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SAMSUNG

Samsung India Electronics Limited’s network equipment business in 2021-22 is estimated at ₹4359.8 crore, having contributed 5.3 percent to its overall revenue. Profit before tax of the Networks segment decreased from ₹484.3 crore in FY21 to ₹462.4 crore in FY21, albeit its share increased from 9.38 percent to 10.21 percent in the overall profit.

With Chinese companies, Huawei and ZTE excluded from participating in the 5G rollout in India, it is perhaps Samsung India that stands to benefit the most. The timing seems just right for Samsung, as its exclusive partnership of 2016 for Reliance Jio’s pan-India 4G network has ended in 2020, following the telco’s decision to build everything related to 5G on its own, and no commitment made for future network-related requirements. Samsung completed the last of its deliveries to RJio in 2021-22.

Samsung has since then been in dialogue to secure new network business from the Indian telcos, Bharti Airtel, Vodafone Idea, and BSNL.

In August 2022, Samsung Electronics was awarded an order estimated at ₹19,750 crore from Bharti Airtel. The vendor is providing its 5G radio units, including Massive MIMO radios, in addition to deployment, optimization, and maintenance services. This marked Samsung’s first 5G network agreement in India, as Airtel has a long-standing partnership with Ericsson and Nokia.

The situation seems to be somewhat changing with RJio and Samsung may continue to be a major part of its telecom story. For, at RJio’s AGM 2022, Mukesh Ambani, CMD, Reliance Industries Ltd. announced that RJio had partnered with Samsung, among other networking brands, for its 5G network rollout. While it is unclear which Samsung products RJio is using in its 5G network, it could be radios, core, or 5G vRAN, RJio has undertaken trials with Samsung in Mumbai.

Samsung had earlier also announced that it will not apply for India’s production-linked incentive (PLI) scheme for telecom equipment. The greenfield facility would have involved around ₹800–1000 crore investment, which it considered extremely high in India, at that juncture.

Samsung had explained to the Department of Telecommunications that its plants in Vietnam, South Korea, and China had sufficient capacity, and that it had been importing the equipment duty-free through the free trade agreement (FTA) route from South Korea and Vietnam.

Later, in August 2022, the company applied for the ₹12,195-crore scheme to benefit by locally manufacturing 4G and 5G gear and other equipment. By then the scheme had also been amended in April 2022; to facilitate design-led manufacturing the government had set aside ₹4000 crore. Samsung is now one of the key players to be leveraging the PLI scheme for mobile phones. It was the only company to have achieved investment and output targets under the scheme in the last fiscal year. In July 2021, it had relocated its mobile and IT display production unit from China to its factory in Uttar Pradesh and invested ₹4825 crore.

Samsung Electronics Co. Ltd. has pioneered the successful delivery of 5G end-to-end solutions, including chipsets, radios, and core. Through ongoing research and development, Samsung drives the industry to advance 5G networks with its market-leading product portfolio from RAN and Core to private network solutions and AI-powered automation tools. The company is currently providing network solutions to mobile operators.

Samsung Electronics Co. Ltd.

Profit and loss statement (Korean won mn)

Particulars Jan-Sep 2022 Jan-Sep 2021
Revenue  231,766,785  203,039,275
Cost of sales  141,414,042  121,464,787
Gross profit  90,352,743  81,574,488
Selling and administrative expenses  51,282,244  43,807,344
Operating profit  39,070,499  37,767,144
Net profit after tax (PAT)  31,812,631  29,069,502
EPS (diluted)  4597  4211

Samsung’s Networks Business in Q3’22 saw an improvement in earnings, led by overseas businesses, including securing a deal with Comcast in Q3’22 and with DISH in Q2’22.

Samsung India Electronics Private Limited

Standalone profit and loss statement ( ₹ crore)

Particulars FY22 FY21
Revenue from operations  82,451.60  75,886.30
Other Income  2873.20  1615.10
Total revenue  85,324.80  77,501.40
Total expenses  79,758.30  71,898.70
Net profit after tax (PAT)  3844.90  4040.90
EPS (diluted) [INR/shares]  177.36  186.40

In fact, the company has seen an increase in revenue every quarter. It plans to sustain revenue growth by expanding both in domestic and exploring new business opportunities in overseas markets, including in North America, Europe, and Japan. At the same time, the company will further improve its in-house 5G chip and solidify foundations for growth and reinforcing technology leadership in vRAN solutions.

Samsung India Electronics Private Limited

Revenue from external customers ( ₹ crore)

Segment FY22
Audio Visual (AV) 6250.3
Home Appliances (HA) 9981.2
Hand Held Phones (HHP) 55,201.6
Software Development and Export (SDE) 1321.7
Networks 4359.8
All other segments 5337.0
Total 82,451.6
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