U.S. wireless carrier Sprint said Wednesday it will be taking on an unspecified number of Ericsson employees as part of a renewal of portions of its managed services contract with the Swedish company.
According to a blog post from Sprint CTO John Saw, the carrier has decided to renew parts of its seven-year-old network outsourcing agreement with Ericsson once the contract term ends in September. Saw said Ericsson will continue to provide a number of multi-vendor services to support ongoing operations and network development. Sprint, however, will assume responsibility for overall Network Service Assurance, Saw said.
To ensure its ability to carry out the latter, Saw said “some” Ericsson employees will transition to Sprint. Neither Sprint nor Ericsson specified the number of employees that will make the move to the carrier.
When the initial contract was signed back in 2009, however, approximately 6,000 Sprint employees made the jump to Ericsson subsidiary Ericsson Services. As part of that agreement, Ericsson took over day-to-day operations and maintenance of Sprint’s CDMA, iDEN and wireline networks as well as management of the carriers’ inventory. At the time, it was estimated the arrangement would help Sprint shave around 20 percent off its network costs.
It seems costs savings are part of the plan this go around as well.
While Saw didn’t speak directly to how much Sprint is looking to save in the renewed deal, he did talk about the carrier’s “aggressive goals to lower costs while at the same time improving our network.”
“With our diverse toolkit of innovative cell site solutions and our deep spectrum holdings, we’re very confident in our ability to drive network improvements while reducing costs,” Saw wrote. “Being closely connected to our network and our customers is a key aspect of Sprint’s turn-around strategy. Therefore, this is the right time for Sprint to take on more direct responsibility for its operations.”
Earlier this year, Sprint face backlash from analysts, investors and competitors when it set its capital expenditure target for 2016 at just $3 billion. The carrier, however, posted a solid June quarter and has started to win over detractors of its strategy.
“We believe the underlying fundamentals of the story are indeed getting more healthy and should remove many of the ‘doomsday’ scenarios out there,” Wells Fargo senior analyst Jennifer Fritzsche wrote. “We believe there is high likelihood the new iPhone 7 will have (three-carrier aggregation) capabilities which could be a significant game-changer for S customers and their experience on (Sprint’s) network.”
The transition to Sprint may come as a boon for some Ericsson employees as the latter company moves forward with a plan to accelerate cuts.
Though Ericsson already cut some 8,000 employees in the first part of the year as part of a plan to cut $1 billion from its operating expenses, a poor second quarter under now-ousted CEO Hans Vestberg spurred the company initiate “extensive and significant new cost reductions.”
Filed Under: Infrastructure