Sprint Nextel and Ericsson Network Services Agreement

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Headline: Sprint Nextel and Ericsson reach $5 billion network services agreement
July 27th, 2009

On July 9th, Sprint and Ericsson announced a plan for Ericsson to take over Sprint’s fixed and mobile network operations. This deal represents the largest Managed Services contract in North America so far, both in terms of contract value and the scale of operations to be managed. This wireless and wireline network Managed Services agreement called "Network Advantage” will provide Ericsson with a payment for services in the range of USD$4.5 billion to USD$5.0 billion over the next seven years and with an option to renew at that end of the period. The details of the deal are: • • • The deal spans across all Sprint’s CDMA and iDEN Networks, excluding the Clearwire WiMAX network, international operations, and any future LTE plans Ericsson will take responsibility of the operations of iDEN, CDMA and Wireline networks including provisioning and maintenance for Sprint's CDMA, and iDEN networks Transference of around 6,000 Sprint employees to Ericsson’s Services Inc organization. No forced reductions are currently contemplated as a result of this agreement Sprint will retain the customer interface, customer experience, customer technical support, ownership of network assets, strategy, investments, technology and vendor selection. Customers will also continue to work directly with Sprint employees for technical support Implementation is under way and transfer of headcount and operations are expected to start by Q3 2009.

What does it mean for Sprint?
Improved perception of leadership: Sprint is the first operator in North America taking a step toward managed services as a competitive strategy. So far competitive moves have been driven by technology. This deal will put the company in a very strong position in terms of network efficiencies, cost reductions and service innovation.

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