underscoring the growing importance of the business, South Korean Prime Minister Lee Nak-yeon visited Samsung’s network division in January. In a closed-door meeting during that visit, Samsung heir Jay Y. Lee asked for government help with recruiting high-level engineers.

Huawei is battling allegations by the United States and some other Western countries that its equipment could enable Chinese spying and should not be used in 5G networks, which will offer higher speeds and a host of new services.

Australia and New Zealand have joined the United States in effectively barring Huawei from 5G, and many other countries, especially in Europe, are considering a ban. Huawei denies that its gear presents any security risk.

Its woes have presented Samsung with a rare opportunity. Telecom firms would ordinarily stick with their 4G providers for 5G upgrades as they can use existing gear to minimise costs, but many firms may now be under political pressure to switch.

“We’re bolstering our network business to seize market opportunities arising at a time when Huawei is the subject of warnings about security,” said one of the Samsung sources.

The sources, who did not disclose specific figures for the employee moves, declined to be identified as they were not authorised to speak on the matter.

Keen to seek new growth, particularly as sales of its mainstay chips and smartphones have begun to drop, Samsung plans to invest $22 billion in 5G mobile technology and other fields over three years. It declined to break down how much will go to 5G and the other areas – artificial intelligence, biopharma and automotive electronic parts.

“Samsung is focused on building trust with our partners and leading the global 5G markets, regardless of other companies,” it said in an emailed statement to Reuters.

Asked about Samsung’s big push into network equipment, Huawei said in a statement that it welcomed competition in the market.

Anindita Ghosh

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