BOSTON--(BUSINESS WIRE)--In a first for the US, Sprint has partnered with Ericsson in a managed services deal for day-to-day operations of its wireless and wireline networks. Strategy Analytics views this seven-year, $4.5 to 5 billion deal in “Ericsson Managed Services for Sprint Network - A US First,” describing it as a win-win for both parties, but not a model that will be replicated soon by other top operators.
“Sprint will remain in the strategic driver’s seat, so it is not giving away the keys, it is just hiring an experienced pit crew to keep its network tuned up while focusing its own efforts and investments on building a better network and a more competitive service and product portfolio,” notes Susan Welsh de Grimaldo, Senior Analyst in Strategy Analytics’ Wireless Network Strategies service. She adds, “Sprint cannot afford to lose more ground to AT&T and Verizon Wireless. By shifting the risk and responsibility for network performance and improvement of operational processes and efficiencies to Ericsson, Sprint can keep its eye on the finish line.”
The Sprint managed services deal with Ericsson is part of a broader trend to improve networks and drive efficiencies through outsourcing or pooling resources through network sharing. “Network operators realize that customer service, brand, and compelling service and product offerings are more essential to their core value than basic network operations,” says Phil Kendall, Director of the Wireless Network Strategies service.
Ericsson, which has shown leadership in productizing managed services, will gain a larger US presence. The vendor may find it hard to push profitability out of the contract initially, but should be incentivized by credits for exceeding service level metrics, as well as the ability to support bids for other US network service projects and its work with Verizon Wireless on LTE using employees skilled in CDMA networks to be transitioned from Sprint.
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