Summary Bullets:
- Samsung has traditionally found itself outside of the sphere of influence with European operators, but a combination of emerging vRAN and O-RAN technologies and geopolitics is creating a new opportunity.
- The company’s O-RAN deal with Vodafone UK, announced in June, is small in size but could represent the beginning of a long tail of opportunity.
Vodafone UK announced in June it will deploy new radio technology from Samsung, including virtualized radio access network (vRAN) solutions as well as open RAN (O-RAN) compliant radios. For both technological and competitive reasons, the new deal – while relatively small in size – could be large in its impact.
From a technological perspective, vRAN and O-RAN bring the potential to make network operations much more efficient and dramatically reduce the capital investment required by operators (radios typically represent the largest portion of network spending for mobile operators). And – as is the case with the Vodafone UK deal – vRAN and especially O-RAN represent an opportunity for operators to expand their list of suppliers.
Enter Samsung, which – according to GlobalData – has managed to carve out a differentiated position in its work to virtualize and disaggregate base station architectures. This contrasts with competitors such as Huawei and Ericsson that have been less enthusiastic about the move to a completely open environment. That’s in part because of the immaturity of vRAN and O-RAN, but also due to the threat that a more open environment could create to their market leadership positions.
Meanwhile, on the regulatory side, many operators have been forced to exclude Huawei from their deployment plans either due to outright bans or in response to political pressure. This in turn has forced these operators – who have no interest in a duopoly dominated by Ericsson and Nokia – to seek other options.
As a result, the win potentially marks a new chapter for Samsung, and at just the right time. Samsung has established strong network positions in its domestic South Korean market and in the U.S., including a $6.6 billion deal with Verizon announced last October, but the company has until now been largely absent from the European market.
However, if is early O-RAN activity is successful, that could change dramatically. The initial Vodafone UK deal is quite small (the operator plans to deploy just 2,500 rural sites in England and Wales), but other operators are likely to be watching closely.
In particular, many other major European operator groups — including T-Mobile, Orange, Telefónica, and Vodafone – are on the record as enthusiastic O-RAN supporters and are at various phases of trials and early deployments. As a result, Samsung hopes the UK could be the first of many European deals coming over the next few years.