Samsung Electronics Co. secured a $6.6 billion order to provide 5G wireless products to Verizon, according to Bloomberg and multiple news outlets. The companies finalized the contract on September 4 and it will run from June 30 through December 2025, per a regulator filing. The agreement mostly covers 5G infrastructure, but also includes network equipment sales, installation and maintenance, according to The Wall Street Journal.
The Verizon deal is one of Samsung’s largest 5G contracts since it opted to invest in networking and go head-to-head with global companies like Nokia and Ericsson in the telecom equipment sector. The contact is expected to increase Samsung’s market share in the wireless industry, according to Bloomberg. Samsung currently ranks fourth in 5G network sales behind Huawei, Ericsson and Nokia. The deal also comes as industry leader Huawei Technologies Co. is dealing with United States sanctions. The U.S. government is encouraging allies to shut out Huawei, as it recently banned selling any chips that use U.S. technology to the company. The ban significantly hinders Huawei’s 5G equipment and handset business.
The timing is also beneficial for Samsung as 2020 is expected to be a key year for 5G deployments, particularly in the United States, according to analysts. The fifth generation of wireless could get a boost after Apple releases its first 5G-enabled phone.
“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,” Samsung said in a statement.
Nokia did not respond to comment requests, but did say in a statement that it plays a critical role in enabling Verizon’s 3G and 4G networks and plans to help the carrier accelerate innovation in 5G.
For Samsung, its efforts to expand its 5G equipment market share have been rewarded. The company, which is the world’s largest memory chip and electronics gadget producer, is now investing in sixth-generation mobile networks, Bloomberg reports.
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