Metro PCS 2007 Annual Report Download - page 35

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Item 1A. Risk Factors
Risks Related to Our Business
Our business strategy may not succeed in the long term.
We offer unlimited wireless services for flat monthly rates without requiring a long-term service contract. This
approach to marketing wireless services may not prove to be successful in the long term. Some companies that have
offered this type of service in the past have not been successful. From time to time, we evaluate our service offerings
and the demands of our target customers and may amend, change, discontinue or adjust our service offerings or new
trial service offerings as a result. These new or changed service offerings may not be successful or prove to be
profitable.
Our performance and ability to construct and launch new metropolitan areas to date may not be indicative of
our future results.
A major component of our business strategy involves expanding into new geographic areas beyond our Core
Markets and these geographic areas may present competitive or other challenges different from those encountered in
our Core Markets. We also have a limited operating and financial history upon which to evaluate our financial
performance, business plan execution, ability to construct and launch new metropolitan areas, and ability to succeed
in the future. We constructed our first networks beginning in 2001 and began offering service in certain
metropolitan areas in the first quarter of 2002. We and Royal Street face significant challenges in constructing and
launching new metropolitan areas, including, but not limited to, negotiating and entering into agreements with third
parties for distributed antenna systems, or DAS systems, leasing cell sites, constructing our network, and securing
all necessary consents, permits and approvals from third parties and local and state authorities, and clearing of
spectrum of incumbent users in the Auction 66 Markets. If we or Royal Street are unable to execute our respective
plans, we or Royal Street may experience delays in our ability to construct and launch new metropolitan areas or
grow our respective business, and our financial results may be materially adversely affected. In addition, our
financial performance in new geographic areas, including our Expansion Markets, may not be as positive as our
Core Markets.
We face intense competition from other telecommunications providers which could adversely affect our
operating results and hinder our ability to grow.
We compete directly in each of our markets with other wireless, wireline, cable, and satellite communications
providers. Many of our current and prospective competitors are, or are affiliated with, major companies that have
substantially greater financial, technical, personnel and marketing resources than we have (including spectrum
holdings, brands and intellectual property) and larger market share than we have, which may affect our ability to
compete successfully. These competitors often have established relationships with a larger base of current and
potential customers. Some of our competitors may undertake mergers and strategic alliances that allow them greater
access to capital, access to wider geographic territory, access to greater spectrum or attractive bundles of services.
In addition, some of our competitors are or are becoming or may become privately owned, which may provide them
with certain advantages and increased flexibility. Although our flat-rate, no long-term contract service offerings
distinguish us from many of our competitors, the competitive pressures of the wireless telecommunications industry
have caused, and may continue to cause, other carriers to offer service plans with increasingly large bundles of
minutes of use at increasingly lower prices, service plans with unlimited nights and weekends, and unlimited service
offerings. Certain of our national wireless competitors have recently announced that they will offer unlimited fixed-
rate service plans in the markets we currently operate and plan to operate and this may cause other wireless PCS
competitors to also offer unlimited fixed-rate service plans. Moreover, certain carriers we compete against, or may
compete against in the future, offer additional services, such as wireline phone service, cable or satellite television,
media and Internet, and are capable of bundling their wireless services with such other services in a package of
services that we may not be able to duplicate at competitive prices. In response to competitive offerings, we have
added, and in the future may be required to add, additional select features to our existing service plans in our
metropolitan areas, and we may consider additional targeted promotional activities as we evaluate the competitive
environment going forward. We currently have competitors who are offering unlimited service plans similar to ours
in the metropolitan areas we currently serve and certain of our national wireless competitors have announced they
will offer unlimited fixed-rate service plans in the markets we currently operate and plan to operate. As a result, we
will be unable to launch fixed-rate unlimited service plans ahead of our competition in our new markets. As a result,
we expect that increased competition will result in more competitive pricing, slower growth and increased churn of