Clearwire 2008 Annual Report Download - page 40

th
e cost an
d
spee
d
w
i
t
h
w
hi
c
h
we
d
ep
l
oy our networ
k
,w
hi
c
h
may a
ll
ow t
h
ose operators to compete more
e
ffectivel
y
, assumin
g
the
y
have adequate spectrum resources, or ma
y
require us to deplo
y
such technolo
g
ies whe
n
we are permitted to do so
.
A
ddi
t
i
ona
lly
, once
f
u
lly d
ep
l
o
y
e
d
on a commerc
i
a
lb
as
i
s, mo
bil
eW
i
MAX ma
y
not per
f
orm as we expect, an
d
,
t
herefore, we may not be able to deliver the quality or types of services we expect. The process of upgrading our pre-
Wi
MAX mar
k
ets
f
rom Expe
di
ence tec
h
no
l
ogy to mo
bil
eW
i
MAX may cost more or
b
e more
diffi
cu
l
ttoun
d
erta
k
e
th
an we expect. We a
l
so ma
ydi
scover unant
i
c
i
pate
d
costs assoc
i
ate
d
w
i
t
hd
ep
l
o
yi
n
g
an
d
ma
i
nta
i
n
i
n
g
our networ
k
or deliverin
g
services we must offer in order to remain competitive. These risks could reduce our subscriber
g
rowth,
i
ncrease our costs o
f
prov
idi
ng serv
i
ces or
i
ncrease our c
h
urn. C
h
urn
i
san
i
n
d
ustry term we use to measure t
h
e rate
at which subscribers terminate service. We calculate this metric b
y
dividin
g
the number of subscribers who
t
erminate their service in a
g
iven month b
y
the avera
g
e number of subscribers durin
g
that month, in each case
e
xc
l
u
di
ng t
h
ose w
h
osu
b
scr
ib
e
f
or an
d
term
i
nate our serv
i
ce w
i
t
hi
n30
d
ays
f
or any reason or
i
nt
h
e
fi
rst 90
d
ays o
f
s
er
v
ice under certain circumstances.
If
t
h
ir
dp
arties
f
ai
l
to
d
eve
l
o
p
an
dd
e
l
iver t
h
ee
q
ui
p
ment t
h
at we nee
df
or
b
ot
h
our existing an
df
utur
e
networks, we may be unable to execute our business strategy or operate our business
.
We current
ly d
epen
d
on t
hi
r
d
part
i
es to
d
eve
l
op an
dd
e
li
ver comp
l
ex s
y
stems, so
f
tware an
dh
ar
d
ware pro
d
ucts
and components for our network in a timel
y
manner, and at a hi
g
h level of qualit
y
. Motorola is our sole supplier of
e
quipment and software for the Expedience s
y
stem currentl
y
deplo
y
ed in our pre-WiMAX markets. The Expe-
di
ence system cons
i
sts o
f
networ
k
components use
db
yusan
d
su
b
scr
ib
er equ
i
pment use
db
y our su
b
scr
ib
ers. T
o
s
uccessfull
y
continue to operate in most of our existin
g
markets, Motorola must continue to support the Expedienc
e
sy
stem, includin
g
continued production of the software and hardware components. An
y
failure b
y
Motorola to mee
t
th
ese nee
d
s
f
or any reason may
i
mpa
i
r our a
bili
ty to operate
i
nt
h
ese mar
k
ets. I
f
Motoro
l
a
f
a
il
e
d
to meet our nee
d
s,
we ma
y
not be able to find another supplier on terms acceptable to us, or at all
.
For our ex
i
st
i
ng mo
bil
eW
i
MAX mar
k
ets, our p
l
anne
d
mo
bil
eW
i
MAX
d
ep
l
oyment
i
n new mar
k
ets an
d
t
he
up
g
ra
d
eo
f
our pre-W
i
MAX mar
k
ets to mo
bil
eW
i
MAX, we are re
lyi
n
g
on t
hi
r
d
part
i
es to cont
i
nue to
d
eve
l
op an
d
deliver in sufficient quantities the network components and subscriber devices necessary for us to build and operat
e
our mobile WiMAX networks. As mobile WiMAX is a new and highly sophisticated technology, we cannot b
e
c
erta
i
nt
h
at t
h
ese t
hi
r
d
part
i
es w
ill b
e success
f
u
li
nt
h
e
i
r cont
i
nu
i
n
gd
eve
l
opment e
ff
orts. T
h
e
d
eve
l
opment process
for new mobile WiMAX network components and subscriber devices ma
y
be len
g
th
y
, has been sub
j
ect to som
e
s
hort-term dela
y
s and ma
y
still encounter more si
g
nificant dela
y
s. If these third parties are unable or unwillin
g
to
d
eve
l
op an
dd
e
li
ver new mo
bil
eW
i
MAX networ
k
components an
d
su
b
scr
ib
er
d
ev
i
ces
i
nsu
ffi
c
i
ent quant
i
t
i
es on a
t
imel
y
basis that perform accordin
g
to our expectations, we ma
y
be unable to deplo
y
a mobile WiMAX network in
our new mar
k
ets or to upgra
d
e our ex
i
st
i
ng mar
k
ets to mo
bil
eW
i
MAX w
h
en we expect, or at a
ll
.I
f
we are una
bl
et
o
d
ep
l
oy mo
bil
eW
i
MAX
i
nat
i
me
l
y manner or mo
bil
eW
i
MAX
f
a
il
s to per
f
orm as we expect, we may
b
e una
bl
et
o
e
xecute our business strate
gy
and our prospects and results of operations would be harmed
.
We may experience difficulties in constructing, upgrading and maintaining our network, which could
a
dversely affect customer satisfaction, increase subscriber churn and costs incurred, and decrease our
r
evenues
.
Our success depends on developin
g
and providin
g
services that
g
ive subscribers a hi
g
h qualit
y
experience. We
e
xpect to expen
d
s
i
gn
ifi
cant resources
i
n construct
i
ng, ma
i
nta
i
n
i
ng an
di
mprov
i
ng our networ
k
,
i
nc
l
u
di
ng t
he
d
ep
l
o
y
ment o
f
mo
bil
eW
i
MAX tec
h
no
l
o
gi
es
i
n new mar
k
ets an
d
t
h
eup
g
ra
d
eo
f
our pre-W
i
MAX mar
k
ets to mo
bil
e
W
iMAX. Additionall
y
, as the number of subscribers usin
g
our network increases, as the usa
g
e habits of ou
r
s
u
b
scr
ib
ers c
h
ange an
d
as we
i
ncrease our serv
i
ce o
ff
er
i
ngs, we may nee
d
to upgra
d
e our networ
k
to ma
i
nta
i
no
r
i
mprove t
h
e qua
li
ty o
f
our serv
i
ces. We may a
l
so nee
d
to upgra
d
e our networ
k
to stay compet
i
t
i
ve w
i
t
h
ne
w
t
echnolo
g
ies introduced b
y
our competitors. If we do not successfull
y
construct, maintain and implement futur
e
upgra
d
es to our networ
k
,t
h
e qua
li
ty o
f
our serv
i
ces may
d
ec
li
ne an
d
t
h
e rate o
f
our su
b
scr
ib
er c
h
urn may
i
ncrease
.
We ma
y
exper
i
ence qua
li
t
yd
e
fi
c
i
enc
i
es, cost overruns an
dd
e
l
a
y
sw
i
t
h
our construct
i
on, ma
i
ntenance an
d
upgrade projects, including the portions of those projects not within our control. The construction of our network
28