Cricket Wireless 2011 Annual Report Download - page 47

If Customer Usage of Our Services Exceeds Our Expectations, Our Costs of Providing Service Could
Increase, Which Could Have a Material Adverse Effect on Our Operating Expenses.
Our most popular Cricket Wireless service plans bundle unlimited local and U.S. long distance service and
unlimited text messaging, with mobile web, 411 services, navigation, data back-up and other features, for a fixed
monthly fee to more effectively compete with other telecommunications providers. Our “smartphones” and other
new devices use greater amounts of network capacity than the handsets and devices we previously offered. We
also offer Cricket Broadband, our unlimited mobile broadband service, and Cricket PAYGo, a pay-as-you-go
unlimited prepaid wireless service. In 2011, we successfully launched Muve Music in all our markets, an
unlimited music download service designed specifically for mobile handsets. We provide nationwide voice, data,
mobile broadband and music download services through our own Cricket network footprint and through roaming
and wholesale agreements that we have entered into with other carriers. Customers usage of our wireless services
has been significant.
If customers exceed expected usage for our voice, data, mobile broadband or music download services, we
could face capacity problems and our costs of providing the services could increase. Although we own less
spectrum in many of our markets than our competitors, we seek to design our network to accommodate our
expected high rates of usage for our services, and we continue to assess and seek to implement technological
improvements to increase the efficiency of our wireless spectrum. We currently manage our network and users of
our Cricket Broadband service by limiting throughput speeds if their usage adversely impacts our network or
service levels or if usage exceeds certain thresholds. However, if future wireless use by Cricket customers
increases faster than we anticipate and exceeds the then-available capacity of our network, service quality may
suffer. In addition, our roaming or wholesale costs may be higher than we anticipate. Depending on the extent of
customers’ use of our network and roaming or wholesale services we expect to provide in the future, we may be
forced to raise the price or alter the service offerings of our wireless or mobile broadband services, further limit
data quantities or speeds, otherwise limit the number of new customers for certain services, acquire additional
spectrum or incur substantial additional capital expenditures to enhance network capacity or quality.
We May Be Unable to Acquire Additional Spectrum in the Future at a Reasonable Cost or on a Timely
Basis.
Because we offer unlimited voice, data, mobile broadband and music download services for a flat monthly
rate, our customers’ average usage of these services per month is substantially above U.S. averages. We intend to
meet demand for our services by utilizing spectrally efficient technologies or by entering into roaming or
partnering agreements with other carriers. We currently have an average of 23 MHz of spectrum in the markets
we operate, which generally include an initial spectrum reserve that we plan to use to deploy LTE. However, we
may need to acquire or access additional spectrum in the future to satisfy increasing demand for data and mobile
broadband services, to maintain an acceptable grade of service or to provide or support new services or
technologies to meet increasing customer demands. In addition, we also may acquire additional spectrum in order
to enter new strategic markets. However, we cannot assure you that we will be able to acquire additional
spectrum at auction or in the after-market at a reasonable cost or at all or that additional spectrum would be made
available by the FCC on a timely basis. In addition, the FCC may impose conditions on the use of new wireless
broadband mobile spectrum, such as heightened build-out requirements or open access requirements, that may
make it less attractive or uneconomical for us. If such additional spectrum is not available to us when required on
reasonable terms or at a reasonable cost, our business, financial condition and results of operations could be
materially adversely affected.
Our and Savary Island’s Wireless Licenses Are Subject to Renewal and May Be Revoked in the Event
That We Violate Applicable Laws.
Our and Savary Island’s existing wireless licenses are subject to renewal upon the expiration of the 10-year
or 15-year period for which they are granted, which renewal period commenced for some of our PCS wireless
licenses in 2006. The FCC will award renewal expectancy to a wireless licensee that timely files a renewal
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