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Ericsson to manage Sprint network in $4.5-$5billion deal

Sprint Nextel Corp said it would pay Ericsson $4.5 billion to $5 billion to manage its network under a 7-year deal in which 6,000 Sprint workers will move to Ericsson. Sprint shares rose 4 percent. Sprint said it would keep full control of its network after the deal, which is the first of its kind for a major U.S. operator. Sweden's Ericsson said the deal would initially hurt margins but provide "satisfactory" profits over seven years.

The No. 3 U.S. mobile service provider said Ericsson would help improve its network performance more efficiently than it could on its own. It also plans to plow any savings from the agreement into improving its network coverage. "This is about improving our customer experience," Steve Elfman, Sprint's network operations head, said on a call with reporters on Thursday. "While we get the benefit of Ericsson's expertise ... we can focus our attention on bringing great devices, great services, great applications to them."

Reuters Technology News

Posted by | Fri, Jul 10, 2009 - 01:28 PM