Sprint Nextel names new CEO
Sprint Nextel named Dan Hesse, former chairman and CEO of local wireline carrier Embarq, as its president and CEO, ending the company’s two-month search for a successor to Gary Forsee.
Hesse is not new to Sprint, having headed the company’s local wireline division before it was spun off as Embarq in May 2006 in the wake of Sprint’s merger with Nextel Communications. Perhaps more importantly, Hesse is familiar with the wireless industry after serving as president and CEO of AT&T Wireless from 1997 to 2000, when AT&T Wireless was the largest U.S. cellular carrier.
“Dan Hesse is the right person to lead our company,” Irvine O. Hockaday Jr., chairman of Sprint’s CEO search committee, said in a statement. “He is a proven leader with deep wireless experience as a chief executive and an established track record of generating strong operating performance.”
Hesse’s tenure at AT&T Wireless — before the company was spun off and eventually sold to Cingular Wireless, which adopted the AT&T name — was exemplary, said Roger Entner, senior vice president of communications for IAG Research.
“Dan Hesse is a really sharp guy with a terrific track record in wireless. If AT&T had left him in charge when they spun it off as an independent company, the wireless industry would look very different today,” Entner said. “He did a tremendous job at AT&T Wireless — it was the largest carrier at that time, grew revenues quickly and did innovative stuff.”
In a statement, Hesse said he is “honored and excited” to lead Sprint Nextel.
“There is no company in the wireless industry with a stronger set of assets,” Hesse said. “I believe, through solid execution and commitment to our customers, we can reinvigorate our operating performance and return the company to a growth trajectory.”
While Hesse will be Sprint Nextel’s president and CEO, James Hance will continue as the company’s chairman of the board. Meanwhile, the rest of Sprint’s management remains in place, with Paul Saleh relinquishing his interim CEO post to continue his job as the wireless carrier’s chief financial officer.
“If Dan wants to makes any changes in management, he’ll announce them when he decides what he wants to do,” Sprint Nextel spokesman James Fisher said. “For the time being, everybody is still just doing their job.”
For Hesse, the biggest job will be to integrate the former Nextel iDEN network into the company’s business — something that Forsee was unable to accomplish. Entner said Sprint Nextel has been losing about 1 million iDEN customers per quarter.
“That’s a really hemorrhaging business unit. [Hesse] has to get the service quality up and migrate people quickly from iDEN to CDMA,” Entner said. “If you take the iDEN side out, [Sprint Nextel] would be gaining 700,000 customers per quarter. That’s not bad.”
Making things more difficult is Sprint’s obligation to reband operations at 800 MHz, which has placed a premium on its spectrum in the band, Entner said.
“That’s one of the problems they’re running into with the [iDEN] subscriber losses. They can’t properly reband, so really that’s what the problem is,” he said. “That’s the nice egg that the old Nextel team left in the nest that turned out to be a hand grenade.”
While the multiple challenges at Sprint Nextel are daunting, Entner said he believes Hesse is well-equipped to face them.
“He has a tough task ahead of him at Sprint, but I think Dan’s a great guy for them,” Entner said.
