- Samsung didn’t always target Tier 2 and 3 operators, but that’s changing
- Many of these operators remain loyal to their tried-and-true vendors, so breaking into the space isn’t easy
- FCC filings show Viaero is using Samsung and Nokia gear as part of its Rip & Replace program
CCA ANNUAL CONVENTION, NEW ORLEANS — For many years, Ericsson and Nokia were the go-to vendors for Tier 2 and 3 U.S. carriers looking to replace Huawei or ZTE gear with new hardware that meets U.S. security standards.
But they’re not the only ones vying for a piece of the “Rip & Replace” business. After years of standing on the sidelines, Samsung is starting to make inroads in a market that’s notoriously hard to crack.
For a long time, Samsung didn’t even try, according to Alok Shah, VP of Networks Strategy and Marketing at Samsung Electronics America.
“For a number of years, we really didn't pursue the Tier 2, Tier 3 space very strongly because we didn't feel like we had a strong enough base of operations here in the U.S.,” he told Fierce here on the sidelines of the Competitive Carriers Association (CCA) annual convention.
“It is a hard space to break into,” he acknowledged. “These operators do have longstanding relationships with vendors, but they're not always happy with their vendor either, right? We do feel like we bring something unique to the table as a challenger.”
Samsung’s U.S. wireless wins
In 2020, Samsung signed a major network deal with Verizon worth $6.65 billion, providing the Korean vendor with a giant dose of credibility in the U.S. market. Samsung went on to supply a huge chunk of Verizon’s virtual RAN network, setting the stage for future wins.
Indeed, Samsung in 2022 was named a key supplier to Dish Wireless for its 5G open RAN and vRAN business. While that didn’t turn out the way they had hoped – Dish Wireless filed for bankruptcy earlier this year – the network for Boost Mobile gave Samsung another high-profile proving ground for its hardware and software.
Beyond those customers, Shah declined to talk about specific customers in the Tier 2 and 3 space because he wasn’t authorized to talk about them in public.
But a quick search of the Federal Communications Commission (FCC) database shows Samsung is a vendor for Viaero, a small Fort Morgan, Colorado-based operator. Viaero provides mobile voice and broadband services in Colorado, Nebraska, Kansas, South Dakota and Wyoming and recently requested an extension to replace Huawei equipment with Samsung and Nokia.
The U.S. government’s Rip & Replace program has a long history. Work pretty much came to a halt when operators discovered they didn’t have the funds to swap out old Chinese gear with new equipment. Funds finally came when Congress authorized proceeds from the AWS-3 auction to make up for the shortfall, but that caused work stoppages that were hard to recover from.
“The challenge has been really one around supply chain and labor because when the program stopped, all of those kind of resources went elsewhere,” Shah said. “It has been a real challenge to get things started up again – to get the tower crews and the ground crews and the equipment that’s required to satisfy a program like this.”
It’s sometimes easier when the operator owns its towers and they're required to get fewer permits. But a lot of Tier 2 and 3 operators have third-party landlords they have to work with, and that can make everything take longer.
Samsung hopes to win more regional operator business going forward, and it’s working with a channel partner called t3 Broadband. The team at t3 is comprised of some ex-Ericsson folks who are helping Samsung make more inroads in the Tier 2 and 3 market, Shah said.
“I think operators feel like if they choose to work with Samsung, we're going to be around for the long term,” he said.
R&R: More time please
Viaero certainly isn’t alone in asking for more time to complete the process of ripping out Chinese gear and replacing it. Companies like Copper Valley Wireless, Country Wireless, NfinityLink Communications and Velocity Communications are a few of the carriers that were recently granted FCC extensions.
As much as it seems as though Congress addressed the funding shortfall for the Rip & Replace program, there are still a lot of carriers that are trying to finish the job, said CCA President and CEO Tim Donovan.
A lot of that is tied to the time it takes to get the aforementioned permits required to get the work done, he said. For some carriers, it’s a time-sensitive issue because the sites that need upgrades are located in areas of the country that will be covered with snow in the not-too-distant future.
If the permits aren’t secured and the work done within a certain timeframe, their next window is next spring and summer, further extending the timeline for Rip & Replace.
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