Clearwire has contracted with Ericsson to manage its 4G network for the next seven years. In a cost-saving measure for Clearwire, 700 Clearwire employees – all involved in network operations –will become Ericsson employees.
The financial terms of the deal are not being disclosed. A spokesman for Clearwire said this is a straight managed services contract; Ericsson is not making a financial investment in Clearwire.
In 2009, Clearwire majority owner Sprint entered a network management contract with Ericsson.
The pace of Clearwire's build-out of its WiMAX network has slowed in the past year, at least in part for a lack of funds necessary to keep building as rapidly as it did at its founding.
Shifting 87 percent of staff along with a management contract is uncommon, but it serves the purpose of getting their salaries and benefits off of Clearwire's books, with the expectation that the money saved will be available for funding operations.
"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."
Clearwire retains ownership of all network assets. Ericsson will be responsible only for network engineering, operations and maintenance, the companies said.
There will be no management changes of any kind at Clearwire, the spokesman said. Current management remains in place. The employees remaining with Clearwire will number about 100. They will continue to be responsible for all functions other than network operations, including technology development, sales and marketing.
Clearwire will also remain the primary point of contact for all interactions with customers, wholesale partners and equipment vendors.
"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."
The transfer of employees is scheduled for sometime within the next few months.