Sprint Nextel and CEO part ways

NEW YORK -- Sprint Nextel Corp.'s board pushed out Chairman and Chief Executive Gary Forsee on Monday, complaining over the cell phone carrier's financial results, which have lagged since the massive Sprint-Nextel merger engineered by Forsee.

"It is the right time to put in place new leadership to move the company forward in improving its performance and realizing corporate objectives," board member Irvine Hockaday said in a company statement.

The board said it was searching for a replacement for Forsee, who was also president. In the meantime, Director James Hance Jr. will be acting nonexecutive chairman, and Chief Financial Officer Paul Saleh will serve as acting CEO.

Also Monday, Sprint Nextel said it expects to report a net loss of roughly 337,000 monthly subscribers in the third quarter. Its operating income, excluding some items, is expected to fall below the previously forecast range $11 billion to $11.5 billion. Revenue is expected to fall below the earlier forecast of $41 billion to $42 billion.

Sprint Nextel shares closed Monday at $18.50, down 51 cents or 2.7 percent. In extended trading, after the announcement of Forsee's departure, the shares regained 50 cents.

Forsee took over the nation's third-largest wireless provider in 2003 and was a driving force behind the acquisition of Nextel Communications Inc. in August 2005.

However, the company has struggled since the merger, and its stock price has dropped 27 percent. Amid technical problems and a sometimes unfocused marketing strategy, Sprint Nextel has steadily lost ground to competitors AT&T and Verizon Wireless in attracting and retaining customers. Nextel's phones, known for their "push-to-talk" feature, haven't been directly compatible with Sprint's network.

Most recently, Forsee has hung the company's future on the development of WiMax, a fourth-generation mobile data network the company claims will provide wireless download speeds comparable to DSL or cable modems. It aims to connect not only cell phones but computers, video cameras and other gadgets. Wide-scale commercial application is still years away, and Forsee's departure raises questions about the company's commitment to the technology.