Summary
This is a positive development as far as the US operators are concerned. As a result of out-sourcing their networks , the operators could realize significant operational cost savings and they could start focusing on the impending 4G technologies as well as rapid migration from the older technologies. Its great for the vendors such as Ericsson , Nokia Siemens Networks and Alcatel-Lucent as along as some profitability is achieved. It is a major technical and operational undertaking for Ericsson because of its non-CDMA presence, especially if Nortel Wireless is acquired by Nokia Siemens networks. There may be implications on existing Sprint employees as some layoffs may take place due to synergies and cost cutting by Ericsson. Service Level agreements between vendors will be very critical as multiple technologies are involved, unlike Europe and Asia where mainly GSM is deployed.
Analysis
Most major vendors have been successful in acquiring several managed services contracts in Europe and Asia due to factors such as standard GSM technologies, relatively simpler operator business models, limited number of equipment suppliers , and readily available expertise in GSM and 3G. Ericsson has been very aggressive in marketing their managed Services since 1990s. They have a good platform to build on. However their biggest challenge will be their limited experience with CDMA, iDEN, 1X-RTT and EV-DO technologies. If NSN acquires the wireless division of Nortel as it is rumored to, then Ericsson will have to have solid SLAs with NSN and Motorola for the maintenance of the Sprint Networks ( both CDMA and iDen).
