Metro PCS 2007 Annual Report Download - page 43

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32
these metropolitan areas will cause interference to incumbent DoD systems, we could be delayed from using the
AWS spectrum in these metropolitan areas, and our launch of service in Philadelphia and Boston could be delayed,
as much as 36 months or more.
We may not achieve the customer penetration levels in our Core and Expansion Markets that we currently
believe are possible with our business model.
Our ability to achieve the customer penetration levels that we currently believe are possible with our business
model in our Core and Expansion Markets is subject to a number of risks, including:
• increased competition from existing competitors or new competitors;
• higher than anticipated churn in our Core and Expansion Markets;
• our inability to increase our network capacity in areas we currently cover and plan to cover in the Core and
Expansion Markets to meet growing customer demand;
• our inability to continue to offer products or services which our current or prospective customers want;
• our inability to increase the relevant coverage areas in our Core and Expansion Markets in areas or expand
our roaming arrangements to areas that are important to our current and prospective customers;
• changes in the demographics of our Core and Expansion Markets; and
• adverse changes in the regulatory environment that may limit our ability to grow our customer base.
If we are unable to achieve the aggregate levels of customer penetration that we currently believe are possible
with our business model in our Core and Expansion Markets, our ability to continue to grow our customer base and
revenues at the rates we currently expect may be limited. Any failure to achieve the penetration levels we currently
believe are possible may have a material adverse impact on our future financial results and operations. Furthermore,
any inability to increase our overall level of market penetration in our Core and Expansion Markets, as well as any
inability to achieve similar customer penetration levels in other metropolitan areas we launch in the future, could
adversely impact the market price of our 9¼% senior notes due 2014 and stock and may inhibit our ability to repay
our indebtedness.
We and Royal Street may incur significant costs in our build out and launch of new markets and we may incur
operating losses in those markets for an undetermined period of time.
We and Royal Street have invested and expect to continue to invest a significant amount of capital to build
systems that will adequately cover our Expansion Markets, and we and Royal Street will incur operating losses in
each of these markets for an undetermined period of time. We also anticipate having to spend and invest a
significant amount of capital to build systems and operate networks in any new metropolitan areas we plan to build,
including the Auction 66 Markets, and expect that we will also incur operating losses in each of these markets for an
undetermined period of time.
We and Royal Street may have insufficient spectrum in our existing and new markets to meet customer demand
or to offer new services that our competitors may be able to offer.
Most national wireless carriers have greater spectrum capacity than we do that can be used to support third
generation, or 3G, and fourth generation, or 4G, services. These national wireless carriers are currently investing
substantial capital to deploy the necessary capital equipment to deliver 3G enhanced services. We and Royal Street
have licenses for less than 20 MHz of spectrum in certain of our markets, which is significantly less than most of the
wireless carriers with whom we and Royal Street compete. This limited spectrum may require Royal Street and us to
secure more cell sites to provide equivalent service (including data services based on EV-DO technology), spend
greater capital compared to Royal Street’ s and our competitors’ , deploy more expensive network equipment, such as
six-sector antennas, EV-DO Revision A with VoIP, or LTE sooner than our competitors, or require us to use DAS
systems or make us more dependent on improvements in handsets, such as EVRC-B or 4G capable handsets. Royal
Street’ s and our limited spectrum may also limit Royal Street’ s and our ability to support our growth plans or new
services without additional technology improvements and/or spectrum, and may make Royal Street and us more