Sprint CEO Resigns; Carrier Announces Major Loss of Customers

Despite Gary Forsee's Ad Efforts, 340,000 Subscribers Ditched Company Last Quarter

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SAN FRANCISCO (Adage.com) -- Despite $1.78 billion in ad spending, and its hiring of one of the leading ad agencies in the nation, Sprint Nextel continued to bleed customers in the most recent quarter, leading to the resignation today of Gary Forsee as chairman and president-CEO.
Sprint Nextel's chairman and president-CEO, Gary Forsee, has resigned following a massive loss of customers.
Sprint Nextel's chairman and president-CEO, Gary Forsee, has resigned following a massive loss of customers. Credit: AP

In a statement regarding the resignation, Sprint also said it will announce that during the third quarter it lost some 340,000 postpaid wireless customers, that is, customers who pay a bill each month instead of those who pay in advance for a limited number of minutes.

Botched merger
Under Mr. Forsee, who has been CEO since 2003, Sprint merged with Nextel, a move which many analysts considered botched as it failed to boost the company's value. His plan was to get the carrier to differentiate by building out a WiMax network by 2010, a plan which cost some $5 billion on a technology some viewed as unproven but others applauded.

"The plans he had are very sound -- Sprint needs a differentiator," said Roger Entner, senior VP-communications sector, IAG Research. However, Mr. Entner added, "losing 300,000 subscribers speaks for itself."

As the carrier's difficulties mounted, Mr. Forsee revamped his marketing department, ousting Chief Marketing Officer Mark Schweitzer and replacing him with Sprint veteran Tim Kelly. The company also put its $1.2 billion ad account into review. Omnicom Group's Goodby, Silverstein & Partners won the business and launched at midyear a campaign tagged "Sprint ahead" and introduced the concept of "Sprint speed." The anthem spot, and an outdoor billboard campaign which followed, featured neon lights.

The campaign followed work from Omnicom sibling TBWA/Chiat/Day, which used the taglines "Power up" and "Yes you can."

While a search is under way for Mr. Forsee's successor, Paul Saleh, Sprint's chief financial officer, will take over as acting CEO. Board member James Hance Jr. will serve as acting chairman.
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