Clearwire Outsources to Ericsson

May 18th, 2011 by · 3 Comments

That clwr is looking for ways to cut costs and thus improve its operational position by any means necessary is not a secret.  I suppose I should have expected them to take a page from the book of their largest shareholder, Sprint Nextel (NYSE:S, news, filings) and outsource network operations to Ericsson, but it hadn’t yet occurred to me.  But that’s exactly what they did according to today’s announcement.  And it makes even more sense alongside the not-so-secret possibility of a network sharing deal between Sprint and Clearwire, since of course Ericsson would be on both sides of it doing the nitty gritty.

Clearwire will still own the network and will make all the technology and strategy decisions, while Ericsson will take over network engineering, operations, and maintenance.  Sounds familiar, I guess Ericsson really does like this stuff.  Approximately 700 Clearwire employees will move over to the Ericsson column, which probably adds to their job security so I’d guess most won’t mind.  At least they’d better not, as that transition will take place by ‘mid 2011’ which translates to ‘in a month or two’, since it’s nearly time to break out the swimsuits according to my calendar.

Will this be enough to silence the company’s critics?  Obviously not, but perhaps it gives some visibility into those operations costs going forward that will help clarify just what kind of scale they need to reach breakeven.  The main focus now, therefore, is subscriber growth.  Lots and lots of subscriber growth.

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Categories: Wireless

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3 Comments So Far

  • thejuice says:

    i just moved to minneapolis and looked at clearwire in terms of home and business service. i decided against using them as their value prop has eroded relative to their peers over the last 6 months or so. in fact i WANTED to use them but couldn’t justify pay the same or more for less service. oh well.

  • mhammett says:

    I don’t know if there has ever been a reason to use ClearWire over Sprint.

  • Telecom Tom says:

    This is the first of many moves John Stanton will make to position CLWR for positive EBITDA in 2012. He is well recognized in the wireless industry for his deal-making skills (to Rob’s point, they need to get lots and lots of wholesale subs on their network), but less well known are John’s amazing operational abilities. The right leader at the right time for CLWR.

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