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Deal
Samsung Electronics said on Monday it had won a $ 6.64 billion order to provide wireless communication solutions to Verizon in the United States, a major victory for the South Korean firm in the next-generation 5G network market.
FILE PHOTO: The Samsung Electronics logo is seen on its office building in Seoul, South Korea, on March 23, 2018. REUTERS / Kim Hong-Ji
Seoul: Samsung Electronics said on Monday it had won a $ 6.64 billion order to provide wireless communication solutions to Verizon in the United States, a major victory for the South Korean firm in the next-generation 5G network market.
Samsung’s global prospects for its networking business have improved following US sanctions on its biggest rival, Huawei, analysts said.
Verizon CEO Hans Vestberg told CNBC in July last year that Verizon does not use any Huawei equipment. Verizon had already been a Samsung customer prior to the order.
Verizon is believed to be Nokia’s largest customer, the JP Morgan investigation said in a July note.
“Verizon’s securing the Samsung order would help the company expand its telecommunications equipment business overseas, which could provide an advantage for negotiating with other countries,” said Park Sung-soon, analyst at Cape Investment and Securities.
The order is for network equipment, a Samsung spokesperson said. The company declined to comment on the detailed terms of the contract, such as the 5G-capable piece of equipment included.
“With this latest long-term strategic contract, we will continue to push the boundaries of 5G innovation to enhance mobile experiences for Verizon customers,” Samsung said in a statement.
Samsung said in a regulatory filing that the contract period, which Samsung’s US unit signed with Verizon Sourcing LLC, is from June 30, 2020 to December 31, 2025.
Samsung had a 3 percent market share of the global telecommunications equipment market in 2019, behind Huawei’s No. 1 with 28 percent, Nokia’s 16 percent, Ericsson’s 14 percent, 10 percent. of ZTE and 7 percent of Cisco, according to market research firm Dell’Oro Group.
Last month, the Trump administration unveiled plans to auction previously dedicated military spectrum for commercial use beginning in mid-2022 to increase fifth-generation network coverage in the United States.
The next-generation 5G wireless network is expected to eventually come online and enable high-speed video transmissions and autonomous cars, among other uses.
In July, Britain ordered Huawei equipment to be completely purged from its 5G network by the end of 2027, adding that it needs to bring in new providers like Samsung Electronics and Japan’s NEC.
Shares of Samsung Electronics were up 2 percent compared to a 0.5 percent rise in the broader KOSPI.
(Reporting by Joyce Lee and Heekyong Yang; Additional reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman and Stephen Coates)
