Tuesday, October 31, 2006

Columnist slaps Sprint CEO

Dear R.S.: What your broker may not have told you is that Stanford Research, Banc of America Securities, RBC Capital Markets, Bear Stearns, Wachovia and Robert Baird, to name a few, have recently downgraded the stock. Sprint Nextel Corp. may have one of the weakest, most inutile and confused chief executive officers of any telephone company this side of Pluto. In fact, Gary Forsee deserves an Emmy, a Grammy, as well as an Oscar for unquestionably being the most perplexed, bewildered and discombobulated CEO in the Wireless Kingdom. While Forsee was vice chairman of BellSouth, he proved that "customer satisfaction" was an oxymoron. Forsee was a nuts-and-bolts man and, to him, customers were as welcome as a toothache. When he finally exited BellSouth in 2003 to join Sprint, BellSouth's customer care was nonexistent and the shares traded at $26. BellSouth now trades at $41 and customer service became the company's mantra.It took a couple years to infuse Sprint with this consumer disdain. Customer service has now collapsed like a house of cards and stock hasn't moved off the dime since Forsee became top dog. Oh, it moved from $17 to $27 with the excitement of the Nextel merger, but the Street recognized last April that Forsee may be incapable of holding the two telecommunications companies together. So S crashed from $27 to less than $17 because the Street believes that Forsee may be overwhelmed by his larger responsibilities. The Nextel merger, while signed, sealed and delivered on the books, is not fait accompli in the customer world of "press 1 for English" or "I have a billing problem" or "You sent me the wrong accessory!" Sprint and Nextel still operate as two distinct and separate wireless companies. Their broadcast signals are not compatible and neither are their phones. Either you have a Nextel phone or a Sprint phone, and it seems this will not change. You get a bill from Sprint or Nextel, and that has not changed. The Nextel system is competing with the Sprint system, and this has not changed. Their billing departments and staff are separate, jumbled and superfluous, and that hasn't changed. The Sprint and Nextel cultures are as different as cheese and chalk. Some suspect that Forsee may see the "hand-wringing on the Wall Street" and sprint away to retirement. If Forsee has the good sense to commit executive hara-kiri, the stock could return to its previous highs. ... By Malcolm Berko

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