Sprint, Ericsson Announce $5B Network Services Pact

Sprint Nextel Inc. announced today a seven-year deal with Ericsson for network services that is valued at up to $5 billion and can be extended.

The agreement means that 6,000 Sprint networking employees will begin working for Ericsson in the third quarter of the year, Sprint said in a statement. They will be a part of Ericsson Services Inc., an Ericsson subsidiary in Overland Park, Kansas, meaning the jobs will be retained in the U.S.

Sprint said no reductions in its workforce are currently contemplated as a result of the deal, which it said "delivers operational efficiencies." It did not elaborate on what those efficiencies are, but the company planned a conference call to discuss the deal at 1:30 p.m. ET.

In the deal, Sprint retains ownership of its network and controls strategy as well as its investment decisions. Sprint customers are going to be served by Sprint employees.

Ericsson, meanwhile, will assume responsibility for day-to-day services, provisioning and maintenace for Sprint's CDMA, iDen and wired networks.