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Last updated: Friday, July 10, 2009

In its latest cost-cutting measure, a struggling Sprint Nextel announced Thursday a seven-year network service agreement with Ericsson. Dubbed Network Advantage, the deal turns over the operation of Sprint’s networks to Ericsson. Sprint will pay Ericsson $4.5 billion to $5 billion over the term of the renewable contract. About 6,000 Sprint employees will be transferred to Ericsson sometime in the third quarter. “No other U.S.-based carrier has followed through on the business-enhancing vision inherent in Network Advantage,” said Steve Elfman, president of network operations and wholesale at Sprint. “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.” Sprint Maintains Control Sprint made clear that Ericsson is only running the network. Sprint will retain ownership and control of its network assets, and make all strategy and investment decisions, including technology and vendor selections. Sprint is also maintaining control of the customer experience, customer technical support, and services review. Ericsson will take responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks. 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. “Managed services has been successful throughout the world. Measures that provide operators with reduced cost and improved efficiency have become increasingly valid and attractive,” said Angel Ruiz, head of Ericsson’s North American operations. “This shows that the trend of full-scope managed services with tier-one global operators is now happening in the U.S.” Sprint Goes First Sprint expects to see immediate fruit from the relationship. Ericsson has more than 15 years of experience in the field with hundreds of carrier contracts and manages networks…

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Sprint Outsources Network Operation To Ericsson

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