Metro PCS 2009 Annual Report Download - page 24

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dropped calls, simplified frequency planning, efficient migration path as our CDMA technology can be easily
upgraded to fourth generation air interface protocols in a cost effective manner, and increased privacy and security.
Our and Royal Street’s decision to upgrade to LTE is based on what we believe are several key advantages of LTE
over other fourth generation air interface protocols, including higher network capacity, potential worldwide market
for devices and equipment, and an efficient upgrade path to voice over Internet Protocol, or VoIP, and other
advanced services. CDMA and LTE are incompatible with certain other air interface protocols. Customers and
former customers of other carriers may not be able to use their wireless devices on our or Royal Street’s networks
because either their wireless device uses a different air interface protocol or the other carriers with compatible air
interface protocols may have restricted the customers from changing the programming of their wireless device to
allow it to be used on networks other than the original carrier’s network. We also purchase EVRC-B, or 4G vocoder,
handsets, which will allow for greater capacity in our network.
Competition
The market for our wireless services is highly competitive. We compete directly in each of our metropolitan
areas with other facilities and non-facilities based wireless broadband mobile service providers, wireline, Internet,
cable, satellite and other communications service providers by providing a wireless alternative to traditional wireline
service. We believe that competition for subscribers among wireless broadband mobile providers is based mostly on
price, service area, services and features, call quality and customer service.
The current facilities-based wireless broadband mobile industry is dominated by four national carriers -- AT&T,
Verizon Wireless, Sprint Nextel and T-Mobile -- and their prepaid affiliates or brands. National carriers typically
offer post-paid plans that subsidize wireless devices, but require long-term service contracts and credit checks or
deposits. The national carriers also have introduced, either directly or through their affiliates, increasingly
competitive unlimited fixed-rate services plans in areas in which we offer service. These unlimited fixed-rate
service plans may cause other competitors to introduce similar or increasingly competitive unlimited fixed-rate
plans. In addition, some facilities-based regional wireless broadband mobile carriers, such as Cricket
Communications, an affiliate of Leap Wireless International, or Leap, have unlimited fixed-rate service plans similar
to ours and compete in certain of our metropolitan areas.
In addition to facilities-based wireless broadband mobile carriers, the wireless broadband mobile industry also
includes carriers such as Tracfone and PagePlus that are non-facility based mobile virtual network operators, or
MVNOs, that contract with wireless network operators to provide a separately branded wireless service. In some
cases these MVNOs have business arrangements with one of the other major nationwide carriers, which may allow
them to provide services over a more extensive geographical area network than our service. These MVNOs offer
increasingly competitive unlimited flat rate service plans similar to the service plans we provide in addition to
offering more traditional prepaid plans that charge by the minute.
The wireless broadband industry also includes facilities-based providers, such as Clearwire who is building a
network utilizing WiMax, which is the name given to a family of digital technologies that are capable of supporting
high-speed, long-range wireless services suitable for mobility applications, using spectrum predominately in the 2.5
GHz range to construct a national network to provide wireless data and telecommunications services. Clearwire
owners include Google, Intel, Sprint, Comcast, and Time Warner Cable.
The wireline industry is dominated by large incumbent carriers, such as AT&T and Verizon, and also includes
competitive local exchange or VoIP service providers. The cable industry also is dominated by large carriers such as
Time Warner Cable, Comcast and Cox Communications. These cable companies, along with cable company
Advance/Newhouse, formed a joint venture called SpectrumCo LLC, or SpectrumCo, which bid on and acquired
20 MHz of advanced wireless services, or AWS, spectrum in a number of major metropolitan areas throughout the
United States, including all of the major metropolitan areas in which we have built.
In the future, we may face competition from mobile satellite service, or MSS, providers, and from resellers of
these services. The FCC has granted some MSS providers, and may grant others, the flexibility to deploy an
ancillary terrestrial component to their satellite services. This added flexibility may enhance MSS providers’ ability
to offer more competitive mobile services. In addition, several large satellite companies, computer companies, and
Internet search and portal companies have indicated an interest in establishing next generation wireless networks,
and certain VoIP providers have indicated that in the future they may acquire FCC licenses or use unlicensed
spectrum to offer wireless services to compete directly with us. The FCC also has adopted an order that allows
companies to provide wireless services on an unlicensed basis in certain unused portions of the television spectrum.