Metro PCS 2009 Annual Report Download - page 51

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We and our suppliers may be subject to claims of infringement.
The technologies used in the telecommunications industry are protected by a wide array of patents and other
intellectual property rights. As a result, third parties may assert infringement and misappropriation claims against us
or our suppliers from time to time based on our or their general business operations, the equipment, software or
services we or they use or provide, or the specific operation of our wireless networks or service. Our suppliers may
be subject to infringement or misappropriation claims that if successful could preclude the supplier from supplying
us with the products and services we require to run our business or offer our services, require the supplier to change
the products and services they provide to us in a way which could have a material adverse effect on us, or cause the
supplier to increase the charges for their products and services to us. We also cannot guarantee that we will be fully
protected against all losses associated with an infringement or misappropriation claim involving our manufacturers,
licensors and suppliers who provide us with the equipment, software and technology that we use in our business. In
addition, our suppliers may refuse to, or may be unable to, pay any damages or honor their defense and
indemnification obligations to us, which may result in us having to bear such losses. We may also have to buy
equipment and services from other third party suppliers or pay royalties to the holders of intellectual property rights.
Moreover, we may be subject to claims that products, software and services provided by different vendors which
we combine with products or with services provided by other vendors or with our own products and services in
order to offer products and services to our customers are infringing on or misappropriating the rights of others, and
we may not have any indemnification protection from our vendors for these claims. Further, we have been, and in
the future may be, subject to claims that certain business processes we use, services we provide, or products we
create may infringe on or misappropriate the rights of third parties, and we may have no indemnification rights from
any of our vendors or suppliers. Whether or not an infringement or misappropriation claim is valid or successful, it
could adversely affect our business by diverting management’s attention, involve us in costly and time-consuming
litigation, require us to enter into royalty or licensing agreements (which may not be available on acceptable terms,
or at all), require us to pay royalties for prior periods, require us or our suppliers to redesign our or their business
operations, processes, systems, services or products to avoid claims of infringement or misappropriation, preclude
our ability to offer certain products and services at all, or require us to purchase products and services from different
vendors or not sell certain products or services. If a claim is found to be valid or if we or our suppliers cannot
successfully negotiate a required royalty or license agreement, we could be forced to pay substantial damages,
including potentially treble damages, or we could be subject to an injunction that could disrupt our business, prevent
us from offering some or all of our products or services and cause us to incur losses of customers or revenues, any
or all of which could be material and could materially adversely affect our business, financial condition and
operating results.
Substantially all of our CDMA network infrastructure equipment is manufactured or provided by a single
infrastructure vendor.
Substantially all of our broadband personal communications services, or PCS, and our advanced wireless services,
or AWS, CDMA network infrastructure equipment is manufactured or provided by Alcatel Lucent, formerly known
as Lucent Technologies, Inc. We have entered into an agreement with Alcatel Lucent to provide us with PCS and
AWS CDMA system products and services, including without limitation, wireless base stations, switches, power,
cable and transmission equipment and services. The agreement does not cover any other non-AWS or non-PCS
spectrum we may acquire in the future, including our spectrum in the 700 MHz band or other technologies, such as
LTE. A substantial portion of the equipment manufactured or provided by Alcatel Lucent is proprietary, which
means that equipment and software from other manufacturers may not work with Alcatel Lucent’s equipment and
software, or may require the expenditure of additional capital, which may be material. The communications
equipment market has been subject to recent economic turmoil. In addition, we have chosen to purchase our LTE
infrastructure from another vendor. As a result, Alcatel-Lucent may not develop new products or services necessary
to us or offer the same level of support as it has done in the past. If Alcatel Lucent ceases to develop, or
substantially delays development of, new products, or ceases to support existing equipment and software, or
experiences problems which prevent Alcatel Lucent from performing its obligations under the agreement, we may
be required to spend significant amounts of money to replace such equipment and software, may not be able to offer
new products or services, and may not be able to compete effectively in our markets. If we fail to continue
purchasing our PCS and AWS CDMA products exclusively from Alcatel Lucent, we may have to pay certain
liquidated damages based on the difference in prices between exclusive and non-exclusive prices, which would have
a material adverse effect on our business, financial condition and operating results.