Sprint Nextel's CEO's time runs out: Gary Forsee rightly paying price for lousy results

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.