Tech giant Samsung has announced that it has been awarded a contract to provide wireless infrastructure solutions to telecommunications company Verizon in a deal that is valued at $6.64 billion.
The deal between the American and South Korean companies comes following several months of threats and tense relations between the U.S. and China regarding Chinese giant Huawei’s potential role in any U.S. 5G network infrastructure.
The Trump administration has put pressure on other nations to outlaw the use of Huawei services and equipment, a move that seems to have payed off in July of this year when the U.K. made a surprise reversal of its previous decision to allow Huawei a stake in its national 5G infrastructure, and made it illegal for British firms to do business with the Chinese company following the end of this year.
As VentureBeat reports, this climate of hostility toward Huawei spearheaded by the U.S. has helped companies like Samsung and Nokia — which currently have a three percent and 16 percent global market share respectively, compared to Huawei’s 28 percent — improve their network businesses, with the latter counting Verizon as its biggest customer.
“Samsung winning the order from Verizon would help the company expand its telecom equipment business abroad, potentially giving leverage to negotiate with other countries,” said Park Sung-soon, an analyst at Cape Investment and Securities.
Details of the contract — which filings reveal to extend from June 30, 2020, to December 31, 2025 — have yet to be revealed, but a spokesperson for Samsung did say it was for network equipment without divulging what portion will be 5G capable.
“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 race to implement national 5G networks has been ongoing for several months now, as the next-generation technology is seen as a key factor in the development of many emerging technologies, including military tech. China has been leading the way thus far, punctuated by a November 2019 launch of 5G service in 50 cities across the country in what is likely the single biggest rollout of a 5G network ever.