Samsung to Sell 2.5G Mobile Phones in Europe
By Kim Myong-hwan
SEOUL (Reuters) - South Korea's Samsung Electronics (05930.KS), aspiring to grab a major chunk of Europe's mobile phone market from Nokia (news - web sites) and other European giants, will begin selling 2.5G mobile phones in Europe late in May.
Samsung's European sales of 2.5-generation mobile handsets will begin with German operator T-Mobile as the first customer, a Samsung executive said on Friday.
``We are at the final stage of negotiations with T-Mobile,'' Park Sang-jin, senior vice-president in charge of Samsung's mobile communications division, told Reuters in an interview.
``As soon as the price is fixed, we will be able to provide about 50,000 GPRS phones by early June,'' Park said, referring to general packet radio services phones.
``By the end of this year, we will be able to sell our 2.5G phones to most European nations.''
GPRS sales would reach up to half of a million units this year, he said.
Ten Percent Share
In 2003, when sales of GPRS phones are expected to exceed those of GSM mobile handsets, Samsung would be able to sell up to eight million GPRS terminals, about 10 percent of Europe's total GPRS market, Park said.
GPRS phones are expected to emerge as the preferred mobile handset in the next four or five years in Europe as network operators there are delaying investments in third-generation services due to high risks and costs, analysts said.
The GPRS operates easily with existing GSM networks, while third-generation mobile services require establishment of infrastructure nearly from scratch.
The 2.5G technology has been developed as an intermediate step to 3G UMTS (universal mobile telecommunication system) services.
``Chances of Samsung emerging as Europe's number-two mobile handset provider are quite high as global players like Ericsson (news - web sites) (LMEb.ST) and Motorola (NYSE:MOT - news) are suffering from excess inventories,'' Park said.
As the global economy slows and the mobile markets in advanced nations near their saturation points, global demand for mobile phones was expected to grow only 20 percent this year, down sharply from 45 percent in 2000, he said.
Samsung could avoid the impact of slowing demand as the company focused on high-quality segments, he added.
Nokia (NOK1V.HE), the world's top-ranked mobile provider with a 30 percent market share, is likely to retain its position in Europe's 2.5G market when it launches sales of its GPRS phones later this year, he said.
Samsung Late-Comer For Gsm
It was not until 1996 that Samsung Electronics began selling second-generation GSM terminals in Europe. Samsung has become the eighth-ranked provider of GSM phones with a three percent share of the European market, scaled at 130 million units a year.
``We are a late-comer in Europe's GSM market,'' said Park. ''But we have prepared strenuously in order to take the lead in the GPRS market.''
Sales of GSM phones account for roughly 45 percent of Samsung's mobile phone sales, with the rest coming from CDMA (news - web sites) (code division multiple access) phones (45 percent) and TDMA (time division multiple access) handsets.
Park said Samsung aims to sell 28 million mobile handsets this year, up 27 percent from 22 million in 2000, with exports jumping 30 percent to 22 million units.
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