In the third quarter of 2007, Reston, VA-based Sprint Nextel (S) announced that it will lose approximately 337,000 subscribers. Make that 337,001, the last minute addition being Gary Forsee, the CEO was has taken the fall for all that has been plaguing the third largest US mobile company. Of course when you get paid $21.6 million a year, well getting the boot comes with the gig.
Wall Street has been baying for blood for a while now, thanks to mounting subscriber losses. Yup, that’s right, the very same Street that rejoiced over Forsee’s appointment as the savior of Sprint. The same Street that threw a party to celebrate the ill-fated coupling on Sprint Nextel.
The very same Street that popped the champagne when Sprint spun off Embarq - even though everyone knew triple play was the way forward. Lately, the Street has been questioning Sprint’s decision to bet on WiMAX and work its way out of the iDEN-CDMA mess.
This is a movie that plays time and again. Remember all the negativity around Verizon (VZ) FiOS and how expensive an effort it was. Well, the tune has changed in recent days. It happened with the old AT&T (T) when Michael Armstrong, the then CEO paid too much attention to the Street and didn’t follow through on his quadplay strategy.
Can Forsee’s successor turn the ship around? I am not sure. Sprint is in transition, and if their WiMAX xOhm strategy is given a chance, then Sprint can be back on top.
10 comments so far
4:44 AM PT
Forsee, for good or for bad, was willing to bet the company on WiMAX. Unfortunately the shareholders weren’t convinced. Chasing Verizon and AT&T on their terms (in an increasingly integrated telecom environment), is an obvious death by a 1000 cuts. I see only two choices: 1) sell the entire company; or 2) sell off the pieces to fund a much smaller WiMAX company.
7:04 AM PT
Forsee or no Forsee, Sprint has a great opportunity to change the rules with WiMax; both from a technology perspective and in terms of Sprint’s business. Hopefully the Board (and Whitworth) won’t be blind to that opportunity (which requires foresight and patience). If all they (and the new CEO they bring in) are interested in is Sprint’s short-term market valuation, and they simply try to compete head-on with Verizon and AT&T, the rest of Sprint’s (likely short) existence will be bloodied and painful.
7:08 AM PT
Om,
nice myth. I mean:
“Of course when you get paid $21.6 million a year, well getting the boot comes with the gig.”
The sad truth is that the people working to make the gig are the ones who get the boot first.
http://www.nytimes.com/2007/01/09/business/09phone.html?_r=1&n=Top%2fNews%2fBusiness%2fCompanies%2fSprint%20Nextel%20Corporation&oref=slogin
12:51 PM PT
“Forsee or no Forsee, Sprint has a great opportunity to change the rules with WiMax; both from a technology perspective and in terms of Sprint’s business.”
I agree. Forsee is a genious and WiMax is the future. Perhaps Google will acquire Sprint . . .
7:12 PM PT
Geez, no wonder US telecom companies are so backwards. Between goverment regulators and moronic Wall Street analysts, it’s tough to be progressive.
8:35 PM PT
Thank God the board came to it’s senses. Gary Forsee made bad decisions at Sprint that cost good people their jobs, the stakeholders money, and the company image problems.
9:14 PM PT
[...] PT | No comments Sprint Nextel’s (S) rough patch is turning into a highway from hell. The exit of CEO Gary Forsee, questions about its plans for a WiMAX network and its aborted partnership with Clearwire (CLWR) [...]
6:51 AM PT
[...] Nextel’s (S) rough patch is turning into a highway from hell. The exit of CEO Gary Forsee, questions about its plans for a WiMAX network and its aborted partnership with Clearwire (CLWR) [...]
7:38 AM PT
[...] Oct. 9, 2007: Sprint CEO Gary Forsee gets the boot [...]
9:48 AM PT
[...] Oct. 9, 2007: Sprint CEO Gary Forsee gets the boot [...]
Leave a Comment