UPDATE 2-Sprint appoints activist investor to board

(Updates with Whitworth's appointment to Sprint board; adds Whitworth statement, share rise, background)

NEW YORK, Feb 12 (Reuters) - Sprint Nextel Corp (S.N: Quote, Profile, Research) has appointed to its board activist investor Ralph Whitworth, who last year threatened a proxy battle against the No. 3 U.S. mobile service provider.

Whitworth, whose Relational Investors LLC has a 1.9 percent stake in Sprint, has pressed for changes at the company after it lost market share amid customer service and network problems.

Sprint shares rose 49 cents, or 5 percent, to $10.22 in morning trade on the New York Stock Exchange as investors appeared to see Whitworth as a catalyst for change. The stock is still down more than 50 percent from a 52-week high in June 2007.

"A turnaround at Sprint Nextel won't be easy, but I believe the ingredients are in place to get the job done for the company's shareholders," Whitworth said in a statement released by Sprint on Tuesday. "I am encouraged by the company's new CEO, Dan Hesse. Dan has committed to review all aspects of the company's business and shown a willingness to make tough decisions."

Last October, Whitworth, 52, threatened a proxy battle unless Sprint made leadership changes. Later that month, Sprint Chief Executive Gary Forsee stepped down. He was succeeded by Hesse in December.

Last month Sprint announced 4,000 job cuts, reported deeper-than-expected subscriber losses in the fourth quarter, and warned of "continued downward pressure on subscriber trends, revenues, and profitability in 2008."

Hesse, who was the chief executive of Sprint's fixed-line spin-off Embarq Corp (EQ.N: Quote, Profile, Research), is reviewing the company's strategy amid criticism that it may be overspending on a new high-speed network based on WiMax technology.

WiMax promises faster speeds over long distances, but its commercial viability has yet to be proven. Sprint had earmarked $5 billion to spend on WiMax, hoping the emerging technology would give it an advantage against rivals like AT&T Inc (T.N: Quote, Profile, Research) and Verizon Wireless, which is owned by Verizon Communications Inc (VZ.N: Quote, Profile, Research) and Vodafone Group Plc (VOD.L: Quote, Profile, Research).