Sprint Nextel's Donahue Steps Down as Chairman
In the latest in a series of setbacks for the nation's third-largest wireless telephone provider, Sprint Nextel Corporation, executive chairman Timothy M. Donahue announced on Tuesday, October 10 that he would step down at the end of the year. The announcement came on the heels of Nextel's performance lagging behind that of principle rivals Cingular and Verizon Wireless.

Donahue, who was chief executive of Nextel Corporation when it merged with Sprint more than a year ago, stated in his employment agreement on file with the Securities and Exchange Commission that he would remain in his position as chairman through 2008.

Donahue, 57, said only that he looked forward to spending more time with family and friends. The Sprint Nextel board did not issue a statement naming a successor.

In the second quarter of this year Sprint Nextel added some 210,000 subscribers, a disappointing figure for company analysts who hoped for higher numbers to boost revenue and profit growth. At the merger of the two companies, a process that presented difficulties, Sprint Nextel had a combined customer base of 51.7 million.

Industry analysts point to uninspired marketing campaigns that have failed to achieve good branding, a high percentage of subscribers with weak credit, and a lack of attractive wireless handsets as fundamental to the company's problems.

In addition, Sprint Nextel faces pressure from smaller carriers like T-Mobile, Leap, and MetroPCS that are luring customers away with lower-cost phone plans. The company has also been hurt by announcements like T-Mobile's plan to spend $2.7 billion to build a high-speed wireless data network to compete with Sprint's data offering.