Sprint announced July 9 a seven-year deal with Ericsson for the Swedish telecommunications services giant to manage and operate Sprint's voice, data and wire-line networks. The $5 billion deal will allow Sprint to focus on new products and customer retention.
Under the terms of the arrangement, Sprint retains full ownership and control of its network assets, network strategy, investment decisions, customer technical support, and technology and vendor selections. Ericsson assumes responsibility for the day-to-day networking services, provisioning and maintenance for the Sprint-owned CDMA (Code Division Multiple Access), IDEN (Integrated Digital Enhanced Network) and wire-line networks.
Ericsson will also manage Sprint's multivendor 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 transaction calls for about 6,000 Sprint employees to begin working as Ericsson employees some time in the third quarter.
"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," Steve Elfman, Sprint's president of Network Operations and Wholesale, said in a statement.
Elfman, who called the deal "historic," said Sprint plans to take advantage of "Ericsson's global expertise to operate the tactical functions of our networks ... Beyond the obvious network advancements, we're now positioned to eclipse the competition by concentrating on our legacy of innovation."
Angel Ruiz, head of Ericsson's North American operations, added that the arrangement allows Ericsson to "expand our successful business model to the U.S., allowing Sprint to operate more efficiently while focusing even more on its customers."
Ruiz said Ericsson's managed services provide operators with reduced cost and improved efficiency. He added, "This shows that the trend of full-scope managed services with Tier 1 global operators is now happening in the United States."
Ericsson manages networks that together serve more than 275 million subscribers worldwide with more than 40 percent of all mobile traffic going through Ericsson's networks.