Metro PCS 2008 Annual Report Download - page 20

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terms. For example, the initial broadband PCS licenses for San Francisco, Sacramento, Miami and Atlanta were
granted in 1997, were renewed in 2007 and are subject to renewal in January 2017; the AWS licenses were granted
in November 2007 and are subject to renewal in November 2022; and the 700 MHz license was granted in June
2008 and is subject to renewal in June 2019. Each FCC license is essential to our and Royal Street’s ability to
operate and conduct our and Royal Street’s business in the area covered by that license. We also have other licenses,
such as microwave licenses, which we use to provide service. We intend to file renewal applications for our licenses
when the renewal filing windows open. The next wireless broadband PCS licenses that need to be renewed expire in
2009. For a discussion of general licensing requirements, please see “— Construction Obligations.”
Distribution and Marketing
We offer our products and services to our customers under the “MetroPCS” brand both indirectly through
independent retail outlets and directly through Company-operated retail stores. We also sell our services over the
Internet using our own branded MetroPCS® website. Our indirect distribution outlets include a mixture of local,
regional and national mass market dealers and retailers and specialty stores. Many of our dealers own and operate
more than one location and may operate in more than one of our metropolitan areas. A substantial number of our
retailers, dealers and corporate store locations also accept payment for our services and many also perform other
services for us. A significant portion of our gross customer additions have been added through our indirect
distribution outlets. For the twelve months ended December 31, 2008, approximately 89% of our gross customer
additions were through indirect channels.
Our marketing strategy is to create and provide products, services and communications that drive growth while
optimizing our marketing return on investment and minimizing the cost to acquire customers. Our marketing
campaigns emphasize that MetroPCS offers unlimited services on a flat rate basis without long-term service
contracts for an affordable price. MetroPCS builds consumer awareness and promotes the MetroPCS brand by
strategic local advertising to develop our brand and support our indirect and direct distribution channels. We
advertise primarily through local radio, cable, television, outdoor and local print media. In addition, we believe we
have benefited from a significant number of word-of-mouth customer referrals.
Customer Care, Billing and Support Systems
We outsource some or all of our customer care, billing, payment processing and logistics to nationally recognized
third-party providers. We also are in the process of transitioning our billing services to another nationally
recognized third party vendor. See “Risk Factors — We currently are migrating our billing services to a new
vendor.”
Our outsourced call centers are staffed with professional and bilingual customer service personnel, who are
available to assist our customers 24 hours a day, 365 days a year. Some of these outsourced call centers are located
outside the United States, in Mexico, Panama, and the Philippines, which facilitates the efficient provision of
customer support to our large and growing subscriber base, including Spanish speaking customers. We also provide
automated voice response service to assist our customers with routine information requests. MetroPCS ranked
"Highest in Customer Satisfaction with Wireless Prepaid Service" in the J.D. Power and Associates third annual
Prepaid Customer Satisfaction Study in July of 2008.
Network Operations
We and Royal Street operate 1xRTT CDMA networks in all of the metropolitan areas where we have launched
service. A network includes a switching center (which may be shared between metropolitan areas) which serves
several purposes, including routing calls, managing call handoffs, managing access to the public switched telephone
network and providing access to voicemail and other value-added services, cell sites or distributed antenna system,
or DAS, nodes, and backhaul facilities, which carry traffic to and from our cell sites and our switching facilities.
Currently, almost all cell sites in the network are co-located, meaning our and Royal Street’s equipment is located
on leased facilities that are owned by third parties who retain the right to lease the facilities to additional carriers.
The switching centers and national operations center provide around-the-clock monitoring of our network.
Our switches connect to the public switched telephone network through fiber rings leased from third-parties,
which transmit originating and terminating traffic between our equipment and local exchange and long distance
carriers. We also have negotiated interconnection agreements with relevant local exchange carriers in our service
areas.
We use third-party providers for long distance services and the majority of our backhaul services.