Samsung acquires American network service company to expand 5G business in U.S.

SEOUL -- Samsung Electronics has acquired TeleWorld Solutions, an American network service company, in an effort to accelerate the expansion of 5G equipment and network infrastructure in the United States following the expulsion of China's Huawei, a major player in the global market for 5G equipment.

TeleWorld Solutions (TWS), which provides network design, testing and optimization services, will operate as a wholly-owned subsidiary of Samsung Electronics America. Samsung said in a statement on Tuesday that TWS, based in Chantilly, would continue to serve its existing customers and clients with no change in its leadership. Financial terms were not disclosed.

"The acquisition of TWS will enable us to meet mobile carriers' growing needs for improving their 4G and 5G networks, and eventually create new opportunities to enhance our service capabilities to our customers," said Samsung's networks business head Cheun Kyung-whoon was quoted as saying.

The U.S. 5G infrastructure market is estimated to reach $47.7 billion with an annual average growth rate of 67.1 percent, according to global market research firm Markets and Markets. In the U.S. market, Samsung competes with Sweden's Ericsson, CISCO, Finland's Nokia Networks and Japan's NEC.

In May 2019, U.S. President Donald Trump issued an executive order barring American companies from engaging in businesses with anyone that is considered a national security threat. China's Huawei and its affiliates were put on America's trade blacklist that prohibits listed companies or people from buying parts and products from U.S. companies without approval.

Based on its experience in South Korea, which set up 5G mobile telecom networks in 2019, Samsung has emerged as a competitive player in the global 5G equipment and infrastructure market. The tech giant has set a goal of achieving a 20 percent share of the global 5G equipment market by the end of 2020.

As of May 2019, Australia, New Zealand, Japan and Taiwan have sided with the U.S. to ban and phase out Huawei equipment within their mobile networks. Other countries are still locked in discussions on whether they should accept Huawei's 5G equipment.