Sprint Nextel sticks with wireless hot spot plan

Sprint Nextel plans to stay the course on WiMax, a developing wireless technology that offers the prospect of unfettered national roaming for wireless broadband users, the acting CEO says.

WiMax "as a strategy is the future of the business," Paul Saleh, recently installed as acting CEO, said in an interview.

Formerly the chief financial officer, Saleh was named acting CEO after the board forced out CEO Gary Forsee earlier this month. The board says it is focusing on outside candidates to fill the job.

Saleh and Forsee worked side-by-side to craft Sprint's s strategy, which envisions a world in which consumers can use laptops and other WiMax-enabled mobile devices to surf the Internet at DSL-like speeds wherever they are. Sprint is working with Clearwire clwr to build a nationwide WiMax network. Their goal: to turn the USA into one big Internet hot spot.

"This is where the market is going," Saleh says flatly.

Less clear is where Sprint is going. Forsee stepped down amid growing dissatisfaction over Sprint's performance since it merged with Nextel, which has a network based on a different technology. The combined company has 54 million customers but is still struggling with a thicket of merger-related problems.

Rivals AT&T t and Verizon Wireless vz are adding more than 1 million subscribers a quarter; Sprint is losing customers. Revenue-per-subscriber, another key measure of performance, is also lagging.

Unhappy investors have pounded Sprint's stock price. Since the merger closed in 2005, shares have lost more than 25% of their value.

To help stem the exodus of customers, Saleh says he intends to eliminate anything that "interferes" with customer growth.

One example? "By not introducing any product that takes too long to activate for customers," he says. "In the past, some Sprint products, because of their sophistication and complexity, took too much time to activate," leading to frustration for customers.

Other nuggets from Saleh about Sprint's future:

•Rumors that Sprint Nextel will scrap its dual-headquarters arrangement in Overland Park, Kan., and Reston, Va. — reflecting the respective former homes of Sprint and Nextel — aren't true, he says. "That issue is not on the table."

•Sprint will not abandon Nextel's IDEN network technology, famous for its push-to-talk capability. "It's key to our strategy."

Over the next few months, Saleh says, a number of push-to-talk services for the Sprint network will roll out. The CDMA technology of its network isn't compatible with IDEN, hence the need for hybrid products that work with both.

Jane Zweig, CEO of The Shosteck Group, a market research firm, says Sprint's problems run deep. "It all gets back to the Nextel and Sprint relationship. … They have two very different technologies that they're trying to (cobble) together."

Her advice: "They have really got to focus on who is your current customer, how do you acquire new ones, and what are you offering" to get them to stay.

Saleh allows that Sprint has had some miscues over the past year, but he also believes the company is well positioned for growth.

"Lots of people have lots of opinions about what went right and what went wrong," he says. "But the merger of (Sprint and Nextel) resulted in a formidable company that has incredible assets."

To those who doubt that Sprint can recover from its high-profile stumbles, Saleh says: "That was then. This is now."