NEW YORK—Sprint Nextel Corp on Tuesday named the head of Embarq Corp, its fixed-line spin-off, as its chief executive, hoping the telecom industry veteran can turn the No. 3 U.S. mobile service provider around.

Analysts welcomed the appointment of Hesse, who was widely seen as the top candidate to replace Gary Forsee, who resigned in October amid a loss of market share to rivals such as AT&T Inc and Verizon Wireless.

But Sprint's shares barely moved as analysts said it would take time to fix its myriad problems. Sprint is suffering from customer defections and is under pressure from investors to reconsider costly investments in new technology.

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"Sprint Nextel's problems are bigger than any one person, a CEO, can change in the near term," said Stifel Nicolaus analyst Christopher King, adding that Hesse was likely the best choice given the difficult task ahead.

"I think it's a safe hire," he said.

Shares in Sprint, whose market value is around $41 billion, were just one cent higher to $13.92 in early afternoon trading on the New York Stock Exchange.

Hesse knows Sprint well, having worked at the company's local phone service division before it was spun off to create Embarq.

Analysts lauded his performance at Embarq, as well as his past leadership at AT&T Wireless. Some noted that Embarq under Hesse had introduced higher-speed Internet services without significant price rises, to combat customer losses to cable.

"There's basically no learning curve," said Berge Ayvazian, chief strategy officer at Yankee Group. He noted that Hesse already knows Sprint's board members well, through negotiations to spin off Embarq.

Hesse has extensive experience in the telecom industry. He spent 23 years at AT&T, including postings as president and CEO of AT&T Wireless Services from 1997 to 2000.

Investors had been wondering why the CEO search was taking so long. Some analysts said the decision may have been delayed by a $5 billion investment offer last month by a group including former Sprint Chairman Tim Donahue.

Sprint rejected the bid by Donahue, who had teamed up with South Korea's SK Telecom Co Ltd and Providence Equity Partners, according to a source.

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