Sprint may outsource network to Ericsson - WSJ

NEW YORK Sun May 3, 2009 9:17pm EDT

NEW YORK May 3 (Reuters) - Sprint Nextel Corp (S.N) is in final negotiations to outsource management of its cellular network to Telefon AB LM Ericsson (ERICb.ST) and transfer 5,000 to 7,000 U.S. employees to the equipment vendor, The Wall Street Journal reported, citing people familiar with the matter.

The move is meant to cut costs to help offset Sprint's dwindling subscriber numbers, the Journal reported on its website on Sunday.

The two companies have not finalized a contract and discussions could continue for a few more weeks, the people familiar with the matter told the paper.

Sprint could end up paying the wireless network equipment maker 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 Journal reported.

The deal is expected to slash the wireless carrier's network costs by about 20 percent, the sources told the paper.

But Sprint may choose not to move forward with the outsourcing strategy at all, the Journal reported, citing sources.

A Sprint spokesman declined to comment on the Journal report and an Ericsson representative was not immediately available.

(Reporting by Anupreeta Das and Sinead Carew; Editing by Richard Chang)

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