Thursday, July 9, 2009

Sprint Drops Bombshell

Sprint has decided to outsource all of its network operations to Ericsson as part of a seven-year deal that indicates Sprint no longer considers network operations a core function, or something that allows it to create customer-facing value.

Network operators have been outsourcing some operations and functions for years. But no tier-one carrier has gone this far. Sprint will continue to own its network and make investment and equipment purchase decisions.

Sprint personnel will maintain first-line, customer-facing operations. But Sprint no longer considers the day-to-day management of its network a core source of market differentiation.

The move does not indicate any change in the perceived value of network ownership. But the devaluation of routine network management is shocking for an industry where most employees once worked in network operations.

1 comment:

Camille Mendler said...

I wrote the Yankee Group report discussing how European telco executives are rethinking their core USPs. Recently, I've also analyzed the Sprint-Ericsson deal.
I believe we're seeing an increasingly consistent trend - the realignment of intellectual and financial resources away from operation of physical network plant. Service management platforms are important, they enable the layering of monetizable intelligence and service control onto the network asset.
By the way, is it time to reconsider David Isenberg's famous discussion about the Stupid Network? Depends how you classify service management.

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