Sprint Nextel Closer to $2 Billion Network Outsourcing Deal

The persistent rumours that Sprint Nextel is nearing a deal to outsource its network infrastructure management to Ericsson got another boost as the Wall Street Journal said the negotiations are nearing their completion.

Any such deal is expected to be worth around US$2 billion and result in the transfer of 5,000 to 7,000 U.S. employees from Sprint Nextel to Ericsson.

The two companies haven't finalized a contract and discussions could continue for a few more weeks, say people familiar with the matter, adding that the deal could slash the network operators costs by as much as twenty percent.

Sprint's board will review the transaction with Ericsson, once terms are final, and decide if the potential cost savings and other benefits justify the complex arrangement, one person familiar with the discussions said. The people cautioned it is still possible that Sprint may choose not to move forward with the outsourcing strategy at all.

Last October, Sprint Nextel appointed a former Ericsson director, Sven-Christer Nilsson to its board of directors. Nilsson worked with Ericsson from 1982 to 1999, where he lead a couple of  infrastructure divisions.

On the web: Wall Street Journal

Posted to the site on 4th May 2009