Ericsson (NASDAQ:ERIC) won a major, seven-year network-outsourcing contract with Clearwire (NASDAQ:CLWR), nearly two years after it inked a similar, $5 billion agreement with Sprint Nextel (NYSE:S), Clearwire's majority owner.
Neither Ericsson nor Clearwire disclosed the value of the managed services pact, which will see Clearwire transfer 700 employees to Ericsson. The deal comes as Clearwire works to pare back costs and secure funding to continue its WiMAX network buildout. It also is notable in light of recent talks between Sprint and Clearwire over Sprint hosting Clearwire's network traffic.
As part of the Clearwire-Ericsson deal--which is similar in many respects to Ericsson's deal with Sprint--Clearwire will retain ownership of all network assets and maintain responsibility for future network technology and strategic decisions. Ericsson, in turn, will be responsible for all network engineering operations and maintenance for Clearwire's core, transmission and radio access networks. Nothing will change with regard to Clearwire's infrastructure vendors, and Clearwire will remain the primary point of contact for customers, wholesale partners and vendors.
Ericsson spokesman Jimmy Duvall said the Clearwire employees will be transferred to Ericsson June 27, which is when the managed services contract will go into effect.
"In short, while we have entered into an agreement with a company whose core competency is network excellence, Clearwire will continue to own our 4G network and remain responsible for network design, network strategy, vendor selection and long-term investment decisions," Clearwire said in a blog post. "Our network is still ours--Ericsson is just managing it--allowing us to streamline the business and deliver a high-quality mobile broadband experience to our customers."
Most carriers in the U.S. have shied away from network outsourcing deals, which are more common in Europe, the Middle East and Africa. One of the primary reasons is that networks are viewed as key differentiating assets in the U.S., whereas abroad more networks are shared between operators. According to a recent report from Infonetics Research, by 2014 mobile networks will account for about 61 percent of all network outsourcing.
- see this release
- see this Clearwire blog post
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