New CEO gets to try to turn Sprint around

NEW YORK -- Hesse replaces Gary Forsee, who was forced out in October. James Hance will remain the non-executive chairman.

Sprint, with 54 million customers, trails Verizon and AT&T and has lost ground since it acquired Nextel in 2005.

Hesse said in a statement he's confident that "through solid execution and commitment to our customers, we can reinvigorate our operating performance and return the company to a growth trajectory."

He added, "We will review every aspect of our strategy … to lead Sprint to the forefront of the wireless industry."

Telecom watchers say that Hesse faces a tough challenge.

"His choices are quite limited," says Shahid Khan, a partner at IBB Consulting, which tracks telecom trends.

The Nextel acquisition presents "a fundamental problem," he says. Sprint bought a company that "runs on a completely different network."

In addition, the two companies "have completely different sets of demographics."

Sprint also alienated Nextel users, he says, by offering "poor customer service."

Sprint reported that it lost about 337,000 customers in the third quarter.

Financial results also suffered. Net profit in the quarter fell 77%, to $64 million, vs. the same period last year on revenue of $8.7 billion, down 1%. Average revenue per user fell 3.2% to $59.

Sprint's stock is down about 45% since it merged with Nextel. Shares closed at $13.76 Tuesday, down 15 cents.

Some analysts say Hesse has options, including pulling back on plans to create a $5 billion WiMax wireless broadband service.