Report: Sprint, Ericsson sign $2B network outsourcing deal
Sprint Nextel and Ericsson have signed a network outsourcing deal worth $2 billion, according to a report in the Swedish business weekly Affarsvarlden.
The report, which first appeared Friday and cited unnamed sources, said that Ericsson had won a contract to take over management of Sprint's networks. The deal is said to last for several years and is reportedly one of the largest orders Ericsson has ever received.
Sprint declined to comment on the report. Ericsson did not respond to inquiries.
The deal, if confirmed, is significant on a number of fronts. It would be a huge cost-saving measure for Sprint, which would outsource, or "re-badge" thousands of employees over to Ericsson, cutting down on severance costs. It is also a large contract win for Ericsson in the North America market, and comes on the heels of Ericsson winning a contract from Verizon Wireless to supply the infrastructure for significant parts of Verizon's LTE network.
However, the move is a curious one, since Ericsson does not specialize in CDMA technology. Sprint has been rumored to be considering outsourcing its network since last November.
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