Sprint Could Outsource Network to Ericsson

Sprint Nextel is in final negotiations to outsource management of its cellular network to Ericsson in a cost-cutting move, a report says.

Author:
Joseph Woelfel
Publish date:
May 4, 2009 12:38 AM EDT

Sprint Nextel

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is in final negotiations to outsource management of its cellular network to

Ericsson

(ERIC) - Get Telefonaktiebolaget LM Ericsson Report

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

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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