Sprint Could Outsource Network to Ericsson
Sprint Nextel
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is in final negotiations to outsource management of its cellular network to
Ericsson
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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
TheStreet Recommends
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
.