Thursday, July 9, 2009

Sprint To Give $5 Billion To Ericsson Over 7 Years To Run Network

This is by far the biggest news so far this summer as far as wireless networks in the US is concerned.  Sprint have come to an agreement with Ericsson to run it's wireless network for the next seven years, paying them $5 billion.

Obviously, the main thing here is money that Sprint hopes to save over time.  About 6K Sprint employees will end up working with Ericcson starting this fall.  

The interesting thing here is what of WiMax?  Sprint is the technology's champion in the US.  According to Computerworld, the deal doesn't cover WiMax, which means it's still up to Sprint and Clearwire to manage and build the WiMax network and penetration into markets.  

What comes to mind is mobile virtual network operator, MVNO.  Sprint now simply sells the services and deal with the mobile customers while letting others like Ericsson and Clearwire work on the networks.  This effectively allows Sprint to be creative about offering services, 

So, why is this big news?  There is a potential for Sprint to pick and choose the technologies they want to offer without having to first pour in billions to build the network.  This would potentially open up the number of handsets and mobile devices that Sprint can offer its customers.  With a lighter load, Sprint will begin to concentrate on getting back customers it has lost over the years.  

For Ericsson, do a good job and more folks may be looking to them to manage their networks.  It would be a quick way for wireless providers to cut overhead, not to mention, someone else to blame if the network doesn't work as advertised.

Perhaps, we may see some interesting things for Sprint this winter.  

Source:  Financial Times

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