Sprint Nextel's Last-Ditch Weapon

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The Samsung Instinct touch-screen handset will be available exclusively from Sprint.

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The yellow and black Sprint service and repair van offers phone repair, answers technical questions, and lets consumers purchase accessories and new handsets. Customers using the service will also be able to move their existing phone books from their previous wireless phone to their new one. "Providing our customers with convenient and superior customer service is a priority for Sprint," says Jeff Bennett, area vice-president for Sprint in the Southeast.

The company is trying to eliminate the reasons for customers to call Sprint in the first place. To achieve a consistent level of quality service in its call centers, the company is standardizing its contracts with call center outsourcers and putting a new emphasis on resolving customer problems on the first call. "They're doing the right set of things," says Jupiter Research wireless analyst Julie Ask. "Consumers are choosing based on the quality of the network, better handsets, and better customer service."

Nationally, Sprint is giving customers the ability to change their rate plans without having to renew contracts, and offering a 30-day ability to drop a new contract without penalty.

Spinning Off WiMax

The Samsung Instinct and other handsets announced at the wireless show are part of a slate of products Hesse hopes will get customers back into its stores. To lure young customers, the company last September was the first to launch Palm's (PALM) hit consumer-centric Centro smartphone.

To satisfy investors, Hesse could soon be giving up its biggest differentiating product: WiMax. The company has been negotiating with cable providers Comcast and Time-Warner, Google, and Clearwire to spin off its Xohm WiMax subsidiary (BusinessWeek.com, 3/27/08) in return for additional funding to build out a nationwide network.

The spin-off could hurt Sprint over the long term, but Hesse has no choice. If his pitch to customers—and by extension, investors—falls on deaf ears, there won't be a long term to worry about.

Edwards is a correspondent in BusinessWeek's Silicon Valley bureau.