Verizon, Samsung Will Team Up to Bring Faster 5G to California
January 03 2018 - 9:29AM
Dow Jones News
By Timothy W. Martin in Seoul and Ryan Knutson in New York
Verizon Communications Inc. has chosen Samsung Electronics Co.
as a major supplier in the telecom giant's push to offer high speed
internet over its wireless network, as the first commercial
launches of fifth-generation offerings take shape.
Verizon's 5G network will launch in the second half of this year
in Sacramento, Calif., before adding the service in other U.S.
markets. It will use cellular antennas to beam high-speed internet
into consumers' homes. Samsung will make network equipment for
Verizon--including the small boxes that will sit inside each home,
receiving the signal and translating it into Wi-Fi-- the companies
said Wednesday.
Financial terms of the arrangement weren't disclosed.
Telecom giant Verizon last year began 5G trials, focused on its
home broadband service and free to consumers, in 11 U.S. markets
from New Jersey to California. Samsung will provide network gear
for Verizon's launch in Sacramento, where customers will be offered
the option of purchasing the faster service.
Companies globally are investing billions of dollars in 5G
despite continued debate over its ultimate uses beyond faster
download speeds.
Government agencies and telecom operators expect broad 5G
availability in many markets by 2020, and with it the potential for
broader adoption of self driving cars, smart cities and internet
connected robots.
"5G is a reality," said Kim Young-ky, president of Samsung's
networks business, in an interview.
The home internet offering is an early step in the industry's
transition to 5G technology, which will be significantly faster and
respond more quickly to user commands than existing 4G
networks.
To Verizon, it carries the potential to disrupt an industry
currently dominated by cable providers like Comcast Corp. and
Charter Communications Inc. Verizon said last month it would also
be supplied by Ericsson AB, another 5G network equipment maker, for
commercial launches in other U.S. markets.
South Korean technology giant Samsung, a small player in the
network equipment world, believes its knowledge making products and
components could give it an edge with telecom customers seeking to
sell connectivity to a wider range of devices.
Samsung's network business generated some 2 trillion ($1.9
billion) to 2.5 trillion won in 2017, according to research firm
Counterpoint Technology Market Research. It targets annual revenue
of 10 trillion won by 2022, a Samsung spokesman said.
AT&T Inc. last month said it would launch a 5G trial site in
Texas, after tests in other markets. Sprint Corp. and T-Mobile US
Inc. have said they are working on nationwide 5G networks,
targeting late 2019 or 2020.
The average U.S. consumer uses about five gigabytes of mobile
data a month, Mr. Kim said. But after 5G becomes more ubiquitous in
the next few years, he believes consumers will eventually use
closer to 100 gigabytes monthly on new services such as virtual or
augmented reality programs--or even from driverless cars that will
require greater data speeds to rapidly process traffic
conditions.
About two years ago, Samsung combined about 1,000 workers from
different divisions including handsets, network and its central
research-and-development group, to create a "Next Generation
Communications Business" team dedicated to 5G.
"With 5G, it's going to be expanding beyond your phone," Kim
Woo-june, a senior vice president of Samsung's Next Generation
business team, said in an interview. The industry's first mobile
phones with 5G capabilities aren't likely to debut until 2019, he
added.
Write to Timothy W. Martin at timothy.martin@wsj.com and Ryan
Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
January 03, 2018 09:14 ET (14:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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