Sprint will outsource its wired and
wireless network operations to Ericsson in a deal that's estimated to be worth nearly $5 billion.
The seven-year deal, which Sprint has titled Network Advantage, "enables Sprint and its millions of customers to enjoy a network services model that is proven successful worldwide and praised by business experts and communications analysts, as an operational best practice for network operators," Sprint said of the Ericsson deal in a statement. Ericsson will also optimize Sprint's multi-vendor inventory of assets such as spare parts and transmission equipment, and provide processes and tools for managing the national network platforms and operational support systems.
The deal gives Ericsson responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks.
"No other U.S.-based carrier has followed through on the business-enhancing vision inherent in Network Advantage," Steve Elfman, Sprint's president of network operations and wholesale, said in a statement. "Our best-ever network performance will become even better by leveraging Ericsson's world-class leadership in network services, their proprietary tools, and the knowledge of more than 30,000 dedicated and highly specialized service professionals to power Sprint's Now Network."
The agreement, which features a renewal option, will result in payments for services valued at between $4.5 billion and $5 billion over the seven-year contract, Sprint said. In addition, the transaction calls for about 6,000 Sprint employees to work for Ericsson sometime in the third quarter. Those employees will be part of Ericsson Services Inc. Sprint said no job reductions are currently planned as part of the Network Advantage agreement.
Sprint noted that it retains full ownership and control of its network assets and owns its network strategy and investment decisions. Sprint will also retain technology and vendor selections for the network. Customers will still work directly with Sprint and Sprint will continue to handle customer service and technical support.
