Again, where have all the iDEN subscribers gone?

Again, where have all the iDEN subscribers gone?
It was about this time last year that I was asking where have all the iDEN customers gone at Sprint Nextel? The question is still applicable today. Nextel push-to-talk customers--once the most loyal and highest revenue-generating subscribers in the industry--continue to defect at an alarming rate. According to Walter Piecyk at Pali Research, Sprint now has fewer iDEN customers on its network than in 2003, and the firm believes the customer base is likely to drop to less than 10 million. It says a lot when a Nextel customer rather switch from instantaneous PTT conversations to a regular mobile phone.

So I find it perplexing that Sprint reportedly wouldn't even discuss a $5-billion investment from SK Telecom and PE firm Providence Equity Partners that included installing Sprint's former chairman Tim Donahue as CEO of the company. Doesn't the company owe it to investors to investigate any proposed turnaround strategy that appears as legitimate as this?

Donahue was the president and CEO of Nextel prior to the 2005 merger and has experience with new technology and managing its expectations. And he certainly can turn around the lagging iDEN business. In the 1990s, Nextel's iDEN service was a new concept as was the PTT business model, but Donahue and his team sold blue-collar professionals on the idea. As a result, Nextel experienced record setting financial results under Donahue's leadership, with nine straight quarters of positive net income. Under his watch, Nextel had an eye on the future, testing high-speed data technology and even considering a flip to CDMA.

Then came the merger with Sprint in 2005. The integration has gone terribly wrong, and some blame Donahue. However, it was Sprint management who ran the business into the ground, while heavily pushing consumer CDMA services and touting the coming benefits of WiMAX. Now Sprint is CEO-less, and things are deteriorating even faster, Piecyk believes. You wouldn't even know that Sprint has a PTT business today.

How long will Sprint take to find a CEO willing to make the hard decisions to turn the company around even though a perfectly fine candidate has jumped into its lap? -Lynnette

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