Metro PCS 2008 Annual Report Download - page 45

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We rely on third-parties to provide products, software and services that are integral to our business.
Sophisticated financial, management, information network management and billing systems are vital to our
business. We currently rely on internal systems and third-party vendors to develop and to provide all of these
systems. We have entered into agreements with third-party suppliers to provide products, software and services that
are integral to our business, such as customer care, financial reporting, network management, billing and payment
processing. We purchase a substantial portion of the products, software and services from only a few major suppliers
and we generally rely on one key vendor in each area. Some of these agreements may be terminated upon relatively
short notice. In addition, our plans for developing and implementing our financial information and billing systems
rely to some extent on the design, development and delivery of products, software and services by third-party
vendors. Our right to use these systems is dependent on agreements with third-party vendors and these systems may
not perform as anticipated. Our base stations are installed on leased cell site facilities or on leased DAS nodes in
connection with DAS systems. A significant portion of these cell sites and all DAS systems are leased from a small
number of cell site and DAS system providers generally under master agreements.
If our suppliers terminate their agreements with us, experience interruptions or other problems delivering
products, software or services to us on a timely basis or at all, it may cause us to have difficulty providing services
to or billing our customers, developing, delivering, and deploying new products and services and/or upgrading,
maintaining, improving our networks, or generating accurate or timely financial reports and information. If
alternative suppliers and vendors become necessary, we may not be able to obtain satisfactory and timely
replacement services on economically attractive terms, or at all. The loss, termination or expiration of these
agreements or our inability to renew them at all or on favorable terms or negotiate agreements with other providers
at comparable rates could harm our business. Our reliance on others to provide essential products, software, and
services on our behalf also gives us less control over the efficiency, timeliness and quality of these products,
software and services. If our master agreement with one of our cell site or DAS providers were to terminate, or if
the cell site or DAS system providers were to experience severe financial difficulties or file for bankruptcy, or if one
of these cell site or DAS system providers were unable to support our use of its cell sites or DAS systems, we would
have to find new sites or rebuild the affected portion of our network. In addition, the concentration of our cell site
leases and DAS systems with a limited number of cell site and DAS system providers could adversely affect our
business, financial condition and operating results if we are unable to renew our expiring leases or DAS system
agreements with these companies either on terms comparable to those we have today or at all. In addition, the tower
industry has continued to consolidate. If any of the companies from which we lease towers or DAS systems were to
consolidate with other cell site or DAS systems companies, they may be unable to honor obligations to us or have
the ability to raise prices which could materially affect our profitability. If a material number of cell sites or DAS
systems were no longer available for our use, it could have a material adverse effect on our business, financial
condition and operating results.
Additionally, our business model utilizes and relies upon indirect distribution outlets including a range of local,
regional and national mass market dealers and retailers allowing us to reach the largest number of potential
customers in our metropolitan areas at a relatively low cost. Many of our dealers own and operate more than one
location and may operate in more than one of our metropolitan areas. Because these third party dealers are the
primary contact between us and our customers in many instances, including in connection with accepting payment
for our services on our behalf, they play an important role in our ability to grow our business and in customer
retention. With the recent deterioration of the United States economy and the credit markets, which may continue for
the foreseeable future, some of our dealers and vendors may be unable to continue their operations or secure funds
for their continued operations. Further, due to the present economic conditions, we may be unable to find
participants in our local markets that would qualify or be able to open a dealer location to replace closed operations.
Since we rely on such third parties to provide some of our services, any bankruptcy, termination, switch or
disruption in service by such third parties or diminution in the number of such third parties could be costly and
affect operating efficiencies and our ability to attract and retain customers which could have a material adverse
effect on our business, financial condition and operating results.
We utilize a limited number of DAS providers.
We currently use, and plan to continue to use, DAS systems in lieu of traditional cell sites to provide service to
certain critical portions of new metropolitan areas in which we plan to build and in supplementing or adding
capacity to existing systems. The use of DAS systems will result in an acceleration of capital expenditures
compared to our traditional metropolitan builds without DAS systems. In order to construct DAS systems, the DAS
provider will be required to obtain necessary authority from the relevant state and local regulatory authorities and to
secure certain agreements, such as right of way agreements, in order to construct or operate the DAS systems. In
addition, the DAS system provider may be required to construct a transport network as part of their construction of
the DAS systems. These DAS systems may be leased and/or licensed from third party suppliers. We utilize a