Sprint Contracts Network To Ericsson

Sprint Nextel will be contracting Ericsson to perform the day-to-day operations and maintenance of its voice, data, and wireline networks.

The $5 billion deal will last for seven years, and Ericsson will service, provision, and maintain the third-largest carrier's CDMA, iDEN, and wireline networks. Despite persistent rumors over the last few years, Sprint will not be selling any part of its network, as it still retains control over network strategy and investment decisions.

As part of the deal, about 6,000 Sprint employees will become Ericsson employees and the companies said no layoffs are expected. Subscribers will continue to contact Sprint with any customer service or technical support questions, Sprint said.

"No other U.S.-based carrier has followed through on the business-enhancing vision inherent in Network Advantage," said Steve Elfman, Sprint's president of network operations, 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."

For Sprint, the move enables the carrier to focus on innovation, executives said. While it still has about 50 million subscribers, Sprint was the only major carrier to lose net subscribers last quarter. Over the last few years, the company has been plagued by real and perceived issues with its customer service, as well as not having exciting handsets like AT&T's iPhone.

CEO Dan Hesse has tried to address these problems by implementing programs that offer in-store personalized setups, and the company said this has improved customer satisfaction surveys.

The mobile operator also recently broke its sales records with the launch of the highly anticipated Palm Pre. Additionally, the carrier is finding new revenue streams by reselling its voice and data services to companies like Virgin Mobile and Amazon's Kindle.

Most companies are just starting the hard work of mobilizing workforces by bringing the software they use to smartphones. InformationWeek analyzed this issue in an independent report, and it can be downloaded here (registration required).