Ericsson Rumoured to Have Won $2 Billion Deal from Sprint Nextel

Ericsson is reported to have won a huge US$2 billion service contract from US operator, Sprint Nextel. Citing sources, the business news magazine, Affarsvarlden said the contract is said to be a surprise considering that Ericsson no long supports the CDMA technology used by Sprint Nextel. The complex integration with the Motorola supplied iDEN network can only add to the headaches, although any deal could lead to speculation that Motorola might try to offload their entire iDEN platform to Ericsson.

Ericsson and Sprint have both declined to comment on the report.

Rumours that Sprint is looking to outsource its network management to Ericsson have been swirling around for several months, although recent analyst meetings with the firm have left them feeling that a deal is not going to be happening in the near-term.

"Despite recent speculation regarding possibly outsourcing at least part of network operations, a deal does not appear to be imminent," William Power, an analyst with Baird, wrote in a recent research note.

Sprint is currently working through plans to cut 8,000 jobs by the end of the month - bringing its total workforce to around 46,000. Outsourcing the network management would leave the network with a clearer focus on trying to recover its shattered market share. If the deal is confirmed, then it can be expected that around 6,000 staff would be transferred from Sprint to Ericsson.

Ericsson recently won a major LTE based supply contract to rival CDMA operator, Verizon Wireless.

On the web: Affarsvarlden

Posted to the site on 14th March 2009