The Wall Street Journal-20080213-New Sprint Director to Call for Changes- Activist Whitworth May Lobby To Put Carrier on the Block

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New Sprint Director to Call for Changes; Activist Whitworth May Lobby To Put Carrier on the Block

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Ralph Whitworth, newly appointed as a director at Sprint Nextel Corp., will push the wireless carrier to consider major changes, including a sale of its Nextel network or the entire company, if difficulties continue, a person familiar with his thinking said.

Mr. Whitworth, 52 years old, was voted onto Sprint's board this week after several weeks of discussions with the Reston, Va., company. Before Sprint's deadline last month for board nominations, he officially notified the company of his intention to seek two seats for his firm, Relational Investors LLC, which owns a 2% stake in Sprint, people familiar with the matter said. In the end, Sprint avoided a public proxy fight by giving him a single seat.

The activist investor has incurred huge losses along with other shareholders as Sprint's stock has tumbled nearly 60% since June. The person familiar with his thinking says Mr. Whitworth's first priority is to help stabilize the company, after huge subscriber defections, and push for capital-spending discipline.

If the company continues on its negative trajectory, the person said, Mr. Whitworth would press his fellow directors to consider some major structural changes, such as a spinoff or sale of the network that supports users of Nextel, which Sprint acquired in 2005.

Another option for Mr. Whitworth, the person familiar with his thinking said, is to lobby Sprint to sell its long-distance unit, its lone remaining tie to the landline business. Mr. Whitworth would even be willing to contemplate a sale of Sprint's entire core cellphone business to another major U.S. carrier or cable company, the person said.

Mr. Whitworth has been critical of Sprint's plans to spend $5 billion on a new high-speed wireless-broadband network using WiMax technology. But he isn't entirely against Sprint pursuing the initiative if it gets outside funding, the person said. It appears Sprint is beginning to gain some traction on a plan to spin off its WiMax unit and expand it with financing from outside partners. Chip maker Intel Corp. has expressed a willingness to put as much as $2 billion into the venture, people familiar with the discussion say. A spokeswoman for Intel declined to comment.

Mr. Whitworth believes it would make sense for Sprint to combine its WiMax resources with those of Clearwire Corp., of Kirkland, Wash., which was founded by cellphone-industry pioneer Craig McCaw, the person familiar with his thinking said. Sprint and Clearwire are discussing a potential joint venture.

In a statement, Mr. Whitworth said he was "encouraged" that Sprint's new chief executive, Dan Hesse, "has committed to review all aspects of the company's business and shown a willingness to make tough decisions."

A Sprint spokeswoman declined to comment on Mr. Whitworth's plans as a new director.