Samsung Electronics signed one of its biggest 5G contracts to date with Verizon. This comes as American companies are looking for new partners now that the Trump administration is restricting business with China’s company Huawei. Samsung Electronics is about to greatly expand its presence in the U.S. market for 5G networking gear.
The contract will last until the end of 2025 and its net worth £5bn that is approximate to almost 3.5% of Samsung electronics 2019 sales.
Last year, Verizon CEO Hans Vestberg told media that the company does not use any equipment from Huawei. According to the JP Morgan research, Verizon is Nokia’s biggest customer. It has already worked with Samsung before signing this contract.
While Samsung Network supplied 5G network equipment to South Korean operators during its 2019 rollout, the Verizon contract is likely to be its biggest contract to date and marks a leap into the highly competitive telecommunications equipment sector. The sector is currently dominated by Huawei 28% , Nokia 16%, and Ericsson 14%.
US President Donald Trump’s relentless attacks against Huawei and other Chinese technology companies such as ZTE is encouraging operators in countries allied to the US to consider working with alternative emerging competitors.
Samsung will provide Verizon with mobile communications solutions over the next five years under one of Samsung’s biggest 5G deals to date. Companies in the U.S. have been looking for new partners as the Trump administration cuts them off from trade with the Chinese firm Huawei.
“Samsung is apparently benefiting from the U.S. government’s sanctions on Huawei. This is likely to work to the benefit of South Korea’s economy. Many 5G parts makers in South Korea will benefit from Samsung’s deal with Verizon.”
The U.S. is the world’s biggest market for 5G equipment, accounting for 25 percent of global sales, and Verizon is the number one American wireless carrier with about 94 million subscribers.
Recent data from U.S.-based market tracker Dell’Oro Group said that in the global market for 5G network equipment, Samsung had a share of 13-point-2 percent as of the first quarter of 2020. Huawei had the largest share with almost 36 percent followed by Ericsson and Nokia. Samsung was also selected in June as the 5G equipment provider for the Canadian telecom company TELUS.
