Wireless Connectivity

Samsung Expects to Increase Network-Equipment Revenue on WiMax

June 24 (Bloomberg) -- Samsung Electronics Co., the world’s second-largest mobile-phone maker, said it expects to increase network-equipment sales as more operators begin deploying the mobile WiMax wireless high-speed Internet service.

“WiMax is a proven technology and there is a lot of interest globally,” Executive Vice President Kim Woon Sub, who heads Samsung’s network business, said in an interview yesterday, without specifying how much revenue will increase. The Suwon, South Korea-based company has a share of about 35 percent of the mobile WiMax-equipment market, Kim said.

Global sales of equipment and devices for WiMax, which can transmit data five times faster than third-generation technology, will rise almost five-fold to $16.1 billion this year from 2008, according to ABI Research. Clearwire Corp., the U.S. provider of mobile WiMax service, plans to spend $1.5 billion to $1.9 billion in 2009 on expanding its network to reach as many as 120 million people across the country by the end of 2010.

Samsung currently supplies mobile WiMax equipment to 12 operators in 11 countries, including Clearwire, UQ Communications Inc. in Japan, YTL E-Solutions Bhd. in Malaysia and Etihad Etisalat Co. in Saudi Arabia. The Korean company also provides trial services for 12 operators in nine nations.

“It’s not just the wireless operators that are showing interest,” Kim said. “It includes broadcasters, cable- television operators and data-service providers.”

Brazil, Russia and India are among countries that should show “healthy growth” in the WiMax technology, ABI Research said this month.

No Acquisitions

Cisco Systems Inc., the world’s largest maker of networking equipment, last month won an order to expand Clearwire’s mobile WiMax network. Alvarion Ltd., an Israeli maker of broadband wireless equipment, yesterday won a contract to deploy mobile WiMax in Italy for ARIA.

Samsung plans to increase its network business on its own and is not considering an acquisition, according to Kim. LG- Nortel Co., which is being sold by Nortel Networks Corp., the Canadian company that filed for bankruptcy, has a different “portfolio” to Samsung, Kim said.

Verizon Wireless, the biggest U.S. mobile-phone company, aims to begin offering a high-speed network in all U.S. regions by 2015 using a different type of technology called Long-Term Evolution, which is scheduled to reach 30 markets by next year.

A “meaningful” market for LTE technology will probably be realized in 2014 or 2015, while mobile WiMax already has an “ecosystem” of chipmakers, equipment makers and device manufacturers, Kim said.

“Mobile WiMax will outpace LTE over the next few years due to its head start on deployments,” researcher In-Stat said in February. “Mobile WiMax already has commercial deployments, while LTE won’t be commercially available until late 2009.”

Kevin Cho

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