Largest Single Contract Achievement in Korea's Telecom Equipment Industry History
Direct Development and Manufacturing of Core Chipsets... Recognized for Both Technology and Security
Manufactured in Cooperation with 86 Companies... Expected to Expand Partner Companies' Sales and Employment
[Asia Economy Reporter Han Jinju] Samsung Electronics has signed the largest-ever 5G equipment and network solution contract in the history of the domestic telecommunications equipment industry with Verizon, the No. 1 mobile carrier in the United States. This achievement comes 20 years after entering the U.S. equipment market with 2G technology.
On the 7th, Samsung Electronics announced that it had signed a long-term network equipment supply contract worth 7.9 trillion KRW with Verizon. The contract period extends until 2025. This is the largest single export contract in the history of the domestic telecommunications equipment industry.
Samsung Electronics successfully launched the world's first commercial 5G service with the three major domestic carriers in December 2018 and signed 5G supply contracts with Verizon, AT&T, and Sprint in the U.S. In Japan, it began commercial 5G services with KDDI in March of this year. Since the end of last year, it has also signed contracts to supply new 5G network equipment to global carriers such as Videotron and Telus in Canada, US Cellular in the U.S., and Spark in New Zealand.
Samsung Electronics has risen as a key telecommunications equipment supplier 20 years after entering the U.S. market, known as the birthplace of the telecommunications industry. Starting with exporting 2G CDMA technology to U.S. carrier Sprint in 1999, Samsung was selected as a mobile vendor for 3G in 2001, 4G in 2011, and 5G in 2018.
Samsung Electronics announced on the 7th that its consolidated operating profit for the second quarter reached 8.1 trillion won. On the same day, the Samsung flag fluttered in the wind in front of the Samsung Seocho Building in Seocho-gu. Photo by Moon Honam munonam@
This contract is significant in that it recognizes Samsung's reliability in terms of technology and security. The U.S. is a core market accounting for 25% of global base station investments and is the world's largest mobile telecommunications service market, valued at $250 billion. Verizon, the No. 1 operator in the U.S., has 183 million subscribers.
The contract is meaningful because Samsung has been recognized for reliability in both technology and security. Samsung Electronics develops and manufactures all key chipsets, including telecommunications equipment and modems, in-house. By securing reliability across supply, manufacturing, and development, it minimizes risks in both supply chains and security. Samsung has led 5G technology by successfully achieving the world's first commercial 5G launch with domestic carriers.
It is expected to fill the export gap caused by COVID-19 and contribute to expanding sales and job creation for small and medium-sized partner companies. Samsung Electronics collaborates with 86 domestic small and medium-sized equipment and parts companies to manufacture network products. Samsung's 5G equipment has a high localization rate, with domestic parts accounting for 40-60%. As overseas orders expand, including the Verizon contract, it will help increase sales and job creation for domestic SMEs and create opportunities for mutual growth with small and medium-sized enterprises.
An industry insider explained, "It can play a key role in revitalizing the sluggish domestic economy not only through increased investment, production, and employment in the telecommunications industry but also through expanded investment in related industries."
A Samsung Electronics official said, "Through this strategic long-term partnership, we will continue 5G innovations to provide enhanced mobile experiences to Verizon's customers."
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