May 18, 2011

Clearwire Outsources Its Network to Ericsson

Clearwire (News - Alert) Corp. is handing over the management of its 4G network to Ericsson.

The seven-year deal is aimed at helping the WiMAX (News - Alert) service provider to save money, and 700 of the carrier’s employees will start working for the vendor as part of the effort.

“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 Clearwire COO Erik Prusch. “By engaging Ericsson (News - Alert), 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.” 

Under the new deal Ericsson will handle the technical aspects of the Clearwire business, including network engineering, provisioning, operations, and maintenance. Clearwire will focus on decision making and working with customers, wholesale partners and equipment vendors. Ericsson and Sprint (News - Alert) struck a similar arrangement in 2009. Sprint is, of course, Clearwire’s largest shareholder and a wholesale partner of the 4G service provider.

Given that, and the fact that Clearwire has been struggling financially, perhaps the move by the 4G provider to outsource its network shouldn’t come as a surprise. As reported in a recent TMCnet story, Clearwire' interim CEO John Stanton recently revealed that said the firm remains focused on raising capital to continue to build out its network, but also said he didn't rule out bankruptcy as a possibility.

“Bankruptcy is always an ugly option,” he said, a reported in March. “That dynamic is not in the best interest of the shareholders,” Stanton said.

The reason Clearwire even is talking about that possible contingency is that it is a public company and already knows it will run out of operating capital by the end of 2011 unless new investment can be found. The company does not foresee reaching a break even position, on an operating cash flow basis, until 2012, according to the report. 

Want to learn more about 4G wireless technologies? Then be sure to attend the 4GWE Conference, collocated with TMC’s (News - Alert) ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. The 4GWE Conference provides unmatched networking opportunities and a robust conference program representing the wireless ecosystem. The conference not only brings together the best and brightest in the wireless industry, it actually spans the communications and technology industry. To register, click here.

Edited by Jennifer Russell




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