Suffering Sprint fires execs, files patent infringement suits
Will Sprint-Nextel's strife never end? A week after announcing the loss of still more wireless subscribers, the cellular specialist today canned three more top execs while filing more lawsuits seeking financial damages.
While AT&T announced the addition of 2.7 million new wireless subscribers today, its suffering competitor Sprint Nextel fired three of its top executives and filed a patent infringement lawsuit seeking monetary damages from four smaller phone companies.
Sprint's latest executive reshuffle and legal maneuvers follow its own announcement last week that it now has only about 53.8 remaining wireless customers, after losing subscribers during the last quarter of last year.
Also last week, Sprint officials said that, in efforts to cut costs, the company will lay off about 4,000 employees and close about 8 percent of its retail stores.
Sprint's troubles really began back in 2005, when the company purchased Nextel. Ever since, Sprint has been struggling to provide adequate physical upgrades and customer service around a total of three wireless networks.
Aside from its own long-time cellular network and that of Nextel, the company is also trying to deploy a nationwide 4G WiMAX wireless broadband network, with the unique brand name Xohm.
Last month, Sprint exec Paul Saleh publicly admitted that Sprint had been actively considering attracting investment money by spinning off its WiMAX network and then purchasing back broadband capacity from those investing in the WiMAX network.
Saleh, a top level financial and management executive, is now gone from Sprint as of today, along with Tim Kelly, chief marketing officer, and Mark Angelino, president of sales and distribution.
Next week, Verizon Wireless, Sprint's other major rival in the US cellular business, is expected to release its quarterly financial results. But like AT&T, Verizon Wireless has been gaining wireless subscribers, while Sprint's subsribership has continued to slide.
Saleh, Kelly, and Angelino are far from the first executives to be forced out of Sprint's revolving door in recent months. Sprint's board scuttled CEO Gary Forsee in October, replacing him in December with Dan Hesse, previously the CEO of Sprint spin-off Embarq.
The temporary replacements for Saleh, Kelly, and Angelino -- who are hail from within the company -- will report directly to Hesse.
Members of the new interim management team include William G. Arendt as acting chief financial officer (CFO); John Garcia as acting chief marketing officer (CMO); and Paget Alves as acting president, sales and distribution.
Also today, in what might be considered a further indication of Sprint's ongoing financial strife, Sprint filed lawsuits in the US District Court in Overland, Kansas against NuVox Communications, Inc.; Broadvox Holdings, LLC; Big River Telephone Company; and Paetec Communications, Inc.
Seeking monetary damaages through the lawsuits and injunctions against further patent infrigement, Sprint claims that each of these four smaller phone companies has infringed at least six of Sprint's Voice-over-packet (VOP) patents by selling VOP services that use the technology.
In similar lawsuit filed in 2005, Sprint was awarded $69.5 million in damages from Vonage Holdings through a jury judgment. Soon afterward, Vonage agreed to take a license under Sprint's VOP portfolio and paid $80 million to Sprint.
In 2006, Voiceglo Communications settled a similar case with Sprint by paying an undisclosed sum, also in exchange for a license to Sprint's VOP portfolio.