Samsung Wins $6.6B Verizon 5G Equipment Deal
The duo will usher in the era of 5G over the next five years
Some would argue that the age of 5G is already here. Although the three major carriers in the U.S. have some form of operational 5G network, this is only the tip of the iceberg. The next few years will see an explosion of 5G technology for both consumers and businesses.
However, getting there will require a lot of new infrastructure and networking equipment. Samsung just won a $6.6 billion contract to supply Verizon with the latter. It will do so from now until the end of 2025. Samsung didn’t specify how much of the ordered networking equipment is 5G-related, but it’s a safe guess to say that it accounts for the majority.
News of Samsung’s big contract broke on Monday when the firm released regulatory filings. However, the deal was reportedly finalized on Friday.
In a statement, Samsung said, “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.”
Obviously, Samsung stands to benefit from enhanced 5G networks. Its smartphones are the second most popular in the U.S. behind the iPhone. Helping to ensure there is a powerful and fast network to support them makes a lot of sense. Of course, $6.6 billion doesn’t hurt either. For the duration of the partnership, Samsung will install and maintain networking equipment for Verizon.
The deal goes a long way towards helping Samsung solidify its position in the 5G market. Last year, the Korean tech giant had a three percent share of the global telecom industry. That’s significantly behind Huawei’s share, which stands at 28 percent.
Nevertheless, with the U.S. distancing itself from Huawei, Verizon decided to work with Samsung for the foreseeable future. A spokesperson for the carrier said, “Samsung has demonstrated their commitment to collaborating with us to drive innovation in 5G, and we are excited to expand our relationship with them and benefit from a long-term strategic agreement.”
Growth on the Horizon
As mentioned, 5G is expected to grow dramatically over the next few years. It is slowly rolling out around the world but has been hampered by the COVID-19 pandemic. Carriers are still working to get the necessary infrastructure in place. Meanwhile, device manufacturers are designing gadgets to support the faster network.
The 5G industry as a whole stands to benefit from a plan which the Trump administration revealed in August. It will free up 100 megahertz of wireless spectrum that the military is currently using, making it available to commercial service providers.
Carriers say that this so-called mid-band range of spectrum is key to ensuring a 5G rollout for rural areas and suburbs. Given that 5G is expected to help close the technology gap for consumers living in these areas this is an important development.
As new consumer devices are released and demand for 5G grows, the network’s adoption will increase exponentially. Thanks to the partnership between Verizon and Samsung there will be a strong foundation to build on.
Originally published at https://www.theburnin.com on September 8, 2020.