Can Hesse stop the bleeding at Sprint?

Industry analysts agree Dan Hesse faces a significant challenge in his new job as chairman and CEO of Sprint Nextel, but generally believe he could well be the man for the job.

“His history in wireless is impeccable,” said Roger Entner of IAG Research. “He is certainly the best person that is currently available. Dan did a miraculous job at AT&T Wireless. If they would have kept him on as CEO, the wireless industry would look very different. AT&T would have remained a force to be reckoned with rather than a company that just sort of withered away.”

Hesse is also credited with pumping new life into Embarq after the local telephone company assets were spun off from Sprint and managing to keep the company profitable through new services and innovations even as it suffered the access line loss that all local telcos are now facing. Embarq pioneered new services including fixed-mobile convergence that helped drive up its average revenue per user and maintain customers.

“He’s a wireless veteran who has a long background in telecom,” said William Ho, wireless analyst with Current Analysis. “He knows the Sprint folks as a function of taking on the Embarq spin-off. At Embarq, he continued profitability despite the usual local access losses that are plaguing the wireline world. As an AT&T alum, he is familiar with running a large corporation and has good investor experience.”

But Hesse will have to move quickly to stem the tide of customer losses, particularly from the IDEN network that it acquired with Nextel, Entner said.

“Fixing the subscriber loss is the number-one priority,” he said. “You have to improve the user experience for the IDEN customers either by improving the network or by migrating them rapidly onto the CDMA network.”

AT&T and Verizon Wireless have been adding subscribers, many of which are Sprint Nextel defectors, with new services and jazzier handsets. In addition, according to industry reports, Sprint Nextel has the industry’s lowest rated customer service, resolving problems with one call only about half the time.

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