Sprint CFO to leave in new executive shake-up

By Sinead Carew

NEW YORK (Reuters) - Sprint Nextel Corp (S.N) Chief Financial Officer Paul Saleh and two other senior executives are leaving the company in a new management shake-up, the No. 3 U.S. mobile service said on Thursday, as it looks to stem subscriber losses.

Sprint shares closed up more than 4 percent as some investors saw the exit of the company's marketing and distribution executives as a good sign since Sprint has struggled with marketing and customer service problems.

Last week, Sprint reported deeper-than-expected fourth-quarter customer losses and said it would cut about 4,000 jobs to reduce costs.

In the fourth quarter, Sprint lost 683,000 high-value subscribers who pay monthly bills and tend to be committed

to a contract. It had seen heavy defections of postpaid subscribers throughout much of 2007.

Chief Executive Dan Hesse -- appointed to his post in December with the task of stemming market share losses to bigger rivals AT&T Inc (T.N) and Verizon Wireless -- said he was reviewing strategy and would consider both internal and external candidates for the jobs.

Saleh, who served as acting CEO after Gary Forsee stepped down in October, will leave Friday along with Chief Marketing Officer Tim Kelly and Mark Angelino, president of sales and distribution, Sprint said.

Company spokeswoman Leigh Horner said the departures were part of Hesse's goal of finding new leadership.

While analysts said the shake-up may cause uncertainty, it gave some hope that Hesse was on the right track to improve Sprint. Stanford Group analyst Michael Nelson has long seen weak marketing as Sprint's biggest problem.

"One of Hesse's first moves is he recognized that one of the problems was poor marketing. It at least tells me that he understands the problem and is attempting to make initial steps," he said, adding that a marketing expert from outside of the telecommunications industry might help Sprint.

MARKETING WOES

Saleh joined Nextel Communications as CFO in 2001 and kept the role when Sprint Nextel was formed in 2005. Saleh did not respond to an e-mail requesting comment.

As Sprint's 2005 purchase of Nextel is seen as the root of many of its current problems, Hesse likely ousted Saleh to clean the slate of legacy managers, Nelson said.

Sprint shares closed up 38 cents, or 4.4 percent, at $9.09 on the New York Stock Exchange. The stock has lost about 60 percent of its value in six months, far worse than AT&T's decline of 8 percent.

Shares of Verizon Communications Inc (VZ.N), which owns Verizon Wireless along with Vodafone Group Plc VOD.N(VOD.L), have fallen about 11 percent over the same period.

JPMorgan analyst Jonathan Chaplin said Sprint's moves demonstrated Hesse's ability to act decisively, adding that the lack of an effective management team had contributed to many of Sprint's operational problems in the past two years.

But he noted a temporary leadership vacuum. "Given that these are critical leadership positions, this likely brings some uncertainty to management's ability to act cohesively and effectively in the interim," he said.

Hesse said in a statement that permanent executives would be named at the same time as his review of overall strategy is announced.

"I have no predetermined time frame in filling these positions but plan to act as quickly as possible as I consider both internal and external candidates," he said.

Sprint Controller William Arendt will serve as acting CFO in the interim. John Garcia, senior vice president of product development, will be acting chief marketing officer and Paget Alves, regional president for sales and distribution, will be acting president of the sales and distribution division.

(Additional Reporting by Michele Gershberg and Tiffany Wu; editing by Gerald E. McCormick/Jeffrey Benkoe)