Ericsson to Run Sprint’s Cellphone Network

July 9, 2009 · Filed Under News by Kalyani Mukherjee·

US telecom services provider, Sprint Nextel announced on Thursday that it was seeking to transfer operation of its network to Swedish telecom equipment maker, Ericsson.

Under the seven year agreement, Sprint will be transferring around six thousand of its employees to a subsidiary unit owned by Ericsson which like Sprint’s headquarters is also based in Overland Park, Kansas. The deal which is worth between $4.5 billion to $5 billion is being seen as Sprint’s latest move to cut spending and arrest the decline in the number of its cellphone services subscribers. According to Sprint executives, the amount of money saved by the cost-cutting measure will enable the company to go ahead with its plans of developing new products. Other than that the deal will also free up funds needed to improve the quality and coverage of Sprint’s networks.

The deal reached between Sprint and Ericsson allows Sprint to retain ownership of the telecom services company while the day-t-day tasks like the management of cell towers and services will be taken over by Ericsson. The president of Sprint network operations and wholesale, Steven L Elfman clarified in a conference call with reporters that Sprint still owned its network and was not selling it to Ericsson.

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