Monday 7 September 2020 10:27 am

Samsung wins $6.6bn US 5G tech deal as Huawei tensions simmer

Samsung Electronics today said it has won a $6.6bn deal with telecoms giant Verizon to provide wireless communications equipment for 5G in the US.

The South Korean electronics magnate is benefiting from a gap in the market left by Chinese rival Huawei, analysts have said, which is banned from working with US companies by the Trump administration on 5G.

However Verizon boss Hans Vestberg told CNBC last year that Verizon does not use Huawei equipment, and had already been using Samsung equipment.

Read more: Samsung mulls ditching App Store and virtual assistant in possible Google tie-up

A Samsung spokesperson said the order was for network equipment, but declined to specify what portion of the contract included 5G-capable equipment.

“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.

The deal will run until 2025.

Last year Samsung held a three per cent market share of the global telecoms equipment market, coming in sixth place.

Huawei had the top spot with 28 per cent, while Nokia held 16 per cent, Ericsson had 14 per cent, ZTE had 10 per cent and Cisco had seven per cent, according to market research firm Dell’Oro Group.

The US said last month it plans to auction off 5G spectrum that was previously reserved for military use starting in mid-2022, in order to boost commercial 5G network coverage.

Read more: Huawei: US ramps up sanctions as China tensions grow

It will contribute to better mobile usage, as well as enable higher video speeds and connected infrastructure such as self-driving cars.

Huawei has faced a similar ban in the UK, with the government in July ordering all equipment from the Chinese vendor to be removed from its network by 2027.

It will have to turn to new suppliers to fill the void, including Samsung and Japan’s NEC. Telecoms firms estimate the total cost of removing Huawei from the network to be the billions.

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