Samsung Aims to Be Among Top 3 Wireless Network Gear Makers

Samsung Aims to Be Among Top 3 Phone Network Gear Maker
Samsung gained 0.1 percent to 933,000 won as of 1:16 p.m. in Seoul trading, the highest level since March 4. Photographer: Kimimasa Mayama/Bloomberg

Samsung Electronics Co., the world’s second-largest mobile-phone maker, aims to become one of the three biggest producers of network gear in four years by tapping demand for new equipment that can handle data faster.

“In terms of revenue and the number of contracts, we’re trying to break into the top three,” I.P. Hong, head of the marketing group at Samsung’s Telecom Systems Business, said in an interview in Seoul. “We’re positively forecasting we’ll be able to achieve that around 2015.”

Samsung, which says it ranks in the top 10, is vying for a larger share of a $34 billion phone-network equipment market dominated by Ericsson AB, Huawei Technologies Co. and Nokia Siemens Networks. The companies compete for contracts to provide routers and switches for fourth-generation networks as operators invest to meet a surge in data traffic spurred by the popularity of Web-connected mobile devices.

From this year, Suwon, South Korea-based Samsung will accelerate sales of products based on the 4G wireless technology known as long-term evolution, or LTE, Hong said yesterday.

The market for LTE equipment will probably surge fourfold to $12 billion by 2014 from $3 billion this year, Hong said. Ying Weimin, president of Huawei’s LTE business, forecast in November that global contracts for such gear may climb to $10 billion in the same period.

Samsung rose 0.9 percent to 940,000 won, the highest level since March 4, at the 3 p.m. close of trading in Seoul. The stock has declined 1 percent in 2011 after advancing the past two years.

Market Growth

The global wireless equipment market will expand about 5 percent this year, Dell’Oro Group, a researcher based in Redwood City, California, said in November. The industry was probably worth about $34 billion in 2010, according to Stefan Pongratz, a Dell’Oro analyst.

Samsung aims to boost its network equipment sales by 30 percent to 40 percent annually, Hong said, declining to say how much revenue was generated last year.

The company is working with 13 phone operators in eight countries including the U.S. to build LTE networks. Samsung is trying to win “a few more contracts” in the U.S., which will remain the biggest market at the early stage of the transition to 4G, and is also seeking opportunities in China, Europe, India and Southeast Asia, Hong said.

While a mass deployment of LTE networks won’t take place until 2014 to 2015, Samsung has begun to roll out smartphones supporting the technology and plans to introduce a tablet computer capable of running on LTE in the second half, he said.

Samsung’s focus so far has been on developing products using WiMax technology, an alternative 4G standard to LTE, Hong said. Growth of the WiMax market, of which Samsung has about a one-third share, probably has peaked as operators switch to LTE and next-generation WiMax, he said. Samsung will continue to adopt both technologies, he said.

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