Sprint awarded a seven-year network management outsourcing contract to Ericsson covering its CDMA, iDEN and wireline networks. Sprint said the deal enables it to focus on delivering a superior customer experience, innovative services and popular new devices while letting Ericsson handle the day-to-day operations of its network. Key points of the deal include:
- Sprint retains full ownership and control of its network assets, and solely owns network strategy and investment decisions.
- Customers will continue to work directly with Sprint employees as their primary contact, as Sprint retains full control of the customer experience, customer technical support and services review.
- Sprint retains technology and vendor selections.
- Ericsson assumes responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks.
- Ericsson will 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 transferred employees will become part of Ericsson Services Inc., a wholly-owned Ericsson subsidiary based in Overland Park, KS, a move that retains jobs in the United States. No force reductions are currently contemplated as a result of this agreement.
The agreement, with an option for renewal, will result in payments for services valued at between $4.5 billion and $5 billion (USD) over the seven-year term of the contract. The transaction calls for about 6,000 Sprint employees to begin performing their network functions as Ericsson employees sometime in the 3rd quarter.
A new entity called Ericsson Services Inc. will be established in Overland Park, KS.
Sprint said it also foresees cost savings, better inventory management and increased network efficiencies from the deal. The cost savings will be reinvested in the network for better coverage. Expected cost savings were not specified in the announcement.
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