Report: Sprint sponsorship of NASCAR in serious trouble

Report: Sprint sponsorship of NASCAR in serious trouble

Sprint chief Dan Hesse will face investors for the first time Thursday morning. His biggest challenge? To stop people from gawking at all the problems he’s inherited and get them to focus on the fixes he’s making. Unfortunately for him, the big story coming out of Sprint Nextel’s fourth quarter earnings is more of the same: since sponsoring NASCAR mobile phone customers continue to leave in droves. The No. 3 wireless shop is expected to report that more than a half million users have cancelled their service as of the end of the year. Worse, say analysts who’ve been watching the monthly defection rate, the company is on track to lose more than a million subscribers this quarter ending March 31. Why are so many subscribers fleeing Sprint? The difficulties can be traced at least back to the ill-managed 2005 merger with Nextel. Nextel’s customers were heavy users of push-to-talk systems, and when Sprint neglected to maintain and upgrade networks, they found the system unreliable and have left in huge numbers. Sprint also bungled relations with the federal government that cost it access to a $20 billion contract opportunity. Industry observers and insiders say Sprint is in critical condition now and Hesse has to take some dramatic action to turn things around. Some analysts and industry executives say Hesse has no choice but to break up the company. Sprint could carve out three businesses - WiMax, business services, and its wireline operation - and keep its wireless unit, say industry observers. Hesse is conducting a sweeping strategic review of Sprint and its options, but he’s not expected to present his conclusions until April. Whether that breakup will jeopardize Sprint’s sponsorship of NASCAR remains to be seen, but clearly, sponsoring NASCAR is not gaining the wireless company any customers. Bookmark to:

Date: February / 28 / 2008
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Car News Overview for February / 28 / 2008

Other News:
Scott Speed to race NCTS limited schedule (February / 28 / 2008)
Sprint Cup Las Vegas preview (February / 28 / 2008)
Ricky Carmichael to run East Series for Ken Schrader Racing (February / 29 / 2008)

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