Business Tech

Samsung Electronics wins $6.6 billion Verizon deal

Samsung Electronics - Appy Pie

Samsung Electronics announced that it has won a $6.6bn network deal with US carrier Verizon. Samsung Electronics said that is a major win for the company in the next-generation 5G network equipment market.

South Korean conglomerate revealed that it has signed a contract with Verizon Sourcing LLC to supply telecom equipment to the US operator till the end of 2025. This deal covers establishing, providing, and maintaining the company’s 5G mobile telecom equipment. The size of the deal is roughly equivalent to 3.43 percent of Samsung Electronics’ 2019 full-year sales of $206bn.

Samsung pronounced that with the latest contract, the company will continue to push the boundaries of 5G innovation to improve mobile experiences for Verizon customers.

Analysts said that Samsung’s global prospects for its network business have improved following US sanctions on its rival Huawei.

Park Sung-soon, an analyst at 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.”

Britain in July ordered Huawei equipment to be removed from its 5G network by the tip of 2027. The US Commerce Department also has passed an order saying fresh sanctions restricting any foreign semiconductor company from selling chips developed using US software or technology to Huawei, without obtaining a license to do so.

The order comes after the firm defied the coronavirus pandemic to post a 7.3 percent rise in second-quarter net profits thanks to strong demand for memory chips.

According to market research agency Dell’Oro Group, Samsung is a still a young player in the global telecom equipment market with 3 percent market share in 2019., Huawei with 28 percent, Nokia with 16 percent, Ericsson with 14 percent, ZTE with 10 percent, and Cisco with 7 percent are the leading players.

The next-generation 5G wireless network is expected to connect and enable high-speed video transmissions and self-driving cars, and many more uses.

Samsung Electronics is the flagship subsidiary of the Samsung group that dominates business in the world’s 12th-biggest economy. Samsung Electronics shares after the deal rose 2 percent compared to the wider KOSPI’s 0.5 percent climb.