Management Turnover as Change Agent: CEO Watch - Gary Forsee, Sprint Nextel Update 2

Monday, October 8, 2007

CEO Watch - Gary Forsee, Sprint Nextel Update 2 - Steps Down

Gary Forsee made it official, he stepped down late Monday afternoon. The company appointed CFO Paul Saleh as Acting CEO. Now comes the real test, what will Sprint Nextel do? In a piece by Amy Thomson of Bloomberg:

Even with new leadership, Sprint may have a tough time meeting the challenge of stitching together two networks after the $36 billion purchase of Nextel Communications Inc. in 2005. The stock has fallen 22 percent since the acquisition, customers still complain about dropped calls, and new ads haven't stemmed the loss of subscribers.

"The problems that Sprint Nextel has are bigger than Gary Forsee,'' said Chris King, a Stifel Nicolaus & Co. analyst in Baltimore who rates the shares ``hold'' and doesn't own them. "This is certainly not a story that's going to be turned around in six months or so, regardless of who's in charge.''

An earlier story in Computerworld summed up Sprint's situation succinctly:

Forsee's departure is good for the company, said Tad Neeley, a principal at Gemini Partners Inc. and a private equity investor in a mobile virtual network operator (MVNO).

"Sprint now needs to focus on developing its strategic plan and figuring out, really, what it wants to be," Neeley said. "Gary Forsee wasn't really providing that kind of leadership." Although it has valuable assets, such as a good [third-generation] mobile data network and the spectrum it's using for WiMax, Sprint hasn't made the most of the Nextel acquisition, he said.