Samsung Electronics awarded KDDI 5G-network contract

Samsung Electronics was selected as a supplier of 5G equipment to Japan’s KDDI, the country’s second-largest telecommunications company.

According to local and Japanese telecommunications sources, Samsung will provide $2 billion worth of 5G equipment over the next five years, mainly in Tokyo. Sweden’s Erickson and Finland’s Nokia were also selected as KDDI’s 5G equipment suppliers. They have been tasked with the delivery of equipment to more rural areas, said a local industry source.

Samsung confirmed it was selected as KDDI’s supplier but did not disclose details on the contract, including its volume.

“Apart from China’s Huawei, Samsung Electronics is the only company that can supply 5G equipment and phones,” said a local industry source. “Japan is speeding up the expansion of 5G services ahead of the Tokyo Summer Olympics. For them, Samsung would have been a reasonable choice as it already has experience in commercializing 5G.”

NTT Docomo introduced four 5G phones when it started a service trial of 5G on Sept. 20. One of them was from Samsung.

Four mobile carriers were allocated 5G frequency - NTT Docomo, KDDI, SoftBank and Rakuten Mobile.

Combined, these four plan to invest 1.6 trillion yen ($14.8 billion) in 5G services over the next five years. Adding the conversion costs for existing 4G networks, the estimated budget exceeds 3 trillion yen. The Japanese government looks to start 5G services from next spring, then expand coverage nationwide in the next two years.

Samsung has been pushing the 5G initiative to hit its goal of 20 percent market share in the global telecommunications equipment market by 2020. In August 2018, the company named 5G as one of its four growth engines.

A confrontation with China’s Huawei is inevitable if Samsung to hopes rank global No.1 for 5G equipment in Europe and elsewhere. Despite the efforts by the United States, the Chinese company has signed more than 46 contracts in more than 30 countries.

BY CHANG CHUNG-HOON [song.kyoungson@joongang.co.kr]