5G, in the US Verizon chooses Samsung
Samsung wins $ 6.7 billion Verizon contract for 5G network equipment in the US
As Huawei trudges under Trump's lunge, Samsung is pushing hard to compete with Nokia and Ericsson on 5G.
Samsung Electronics announced that its US unit has been awarded a $ 6.7 billion contract to provide wireless communications solutions to Verizon in the US.
As the Financial Times reports , Verizon will use Samsung components for its 5G telecom services, according to people familiar with the matter.
According to Bloomberg , the deal marks one of Samsung's largest 5G contracts since the Korean company decided years ago to compete with global players like Nokia and Ericsson in providing telecommunications equipment .
And on the markets there are already those who go up and those who go down. Shares of Samsung were up 2.1% on Monday morning in Seoul. Unlike Nokia's shares, it fell as much as 2.5% on Monday in Helsinki.
Verizon is believed to be Nokia's largest customer, according to research by JP Morgan published in July .
THE DETAILS OF THE CONTRACT
The contract, explains the South Korean company, is equivalent to 3.4% of last year's sales "and is strategic in the long term".
The contract, finalized on Friday, is valid from 30 June 2020 to December 2025, according to a regulatory document.
The contract is for network equipment, a Samsung spokesperson said. But he declined to comment on further terms of the contract, such as the 5G-compatible portion of equipment.
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Additionally, Liberum analyst Janardan Menon pointed out to Bloomberg that Nokia is losing shares in Verizon to Ericsson.
PUSH ON 5G
“With this latest long-term strategic contract, we will continue to push the boundaries of 5G innovation to improve mobile experiences for Verizon's customers,” Samsung said in a statement released.
Samsung, the world's largest manufacturer of memory chips and electronic gadgets, has pushed hard to expand its share of the 5G equipment market and invest in sixth generation mobile networks.
Without forgetting that the South Korean giant has supplied 4G and 5G network equipment to US operators including AT&T, Sprint and Verizon. Samsung is also working with Japan's NTT DoCoMo and KDDI to develop 5G business models.
Finally, the group increased its market share in South Korea. Seoul launched the world's first 5G mobile service in April 2019 .
SMALL MARKET POSITION COMPARED TO HUAWEI, NOKIA AND ERICSSON
However, Samsung has a long way to go to compete with the industry players.
As the FT points out , Samsung has a relatively small global presence in the telecommunications equipment market with a 3% share in 2019, according to research firm Dell'Oro Group. The market leader remains the Chinese giant Huawei with 28%, followed by Nokia with 16% and Ericsson with 14%.
SAMSUNG EARN GROUND WITH HUAWEI IN SUBLIE
But Huawei does not have an easy time with the United States increasing sanctions and pressing on allies around the world to get them to exclude the Shenzen giant. Last month Washington banned the sale of any chips using US technology to the Chinese company.
As Marco Orioles wrote on Start , "starting September 15 Huawei will no longer be able to produce its proprietary chipsets due to the ban placed by the Trump administration".
Under increasing pressure from the US, many countries, including the UK and India, are phasing out Huawei equipment from their 5G infrastructure.
In this scenario, Samsung could therefore gain share.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/5g-negli-usa-verizon-sceglie-samsung/ on Mon, 07 Sep 2020 13:00:16 +0000.