Samsung Electronics has bagged a network supply contract worth $6.6 billion with American telecoms group Verizon Sourcing, the South Korean tech conglomerate announced on Monday.
In a regulatory filing, Samsung said the deal was completed on Friday and will be in effect starting June 30 to December 2025. The contract involves the delivery of 5G wireless technology to Verizon Communications, marking a major triumph for Samsung's next-generation communications hardware business.
The deal also sets the stage for Samsung Electronics America – the South Korean tech group's domestic arm – to boost its foothold in the U.S. as Chinese competitor Huawei Technologies has been cropped out of the picture in the most important communications arena in the world.
Market observers said that Samsung's shot at snagging a sizeable amount of international clients for its 5G business has greatly improved after the U.S. clampdown on Huawei. The size of Samsung's latest deal is equivalent to nearly 3.5 percent of its full-year revenues of $193.6 billion last year.
The announcement of the deal comes as the U.S. continues to keep Huawei from getting its hands on American technology. Some 38 Huawei affiliates had been included in Washington's Entity List, which prohibits the foreign businesses from getting American export without authorization, U.S. Commerce officials last month said last month.
In a July 2019 CNBC interview, Verizon chief executive officer Hans Vestberg said that the company has never used any communications or technology by Huawei, pointing out that Verizon had been a Samsung user even prior to the deal. A recent document by JP Morgan disclosed that Verizon is widely thought to be the most valuable client of Nokia.
The biggest semiconductor and electronics device manufacturer in the world, Samsung has kicked off an aggressive campaign to boost its market share in the fifth-generation technology landscape and has actually poured a tremendous amount of money into sixth-generation mobile infrastructure.
