Sprint (S) Looking At Outsourcing Its Network To Ericsson (ERIC)

Sprint Nextel Corp. is in final negotiations to outsource management of its cellular network to Telefon AB L.M. Ericsson (Nasdaq: ERIC) and transfer 5,000 to 7,000 U.S. employees to the equipment vendor in a move to cut costs, according to the Wall Street Journal.

The two companies haven't finalized a contract and discussions could continue for a few more weeks, reported the Journal, but Sprint could end up paying Ericsson as much as $2 billion over several years to maintain the thousands of cell sites that carry Sprint's wireless voice and data traffic. The deal could cut Sprint's network costs by about 20%.

The negotiations come as Sprint is trying to aggressively cut spending to counter revenue losses from customers leaving the Sprint network.

Earlier today, Sprint Nextel reported earnings and it anticipates post-paid and total subscriber full-year losses should improve in 2009 as compared to 2008.
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