Samsung Electronics won a contract to supply 5G mobile network equipment to KDDI, Japan’s second-largest telecommunications company, paving the way for its entry into the global market.
In a press release on Monday, Samsung said it “will provide KDDI with its latest 5G network solutions, including various radio base stations… as well as virtualized RAN.”
It did not reveal the details of the contract, but local media reports said the 5G equipment supplied by Samsung is expected to amount to US$2 billion over the next five years.
Some observers believe KDDI’s decision to choose Samsung as its partner could have been influenced by Washington’s blacklisting of Chinese tech giant Huawei. However, Samsung said the two companies have been collaborating for years to provide 5G service in Japan.
“KDDI and Samsung have successfully proved that 5G can be implemented in dense metropolitan cities since 2015 using Samsung’s end-to-end 5G solutions,” said Samsung. “In preparation for the arrival of 5G, the two companies have carried out several successful trials on real-world use cases and achieved world-first 5G milestones.”
KDDI also selected Nokia and Ericson as 5G equipment providers but excluded Huawei.
Other Japanese carriers have also excluded Huawei. SoftBank chose Nokia and Ericsson as its 5G equipment provider while NTT Docomo launched 5G services on a trial basis with Nokia, according to a report by Japan Times.
Samsung and Huawei are the only firms that provide end-to-end 5G solutions, including chipset, base stations, virtualized solution, and smartphones. However, Samsung lags behind Huawei and 5G gear maker Nokia.
Samsung currently supplies 5G equipment to Verizon of the US and the world’s first 5G commercial provider, SK Telecom, and KT of Korea. Huawei has won 50 commercial 5G contracts with countries including Switzerland, the United Kingdom, Finland and South Korea, according to a media report quoting Ryan Ding, the president of Huawei’s carriers business group.
Nokia is catching up with Huawei.
Nokia said in a June press release that it had won 42 commercial 5G deals with operators around the world, 22 of them with major customers such as T-Mobile, Telia Company and Softbank. It said, “Including these agreements, Nokia’s 5G deals, trials, and demos total over 100 5G customer engagements to date.”
It added, “Since the announcement of the 30th commercial 5G contract at the end of March, the company has seen an average of one major contract win each week.”
Washington has pushed allies not to use Huawei’s gear, accusing the Chinese tech giant of allegedly using its device for spying.
Amid this business environment, expectations are rising that the latest supply contract with KDDI could open up opportunities for Samsung to expand its global 5G business.
An industry insider told Asia Times, “Samsung is a latecomer in this industry, but it is likely to win more contracts to provide 5G gears with more operators across the globe as Samsung quickly catches up with forerunners in technology and experience for setting up 5G equipment.”