Marcelo Claure, the CEO of cellphone distributor Brightstar, will replace Dan Hesse on Monday, Sprint Corp. said Wednesday.
Claure, 43, had been CEO of Brightstar Corp., which is part of Softbank Corp. of Japan. Softbank bought 70 percent of Sprint last year.
Sprint shares fell 17 percent in morning trading Wednesday.
The Wall Street Journal said Tuesday that Sprint decided not to pursue the merger of the No. 3 and No. 4 U.S. carriers. The paper cited unnamed people familiar with the matter. The merger would have faced tough opposition from U.S. regulators who want to preserve competition among wireless carriers.
In a statement Wednesday, the CEO of Softbank and chairman of Sprint said the company's focus had shifted away from acquisitions.
"While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier," Masayoshi Son said.
"We will focus on becoming extremely cost efficient and competing aggressively in the marketplace. While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint," he said.
Hesse joined Sprint as CEO in 2007. It has lost money every year since then because of stiff competition and the disastrous legacy of the 2005 Nextel acquisition, but Hesse has been credited with improving the carrier's customer service and shepherding it back to the cusp of profitability. The soft-spoken Hesse was also the company's chief pitchman, appearing in its TV commercials for several years.
Sprint shares fell $1.22 to $6.06. It was the lowest level for the shares since last October.
T-Mobile US shares dropped $2.76, or 8.1 percent, to $31.15 in morning, erasing several days of gains, as the prospect of a Sprint deal faded.
Claure's tough talk on pricing and the prospect of a continued battle among four national wireless carriers brought down the shares of Verizon by 1.5 percent and AT&T by 1.3 percent.