|
I got outsourced
Sprint (NYSE: S) Nextel confirmed today that it will indeed outsource the daily operations of its two wireless networks-both CDMA, iDEN, and wireline-to Ericsson (NSDQ: ERIC), in a deal worth $4.5 to $5 billion over the length of the seven-year agreement. As part of the agreement, about 6,000 Sprint employees will begin working as Ericsson Services employees starting in the third quarter, according to a document filed today with the SEC.
Sprint was rumored to be considering such a move to save the company money. However, a deal of this kind was pretty controversial since outsourcing has not caught on here in the U.S. To be clear, the company is not transferring ownership or control of its network over to Ericsson, and will continue to control network strategy and investment decisions. It will also remain in compete control of the customer. Sprint said it expects to gain a competitive advantage by tapping into Ericsson's 30,000 trained experts, while also realizing immediate cost-savings on labor, network management and operations. Sprint is calling the project with Ericsson, "Network Advantage."
Sprint's President Steve Elfman said in a release: "No other U.S.-based carrier has followed through on the business-enhancing vision inherent in Network Advantage. 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."
|