Ericsson and Sprint announced a renewal of portions of the companies' 2009 managed services contract, which reaches its full term in September 2016. Financial terms were not disclosed and the companies did not reveal how large a portion of the contract has been renewed.
The companies did say that Ericsson will continue to be a key business partner for Sprint, providing some multi-vendor services that support the ongoing operations, development and transformation of Sprint's networks. Overall Network Service Assurance management of the network will be performed by Sprint.
Roger O'Hargan, Head of Network Services, Ericsson North America, says: "We are very proud of the work Ericsson has done to help Sprint achieve its business objectives over the past seven years. We look forward to continuing our partnership and helping Sprint deliver enhanced operational performance and achieve the cost advantages that can come through our managed services offerings."
Dr. John Saw, Sprint Chief Technology Officer, says: "Sprint's network is performing at best-ever levels, and we are proud of the progress we have made with Ericsson over the last seven years. Ericsson remains a valued strategic partner in supporting the Sprint network. As with any long-term managed services agreement, it is crucial that the relationship is regularly reviewed and adjustments made when necessary so that business strategies remain aligned."
- Sprint retains full ownership and control of its network assets, and solely owns network strategy and investment decisions.
- Customers will continue to work directly with Sprint employees as their primary contact, as Sprint retains full control of the customer experience, customer technical support and services review.
- Sprint retains technology and vendor selections.
- Ericsson assumes responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks.
- Ericsson will 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 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 force reductions are currently contemplated as a result of this agreement.
A new entity called Ericsson Services Inc. will be established in Overland Park, KS.
Sprint said it also foresees cost savings, better inventory management and increased network efficiencies from the deal. The cost savings will be reinvested in the network for better coverage. Expected cost savings were not specified in the announcement.