In a bid to cost costs and shore up its financial balance sheet, U.S. WiMax operator Clearwire has signed a seven-year agreement with Ericsson to take over management and day-to-day operation of its 4G WiMax network. As part of the deal, some 700 Clearwire employees will become Ericsson employees by the middle of the year. Clearwire emphasizes that it will continue to be responsible for designing its network and charting its own business strategy: “Our network is still ours—Ericsson is just managing it.”
The deal marks Ericsson’s second major managed services contract with a U.S. communications operator: in 2009, Ericsson landed a substantial network management contract with U.S. mobile operator Sprint. Sprint is largest investor in Clearwire, and Sprint’s 4G services for consumers and businesses operate on Clearwire’s WiMax network.
Clearwire says it expects the transition will be seamless for customers, since the same people who are operating Clearwire’s network now will continue to be the same people operating the network under Ericsson’s banner. The arrangement will also bolster Clearwire’s bottom line: although the company has just inked a deal to receive $1 billion from Sprint for wholesale network access, shedding 700 employees from its payroll will help Clearwire trim its costs and improve business efficiency.
The deal is just the latest in a series of major announcements since the departure of Clearwire CEO Bill Morrow back in March—including a statement earlier this week that Clearwire won’t be selling WiMax phones, which ended a trademark dispute with Sony-Ericsson. The company is currently being headed by chairman John Stanton, the former head of Voicestream and Western Wireless, while the company ostensibly engages in a search for a new CEO.