New Sprint director may look at selling company
Written by admin on February 15th, 2008 in devices and gadgets.
A newly appointed director to Sprint Nextel’s board is looking to shake things up at the wireless carrier. According to a Wall Street Journal article, Ralph Whitworth was appointed to Sprint’s board this week. The appointment came after Whitworth requested two seats for his firm called Relational Investors LLC. The firm owns a 2% stake in Sprint.
Rather than giving up two seats, Sprint Nextel gave Whitworth a single seat. It is believed Sprint Nextel did so to avoid a proxy fight with Whitworth. The article references a source who believes that if Sprint Nextel continues its current plummet Whitworth may push for a spinoff or sale of the Nextel network. Another possibility would be for Sprint Nextel to sell its long distance service.
Whitworth is also not a huge fan of Sprint’s plans to spend US$5 billion on a new WiMax network, which promises wireless broadband speeds. He is more open to it if Sprint Nextel teams up with other companies to help cover the costs of such a network. As a final solution to Sprint Nextel’s financial woes, Whitworth is believed to also be supportive of an all out sale of Sprint Nextel.
Read more from the Wall Street Journal article.
Brian’s Opinion
I have got to believe that Sprint’s acquisition of Nextel has not been the success many investors believed it should have been. That’s got to be especially true if a current director on Sprint’s board believes a viable option is to spin off or sell off the Nextel network. That might not be a bad idea.
Sprint has been slow to offer technologies that take advantage of both Sprint’s network and Nextel’s network. Also, it seems to me that Nextel hasn’t really been “brought into the fold” like it should have been. Other than Nextel becoming a brand offered by Sprint, I haven’t really seen much difference since Sprint bought Nextel.
To Sprint’s credit, the company does offer technology that takes advantage of both of its networks; still, it doesn’t seem to be really pushing those solutions like the company should. Considering the losses realized by Sprint Nextel shareholders, I can understand why Whitworth would have been so insistent about securing a seat on the board. Hopefully, he’ll help the company to plug up its leaking subscriber numbers so that the ship can once again be righted. If the leaks don’t stop, then the ship will surely sink.
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