Samsung sign’s 6.6 billion USD 5G deal with Verizon to replace Nokia?

In July 2020 information appeared online that Verizon might replace Nokia with Samsung for 5G gear. An analysts from Rosenblatt “predicted” that Verizon will award a huge contract to Samsung for 5G radio access network instead to Nokia. The recent financial filings by Samsung confirmed that.

Verizon and Samsung signed a 5-year 6.6 billion dollars networks deal, translating in around 1.3 billion dollars annually which would represent a third of Samsung’s networks business revenue in 2019, as estimated by LightReading.

Nokia said to Reuters that Verizon remains one of the 3 biggest customers to the Finns and that Nokia will continue working on their 3G and 4G network, as well as “continue to work with them to accelerate innovation in 5G”. As LightReading suggests, Nokia will continue to maintain the 3G and 4G network, while Samsung will most likely cover the 5G segment using an “overlay” over Nokia’s 3G and 4G infrastructure.

Another interesting bit is that a lot of European operators that choose Huawei for their single RAN network (same gear for 2G, 3G and 4G) are more likely to pick Nokia or Ericsson for 5G and legacy network replacement (due to geopolitical situation), because having the same vendor for 4G and 5G increases networks performance. While Samsung’s tech might be competitive in 5G, the experience Nokia and Ericsson have with older network generations help win contracts in some region.

Anyways, this is obviously a missed opportunity for Nokia and I think it is good to have more competitive players in the networks infrastructure space, because competition pushes innovation and hopefully lower prices for end customers.

Thanks SirFaceFone for the tip. 🙂