Forsee to get the boot?

Sprint Nextel Corp. is seeking a replacement for CEO Gary Forsee, according to the Wall Street Journal.
The carrier, which declined to comment on the subject, has struggled with a declining stock price and rising churn, and is generally losing ground to larger rivals AT&T Mobility and Verizon Wireless. The carrier has attempted to appease concerned investors by touting the improved performance of its iDEN network, investments in customer care and its soon-to-be-launched WiMAX network-but Wall Street has so far responded tepidly.
The Journal reported that a new CEO could be announced by early December and would probably be an outsider, citing unnamed sources familiar with the matter. Ralph Whitworth, a major Sprint Nextel stockholder, told the Journal that he’d lost confidence in Foresee and warned that he was willing to engage in a proxy battle for board seats if the board of directors did not “immediately” deal with the leadership issue.
Even if Sprint Nextel does replace Forsee, analyst Walter Piecyk of Pali Research said that change would be unlikely to have a positive financial impact right away for the company.
Piecyk said in a research note that it’s already too late for Sprint Nextel to meet analysts’ expectations for earnings before interest, taxes, depreciation and amortization for 2008-and that a new CEO would probably want to lower guidance, perhaps by as much as $2 billion or more, from the current EBITDA guidance of $12.5-$13.5 billion for the year. Pali estimates Sprint Nextel’s 2008 EBITDA at $10.7 billion.
“A new CEO at Sprint would likely want to set the expectations bar low in order to regain the credibility of the company,” Piecyk said. He noted that Sprint Nextel’s stock has been boosted by an anticipated management change, but that it might fall again once investors get a better sense of the company’s health.
A new CEO might be able to improve EBITDA by 2009, Piecyk said, but by then “the proliferation of unlimited rate plans, Wi-Fi VoIP and data could drastically change the wireless industry, which we estimate will be over 93% penetration at that time.”
“It is not easy to apply quick fixes in the telecom industry as customer actions occur over time when contracts are up or phones are replaced,” Piecyk said. “Management’s claim that iDEN churn would improve simply because the network was performing better were na