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Sprint Nextel refuses to comment on Forsee ouster report

Sprint Nextel Corp. said Thursday it wasn't commenting on a published report that its board of directors has begun looking to replace Chairman and Chief Executive Gary Forsee.

The Wall Street Journal, quoting unidentified people familiar with the situation, reported on its Web site Thursday afternoon that Sprint Nextel's board had begun quietly talking to industry leaders for a successor and hoped to announce a selection by early December.

Forsee, who took over at the nation's third-largest wireless provider in 2003, has overseen a rocky integration of Nextel Communications Inc., which Sprint bought in August 2005.

Amid technical problems and a sometimes unfocused marketing strategy, Sprint Nextel has steadily lost ground to competitors AT&T Inc. and Verizon Wireless in attracting and retaining customers. The company's stock is down 19 percent from where it was before the purchase.

Most recently, Forsee has hung the company's future on the development of WiMAX, a fourth-generation mobile network the company claims will provide wireless download speeds comparable to DSL or cable modems and be available in a wide range of products.

He also has tried to boost spending on improving signal strength and new advertising and ordered a revamping of the company's customer credit requirements, trying to thin the customer base of people less likely to pay their phone bills.

The Journal reported company directors began looking for Forsee's replacement in August, around the time Sprint Nextel, based in Reston, Va., with operational headquarters in Overland Park, Kan., announced smaller second-quarter profits and that it would continue to struggle during the second half of the year.

The Journal reported earlier Thursday that activist investor Ralph Whitworth said he no longer had faith in Sprint Nextel's CEO and board.

"We have lost confidence in Gary Forsee," Whitworth was quoted as saying. He gave as reasons "management's inability to forecast the company's results and their apparent inability to address the fundamental issues surrounding the core business," according to the Journal.

The Journal said Whitworth, the principal of Relational Investors LLC, had stopped short of calling for Forsee's resignation but was threatening to launch a proxy fight for seats on Sprint Nextel's board.

A person familiar with Relational's thinking told The Associated Press late Thursday the firm has been in contact with Sprint Nextel's board and for the time being has agreed not to pursue a proxy fight.

That person, who spoke on condition of anonymity, added that the Journal's account Thursday accurately characterized Relational's position.

Relational has acquired about 53.1 million shares, or 1.9 percent, of Sprint Nextel stock, according to the Journal.

Whitworth has orchestrated change at a number of companies, including Waste Management Inc., Mattel Inc. and Apria Healthcare Group Inc. Last year, his pressure on Sovereign Bancorp Inc. led to the ouster of CEO Jay Sidhu, while his threat of a proxy battle at Home Depot Inc. helped sweep out Bob Nardelli early this year.Shares of Sprint rose 52 cents, or 2.8 percent, to $19.28 Thursday.

———AP Business Writer Adam Schreck contributed to this report.

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