Sprint Nextel puts its hopes in new generation of phones

Sprint Nextel Corp. will have a new lineup of cutting-edge phones by the end of this year that should boost the company’s flagging fortunes, chief executive Gary Forsee said Wednesday.

In addition to offering new thin phones from Motorola, Sprint will be ready to sell at least 1 million hybrid phones that will offer both the popular walkie-talkie service on the Nextel portion of the company’s network and Internet surfing and other data communications on the Sprint portion, Forsee said.

“The benefit of the merger will come into play in the fourth quarter,” Forsee said during a presentation at the Goldman Sachs “Communacopia” conference in New York.

Sprint will deploy millions more of the hybrid devices in 2007, he said.

Wireless industry rivals Cingular and Verizon have been enjoying robust sales of Motorola’s RAZR phone, a sleek handset that has been one of the hottest devices among cell phone consumers. Sprint has been trying to counter with other thin phones, but it lacked access to the RAZR.

Wall Street analysts have cited this situation in recent months while detailing marketing missteps by Sprint. The company has not been adding new customers at the same pace as industry leaders.

Forsee acknowledged that having cutting-edge phones can make a huge difference for a wireless company’s growth.

“Handsets and applications are in the top three or four reasons that customers stay with you and customers come and buy with you,” Forsee said.

In the past, Forsee said, Sprint and Nextel have been leaders in offering camera phones, music services and other innovations.

“Having the most robust handset lineup is part of what put Sprint on the map,” Forsee said.

Last month, Len Lauer, Sprint’s chief operating officer, left the company and Forsee took over his duties shortly after a disappointing second-quarter earnings report that sent the company’s stock sharply lower.

While he would not go into specifics, Forsee said investors should not correlate the timing of Lauer’s departure with anything specific about the company’s performance.

“Those kinds of management changes are very difficult and complicated,” Forsee said.

Sprint has simplified its management structure, assigning an executive to oversee all of the services Sprint provides and another to oversee sales and distribution.

“My role now as the operating chief as well as the chief executive officer is to be sure we are very focused,” Forsee said.

Sprint recently announced plans to invest up to $3 billion on new technology that will allow mobile high-speed Internet access. Forsee faced an analyst’s questions today about whether it was prudent to spend so much on this initiative instead of devoting additional cash to $6 billion set aside to repurchase shares.

The new generation of network technology could provide Sprint with a significant advantage bringing future growth, Forsee said. Sprint’s leaders determined that the company’s best strategy was to make this investment as well as pursue the share buyback.

“$6 billion is a very significant share buyback,” Forsee said. “At today’s prices it is almost 12 percent of our shares outstanding.”

Source- http://www.kansascity.com

Technorati : Cingular, Mobile, Motorola, Sprint Nextel, Verizon
Ice Rocket : Cingular, Mobile, Motorola, Sprint Nextel, Verizon