Cricket Wireless 2011 Annual Report Download - page 26

any materials filed with the SEC may be read and copied by the public at the SEC’s Public Reference Room at
100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The information on our website is not part of this report
or any other report that we furnish to or file with the SEC.
Financial Information Concerning Segments and Geographical Information
Financial information concerning our operating segment and the geographic area in which we operate is
included in “Part II - Item 8. Financial Statements and Supplementary Data” of this report.
Employees
As of December 31, 2011, we had 3,891employees.
Seasonality
Our customer activity is influenced by seasonal effects related to traditional retail selling periods and other
factors that arise in connection with our target customer base. Based on historical results, we generally expect
new sales activity to be highest in the first and fourth quarters and customer turnover, or churn, to be highest in
the third quarter and lowest in the first quarter. Sales activity and churn, however, can be strongly affected by
other factors, including changes in service plan pricing, promotional activity, device availability, economic
conditions, high unemployment (particularly in the lower-income segment of our customer base) and competitive
actions or the relative amount of time a market has been in operation, any of which may have the ability to either
offset or magnify certain seasonal effects. From time to time, we have experienced inventory shortages, most
notably with certain of our strongest-selling devices, and these shortages have had the effect of limiting the
customer activity that would otherwise have been expected based on seasonal trends. We also design and offer
marketing programs and promotions, including device and accessory discounts, to help increase customer
activity for our wireless services which may affect seasonal trends. The frequency and timing of these programs
and promotions vary depending upon marketing conditions, competition and our operating performance. For
example, we utilize a program which allows existing customers to activate an additional line of voice service on
a previously activated Cricket device not currently in service. Customers accepting this offer receive a free first
month of service on the additional line of service after paying an activation fee. We also offer certain former
customers an initial free month of service as an incentive to reinstate their service with Cricket and offer certain
other customers whose accounts have been suspended for failing to timely pay their bill the opportunity to
reinstate their service for a discounted amount or a free month of service. We increased our use of these offers in
the fourth quarter of 2011 to increase customer activity and to offset in part the effect of the intermittent billing
system disruptions we experienced in 2011. Although some customers who reinstate service under these
programs may churn at a faster rate than the average customer, we believe that these kinds of programs and other
promotions provide important long-term benefits to us by extending the period of time over which customers use
our wireless services.
Inflation
We believe that inflation has not had a material effect on our results of operations.
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