Cricket Wireless 2010 Annual Report Download - page 16

Competition
The wireless telecommunications industry is very competitive. In general, we compete with national facilities-
based wireless providers and their prepaid affiliates or brands, local and regional carriers, non-facilities-based
mobile virtual network operators, or MVNOs, voice-over-internet-protocol service providers, traditional landline
service providers, cable companies, and mobile satellite service providers. The competitive pressures of the
wireless telecommunications industry have continued to increase and have caused a number of our competitors to
offer competitively priced unlimited prepaid and postpaid service offerings. These service offerings present
additional strong competition in markets in which our offerings overlap, and the evolving competitive landscape has
negatively impacted our financial and operating results since early 2009.
Many of our competitors have greater name and brand recognition, larger spectrum holdings, larger footprints,
access to greater amounts of capital, greater technical, sales, marketing and distribution resources and established
relationships with a larger base of current and potential customers. These advantages may allow our competitors to
provide service offerings with more extensive features and options than those we currently provide, offer the latest
and most popular devices through exclusive vendor arrangements, market to broader customer segments and offer
service over larger geographic areas than we can, offer bundled service offerings which include landline phone,
television and internet services that we are not able to duplicate, and purchase equipment, supplies, devices and
services at lower prices than we can. As device selection and pricing become increasingly important to customers,
our inability to offer customers the latest and most popular devices as a result of exclusive dealings between device
manufacturers and our larger competitors could put us at a significant competitive disadvantage and make it more
difficult for us to attract and retain customers. In addition, some of our competitors are able to offer their customers
roaming services at lower rates. As consolidation in the industry creates even larger competitors, advantages that
our competitors may have, as well as their bargaining power as wholesale providers of roaming services, may
increase. For example, in connection with the offering of our nationwide voice and data roaming services, we have
encountered problems with certain large wireless carriers in negotiating terms for roaming arrangements that we
believe are reasonable, and we believe that consolidation has contributed significantly to some carriers’ control over
the terms and conditions of wholesale roaming services.
The competitive pressures of the wireless telecommunications industry and the attractive growth prospects in
the prepaid segment have continued to increase and have caused a number of our competitors to offer competitively-
priced unlimited prepaid and postpaid service offerings or increasingly large bundles of minutes of use at
increasingly lower prices, which are competing with the predictable and unlimited Cricket Wireless service
plans. For example, AT&T, Sprint Nextel, T-Mobile and Verizon Wireless each now offer unlimited service
offerings. Sprint Nextel also offers competitively-priced unlimited service offerings under its Boost Unlimited and
Virgin Mobile brands, which are similar to our Cricket Wireless service. T-Mobile also offers an unlimited plan that
is competitively priced with our Cricket Wireless service. In addition, a number of MVNOs offer competitively-
priced service offerings. For example, Tracfone Wireless sells wireless offerings exclusively in Wal-Mart under its
“Straight Talk” brand using a number of other carriers’ wireless networks. Moreover, some competitors offer
prepaid wireless plans that are being advertised heavily to the same demographic segments we target. These various
service offerings have presented, and are expected to continue to present, strong competition in markets in which
our offerings overlap.
In addition to voice offerings, there are a number of mobile broadband services that compete with our Cricket
Broadband service. AT&T, Sprint Nextel, T-Mobile and Verizon Wireless each offer mobile broadband services. In
addition, Clearwire Corporation has launched unlimited 4G wireless broadband service in a number of markets in
which we offer Cricket Broadband. Best Buy also recently launched a mobile broadband product using Sprint’s
wireless network. These broadband service offerings have presented, and are expected to continue to present, strong
competition in markets in which our mobile broadband offerings overlap.
We may also face additional competition from new entrants in the wireless marketplace, many of whom may
have significantly more resources than we do. The FCC is pursuing policies designed to increase the number of
wireless licenses and spectrum available for the provision of voice, data and mobile broadband services in each of
our markets, as well as policies to increase the level of intermodal broadband competition. For example, the FCC
has adopted rules that allow the partitioning, disaggregation and leasing of wireless licenses, which may increase
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