According to Rosenblatt analyst Ryan Koontz, Verizon is planning to award Samsung a 5G radio access network (RAN) contract worth more than $1 billion per year for five to seven years. And it’s awarding this contract to Samsung, rather than Nokia.
Koontz won’t reveal the source of this information, so it amounts to a rumor at this point.
The analyst thinks Ericsson will maintain its roughly 50% Verizon supplier share, while Samsung "leapfrogs Nokia to secure one of the largest new supplier telecom contracts in many years," according to Seeking Alpha.
Koontz told FierceWireless that it’s a “$1 billion opportunity that Nokia may lose” and that “these sorts of decisions only come every 7-10 years.” He estimates that Ericsson’s 50% share of Verizon’s 5G awards also amounts to about $1 billion per year.
Nokia said in an email, “We do not comment on our customers’ vendor strategy. Nokia is proud to serve Verizon, and we are committed to continuing to help them build the best, most reliable and highest performing network. Nokia and Verizon have a longstanding strategic partnership in key technologies across their network with our end-to-end solutions portfolio.”
Samsung said it doesn’t comment on rumors. And Verizon didn’t immediately reply to a request for comment.
Typically, Verizon would award its contracts on a market-by-market basis.
Verizon has already said it’s using Samsung for some of its 5G work. At Mobile World Congress Americas in 2019, Verizon acknowledged it was the first to use Samsung’s 5G New Radio access unit for mmWave spectrum.
Both Nokia and Samsung made announcements yesterday regarding commercialization of 5G RAN equipment.
Nokia is building open RAN interfaces on top of its existing AirScale RAN portfolio. An initial set of open RAN functionalities will become available this year, while the full suite of open-RAN-defined interfaces is expected to be available in 2021.
Samsung said its fully virtualized 5G RAN product will be commercially available this quarter, in a shift away from dedicated hardware in favor of software elements that run on a general-purpose computing platform.
If Verizon does indeed swap out Nokia in favor of Samsung, that would be another blow to Nokia, a company that’s experienced a rough patch for the last several months.
In October 2019 Nokia said that it had made a bad decision to go with field programmable gate array (FPGA) silicon for its 5G ReefShark chipsets. The chips turned out to be too expensive, and the Finnish vendor was making a quick pivot away from the FPGA silicon.
At the beginning of 2019 Nokia’s stock was trading at about $6 per share. Today, it’s trading at about $4 per share.
Nokia’s longtime CEO Rajeev Suri recently resigned and has been replaced by Pekka Lundmark, who will be tasked with pulling the company out of a difficult run.