The telecom network equipment division of Samsung Electronics Co. Ltd. is making its first foray into Canada amid a continuing national-security review that could see Huawei Technologies Co. Ltd. banned from supplying technology for the country’s 5G wireless networks.
The South Korean conglomerate has struck a deal to supply equipment to Quebecor Media Inc.'s Videotron Ltd. for the development of its LTE Advanced and fifth-generation cellular networks in Quebec and Ottawa. Service will start to become available in the second half of 2020.
Samsung’s entry brings another player into a space currently dominated by Huawei and its European rivals, Finland’s Nokia Corp. and Sweden’s Ericsson.
A number of Canadian telecom providers have come to rely on Huawei to spur more competitive pricing for network equipment. One industry executive, to whom The Globe and Mail granted anonymity because of a non-disclosure agreement, said that prices will climb if the Shenzhen-based company is banned from Canada’s 5G networks and carriers are left with only one or two feasible options to purchase equipment from.
“Huawei has been pretty well known for pricing below the more established players,” said Edward Jones analyst Dave Heger. “Any time you have more players competing, it tends to bring better pricing," he added.
The value of the Videotron deal was not disclosed, but Stephen Wiktorski, who heads up the network-equipment division at Samsung Canada, called it a “significant investment.”
“5G networks are long-term investments," Mr. Wiktorski said in an interview. "This really is going to put Videotron on the map in terms of performance, reliability and capacity.”
Ottawa is in the midst of conducting a cybersecurity review that is expected to determine whether Huawei can keep selling its equipment to Canadian carriers.
Robert O’Brien, U.S. President Donald Trump’s national security adviser, has cautioned that if Canada doesn’t blacklist the Chinese telecom giant, the country’s participation in the Five Eyes alliance, which includes intelligence agencies in Australia, New Zealand, the United Kingdom and the United States, will be affected.
The Americans and Australians have expressed concerns that Huawei answers to China’s ruling Communist Party and could be compelled to help Beijing spy on or sabotage Western networks.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.