EDS Cuts $234 Million Deal With Nextel

Wireless communication firm Nextel Communications Inc. is outsourcing IT infrastructure management to EDS in a five-year, $234 million deal. The Texas-based EDS will manage Nextel’s corporate data center, database administration, helpdesk, desktop services and other technical functions. EDS has chosen Sun as the platform provider of choice for the contract.

Both Nextel and EDS are closely aligned with Sun Microsystems . Last April, Nextel became the first company in North America to provide Sun’s Java technology over wireless phones, and the Reston, Va.-based company expects to have one million Java technology-enabled handsets in the marketplace by March.

EDS established a “Continuum of Services Alliance” with Sun last year to work collaboratively to provide strategy, technology and services to support major corporations. All three companies expect to work together to identify the potential for developing wireless data solutions based on Java technology.

“To stay at the top of our game, we count on reliable IT systems to support our day-to-day and mission-critical work,” said Dick LeFave, senior vice president and chief information officer of Nextel. “This relationship with EDS is critical to our ability to realize efficiencies through IT solutions. We expect to reduce our IT costs by $140 million over five years, while exceeding service levels to our internal and external customers.”

Nextel employs IT personnel in various offices across the United States. As part of the outsourcing agreement, about 290 employees will be transitioned to EDS employment and management and will continue to work in support of Nextel’s IT infrastructure.

“This new contract allows Nextel to take advantage of EDS’ industrial strength and its capability to launch new services for their clients. The collaboration of the three companies will enable new and unique solutions in the mobility marketplace,” said Doug Frederick, president of EDS’ Information Solutions line of business.

Nextel and Nextel Partners Inc., currently serve 195 of the top 200 U.S. markets. Through recent market launches, Nextel and Nextel Partners service is available in areas of the U.S. where approximately 230 million people live or work. In addition, through NII Holdings, Inc., Nextel has international wireless operations and investments primarily in selected Latin American markets.