Sprint (S) CEO Forsee Under Seige
October 3, 2007 by Douglas A. McIntyreSprint Nextel (S) CEO Gary Forsee may be lingering in his office these days. Heading outside could be dangerous. Relational Investors LLC, which owns almost 2% of Sprint’s shares, is being less than polite about disapproving of Forsee’s performance. The Wall Street Journal quotes the head of Relational as saying, "We have lost confidence in Gary Forsee."
Investors are impatient with the poor performance of Sprint’s share price and its inability to add subscribers while rivals AT&T (T) and Verizon Wireless pack on new customers every quarter.
Relational and it supporters are equally upset with Forsee’s plan to spend $5 billion to build a national WiMax network. But, that is where they miss the point.
Sprint (24/7 view) has little chance of adding a large number of new customers or making headway against it larger competitors without some unusual advantage. WiMax, with its ultra-fast wireless capacity, could power both handsets and PCs on the Sprint network. The technology is faster than the 3G platform used in traditional wireless broadband installations. It is supported by R&D work and investment capital from Intel (INTC) and Motorola (MOT).
If WiMax works, it will change the face of wireless communications. If not, Sprint’s shareholders will not be much worse off than they are today.
Douglas A. McIntyre
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