Clearwire 2009 Annual Report Download - page 35

Th
e amount an
d
t
i
m
i
ng o
f
any a
ddi
t
i
ona
lfi
nanc
i
ngs to sat
i
s
f
yt
h
ese a
ddi
t
i
ona
l
cap
i
ta
l
nee
d
s,
if
any, are
diffi
cu
lt
t
o estimate at this time. To raise additional capital, we ma
y
be required to issue additional equit
y
securities in public
or private offerings, potentially at a price lower than the market price of Class A Common Stock at the time of such
i
ssuances. We may see
k
s
i
gn
ifi
cant a
ddi
t
i
ona
ld
e
b
t
fi
nanc
i
ng, an
d
as a resu
l
t, may
i
ncur s
i
gn
ifi
cant
i
nterest expense
.
O
ur existin
g
level of debt ma
y
make it more difficult for us to obtain this additional debt financin
g
,ma
y
reduce th
e
amount o
f
money ava
il
a
bl
eto
fi
nance our operat
i
ons an
d
ot
h
er
b
us
i
ness act
i
v
i
t
i
es, may expose us to t
h
er
i
s
k
o
f
i
ncreas
i
ng
i
nterest rates, may ma
k
e us more vu
l
nera
bl
e to genera
l
econom
i
c
d
ownturns an
d
a
d
verse
i
n
d
ustry
c
on
di
t
i
ons an
d
ma
y
re
d
uce our
fl
ex
ibili
t
yi
np
l
ann
i
n
gf
or, or respon
di
n
g
to, c
h
an
gi
n
gb
us
i
ness an
d
econom
ic
c
onditions. We also may decide to sell additional debt or equity securities in our domestic or international
s
ubsidiaries, which may dilute our ownership interest in or reduce or eliminate our income, if any, from those
e
nt
i
t
i
es. T
h
e recent turmo
il i
nt
h
e econom
y
an
d
t
h
e wor
ld
w
id
e
fi
nanc
i
a
l
mar
k
ets ma
y
ma
k
e
i
t more
diffi
cu
l
t
f
or us t
o
obtain necessar
y
additional equit
y
and debt financin
g
.
If
we are requ
i
re
d
to o
b
ta
i
na
ddi
t
i
ona
l
cap
i
ta
l
to
f
un
d
our
b
us
i
ness, or
if
we e
l
ect to see
k
a
ddi
t
i
ona
l
cap
i
ta
l
to
p
ursue new or alternative business strate
g
ies, we ma
y
not be able to secure such additional financin
g
when needed o
n
acceptable terms or at all. If we fail to obtain additional financin
g
on acceptable terms, our business prospects
,
fi
nanc
i
a
l
con
di
t
i
on an
d
resu
l
ts o
f
operat
i
ons may
b
ea
d
verse
l
ya
ff
ecte
d
,orwemay
b
e
f
orce
d
to curta
il
our p
l
ans to
r
educe the amount of additional ca
p
ital re
q
uired
.
We have committed to deploy a wireless broadband network using mobile WiMAX technology and woul
d
incur significant costs to deploy alternative technologies, even if there are alternative technologie
s
a
vai
l
a
bl
eint
h
e
f
uture t
h
at wou
ld b
e tec
h
no
l
ogica
lly
su
p
erior or more cost e
ff
ective.
Un
d
er t
h
e Inte
l
Mar
k
et Deve
l
opment Agreement, we
h
ave comm
i
tte
d
to un
d
erta
k
e certa
i
n mar
k
et
i
ng e
ff
orts
w
ith respect to our 4G mobile broadband services and are sub
j
ect to certain restrictions on our abilit
y
t
o
c
ommerc
i
a
ll
y
d
ep
l
oy w
i
re
l
ess
b
roa
db
an
d
or
d
ata tec
h
no
l
ogy ot
h
er t
h
an mo
bil
eW
i
MAX on our networ
k
st
h
roug
h
F
ebruar
y
28, 2012, as lon
g
as certain requirements are satisfied.
We have expended significant resources and made substantial investments to deploy a 4G mobile broadban
d
n
etwor
k
us
i
n
g
mo
bil
eW
i
MAX tec
h
no
l
o
gy
.We
d
epen
d
on or
igi
na
l
equ
i
pment manu
f
acturers to
d
eve
l
op an
d
pro
d
uce
m
o
bil
eW
i
MAX e
q
u
ip
ment an
d
su
b
scr
ib
er
d
ev
i
ces t
h
at w
ill
o
p
erate on our networ
k
,an
d
on Inte
l
an
d
ot
h
er
m
anufacturers to cause mobile WiMAX chipsets to be embedded into laptops and other computing devices. Whil
e
w
e
h
ave
d
ep
l
o
y
e
d
our mo
bil
eW
i
MAX tec
h
no
l
o
gy i
n27mar
k
ets as o
f
Decem
b
er 31, 2009, we cannot assure
y
ou t
h
a
t
c
ommerc
i
a
l
quant
i
t
i
es o
f
mo
bil
eW
i
MAX equ
i
pment an
d
su
b
scr
ib
er
d
ev
i
ces t
h
at meet our requ
i
rements w
ill
cont
i
nu
e
t
o be available on the schedule we ex
p
ect, or at all, or that vendors will continue to develo
p
and
p
roduce mobile
Wi
MAX equ
i
pment an
d
su
b
scr
ib
er
d
ev
i
ces
i
nt
h
e
l
ong term, w
hi
c
h
may requ
i
re us to
d
ep
l
oy a
l
ternat
i
ve tec
h
no
l
og
i
es.
We incurred si
g
nificant expense up
g
radin
g
16 of our le
g
ac
y
markets from pre-4G technolo
gy
to mobile
Wi
MAX an
d
expect to cont
i
nue to upgra
d
eama
j
or
i
ty o
f
our rema
i
n
i
ng
l
egacy mar
k
ets to mo
bil
eW
i
MAX
i
n 2010.
T
h
ese
f
uture upgra
d
es may cost more or
b
e more
diffi
cu
l
ttoun
d
erta
k
et
h
an we expect. As we cont
i
nue to upgra
d
e
our le
g
ac
y
markets to mobile WiMAX, we expect that churn will increase in those markets. Churn is an industr
y
t
erm we use to measure the rate at which subscribers terminate service. We calculate this metric by dividing the
n
um
b
er o
f
su
b
scr
ib
ers w
h
o term
i
nate t
h
e
i
r serv
i
ce
i
nag
i
ven mont
hb
yt
h
e average num
b
er o
f
su
b
scr
ib
ers
d
ur
i
n
g
th
at mont
h
,
i
n eac
h
case exc
l
u
di
n
g
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
a
y
s
f
or an
y
reaso
n
or in the first 90 days of service under certain circumstances
.
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 ma
y
not be able to deliver the qualit
y
or t
y
pes o
f
services we expect. We also ma
y
discover unanticipated
costs associated with deploying and maintaining our networ
ks or delivering services we must offer in order to remain
r
r
c
ompet
i
t
i
ve. Ot
h
er compet
i
ng tec
h
no
l
og
i
es,
i
nc
l
u
di
ng ot
h
er 4G or su
b
sequent tec
h
no
l
og
i
es suc
h
as LTE, t
h
at may
h
ave
advanta
g
es over mobile WiMAX will likel
y
be developed, and operators of other networks based on those competin
g
t
echnolo
g
ies ma
y
be able to deplo
y
these alternative technolo
g
ies at a lower cost and more quickl
y
than the cost and
s
pee
d
w
i
t
h
w
hi
c
h
we
d
ep
l
oy our networ
k
s, w
hi
c
h
may a
ll
ow t
h
ose operators to compete more e
ff
ect
i
ve
l
y, assum
i
ng t
h
ey
have adequate spectrum resources, or ma
y
require us to deplo
y
such technolo
g
ies when we are permitted to do so
.
Th
ese r
i
s
k
s cou
ld
re
d
uce our su
b
scr
ib
er growt
h
,
i
ncrease our costs o
f
prov
idi
ng serv
i
ces or
i
ncrease our c
h
urn.
25