Cricket Wireless 2010 Annual Report Download - page 32

may modify, change, adjust or discontinue our product and service offerings or offer new products and services on a
permanent, trial or promotional basis. We cannot assure you that these product or service offerings will be
successful or prove to be profitable.
If We Are Unable to Manage Our Growth, Our Operations Could Be Adversely Impacted.
We have experienced substantial growth in a relatively short period of time, and we expect to continue to experience
growth in the future in our existing and new markets. During 2009, new markets were launched in Chicago, Philadelphia,
Washington, D.C., Baltimore and Lake Charles covering approximately 24.2 million additional POPs. In addition, we
have pursued other opportunities within recent years to continue to strengthen and expand our business. These activities
have included the broadening of our portfolio of products and services, including through the introduction of our Cricket
Broadband and Cricket PAYGo services, our new “all-inclusive” rate plans and our new Muve Music service. We have
also pursued activities to strengthen and expand the available network service area for Cricket products and services,
which have included enhancing network coverage and capacity in our existing markets, entering into agreements to
provide Cricket customers with nationwide voice and data roaming services as well as a wholesale agreement which
permits us to offer Cricket services outside of our current network footprint.
The management of our growth requires, among other things, continued development of our financial controls,
budgeting and forecasting processes and information management systems, stringent control of costs, diligent
management of our network infrastructure and its growth, increased spending associated with marketing activities
and the acquisition of new customers, the ability to attract and retain qualified management personnel and the
training of new personnel. Furthermore, the implementation of new or expanded systems or platforms to
accommodate our growth, and the transition to such systems or platforms from our existing infrastructure,
could result in unpredictable technological or other difficulties. Failure to successfully manage our expected
growth and development, to effectively manage launched markets, to enhance our processes and management
systems or to timely and adequately resolve any such difficulties could have a material adverse effect on our
business, financial condition and results of operations.
In addition, the growth and launch of new markets, the integration of newly-acquired markets or businesses
and the introduction of new device offerings such as the “smartphones” we introduced in August 2010 require
continued management and control of our device inventories. From time to time, we have experienced inventory
shortages, most notably with certain of our strongest-selling devices, including shortages we experienced during the
second quarter of 2009 and again in the second and third quarters of 2010. While we have recently implemented a
new inventory management system and have undertaken other efforts to address inventory forecasting, there can be
no assurance that we will not experience inventory shortages in the future. Any failure to effectively manage and
control our device inventories could adversely affect our ability to gain new customers and have a material adverse
effect on our business, financial condition and results of operations.
We May Have Difficulty Managing and Integrating New Joint Ventures or Partnerships That We Form
or Companies or Businesses That We Acquire.
In addition to growing our business through the operation of our existing and new markets, we may also expand
our business by entering into joint ventures or partnerships with others or acquiring other wireless communications
companies or complementary businesses. For example, in October 2010, we and Pocket contributed substantially
all of our respective wireless spectrum and operating assets in the South Texas region to STX Wireless to create a
joint venture to provide Cricket service in the South Texas region. In exchange for such contributions, Cricket
received a 75.75% controlling membership interest in STX Wireless and Pocket received a 24.25% non-controlling
membership interest. Commencing October 1, 2010, STX Operations began providing Cricket service to
approximately 700,000 customers with a network footprint covering approximately 4.4 million POPs. Entering
into joint ventures and partnerships or acquiring other companies or businesses may create numerous risks and
uncertainties, including unanticipated costs and liabilities, possible difficulties associated with the integration of the
parties’ various operations and the potential diversion of management’s time and attention from our existing
operations. In addition, the consolidation of operating assets and operations following the formation of a joint
venture may result in significant restructuring charges. For example, we are implementing a plan for STX Wireless
to integrate the Cricket and Pocket operating assets in the South Texas region so that the combined network and
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