Metro PCS 2008 Annual Report Download - page 37

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28
• our inability to launch service in new metropolitan areas;
• our inability to attract and retain indirect agents and dealers for our products and services;
• our inability to increase the relevant coverage areas in our existing markets to expand our roaming
arrangements to areas that are important to us, or to allow us to offer services at rates which are attractive to,
our current and prospective customers;
• unfavorable United States economic conditions, which may have a disproportionate negative impact on
portions of our customer base;
• changes in the demographics of our markets; and
• adverse changes in the legislative and 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, our ability to continue to increase our customer base and revenues at the rates we currently
expect may be limited and we may fail to achieve additional economies of scale. Any failure to achieve the
penetration levels we currently believe are possible and to successfully increase our customer base may have a
material adverse impact on our business, financial condition and operating results.
Our business is seasonal and our operating results for future periods will be affected negatively if we fail to
have strong customer growth in the first and fourth quarters.
Our business is seasonal, with our largest number of subscribers typically being added in the first and fourth
quarters. If we fail to meet our expectations for customer additions in the first or fourth quarter, it could have a
negative impact on our business, financial condition and operating results.
Failing to manage our churn rate or experiencing a higher rate of customer turnover than we have forecasted
could adversely affect our business, financial condition and operating results.
Our customers do not have long-term contracts and can discontinue their service at any time without penalty. We
expect our churn rate to be higher than postpay wireless carriers. If we experience an even higher rate of churn than
we expect, we could experience reduced revenues and increased marketing costs to attract replacement customers
required to sustain our business plan, which could reduce our profit margin and could reduce the cash available to
construct and operate new markets. In addition, we may not be able to profitably replace customers who leave our
service or replace them at all. Our rate of customer churn can be affected by a number of factors, including the
following:
• network issues, including network coverage, network reliability, dropped and blocked calls, and network
availability;
• lack of competitive regional and nationwide roaming and the inability of our customers to cost-effectively
roam onto other wireless networks;
• affordability and general economic conditions;
• supplier or vendor failures;
• customer care concerns;
• handset issues, including lack of early access to the newest handsets, handset prices and handset problems;
• wireless number portability requirements that allow customers to keep their wireless phone numbers when
switching between service providers;
• our inability to offer bundled services or new services offered by our competitors; and