Telecom
Sprint Could Outsource Network to Ericsson
Sprint Nextel (S) is in final negotiations to outsource management of its cellular network to Ericsson(ERIC) and transfer 5,000 to 7,000 U.S. employees to the equipment vendor, the Wall Street Journal reports, citing people familiar with the matter.
The deal is seen as a cost-cutting move that would help offset Sprint's dwindling subscriber numbers, the Journal notes. The two companies haven't finalized a contract and discussions could continue for a few more weeks, the newspaper reports. Sprint could end up paying Ericsson as much as $2 billion over several years to maintain the cell sites that carry Sprint's wireless voice and data traffic. The deal is expected to slash Sprint's network costs by about 20%, these people say. Ericsson and Sprint declined to comment for the Journal. The people close to the matter cautioned it is still possible that Sprint may choose not to move forward with the outsourcing strategy at all, according to the Journal.TheStreet Premium Services
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