Sprint Shares Fall Amid Concern Over Expansion of Network
Stock Chart for Sprint Corp (S)
Sprint Nextel Corp. (S), the third- biggest U.S. wireless carrier, declined the most in two months amid concern over the management of its fourth-generation network expansion.
About 250 employees that had been assigned to Ericsson AB to help plan and oversee the network were reassigned back to Sprint. The shift of employees was highlighted in a report today by Detwiler Fenton & Co., which called the change a “black eye” for Ericsson and a sign that Sprint may have had troubles coordinating the work. Ericsson was hired as a contract partner to handle Sprint’s network operation and expansion.
The carrier is playing catch-up with Verizon Wireless and AT&T Inc. (T) in building out a network with long term evolution, or LTE, technology. Sprint also has a $15.5 billion contract with Apple Inc. (AAPL) to sell the iPhone, which is adding pressure to upgrade the network. Analysts expect the next iPhone, due later this year, to feature LTE.
Sprint shares fell 6.1 percent at $3.09 at the close in New York, the biggest decline since April. The stock has climbed 32 percent this year.
Kelly Schlageter, a spokeswoman for Overland Park, Kansas- based Sprint, said that Sprint and Ericsson determined it was better to move the engineers and network personnel back to Sprint for better strategic control of the expansion.
Sprint has said it will have LTE service in six major cities, including Atlanta, Dallas and Baltimore, by mid-year. In terms of that goal, “everything is tracking to plan,” Schlageter said.
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