Samsung signs ₩1 trillion 5G equipment deal with DISH Wireless

Tech

Published: 04 May. 2022, 18:24

Samsung signs ₩1 trillion 5G equipment deal with DISH Wireless

DISH Wireless' headquarters in Littleton, Colorado. [SAMSUNG ELECTRONICS]

Samsung Electronics agreed to supply 1-trillion-won ($794 million) worth of 5G network equipment to DISH Wireless, the fourth-largest wireless carrier in the United States. It marks Samsung’s second-biggest network equipment contract with a U.S. company, the electronics manufacturer said.

Samsung announced Tuesday that it clinched a multi-year deal to supply 5G network equipment to DISH Wireless, a Colorado-based wireless network provider wholly owned by DISH Network. Though the companies did not disclose the exact value of the deal, local reports estimate it may be worth over 1 trillion won.

The deal is the company’s biggest 5G network equipment supply contract after a five-year 7.9-trillion-won deal with U.S. telecommunication company Verizon in 2020.

Samsung Electronics vice president Lee Jae-yong, right, poses for a photo with Verizon CEO Hans Vestberg at Verizon headquarters in New Jersey, last November. [JOONGANG PHOTO]

Founded in 1980 as a satellite television provider, DISH Network acquired wireless-spectrum licenses to enter the 5G wireless service market in 2020, on the condition of establishing a nationwide 5G network covering 20 percent of the country by June and 70 percent by 2023. If DISH fails to meet the goal, the company will face a penalty of $2.2 billion.

Several competitors including Nokia and Ericsson had been vying for the deal before Samsung ultimately landed the contract.

“As we were chosen as the supplier for DISH Network’s 5G network equipment, it gives us an opportunity to expand our market presence in the United States, the world’s biggest telecom market, and secure a foothold as a major equipment supplier,” said Samsung Electronics.

Samsung will sell software and radio units necessary for DISH’s cloud-based 5G network deployment, which includes virtual radio access network software, or vRAN. vRAN enables telecom companies to run networking functions as software in contrast to the widely-used, centralized radio access network that requires physical hardware upgrades.

“Virtual 5G base station technology, which is the result of Samsung Electronics’ next-generation software technology and global commercialization capabilities, is leading the paradigm shift in the telecom market,” said Samsung Electronics president Jeon Kyung-hoon, who is leading the company’s network business.

“Samsung’s 5G solutions will play an integral role in our network expansion, giving us the flexibility to deploy our cloud-native network with software-based solutions that support advanced services and operational scalability,” said John Swieringa, president and chief operating officer of DISH Wireless.

Samsung Electronics Vice Chairman Lee Jae-yong played a vital role in signing the deal, the company said.

Lee and Charlie Ergen — co-founder and chairman of the board of directors of DISH Network — hiked Mount Bukhan in Seoul together when Ergen visited Korea last September. As Ergen is known to be a mountain enthusiast, Lee proposed the excursion and personally drove Ergen to the mountain which they climbed for 5 hours.

DISH Network co-founder Charlie Ergen

“Long-term contracts based on trust can make or break network equipment business,” said a spokesperson for Samsung, explaining that Lee and Ergen “went hiking during the negotiation process of the 5G equipment contract, practically finalizing the deal.”

Lee previously partook in the negotiation process for large network deals with Verizon, Japan’s NTT Docomo and KDDI.

The Samsung spokesperson commented that “Vice President Lee’s broad global network is an indispensable asset for Samsung’s network equipment business,” adding that “he played a role in signing large 5G equipment deals and entering a new market.”

The global telecom equipment market was worth some $100 billion in 2021, up 7 percent year on year, according to market researcher Mobile Experts. Stockholm-based Ericsson, the industry frontrunner, claimed the market share of 26.9 percent, followed by Finland’s Nokia which had a 21.9 percent share. Chinese manufacturers Huawei and ZTE took up 20.4 percent and 14.5 percent each, while Samsung Electronics came fifth with 8 percent of the market share.

BY KIM TAE-YUN, SHIN HA-NEE [shin.hanee@joongang.co.kr]