Dan Hesse, chief executive officer of Sprint Nextel, said the company would spin off its landline telephone business unit sometime in the second quarter of 2006.

Hesse paid customers and employees in Rocky Mount, N.C., a visit on Monday to explain the spinoff. The new company doesn’t yet have a name, though he said a decision was due sometime in the next few weeks.

The company has about 7.5 million landline local telephone customers, according to a company spokesman. The business unit generated $2.9 billion in revenues in the first half of 2005.

Employees of the landline unit had gone on strike Oct. 10, and returned to work Nov. 28 after approving a new contract.

“Sprint’s wireless division is so much larger than its landline operations,” Hesse told the Rocky Mount Telegram. “They competed with each other.”

The spinoff will also allow Sprint Nextel to focus solely on competing in the wireless market, which Hesse expects to become even more competitive.

The company, once separated, will offer bundles of local, long distance, wireless, Internet and television, Hesse said, similar to larger telephone companies such as Verizon and BellSouth. It will provide service in mostly rural parts of 18 states.

The company is expected to aggressively pursue small business customers, which Hesse said the larger telephone companies had abandoned.

Sprint, which began over 20 years ago as a long distance carrier, touting its fully digital network, merged with wireless carrier Nextel in August.