Ericsson to manage Clearwire's 4G network as part of cost-cutting deal

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Ericsson to manage Clearwire's 4G network as part of cost-cutting deal
Now that Clearwire definitely isn't producing its own smartphone, the company has apparently decided to focus its efforts on maintaining its WiMAX network -- with the help of Ericsson. Yesterday, the 4G operator announced that it had struck a seven-year deal with the Swedish telecom firm, just a few months after fighting a brief trademark lawsuit filed by Sony Ericsson. Under the arrangement, Ericsson will assume all network engineering, operations, and maintenance responsibilities, allowing Clearwire to concentrate on cutting costs and increasing efficiency. Clearwire will retain ownership over its technology and will still handle all customer relations, but about 700 of its employees will be transferred to Ericsson. The Kirkland-based company says its decision was at least partially influenced by new best friend Sprint, which forged a similar partnership with Ericsson back in 2009. Financial details on the new deal remain fuzzy, though Clearwire says it expects to see a major reduction in operating costs -- which sounds like the right prescription. Full presser after the break.
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Clearwire Selects Ericsson for Managed Services

* Clearwire to Leverage Ericsson's Global Best Practices, State-of-the-Art Tools and Processes to Maximize Efficiencies, Provide Continued Network Quality and Reduce Operating Costs
* Clearwire Retains Ownership of All Network Assets and Full Responsibility for Future Network Technology and Strategy Decisions
* Ericsson Responsible for Network Engineering, Operations and Maintenance
* Ericsson to Add Approximately 700 Clearwire Employees

KIRKLAND, Wash. and STOCKHOLM, Sweden, May 18, 2011 (GLOBE NEWSWIRE) -- Clearwire Corporation (Nasdaq:CLWR), a leading provider of 4G wireless broadband services in the U.S., and Ericsson (Nasdaq:ERIC) today announced a seven-year, managed services partnership that will transfer the day-to-day management of Clearwire's 4G network to Ericsson and allow Clearwire to realize operational efficiencies and reduce operating costs.

"Clearwire's effort to reduce costs and maximize efficiency while delivering a high quality mobile broadband service to our customers extends to all parts of our business," said Erik Prusch, Clearwire's chief operating officer. "By engaging Ericsson, a proven leader in managed network services, we can achieve those objectives, and benefit from their extensive global expertise and best-practices developed while serving clients around the world."

"We greatly appreciate the tireless contributions the talented people on our network services team have made in building Clearwire's 4G network and laying the foundation for our success," Prusch continued. "We are pleased they will have new opportunities within Ericsson to support our customers, and further position Clearwire as the leader in mobile broadband."

Key aspects of the partnership include:

* Clearwire retains ownership of all network assets and full responsibility for future technology and strategy decisions.
* Ericsson will be responsible for network engineering, operations and maintenance, including field services, 24X7 network monitoring, end-to-end engineering, provisioning and routine maintenance.
* Clearwire will remain the primary point of contact for all interactions with customers, wholesale partners and equipment vendors.
* Approximately 700 Clearwire employees are expected to begin performing their network functions as Ericsson employees in locations around the United States before mid-year 2011.

"The responsibility for network engineering, operations and maintenance of one of the leading mobile broadband networks in North America is one that Ericsson takes very seriously," said Angel Ruiz, head of Ericsson's North American operations. "We look forward to welcoming the Clearwire employees to Ericsson and appreciate the unique skills and expertise they bring to our company."

"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," observed Berge Ayvazian, Senior Consultant with Heavy Reading. "It also represents Ericsson's second managed services contract in the U.S., building on the Network Advantage agreement that has already delivered major operational and economic benefits for Sprint."

In 2009, Ericsson entered into a similar network management partnership with Sprint, Clearwire's largest shareholder and wholesale partner. Ericsson's experience and track record for success in Managed Services will also offer Clearwire an efficient, cost-effective way to manage its network. Ericsson has invested more than $1 billion in state-of-the-art tools, processes and global best practices. The networks that Ericsson manages for operators serve over 800 million subscribers worldwide. In addition, Ericsson provides 24/7 tech support to operators for well over two billion subscribers.
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