Adam Bender

Sprint said Wednesday that it’s committed to the Nextel push-to-talk network, but some analysts have doubts. “Nextel Direct Connect provides a differentiated experience for our customers,” CEO Dan Hesse said. “The Nextel National Network (iDEN) is key to delivering Nextel Direct Connect. Sprint has invested significantly during the past two years and the network is performing at best-ever levels. Customers can expect to see continued investment and the introduction of new handsets to utilize the network’s unique capabilities.”

A bill shrinking the executive branch’s state secrets privilege could remove a major obstacle to lawsuits against telcos alleged to play a role in the National Security Agency’s illegal surveillance program, the Electronic Frontier Foundation said Tuesday at a House Constitution, Civil Rights and Civil Liberties subcommittee hearing. The law should be changed to prevent the executive branch from withholding information “for its own political advantage, or to avoid accountability,” said EFF attorney Kevin Bankston. Subcommittee Chairman Jerrold Nadler, D-N.Y., said he plans to introduce a bill to do that.

Verizon had strong Q4 revenue growth despite falling short of AT&T’s record-setting wireless net adds (CD Jan 26 p10). The Bell boosted total Q4 operating revenue 5.5 percent year-over-year to $23.8 billion. Total 2007 revenue was $93.5 billion, $5.3 billion more than 2006’s. The carrier isn’t seeing ill effects from the economy, officials said Monday in a conference call.

Sprint Nextel CEO Dan Hesse shuffled senior management, replacing three officers Thursday. Exiting Jan. 25 are Paul Saleh, chief financial officer; Tim Kelly, chief marketing officer; and Mark Angelino, sales & distribution president, Sprint said. William Arendt, controller, becomes acting CFO; John Garcia, product development and management senior vice president, becomes acting CMO; and Paget Alves, regional president for sales and distribution, becomes acting president for the division. “Permanent leaders will be named in conjunction with a review of overall strategy and an effort to streamline operations,” Hesse said. “I have no predetermined timeframe in filling these positions but plan to act as quickly as possible as I consider both internal and external candidates.” The moves are simply about getting “new blood” into a struggling company, said Moody’s analyst Dennis Saputo in an interview. All were capable, but Sprint likely determined the three officials’ operations weren’t meeting expectations, he said. After ex-Nextel officials Saleh and Angelino’s exit, the balance of merged senior management now tilts in Sprint’s direction, he said. Hesse likely is replacing Saleh and Kelly because of their close ties to ex-CEO Gary Forsee, said Pali Research analyst Walter Piecyk in an interview. Kelly in particular did a “poor job,” but Forsee was protecting his position, he said. Angelino’s exit wasn’t necessary, but Hesse should have forced out officials in charge of handsets and customer care, he said. The shakeup is a “step in the right direction,” but Sprint also needs to kick out some board members who are due for re-election this spring, Piecyk said, saying ex-Hallmark CEO Irvine Hockaday should be top of the list. Saputo disagreed with the call, saying the board has a “well developed” understanding of the company.

The satellite industry is “as stable as I have ever seen it in 20 years,” Sea Launch President Rob Peckham told a Washington Space Business Roundtable lunch Thursday. There’s potential for growth but “at minimum, there’s stability,” he said. That doesn’t mean doing business is easy, he said: “I don’t think there’s too many other businesses out there that are one step away from catastrophe as this industry is.” Sea Launch saw disaster first hand when one of its rockets blew up at launch last January (CD Feb 1/07 p14). Sea Launch’s successful launch last week showed it overcame “two significant hurdles": regaining the company’s “launch tempo” and “understanding what the ocean is capable of.” That doesn’t mean it won’t happen again, he said. He’s satisfied with investigations conducted and improvements made, he said, but “anyone who says ‘never’ will be proven wrong.” This year, Sea Launch plans five more sea launches and three land launches, he said. It plans to launch another nine rockets in 2009 and ten in 2010. Sea Launch is also talking to NASA about providing a resupply service for the International Space Station, Peckham said. “As my predecessor used to say, why would NASA use their brightest minds to get toilet paper and run it up to the station?” Peckham isn’t concerned about rivals, he said. New launch systems mean innovation is occurring in the industry, he said. Meanwhile, there’s no point worrying about China’s reentry and India’s entry into the market because both are government-funded programs. “They're going to be in business whether there’s commercial business or not.”

Sprint filed four infringement lawsuits involving Voice over Packet patents Thursday in the U.S. District Court for Kansas. Sprint seeks damages and injunctions against NuVox, Broadvox, Paetec and Big River Telephone. Each company has infringed “at least” six Sprint VOP patents, the carrier said. “Sprint has invested a great deal in the technology covered by its VOP portfolio,” said Harley Ball, vice president of intellectual property for Sprint. “We will take all necessary steps to protect what is ours and we will continue to police the marketplace to stop others from misappropriating our technology.” Paetec is reviewing the complaint, a spokeswoman said. So is Big River, which plans a statement next week, a spokesman said. NuVox and Broadvox didn’t immediately return calls seeking comment.

A slowing economy didn’t hurt AT&T’s Q4 wireless results. AT&T added 2.7 million subscribers in the quarter, a U.S. wireless industry record contrasting starkly with Sprint Nextel’s 638,000 post-paid customer loss in the period (CD Jan 22 p5). “We had an excellent fourth quarter, which affirms our outlook for 2008,” said Rick Lindner, chief financial officer.

Motorola shares plummeted 18.75 percent in regular trading Wednesday after the device maker said it expects demand for its handsets to keep slowing in 2008. Falling cellphone market share sank Motorola net earnings for Q4 $423 million year-over-year to $100 million, the handset maker said Wednesday. “2008 will be a challenging year and the recovery of mobile devices will take longer than previously expected,” said CEO Greg Brown in a Q4 results call. “We are taking on these challenges with both a sense of determination and urgency.”

Wireless needs to be as open as the Internet if that industry wants to be as “vibrant” as consumer electronics, FCC Commissioner Michael Copps said. He spoke Tuesday on a New America Foundation panel. Consumers have a “fantastic world of choice” on personal computers, but not on cellphones, he said. Carrier arguments against open access regulation are no good, he said. Past carrier claims that networks could be hurt by third-party devices were the “same arguments” wireline raised 40 years ago amid the Carterfone brouhaha, he said. Meanwhile, industry-designed open platforms promoted in press releases must be observed by the FCC, he said.

Sprint Nextel will lay off thousands and close 8 percent of its retail locations as it braces for continuing downward subscriber trends, revenue and profitability this year, it said Friday, releasing preliminary Q4 2007 subscriber results. Investors didn’t react well; Sprint’s stock nosedived $2.87 to $8.70, a 24.8 percent drop, in regular trading Friday. Since last January, it has fallen about $9. That could herald a buyout, analysts said.