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How Long Has Hesse Got?

Dan Jones
7/29/2009

5:40 PM -- You have to wonder how much longer Sprint Corp. (NYSE: S) CEO Dan Hesse can continue to helm the company without a more significant turnaround at the carrier.

The third-ranked cellular operator posted another set of downbeat results today, with a 10 percent drop in revenues. Sprint managed to slow the rate of monthly wireless subscribers defecting, but otherwise the results were pretty much the same story we've seen for quarter upon quarter now.

It is not Hesse's fault that Sprint is in this mess. The operator's troubles started when it inked the merger deal with Nextel in the third quarter of 2005. Customer defections started then, and the operator has never really got the situation under control since. (See Sprint: Profits Up, Subs Stall and Hard Times: Sprint Loses 1.3M Customers in Q4.)

Nonethless, former CEO Gary Forsee left early in October 2007 under pressure from angry investors, partly because of Sprint's subs problem. At the time, Sprint's shares were seeing lows around $18.05.

Hesse joined as Sprint CEO in December 2007, just in time to get clobbered by the economic downturn. (See Sprint Nextel's New Broom.) At the time, Hesse promised "decisive actions" to turn the company around.

Between then and now, Hesse & Co. have cut thousands of jobs, decided to spruce up iDEN, given Sprint's WiMax assets over to Clearwire LLC (Nasdaq: CLWR), and outsourced network management to Ericsson. Yet still the operator continues to lose customers. (See Sprint, Clearwire Form WiMax Giant, Ericsson, Sprint in $5B Managed Services Deal and Sprint 'Committed' to iDEN .)

Sprint's shares are at $4.05 today.

Which leads me to wonder: How long has Hesse got left before Sprint's investors start to get restless again?

— Dan Jones, Site Editor, Unstrung

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SprintBlog
SprintBlog
12/5/2012 | 3:59:32 PM
re: How Long Has Hesse Got?
Dump the money sink that Sprint calls Nextel. It was the former CEO that did that deal. Sprint should cut it's losses and just dump that turd in the river. Everyone in the wireless industry knows that Sprint's former CEO was the real problem with Sprint. I feel for those people and what they are put through.
COCOViper
COCOViper
12/5/2012 | 3:59:06 PM
re: How Long Has Hesse Got?


There's a few reasons the solution isn't that simple:


 


1-There's not much credit out there and those that do have it certainly aren't going to blow 5-10 billion on the nextel network with it's key advantage a 2002 buzzword (push to talk).


 


2-The network and systems are pretty much completely integrated with the rest of Sprint at this point and thus to pull them out would cause additional distractions and cost for the company, something they really don't need right now.


 


The best real world option is the one they are pursuing- use nextel's old PTT/Voice network as an already sunk cost and bring lots of low maintence, low subsidy pay as you go subs on (Boost) and then use the superior CDMA network for data intensive users. It's a two pronged strategy that makes business sense...they just have to turn their image around from all the customers they upset over the years.

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