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Sprint forms $5bn Ericsson network deal

10 июля 2009

Sprint Nextel, the struggling US mobile network operator, is to outsource the management and day-to-day running of its two nationwide networks to Sweden’s Ericsson in a seven-year deal worth between $4.5bn and $5bn.

The deal, believed to be the largest network management deal to date, represents a coup for Ericsson and the latest in a series of moves by Sprint to streamline its operations, stem customer defections and return to financial health.

Sprint, the third-largest US mobile operator, is the first of the large US network operators to adopt the outsourced managed services model, which has become increasingly popular among mobile telecommunications groups in recent years.

“This is a very important agreement for us,” said Hans Vestberg, Ericsson’s chief financial officer, who will succeed Carl-Henric Svanberg as chief executive at the start of 2010.

Mr Vestberg emphasised that Ericsson would focus on ensuring the success of the Sprint agreement, but he hoped it would lead to other deals in the US.

Sprint, formed through the $36bn merger of Sprint Communications and Nextel Communications in 2005, said on Thursday it would retain full control of its networks.

“This is about improving our customer experience,” said Steve Elfman, network operations head. “While we get the benefit of Ericsson’s expertise . . . we can focus our attention on bringing great devices, great services, great applications to them.”

Ericsson, under Mr Svanberg, helped pioneer the managed network services model and has signed more than 100 such deals with mobile operators, including a seven-year deal in the UK with 3, the mobile business of Hutchison Whampoa, in 2005 thought to be worth between $3bn and $3.5bn.

It struck a similar five-year deal with 3’s Italian network worth $1.75bn- $2.5bn the same year.

Ericsson manages networks serving more than 275m subscribers around the world and derived about 7 per cent of its revenues last year from managed network services.

Sprint has nearly 50m subscribers on its CDMA and iDen networks in the US. Under the deal’s terms about 6,000 Sprint employees will be transferred to Ericsson during the third quarter.

Sprint, led by chief executive Dan Hesse, has been struggling to return to financial health and stem customer losses following the 2005 merger.

Under Mr Hesse since 2007, the company has restructured operations, cut its workforce aggressively and spun off its embryonic 4G Wimax network operations into Clearwire.

Источник: Financial Times

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