| Page 2 of 2 < |
Forsee: WiMaxed Out
Gary Forsee, who stepped down as chief executive yesterday, was accused of neglecting Sprint's core business in favor of an unproven technology.
(By Rick Maiman -- Bloomberg News)
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
He added that the company is still struggling to perfect the network's ability to hand over traffic between towers as people move between coverage areas, which is necessary to stay connected while driving, for example.
Forsee found himself in much the same situation as Jean-Marie Messier, former head of Vivendi Universal. Like Forsee, Messier had a vision when he took over the company in 1996.
Messier envisioned that consumers from the Left Bank to Hollywood would pay to download music and videos to their cellphones and mobile devices. Messier spent Vivendi Universal into near-bankruptcy, buying telecom, movie and music companies, chasing the dream.
Messier was right but about five years too early. His company's stock plummeted, the disparate conglomerate never fit together and it ended up getting sold off in pieces. Messier was kicked out by his board in 2002.
Mike Nelson, an analyst with Stanford Group, said investors would not be so concerned about the big bet on WiMax if Sprint was also showing signs of fixing the core wireless business.
"If we were Sprint's CEO for a day, we wouldn't kill WiMax, since it could eventually be a competitive advantage, but would halve the spending in 2008," Philip Cusick, equity research analyst at Bear Stearns, wrote Friday in a note to investors. "We would re-emphasize the core business . . . over non-core distractions" like its prepaid Boost brand and WiMax, he wrote.
In August, Sprint gained new subscribers for the first time in a year but also warned it expected to lose subscribers in the third quarter.
Cusick added that he does not expect WiMax to gain momentum until late 2008 or 2009. A management shift could further delay Sprint in finalizing its contract with Clearwire to build out the network.
"We believe that Sprint is likely to de-emphasize the WiMax business, which could result in a slower rollout for WiMax in the U.S., lower economies of scale for Clearwire and shrink the ecosystem necessary to attract consumer electronics companies to WiMax," Cusick wrote.
