Cricket Wireless 2011 Annual Report Download - page 43

operations, or financial condition could be significantly adversely affected. Because of the costs and time lags
that can be associated with transitioning from one supplier or service provider to another, our business could be
substantially disrupted if we were required to replace the products or services of one or more major suppliers or
service providers with products or services from another source, especially if the replacement became necessary
on short notice. Any such disruption could have a material adverse effect on our business, results of operations
and financial condition.
System Failures, Security Breaches, Business Disruptions and Unauthorized Use or Interference with Our
Network or Other Systems Could Result in Higher Churn, Reduced Revenue and Increased Costs, and
Could Harm Our Reputation.
Our technical infrastructure (including our network infrastructure and ancillary functions supporting our
network such as service activation, billing and customer care) is vulnerable to damage or interruption from
technology failures, power surges or outages, natural disasters, fires, human error, terrorism, intentional
wrongdoing or similar events. In the past, our operations in certain markets have been adversely affected by
hurricanes and related weather systems. Unanticipated problems at our facilities or with our technical
infrastructure, system or equipment failures, hardware or software failures or defects, computer viruses or hacker
attacks could affect the quality of our services and cause network service interruptions. Unauthorized access to or
use of customer or account information, including credit card or other personal data, could result in harm to our
customers and legal actions against us, and could damage our reputation. In addition, earthquakes, floods,
hurricanes, fires and other unforeseen natural disasters or events could materially disrupt our business operations
or the provision of Cricket service in one or more markets. Costs we incur to restore, repair or replace our
network or technical infrastructure, as well as costs associated with detecting, monitoring or reducing the
incidence of unauthorized use, may be substantial and increase our cost of providing service. Any failure in or
interruption of systems that we or third parties maintain to support ancillary functions, such as billing, point of
sale, inventory management, customer care and financial reporting, could materially impact our ability to timely
and accurately record, process and report information important to our business. If any of the above events were
to occur, we could experience higher churn, reduced revenues and increased costs, any of which could harm our
reputation and have a material adverse effect on our business, financial condition or results of operations.
We Have Upgraded a Number of Significant Business Systems, Including Our Customer Billing System,
and Any Unanticipated Difficulties, Delays or Interruptions with the Transition Could Negatively Impact
Our Business.
During recent years, we have upgraded a number of our significant, internal business systems, including
implementing a new inventory management system, a new point-of-sale system and a new customer billing
system. The implementation of significant new systems often involves delays and disruptions in connection with
the transition to and operation of the new systems.
From time to time since the launch of our customer billing system in the second quarter of 2011, we have
experienced intermittent disruptions with certain aspects of the system, which have limited our ability to activate
new customers and to provide account services to current customers. We believe that these system issues have
had the effect of reducing our gross customer additions and increasing churn, and these system issues could
impact customer additions and churn in the first half of 2012. Although we believe that we have largely
identified the cause of these disruptions and are implementing plans to remedy them, we cannot assure you that
we will not experience additional disruptions with our customer billing system in the future.
Future significant difficulties in operating our customer billing system or other new systems could
materially impact our ability to attract and retain customers or to timely and accurately record, process and report
information that is important to our business. If any of the above events were to occur, we could experience
decreased gross customer additions, higher churn, reduced revenues and increased costs or could suffer a
material weaknesses in our internal control over financial reporting, any of which could harm our reputation and
have a material adverse effect on our business, financial condition or results of operations.
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