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From Staff Reports
Shares of Sprint Nextel Corp. (S) suffered the worst decline in 25 years after the third-largest mobile phone company issued a report saying it lost 1.2 million subscribers in 2007 and planned to lay off 4,000 workers.
Sprint is eliminating almost 20% of its retail locations, as the company is still struggling after the $36 billion merger with Nextel in 2005. According to Bloomberg data, the two companies combined market share pre-merger was valued at $70 billion. That share has dropped two-thirds, to only about $24 billion.
Sprint has struggled to keep up with its two main rivals AT&T Inc. (T) and Verizon Communications Inc. (VZ), both of which have had more success with popular handsets like the iPhone and Chocolate. Sprint's troubles lead to the ouster of former Chief Executive Gary Forsee in October. Forsee was replaced with industry veteran Daniel Hesse.
Fitch Ratings lowered Sprint Nextel's issuer-default and senior unsecured notes ratings to "BBB-" from "BBB" on the news, only one rating level above junk bonds.
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