The Wall Street Journal reports that Sprint Nextel CEO Gary Forsee stepped down from his post today after rumors spread that the board of the company was looking to replace him.Sprint Nextel warned investors yesterday that the company continues to lose high value subscribers and won't meet its financial targets for annual revenue this year.
As CEO of Sprint, Forsee oversaw the $35 billion dollar acquisition of Nextel in 2005 to make Sprint Nextel into the nation's third largest wireless carrier.
But the Wall Street Journal reports Forsee had a difficult time merging the two different corporate cultures and wireless technologies.
In addition, Sprint Nextel is notorious for having some of the worst customer service in the wireless business. Customers have been leaving the company in droves.
In the third quarter, Sprint Nextel said it expects to lose about 337,000 subscribers in the important "postpaid" market segment -- customers who sign annual contracts and pay monthly bills.
I am one of those customers.
I became a Sprint subscriber back in 2004. My girlfriend's family uses Sprint and she wanted to have the same wireless company as they do to save money.
Little did we know that saving money with Sprint would cost us hundreds of extra dollars.
Sprint was always adding extra fees to the monthly bill for things we didn't ask for or use. For example, Sprint added camera features to our phone package a month after we signed our contract in 2004. For nearly three years, we were paying for this feature that we didn't know we had and certainly didn't want. And of course you have to be an accountant to read the Sprint bill and understand it correctly, so we didn't notice that we were being overcharged approximately $25 a month until earlier this year.
Then, when we tried to call and complain about the issue, we couldn't get anybody to take our calls. When we did get somebody at Sprint headquarters on the phone, they kept us on hold for over an hour while we waited to speak to somebody from "management". When the person from "management" finally did come on the phone, we lost contact with her because the Sprint signal, never very strong, dropped out and our call was disconnected.
We finally did fix the camera fees (although the company refused to refund our money even though they couldn't produce any evidence that we had asked for the camera features to be added to our phone package.) But right after that Sprint started charging roaming fees for calls received outside of our calling area. That added - surprise, surprise - $25 bucks to our monthly bill!
We decided to leave Sprint and find another wireless carrier. We had signed our contract with Sprint in April of 2004. The contract should have ended in April of 2006. Unbeknownst to us, however, Sprint Nextel had secretly extended the contract on one of the phone lines in March of 2007 so that when we tried to close our account, the charge was an extra $200 bucks.
This was too much. We googled "Sprint + customer complaints" and discovered the company has a reputation for 1) charging for things people don't want or ask for 2) adding features and/or changing customer plans every time customers call Sprint 3) secretly extending customer contracts and charging hundreds of dollars to close Sprint accounts with contracts that have already expired.
We wrote a letter to Sprint in which we listed the abuses and fraudulent practices Sprint had engaged in against us, noted how Sprint had a reputation for such customer abuse and fraud, told Sprint how we had contacted the Department of Consumer Affairs, the Federal Trade Commission, the NY Attorney General, and our congressman about the matter, and wanted redress for our grievances. (When we contacted our congressman, btw, his consumer affairs person was herself a Sprint customer who knew all about the problems with the company, since they had secretly extended her contract and had charged her fees for services she had never asked for.)
This time we got a letter back from somebody high up in management. We called the number given and got to speak with the person from management within two minutes of calling. We repeated our grievances from the letter and said we wanted out of Sprint. The Sprint person agreed to drop the breach of contract fees, the roaming charges, and the monthly bill. We went to T-Mobile right after that, set up a new plan, and left Sprint that night.
Forever.
Now here's the clicker. I don't know if T-Mobile is any better than Sprint in terms of customer service. I don't know if T-Mobile is honest when it comes to billing (although we have spoken to a number of people who have had both Sprint and T-Mobile and they all said that T-Mobile is a HUGE improvement over Sprint.)
But I do know this - when I accidentally clicked a button on my new T-Mobile phone that connected me to the Internet and when I mistakenly opened a text message from T-Mobile, I fully expected to be charged for both those mistakes. Sprint constantly sent text messages to us and charged for them (We never opened them after we learned of the charges, and now suspect that was where they were "offering" us new features for fees and notifying us of changes to our account.)
But when my girlfriend called T-Mobile to ask what the charges would be for those "mistakes," not only did she get a T-Mobile customer service rep within seconds of calling, but when she asked about the charges we had incurred, he said "No, we don't charge you for things unless we tell you. That would be unethical..."
My girlfriend began laughing. The T-Mobile rep asked what was so funny. She said she was a former Sprint customer and Sprint did that all the time. This was why were now T-Mobile customers.
The T-Mobile rep said he heard stories like that all the time.
Now that Sprint Nextel CEO Forsee is gone from the company, I bet he'd admit he has heard stories like that all the time too.
Which is why he's gone, along with 337,000 monthly subscribers this quarter.
I hope that the lesson learned by Sprint, Wall Street and businesses in general is that treating customers honestly and respectfully is a more effective business practice than defrauding them and squeezing every dime they can out of them.
Unfortunately, I suspect that lesson will not be learned.
In the meantime, I await my last Sprint bill to see if the Sprint manager was playing squarely with us.
I also await my first T-Mobile phone bill to see if they're playing squarely too.
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