Embarq CEO Resigns to Run Sprint
Hesse replaces Gary Forsee who resigned from Sprint in October following nearly a year of falling earnings and declining subscriber numbers. (See Sprint Nextel CEO Steps Down.) Sprint's chief financial officer, Paul Saleh, had been the interim CEO up until this point.
Hesse will have his hands full when he returns to Sprint Nextel. In addition to the company's operational struggles, the company is also reeling from the recent flop of its $3 billion WiMax project. The nationwide service, branded as "Xohm," was to be deployed through a partnership with Clearwire LLC (Nasdaq: CLWR), but that partnership is currently very much in question. It was first reported in November that the two companies had ended their relationship, but recent reports have suggested the venture might be back on again. (See Report: Sprint & Clearwire Split and Sprint-Clearwire: On Again in 2008?)
Meanwhile, at Embarq, the departure of Hesse was not completely unexpected. Hesse had told a crowd at an investor conference this month that he was a leading candidate for the Sprint job and had also been considered for the top job at Qwest Communications International Inc. (NYSE: Q), which was eventually filled by Ed Mueller.
Embarq has named its general counsel, Tom Gerke, as it interim CEO and has acknowledged that he is a top candidate to get the permanent job.
"We'll conduct an orderly process for Mr. Hesse's successor," said an Embarq representative. "Mr. Gerke is certainly a candidate." On the sudden departure of Hesse, the spokesperson said, "Mr. Hesse was offered the chance to lead a Fortune 50 company, and he thought he would return to his roots, which is in wireless."
Hesse was the CEO of AT&T Wireless from 1997 to 2000.
— Raymond McConville, Reporter, Light Reading