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By Kim Yoo-chul
Samsung Electronics has acquired a U.S.-based telecom firm, providing wireless and consulting services, to better deal with the saturated smartphone market and take the lead in the race for a bigger share of fifth-generation (5G) network equipment sales.
In a statement, the tech heavyweight said it had completed the acquisition of TeleWorld Solutions (TWS). Samsung said it will utilize TWS's 5G services to better construct the next-generation wireless infrastructure.
Samsung declined to elaborate about the cost of the acquisition, which is widely regarded as a "low-key" but "clear" move for speedy and continuous progress in the promising 5G market.
"The acquisition of TWS will enable us to meet mobile carriers' growing needs to improve their fourth-generation (4G) and 5G networks, and eventually create new opportunities to enhance our service capabilities for our customers," Samsung Electronics Executive Vice President Cheun Kyung-whoon said in the statement. "Samsung will continue to provide customized and optimized services for various network deployments that accelerate U.S. 5G network expansion."
Thanks to the acquisition, Samsung will be able to offer its consulting services to TWS clients, a key point of the buyout as it will not have to invest more for new clients at a time when 5G is going beyond just mobile connectivity.
Samsung is focusing more on less volatile and sustainable business-to-business (B2B) segments, as while it is the global leader in smartphones, televisions and memory chips, it has long been a minor player in 5G networks.
The acquisition comes as the leader in the 5G network equipment sector, Huawei, is losing its luster in the United States over growing concerns, propagated by Washington, that it has close links with the Chinese government. While Huawei is denying such claims, the growing U.S. pressure is expected to offer Samsung a chance to increase its presence in the U.S. 5G market.
Samsung wouldn't comment on current U.S. import controls against the Chinese company, as Huawei is also a client buying its advanced sensor chips and displays.
As of 2018, Samsung Electronics held only a 6.6 percent share of the global telecom equipment market, compared with the Chinese firm's 31 percent. Its target for this year is 20 percent. South Korea's SK Telecom is Samsung's biggest customer for network gear while in the U.S., it has been selling 5G network equipment, including base stations and small cells, to top-tier telecom operators AT&T, Verizon and Sprint.
Given the successful nationwide commercial deployment of some pre-standard 5G networks, here, a plus factor in terms of track record, company officials said the acquisition will further boost its 5G presence.
The timing of the acquisition looks positive for Samsung's aspirations in 5G because its key memory chip business is seeing clear signs of improvement thanks to the growing need for consumer products that offer high-speed and faster data processing.
