Sprint To Let Ericsson Handle Network Operations

RadioRaiders · Jul 13, 2009

Looks like after months of rumors, it's now a done deal. I'm a little perplexed tho, how/why Sprint chose a company (Ericsson) that has zero CDMA (or WiMAX) equipment in their product portfolio to run their CDMA network.... ...and why Ericsson, a very pro-GSM/UMTS/LTE company, accepted...

NEW YORK (Dow Jones)--Sprint Nextel Corp. (S) agreed to pay up to $5 billion over the next seven years to L.M. Ericsson Telephone Co. (ERIC), turning over day-to-day operations of its network to the Swedish telecommunications company as the carrier looks to focus on new products and customer retention.

The deal represents the first time a U.S. carrier - notorious for exercising tight control over assets - has outsourced any network functions to a third-party vendor. It underscores the growing need for carriers to focus on different areas such as improved cellphones and applications, and could lead to similar moves by other wireless players.

"The North American telecom market has finally cracked," said Yankee Group analyst Camille Mendler. "Sprint's deal with Ericsson is a game changer that challenges ingrained perceptions of what is core and non-core to telecom operators' business activity."

The Wall Street Journal originally reported on a potential deal between the two companies in May.

Under the agreement, Sprint, based in Overland Park, Kan., will retain ownership and control of the network assets. Ericsson will take over responsibility of the maintenance. Steve Elfman, president of Sprint's network operations, said the company never considered selling the assets. While Sprint expects to save some operating costs, Elfman declined to provide a specific figure.

J.P. Morgan analyst Mike McCormack, however, estimates savings between $35 million and $260 million over the next seven years, and said he sees additional modest benefits to Sprint's profitability.

As part of the agreement, 6,000 Sprint employees will move to Ericsson at the end of the third quarter. Neither company expects any layoffs, but it's unclear, as always, how the individual workers will deal with the transition to a new employer.
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Ericsson currently manages 80 fixed and wireless networks serving 275 million subscribers around the world, and 40% of all mobile traffic goes through Ericsson's networks. But Sprint is a different beast, with two different wireless networks and a wireline infrastructure that must be maintained.
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larry · Jul 13, 2009

I'm surprised that there haven't been a bunch of people here going into panic mode yet, saying this will be the end of Sprint. lol But seriously this deal is designed to help Sprint become more efficient and to ultimately make more money. This deal shouldn't have any effect on us, the end users.

TelcomJunkie · Jul 14, 2009

RadioRaiders said: ↑

Looks like after months of rumors, it's now a done deal. I'm a little perplexed tho, how/why Sprint chose a company (Ericsson) that has zero CDMA (or WiMAX) equipment in their product portfolio to run their CDMA network.... ...and why Ericsson, a very pro-GSM/UMTS/LTE company, accepted...
Click to expand...

Considering most of their equipment of Al-Lu, it outta be interesting! Nothing better than your competitor maintaining your equipment.

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Sprint To Let Ericsson Handle Network Operations

RadioRaiders RF Black-Belt
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Sprint To Let Ericsson Handle Network Operations

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TelcomJunkie Bad Handoff Investigator Senior Member

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RadioRaiders RF Black-Belt
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larry Sprint loyalist and former mod
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TelcomJunkie Bad Handoff Investigator
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