SAMSUNG ENTERS EUROPEAN 5G RACE TO FILL UP HUAWEI VACUUM

European mobile operators are starting to consider Samsung Electronics, long seen as a non-starter, in the race to replace China’s Huawei as the supplier of their fledgling 5G systems, although early talks suggest it will still be an uphill struggle, Isla Binnie, Supantha Mukherjee and Mathieu Rosemain reported for Reuters.

After Samsung unexpectedly landed a $6 billion deal with US giant Verizon in September, Spain’s Telefonica and France’s Orange have both held talks with the South Korean firm, company executives say.

Huawei’s hardware makes up nearly half of the European 4G network that will form the foundation for super-fast 5G, alongside that of Nokia and Ericsson.

But European operators are under pressure from the United States to shun the Chinese giant for 5G systems that could in future be supporting services ranging from telemedicine to factory automation.

Washington says there is a risk Huawei could spy for Beijing, though the firm has repeatedly denied this.

One problem for Samsung is that operators worry that its products will not be compatible with the existing 4G networks built by Huawei, and that it will cost hundreds of millions to rip these out and replace them rather than simply upgrade them.

“They need to be extremely competitive,” said Telefonica Chief Technology Officer Enrique Blanco. “The cost of swapping the 4G is an extra cost for Samsung so, even if you are inviting them, it is difficult for them to be competitive.”

A Samsung spokesman said the idea that its equipment was not compatible with existing infrastructure was a misconception, but did not provide technical details. He declined to specify which European markets it was trying to enter, but said it hoped to replicate inroads it had made in Asia and the Americas.

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