news of local consequence.
July 9, 2009 - 9:08 PM EDT
Sprint Nextel Inks $5 Bln Network Deal With Ericsson
(RTTNews) - Thursday, Sprint Nextel Corp. (S) announced that it has entered into a $4.5 billion to $5 billion wireless and wireline network services agreement with global leader LM Ericsson Telephone Co. (ERIC). Under the seven-year agreement, Ericsson would manage Sprint's telecommunications system's network.
Upon the execution of the deal, about 6,000 Sprint employees would perform their network functions as Ericsson employees sometime in the third quarter. The transferred employees will become part of Ericsson Services Inc., a wholly-owned Ericsson subsidiary based in Overland Park, KS, a move that retains jobs in the United States. No job cuts are currently contemplated as a result of the agreement.
The terms of the deal enables Sprint to retain full ownership and control of its network assets, and solely owns network strategy and investment decisions. Further, Sprint would retain full control of the customer technical support and services review. While, Ericsson would assume responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks.
Further, Ericsson would optimize Sprint's multi-vendor inventory of assets such as spare parts and transmission equipment, and provide processes and tools for managing the national network platforms and operational support systems.
The third-largest wireless provider in the U.S., expects to immediately benefit from Ericsson's leadership and best-in-class economies of scale in network services.
Ericsson was the pioneer with leading global carriers in Europe as well as AsiaPacific and Latin America. Ericsson currently manages networks that together serve more than 275 million subscribers worldwide. Additionally, more than 40% of all mobile traffic goes through Ericsson's networks. Its investments in best practices and tools will enhance Sprint's business and bring scale and efficiency that will impact Sprint beyond what it could achieve as a stand-alone carrier.
Commenting on the deal, Steve Elfman, president of network operations and wholesale at Sprint said, "Taking advantage of Ericsson's global expertise to operate the tactical functions of our networks will greatly enhance Sprint's business. Beyond the obvious network advancements, we're now positioned to eclipse the competition by concentrating on our legacy of innovation - whether it's revolutionizing the customer experience as we've done with Ready Now and our value plans, or delivering iconic, highly-sought-after products like Sprint Mobile Broadband Cards, the Palm Pre and MiFi."
S closed Thursday's regular trading session at $4.46, up $0.17 or 3.96% on a volume of 40.65 million shares. Further, the stock gained $0.03 or 0.67%, and traded at $4.49 in the after-hour trade. The stock has been moving in the range of $1.35 - $9.75 for the past 52 weeks.
ERIC closed Thursday's regular trading session at $9.34, down $0.02 or 0.21% on a volume of 6.32 million shares. However, the stock gained $0.16 or 1.71% and traded at $ 9.50 in the after-hour trade.
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Source: RTTNews (July 9, 2009 - 9:08 PM EDT) |
