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Thu, Oct 12, 2006 - Page 10 News List

Sprint Nextel chairman to retire soon

NY TIMES NEWS SERVICE , NEW YORK

Timothy Donahue, executive chairman of the Sprint Nextel Corp, the third-largest US wireless carrier, said on Tuesday that he would retire at the end of the year, in the latest shake-up at a company that has lost ground to its larger rivals Cingular and Verizon Wireless.

The announcement of his departure came earlier than expected. In his employment agreement, filed with the Securities and Exchange Commission in March last year, Donahue said he would remain as chairman through 2008. He was chief executive of the Nextel Corp before it merged with Sprint more than a year ago.

In a statement on Tuesday from the company, Donahue, 57, said only that he looked forward to spending more time with his family and friends.

Sprint Nextel's board did not immediately name a successor.

The announcement came less than two months after Len Lauer, the chief operating officer, left Sprint Nextel. Lauer, many analysts said, was a victim of the company's poor performance in recent quarters.

Sprint Nextel added 210,000 subscribers in the second quarter, far below estimates by analysts, who were also disappointed with the company's revenue and profit growth. Sprint Nextel executives said they had faced difficulties in merging the operations of their companies, which together have 51.7 million wireless customers.

The company's results have been hurt, analysts said, by a lack of attractive handsets, an uninspiring branding campaign and too many subscribers with weak credit, which has increased turnover.

Unlike Cingular and AT&T Wireless, which merged two years ago, Sprint and Nextel have networks that operate on different wireless technologies, increasing the hurdles in merging operations.

While many companies that merge face difficulties integrating their businesses, analysts said Sprint Nextel's executives had several additional distractions that gave rivals a chance to gain ground.

In the last year, Sprint Nextel has spun off its local phone group, purchased several affiliates, formed a partnership with major cable companies and announced that it would work with Intel, Samsung and others to build a next-generation wireless broadband network.

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