Operator, Get Me Operations
What business are you in? It’s a question that all companies need to ask themselves from time to time, especially in rapidly changing technology realms. Famously, the railroads saw themselves in the railroad business, not the transportation business, and largely missed out on automobiles, highways, airplanes, airports, and a few other the trillion-dollar developments. The venerable Society of Naval Architects and Marine Engineers opted not to include in its ranks the new aeronautical engineers of the 20th century, despite the similarities between air and water flows. Computer-maker Wang saw itself a purveyor of systems for word processing, not computation. The list is endless. Sprint has apparently asked itself what business it’s in. According to a story reported by the Financial Times and others,
Sprint Nextel, the struggling U.S. mobile network operator, is to outsource the management and day-to-day running of its two nationwide networks to Sweden's Ericsson in a seven-year deal worth between $4.5bn and $5bn.
There’s a certain irony to the FT coverage, isn’t there? Even as it is reporting otherwise, the FT calls Sprint a “U.S. mobile network operator,” when that’s exactly what Sprint has decided not to be. Ericsson will be the operator of Sprint’s U.S. mobile network. Sprint itself, even as it sheds itself of its own network operations duties, finds it hard to pay lip service to what might have easily been thought of as its core business:
Sprint, formed through the $36 billion merger of Sprint Communications and Nextel Communications in 2005, said yesterday it would retain full control of its networks.
It's hardly the first time Sprint done this kind of rethinking. Last year, it sold thousands of cellular towers to TowerCo in a $670 million deal. So it was already a cellular network operator without a lot of cellular base stations.
Meanwhile, a boatload of Sprint employees will have to redefine their own personal core missions, from “Sprint employees” to “people who run the Sprint network”:
Sprint has nearly 50 million subscribers on its CDMA and iDen networks in the U.S.. Under the deal's terms about 6000 Sprint employees will be transferred to Ericsson during the third quarter.
Presumably, once this legion rips off the Sprint logo from its collective workshirt and replace it with Ericsson’s, it won’t find the whole thing too confusing. Same job, new day. Similarly, Sprint does seem to understand what it considers the core mission of a mobile operator to be, once it doesn’t involve, you know, operations:
"This is about improving our customer experience," said Steve Elfman, network operations head. "While we get the benefit of Ericsson's expertise . . . we can focus our attention on bringing great devices, great services, great applications to them."
Uh, just one other thing. Maybe let’s get Elfman a new job title.