Ericsson signs deal to run Sprint wireless, wireline networks

Sprint and telecom systems provider Ericsson have signed a seven-year deal that will give Ericsson day-to-day responsibilities for managing Sprint's wireline and wireless networks.

Sprint says that while it will retain full ownership and control over its networks, Ericsson will be responsible for the provisioning and maintenance of Sprint’s iDEN, CDMA and wireline networks. Bob Azzi, Sprint’s network senior vice president, says that Sprint is choosing to outsource its network operations to redirect resources to other priorities such as enhancing wireless coverage and improving customer service.

Sprint says that about 6,000 of its employees will be transferred to Ericsson as part of the deal. These workers are responsible for regular network maintenance tasks such as installing new lines, overseeing daily network traffic and managing network storage.

Although Sprint will be the first U.S. carrier to hire Ericsson to manage its network operations, the Swedish telecom systems provider currently manages networks for telecom companies abroad, including T-Mobile UK and 3 Italia. In total, the company says it manages networks that cover roughly 275 million customers around the globe and that it can manage both 3G and 4G wireless technologies.

“We have talked to the [carriers] who are customers of Ericsson and have found this to be a very mature process,” says Azzi. “We spent a lot of time visiting companies like ours… and in all cases they were very satisfied with the performance of Ericsson. The employees, once they were integrated into the Ericsson culture, were very delighted to be over there, they were very customer focused, and so it was a resounding success across the board.”

Sprint's rationale that it wants to focus more of its resources on improving customer service is consistent with its overall turnaround plan, which rests primarily on boosting customer satisfaction. The company has been stricken by major customer losses in its wireless services recently, as it reported losing more than 4 million wireless customers in 2008 alone. However, a recent study published by the American Customer Satisfaction Index suggests that Sprint's efforts to improve customer service are starting to pay dividends as that rating surged 12.5% last year over 2007.