Could NASCAR lose Sprint as sponsor?

UPDATE A major phone company partner bringing 824,000 wireless subscribers to Sprint Nextel Corp. could take its business elsewhere. Edward Mueller, chairman and chief executive officer of Qwest Communications International, said Monday that he was not satisfied with the phones, advanced technology and other opportunities coming through the existing deal with Sprint.

“We need a wireless partnership that is different than the one we have today," Mueller told Wall Street analysts at a presentation in New York.

Mueller said Qwest is viewed by other major wireless companies as an attractive partner providing access to millions of potential new customers. Speculation has centered on alternatives that include AT&T Inc. and Verizon Wireless, the industry’s top companies, as well as smaller upstarts offering new technology.

“I can’t reveal too much, but there is interest," Mueller said. Kansas City Star

02/28/08 Sprint chief Dan Hesse will face investors for the first time Thursday morning. His biggest challenge? To stop people from gawking at all the problems he's inherited and get them to focus on the fixes he's making.
Unfortunately for him, the big story coming out of Sprint Nextel's fourth quarter earnings is more of the same: since sponsoring NASCAR mobile phone customers continue to leave in droves. The No. 3 wireless shop is expected to report that more than a half million users have cancelled their service as of the end of the year. Worse, say analysts who've been watching the monthly defection rate, the company is on track to lose more than a million subscribers this quarter ending March 31.

Why are so many subscribers fleeing Sprint? The difficulties can be traced at least back to the ill-managed 2005 merger with Nextel. Nextel's customers were heavy users of push-to-talk systems, and when Sprint neglected to maintain and upgrade networks, they found the system unreliable and have left in huge numbers. Sprint also bungled relations with the federal government that cost it access to a $20 billion contract opportunity. Industry observers and insiders say Sprint is in critical condition now and Hesse has to take some dramatic action to turn things around.

Some analysts and industry executives say Hesse has no choice but to break up the company. Sprint could carve out three businesses – WiMax, business services, and its wireline operation – and keep its wireless unit, say industry observers. Hesse is conducting a sweeping strategic review of Sprint and its options, but he's not expected to present his conclusions until April. Whether that breakup will jeopardize Sprint's sponsorship of NASCAR remains to be seen, but clearly, sponsoring NASCAR is not gaining the wireless company any customers.