Bloomberg News reports that Gary Forsee, Sprint Nextel's (NYSE: S) CEO has been shown the door after he failed to gain market share from Verizon Communications (NYSE: VZ) and AT&T Inc. (NYSE: T). Forsee will leave immediately, and CFO Paul Saleh will run the company Sprint, the third-largest U.S. wireless carrier, finds a permanent replacement.
Forsee lost customers following Sprint's $36 billion purchase of Nextel. Ultimately, the deal was flawed as a strategic response to competition from Verizon and Sprint and Foresee was distracted in a failed effort to integrate the two companies from adapting to rapidly changing competitive pressures.
Forsee is rightly paying the price for lousy results he oversaw. Sprint lost about 337,000 contract subscribers in the third quarter. And it anticipates results below forecast -- it had predicted $11 billion to $11.5 billion in operating income and $41 billion to $42 billion in sales. Meanwhile Nextel customers complained about poor reception and dropped calls, and Sprint still has to combine two billing systems, a process that may confuse subscribers who receive new bills.
Let's hope Sprint shareholders can get a new leader who can fix these problems fast!
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
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Reader Comments (Page 1 of 1)
10-08-2007 @ 8:44PM
wade apollo said...
Key on Nextel Walkie-Talkie technology. Make
deal with GM , Ford, and Chrysler. All American
automobiles should incorporate the Nextel
walkie-talkie system in design. It should be incorporated just like turning on the radio i.e.
AM/FM/Nextel.
Then, of course, the imported cars.
10-10-2007 @ 3:26PM
eye4sprint said...
Sprint's real cancer is within its personality as a company. Deceptive characteristics are well known. Its buraeucracies around hierchy structure provides no place for customers. Does anyone at Sprint actually care for business? Probablly not.
10-09-2007 @ 5:55PM
AN said...
Any word on whether or not the rumors between Spring and Verizon last week were just that, rumors? I doubt it will happen, but to me it seems as if Sprint is going downhill, and they do have some corporate ties to at least start negotiations http://www.newsvisual.com/newsvisual/2007/10/sprint-and-veri.html . Does anyone think this is a possibility?
10-13-2007 @ 10:14PM
bob dobbs said...
The Nextel network must die for Sprint to survive. Sprint should have never bought Nextel. It is an ancient network, and needs to be either sold or dismantled. Should have purchase someone like Alltel or Criket. Now, Sprint must suffer the Nextel and XOHM wrath.