Metro PCS 2008 Annual Report Download - page 43

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sell additional equity, seek additional debt financing, borrow additional amounts under our existing senior secured
credit facility, refinance our existing indebtedness, or delay certain of our planned expansion or other initiatives,
additions of capacity, and technological advances. Additionally, our senior secured credit facility includes a
revolving line of credit that is to be funded by a number of commercial and investment banks. The deteriorating
worldwide economic conditions, the banking crisis, and tightening capital markets may affect whether our lenders
are able to honor their commitments to fund our revolving line of credit should we need to draw on such line of
credit to pursue new opportunities, engage in acquisitions, or purchase additional spectrum. Should we need to
access the market for additional funds the competitiveness of the wireless telecommunications industry, the
volatility and demand of the capital markets, and the continued uncertainty in the credit and capital markets may
make it more difficult and costly for us to raise capital through the issuance of any equity securities or incur any
additional debt or refinance existing debt on terms acceptable to us or at all and there can be no assurance that
sufficient funds will be available to us under our existing indebtedness or otherwise. Further, should we need to raise
additional capital, the foreign ownership restrictions mandated by the FCC, and applicable to us, could limit our
ability to attract additional equity financing outside the United States. If we were able to obtain funds, it may not be
on terms and conditions acceptable to us, which could limit or preclude our ability to pursue new opportunities,
engage in acquisitions, or purchase additional spectrum, thus limiting our ability to expand our business which could
have a material adverse effect on our business, financial condition and operating results.
We are exposed to counterparty risk in our senior secured credit facility and related interest rate protection
agreements.
We have entered into interest rate protection agreements to manage the Company’s interest rate risk exposure by
fixing a portion of the interest expense we pay on our long-term debt under our senior secured credit facility. There
is considerable turmoil in the world economy and banking markets which could affect whether the counterparties to
such interest rate protection agreements are able to honor their agreements. If the counterparties fail to honor their
commitments, we could experience higher interest rates, which could have a material adverse effect on our business,
financial condition and operating results. In addition, if the counterparties fail to honor their commitments, we also
may be required to replace such interest rate protection agreements with new interest rate protection agreements in
an amount equal to that portion of our long-term debt under our senior secured credit facility and indentures
governing our senior notes, which is not fixed and which is less than 50% of our total long-term debt under our
senior secured credit facility and indentures governing our senior notes, and such replacement interest rate
protection agreements may be at higher rates than our current interest rate protection agreements. Further, if we are
unable to enter into new interest rate protection agreements, the lenders may claim we are in default under the terms
of our senior secured credit facility, which could have a material adverse effect on our business, financial condition
and operating results.
The investment of our substantial cash balances are subject to risk.
We can and have historically invested our substantial cash balances in, among other things, securities issued and
fully guaranteed by the United States or any state, highly rated commercial paper and auction rate securities, money
market funds meeting certain criteria, and demand deposits. These investments are subject to credit, liquidity,
market and interest rate risk. Such risks may result in a loss of liquidity, substantial impairment to our investments,
realization of substantial future losses, or a complete loss of the investment in the long-term which may have a
material adverse effect on our business, financial condition, operating results and liquidity.
We currently are migrating our billing services to a new vendor.
We recently entered into an agreement with a new billing services provider, Amdocs Software Systems Limited
and Amdocs, Inc., or Amdocs, under which, subject to certain exclusions, Amdocs will be our exclusive supplier of
billing services in North America. Amdocs is in the process of implementing the new billing services and migrating
our customers from our existing billing platform to the Amdocs platform. If Amdocs does not perform its
obligations under the agreement, ceases to continue to develop, or substantially delays development of, new features
or billing services or ceases to support its existing billing systems, we may be unable to secure alternative billing
services from another provider or providers in a timely manner, for a reasonable cost or otherwise, which could have
a material adverse effect on our business, financial condition, and operating results. Our prior billing services
vendor, Verisign, also has sold its billing services business to another third party billing services vendor and we
have amended our contract with this new third party billing services vendor to include certain transition services. If
this third party billing services vendor fails to continue to provide the services that Verisign previously provided
prior to our transition to Amdocs, if the third party billing services vendor fails to provide the agreed upon transition