Samsung, signaling its intent to become more aggressive in the crowded North American CDMA market, is announcing at the Cellular Telecommunications & Internet Association's Wireless 2005 this week three new base stations for suburban, highway and in-building environments.

The move also marks a strategic shift for the Korean vendor. Instead of challenging incumbent vendors on their own turf for macrocell deployments in major markets, Samsung is pinpointing gaps in carrier networks where no base stations currently exist.

“The cities here are pretty well-covered,” said Jim Parker, Samsung portfolio manager for wireless systems. “The highways, the buildings and many rural and suburban areas, however, are not. We're now offering a more complete solution. We have a wider range of products to target those areas.”

Samsung is releasing a small in-building picocell, a more robust microcell for both in-building and rural deployments, and a low power suburban base station — all of which are upgradeable to EV-DO. The three have all been deployed in Asian markets and reconfigured for North America, where, until now, Samsung offered only its standard V.5 BTS urban base station.

With or without a niche strategy, Samsung may find it hard to penetrate what many consider the most fiercely competitive CDMA market in the world. Lucent Technologies and Nortel Networks control an estimated 85% to 90% of the infrastructure contracts in the region, and what is left is fought over by Motorola and a handful of other vendors.

Samsung has a commanding position in CDMA handset sales, but its only infrastructure foothold is in Sprint's Puerto Rican network. Parker said Samsung plans to use that deployment as a launch point in the U.S. market, offering other benefits the incumbent vendors can't provide. Parker pointed to Samsung's innovation in 3G, having deployed both the first 1X and the first EV-DO networks for SK Telecom. Samsung also is the only major carrier that manufacturers its own CDMA baseband silicon through a licensing deal with Qualcomm, meaning it can push products to market faster than its competitors, Parker said.

“We're already in with Sprint,” Parker said. “The difficult part is getting into a market. Once you're in, you can leverage that relationship into more business.”

Samsung's competitors are skeptical.

“Nortel has a large install base [in North America],” a Nortel spokeswoman said. “A new vendor coming into the market today would have to play catch-up.”

In an e-mail interview, Motorola senior vice president and North America general manager Fred Wright said the only markets left open are sparsely populated regions in the Western U.S. and isolated rural markets. But even a new vendor would have trouble winning those contracts because consolidating carriers may ditch vendors, and would be reluctant to pick a new supplier. Also, several other vendors are waiting in line.

“We're in a position to take advantage and move if our competition falters,” said Angel Ruiz, CEO of Ericsson North America (see story, page 26).

Yankee Group senior analyst Phil Marshall said Samsung may be using its new product launch to target Latin America or to establish itself for backhaul or WiMAX deals. “Even with these base station alternatives, Samsung is going head-to-head with the incumbent vendors,” Marshall said. “It's almost impossible to come into market at this stage and usurp an incumbent.”

The North American battlefield for CDMA

Lucent Technologies — Has an estimated 60% CDMA market share in North America.

Nortel Networks — Holds about 25% of North American CDMA contracts.

Motorola — Network division is far eclipsed by handset division, but won part of Sprint's EV-DO upgrade.

Ericsson — Has won infrastructure deals with smaller carriers such as Leap Wireless.

Source: Analysts and Telephony staff