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Sprint Willing to Wait for Forsee

February 11, 2003

KANSAS CITY, Mo. (AP) _ If Gary Forsee does finally pull into town to take over Sprint Corp., he will have to prove he’s been worth all the trouble.

Sprint already has ordained the veteran telecommunications executive its next leader, and is waging a bitter public battle over him with rival BellSouth. The dispute looks like it will be solved only through arbitration.

Industry experts see good reasons for the legal fight in Forsee’s wide-ranging experience, spotless ethical record and reputation for making tough, right decisions.

``He’s been with all the major types of players in the telecom industry and has been a success at each,″ said Seth Harris, a partner in the technology division of the headhunting firm Christian and Timbers.

Sprint wants Forsee to replace William Esrey, who is being relieved as chairman and chief executive, reportedly over his use of a questionable tax shelter for his personal finances.

BellSouth went to court last month to stop Forsee from taking that job, citing concern that he could disclose key information about the Atlanta-based company’s business to one of its main rivals. On Monday, a judge in Atlanta extended a restraining order that temporarily bars Forsee from joining Sprint.

But Fulton County Superior Court Judge Stephanie Mannis also ordered the two companies to complete arbitration over a non-compete clause in Forsee’s contract within 30 days.

Sprint then announced it would hire Forsee as Esrey’s successor after arbitration. On Tuesday, Sprint said Esrey had agreed to stay as the company’s chairman and chief executive officer until Forsee is hired.

Sprint said its president and chief operating officer, Ronald T. LeMay, also has agreed to stay during the transition period. LeMay also is reportedly on the way out.

``Both Ron and I will work with Gary to make his transition to CEO of Sprint as smooth and successful as possible,″ Esrey said in a prepared statement.

Forsee’s three decades in the business includes stints with Southwestern Bell and AT&T, which he left to go to Sprint after wiggling out of a non-compete clause that played out similarly in 1989. He has overseen contracts with governments, business customers and wireless. He worked in Europe on Global One, Sprint’s international partnership with France Telecom and Deutsche Telekom.

Conrad Prusak, president of Ethos Consulting Inc., has known Forsee for 10 years and said he has the knowledge and skills to analyze Sprint’s position in the telecom industry and determine what its future should be.

``After that, the question is, can you act, can you communicate, can you gather the troops and get them motivated?″ Prusak said. ``Forsee scores very high in all those areas. I can see why Sprint wants him back.″

Ethos is a San Francisco-area company that helps companies and chief executive officers in transition.

If Sprint wins Forsee, he will be quickly pressed to make some big decisions, said Jeff Kagan, an independent telecom analyst in Atlanta.

Sprint’s leaders have to decide if they are going to reshape the company by expanding into new businesses, or prepare for a sale or merger, he said.

Sprint and BellSouth both sell local and long-distance service and compete nationally for cellular customers. Last week, Sprint reported a $39 million profit for the fourth quarter, compared to a $1.2 billion loss the company reported during the same period a year earlier.

The company credited cost-cutting measures, which have included 17,000 layoffs since Oct. 2001, for the improvement.

``Sprint is sorely in need of new direction, and Forsee is just what Sprint needs to make those decisions,″ Kagan said.

Kagan is less optimistic than Sprint and some other analysts that an arbitrator will allow Forsee to jump to Sprint. It’s hard to see how Forsee can keep a competitor’s secrets while he works with Sprint’s board to determine the company’s future.

``It seems like an impossible situation,″ he said. ``I can’t see any arbiter coming to the conclusion that a vice chairman from one company can move to the CEO job of a direct competitor.″

Esrey and LeMay’s ouster and the resulting negative publicity will make the job tougher for Forsee, if he gets it, the analysts said.

``Right now the news related to those two guys is overshadowing what people are really thinking about the company,″ Harris said. ``It’s far more damaging than the fight over Forsee.″


On the Net: Sprint: www.sprint.com

Bellsouth: www.bellsouth.com

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