Citing disagreements over strategy, direction and claims that Nextel Communications Inc. failed to keep a promise made to him, Peter Adderton, Boost Mobile L.L.C. founder and chief executive officer, has left the youth-oriented Boost Mobile prepaid joint venture, which both companies launched last year.
Adderton, who founded Boost in Australia in 1999, said he told Nextel CEO Tim Donahue during a meeting Sunday that he “believes the company and several senior officials have failed to live up to promises made when Nextel completed its purchase of Boost this past August.”
“When Nextel bought our company, it was made clear to me that Boost would continue to operate independently and that our job was to build a brand that could dominate the youth wireless market,” Adderton said. “Instead, they’re trying to turn us into Nextel in jeans. Every day, Nextel reins us in a little more and makes us increasingly corporate. That’s completely incompatible with what we’re trying to accomplish.”
Adderton cited a number of operational issues, including the failure to expand the offering from the original California and Nevada markets to a nationwide offering, and added “I just want to take Boost back and run it myself in the way I know will work.”
Analysts have noted Nextel has played the Boost offering conservatively in an attempt to mitigate any potential operational drawbacks the prepaid services could have on its balance sheet, including higher churn and lower average revenue per user. Nextel recently reported it had signed up more than 250,000 Boost customers at the end of the third quarter, and it was still studying plans to expand the offering to additional markets.
