Sprint Nextel's (NYSE:S) board is taking a more active role in managing investor concerns about the direction of the carrier and is keeping an eye on the moves of CEO Dan Hesse, according to a report in the Wall Street Journal.
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The report, which cited unnamed sources familiar with the situation, said Sprint Chairman Jim Hance has met all of the company's major shareholders in the past six months to persuade them that the board understands their concerns about Sprint, which despite improving subscriber numbers is still losing money.
According to the report, Sprint's board dispatched Hesse to work more closely with Keith Cowan, Sprint's head of strategic planning, in order to accommodate partner concerns about Cowan's style. Hesse and Cowan worked together to finalize funding and partnership agreements with Clearwire (NASDAQ:CLWR) last fall. The report also noted that two potential deals have foundered this year, one to acquire flat-rate player MetroPCS (NYSE:PCS) and another with T-Mobile USA over network sharing. The MetroPCS deal was reportedly close to being finalized last month but was killed by Sprint's board.
Sprint spokesman Scott Sloat declined to comment on the report but pointed to progress Sprint has made over the past few years under Hesse. "Our customer experience has gone from worst to first in the industry, and last year we added more than five million total customers and recorded the highest number of customers in the company's history," he told FierceWireless. "More customers, along with our success in driving costs from the business, have improved our financial performance as well. Our unlimited data pricing is a clear differentiator in the marketplace, we offer an unmatched innovative device and service portfolio have a strong position in the growing prepaid segment."
The Journal report noted that the board remains confident in Hesse but that their involvement in the nitty-gritty of Sprint's management reflects an unusual degree of concern. "The board has been stunningly engaged," one source said. "It sort of has to be because the company's not doing well."
Sprint is in the midst of a multibillion-dollar network upgrade called Network Vision, which will allow Sprint to deploy LTE and shut down its iDEN network while reducing costs. Sprint also has a four-year, $15.5 billion contract with Apple (NASDAQ:AAPL) to sell the iPhone. Despite Sprint's improvement in customer satisfaction and subscriber growth, the company still posted a net loss of $2.89 billion in 2011, down from a net loss of $3.46 billion in 2010.
For more:
- see this WSJ article (sub. req.)
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Article updated March 13 to correct a misspelling of Keith Cowan's last name.