Samsung Signs $6.6 Billion Deal With Verizon To Supply 5G Network Solutions

CIOReviewIndia Team | Monday, 07 September 2020, 04:20 IST

Samsung Signs $6.6 Billion Deal With Verizon To Supply 5G Network SolutionsSamsung Electronics said it won $6.64 billion order for providing wireless communication solutions to Verizon in the United States. It is regarded as a major win for the South Korean firm in the field of next-gen 5G network market.

After the U.S. sanctioned Samsung’s biggest rival Huawei, the company’s global prospects related to network business models improved.

The CEO of Verizon, Hans Vestberg said to CNBC, last year in July, that Verizon does not use any Huawei equipment and it already is a Samsung customer before the order took place.

In a research by JP Morgan, in a note from July, it is said that Verizon is supposed to be Nokia’s biggest customer.

Park Sung-soon, Analyst, Cape Investment and Securities, said, “Samsung winning the order from Verizon would help the company expand its telecom equipment business abroad, potentially giving leverage to negotiate with other countries.”

The order placed is due with network equipment, as said by a spokesperson of Samsung. However, Samsung refused to state details like the portion of 5G-capable equipment of the contract.

Samsung released a statement saying, “With this latest long-term strategic contract, we will continue to push the boundaries of 5G innovation to enhance mobile experiences for Verizon’s customers.”

The duration of the contract between Samsung’s U.S. unit and Verizon Sourcing LLC started from June 30, 2020, and will end on December 31, 2025, as said in a regulatory filing by Samsung.

Last year, Samsung acquired 3 percent market share of the global total telecom equipment market, and was behind Huawei (No. 1) with 28 percent, Nokia 16 percent, Ericsson 14 percent, ZTE 10 percent and Cisco 7 percent. It is released in a market search report by Dell’Oro Group market research firm.

In the previous month, the Trump administration revealed plans for auctioning the spectrum, which was previously dedicated to military purposes for commercial use (starting in mid-2022) for ramping up fifth-generation network coverage in the United States.

The next-gen 5G wireless network will connect and provide high-speed video transmissions and self-driving cars, in addition to other usages.

In July, Britain ordered Huawei equipment to be purged completely from its 5G network by the end of 2027, adding which requires bringing in new suppliers like Samsung Electronics and Japan’s NEC.

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