Clearwire Hands Network to Ericsson

Clearwire LLC (Nasdaq: CLWR) has awarded Ericsson AB (Nasdaq: ERIC) a seven-year managed services deal that will see 700 staff transfer from the WiMax operator to the Swedish vendor.

While Clearwire will retain ownership of the physical network and decide on suppliers and strategy, Ericsson will be responsible for all engineering, operations and maintenance for the entire network (core, transport and radio access).

The 700 Clearwire network management staff affected by the deal will transfer to Ericsson before the second half of the year. The value of the deal was not revealed.

"This managed services partnership is the next logical step for both Clearwire and Ericsson, one that will have significant near-term and long-term benefits for Clearwire's employees, customers, retail distributors and investors," stated Berge Ayvazian, senior consultant at Heavy Reading .

This is Ericsson's second major wireless network managed services deal in the U.S. -- in June 2009 the vendor struck a seven-year managed services deal with Clearwire's largest shareholder, Sprint Corp. (NYSE: S) valued at up to US$5 billion. (See Sprint Gives Clearwire $1B Boost and Ericsson Bags $5B Deal.)

Clearwire's share price is up $0.09, more than 2 percent, to $4.36 in early trading Wednesday.

Why this matters
Clearwire needs to cut costs and focus on its services and customer growth strategy, things that this deal should help it achieve.

It also makes a network sharing deal between Clearwire and Sprint a clean and easy prospect. Sprint CEO Dan Hesse confirmed Tuesday that the two are talking about just such a deal. (See Sprint CEO: More LTE Info Coming This Summer.)

For Ericsson, the deal strengthens its services hand in the U.S. and confirms its status as the world's leading supplier of managed services, one of the few areas of growth left for the major vendors.

For more
Here's the latest on Clearwire:

— Ray Le Maistre, International Managing Editor, Light Reading

TelecomEngineer 12/5/2012 | 5:03:25 PM
re: Clearwire Hands Network to Ericsson

This is a shell game folks.  Smoke and mirrors.  Sprint and Clear haven't stopped sharing.  In fact, and I can't without laughing call it a "launch", but XOHM delayed "launching" because its original XOHM (wimax) only card would have exposed their dirty little secret.  They had to then and have to now have their 4G "car" towed by the 3G tow truck assuming they want their car to go anywhere.

The Ericsson deal:  Clear learned this trick from Sprint.  To outsource your engineering staff, many are highly paid with lengthy severance packages, the plan behind the scenes, is to have Ericsson start to layoff, downgrade, cut benefits very gradually at first, like the frog in boiling water, claiming all along they aren't doing what they fully intend and have a business case based on doing. 

Past the 1 year mark as an Ericsson employee, the risk of these x Clear folks being able to come back to the Sprint carried over Clear severance is low, so Ericsson can then really ramp up layoffs over the next 24 months changing the severence package details and amounts, further demotions and salary cuts, as it planned to do from the beginning.  All under the polite headings of "efficiency"  'reorganization"  "synergies"  "removing duplications"  "becoming lean and stronger to compete".  Clear has learned from Sprint out to "outsource" their layoffs.  Using shareholder money to pay someone else to make the tough decisions you don't have the guts to make yourself.

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