Sprint Nextel has announced that industry veteran Dan Hesse will take over as CEO. Hesse will replace Gary Forsee who left in October; CFO Paul Saleh has been serving as interim CEO since then. The 54-year-old Hesse is leaving the CEO post at Embarq Corp, the local telecommunications division that Sprint had spun off in 2006. Prior to that he spent 23 years at AT&T, and was CEO of AT&T Wireless from 1997 to 2000.
Though his industry credentials are well-established, Mr. Hesse will have his hands full at Sprint. He will have to address subscriber losses, the continuing problems with integrating the Nextel operations, while deciding what course of action Sprint will follow with regard to their fledgling WiMAX service. While many analysts have been focused on the WiMAX initiative, it appears that Hesse will have to get the core business in order before tackling anything else.
As a result, we can expect to see a slowdown in Sprint's aggressive $5 billion WiMAX rollout that had been planned for 2008. In the rollicking wireless market, Sprint itself could wind up a takeover target, and Google's name keeps popping up as a potential buyer. In November, Sprint rejected a $5 billion investment bid from Providence Equity Partners and SK Telecom, a South Korean CDMA carrier.
It has been clear form all of their public pronouncements that nothing significant was going to take place at Sprint until a new CEO was in place. While Sprint was engaged in the search, Verizon announced their intention to support an open handset initiative and plans to test LTE rather than WiMAX or UMB as their potential 4G solution. If there's one sure bet it's that Mr. Hesse is going to have a busy Christmas vacation.
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