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Samsung signs up Verizon as first customer for indoor 5G gear

FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul. Picture taken January 7, 2019. REUTERS/Kim Hong-Ji/File Photo

STOCKHOLM (Reuters) - Samsung Electronics 005930.KS has signed up Verizon VZ.N as its first customer in the United States for its 5G products to increase indoor coverage, weeks after winning a $6.64 billion order for telecom equipment from the mobile network operator.

A small player until recently in the telecom equipment business, Samsung has gained ground in recent years and is challenging the dominance of Nokia NOKIA.HE and Ericsson ERICb.ST in telecom gear.

It has also benefited from China’s Huawei [HWT.UL] getting barred from bidding for 5G contracts in the United States.

Samsung’s new 5G portfolio will help operators add coverage and capacity indoors, be it homes of users or factories and warehouses, Alok Shah, Vice President of Network Strategy at Samsung, told Reuters.

He said the company was in talks with other U.S. telecoms operators.

Indoor coverage is crucial for 5G as the millimetre wave radio frequency used by the likes of Verizon faces problems in passing through walls or other obstacles. Samsung had a 3% market share of the total global telecoms equipment market in 2019, behind No. 1 Huawei with 28%, Nokia's 16%, Ericsson's 14%, ZTE's 000063.SZ 10% and Cisco's CSCO.O 7%, according to market research firm Dell'Oro Group. The South Korean company is positioning itself between the traditional suppliers and the ones like Mavenir and Altiostar, which are using software to run network functions on the cloud dubbed Open Radio Access Network (RAN), reducing the use of physical equipment. Larger suppliers are more protective of their current market share and smaller players who are pushing the envelope on technology don't have the skill at this time. Samsung sits right in the middle, Shah said. "We have scale that we can bring to bear, but we're also a challenger and we're very hungry and aggressive," Shah said. "So far that's really been the secret sauce for us to bring both sides of that coin to customers."

Reporting by Supantha Mukherjee in Stockholm; Editing by Mark Potter and Elaine Hardcastle

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