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Sprint Nextel CEO Faces Hard Questions at Shareholder Conference

6:30 am on May 14, 2008 | Category: Business, Telecom Services, Wireless

Sprint Nextel’s recently-installed Chief Executive Officer, Dan Hesse, had to answer some tough questions yesterday at the company’s annual shareholder meeting, as investors grow increasingly concerned about ongoing subscriber losses.

“Over the last year, AT&T and Verizon have really been eating our lunch, particularly in terms of high-value customers,” noted Sprint investor, Carlos Roberts of McLean, asking Hesse what he was doing about the problem.

The new CEO (hired in December after the board of directors ousted his predecessor, Gary Forsee) assured Robers and other shareholders that Sprint is taking appropriate steps to retain subscriber momentum, but warned them not to expect significant improvement until the end of the year. “Improving our performance will take time,” he said.

Chairman James Hance Jr., meanwhile, blamed the company’s problems on the struggle to integrate Nextel’s network and corporate culture with Sprint’s after the two companies merged in mid-2005.

“Over the course of merging Sprint and Nextel, we lost our focus on how we attract, serve and retain our customers,” Hance explained. “As a result, we lost ground to our competitors. Too many good customers have walked out the door unhappy with us.”

Hesse explained that in the months to come, the company hopes to retain more of its high-end customers through improved customer service and special offers, as well as the roll-out of a new smartphone called the Instinct, which will compete with the Apple iPhone beginning next month.

Overall, Sprint is seeking to provide devices and services that will distinguish its brand from those of larger rivals, AT&T Mobility and Verizon Wireless.

Chief among such innovations will be the company’s forthcoming WiMAX network, developed through a recently announced partnership with Clearwire Corp. WiMAX is a high-speed, long-range mobile broadband technology that is “at least” two years ahead of comparable services from AT&T and Verizon, according to Hesse.

“Sprint will be the only wireless carrier providing landline-level capability to mobile customers,” the CEO said.

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