Metro PCS 2009 Annual Report Download - page 52

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Substantially all of our LTE infrastructure equipment and initial dual mode CDMA/LTE handsets are
manufactured or provided by one vendor.
We are dependent on third-party providers to manufacture, design and develop compatible systems and devices
that will operate on our network. We currently have entered into a non-exclusive agreement to purchase and license
LTE system products, licensed materials and services from a single network infrastructure provider. In addition, we
currently have executed a non-exclusive agreement with a single handset vendor for the delivery of a dual mode
CDMA/LTE handset, which will be used in the initial launch of our LTE service. As LTE is new, complex
technology with little current development, we cannot assure you that these vendors will be successful in their
continuing development efforts. In the event that either of our vendors fails to deliver or is delayed in delivering the
LTE products, software and services we have contracted to purchase from it, we may be delayed in launching our
LTE services. In addition, if our LTE network infrastructure provider ceases to develop, substantially delays the
development of, new LTE products or ceases to support existing LTE equipment and software once deployed, or it
fails to perform 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 and services, may be delayed in offering LTE
services, and may not be able to compete effectively in our markets. If any of the foregoing risks occur, it could
have a material adverse effect on our business, financial condition and operating results.
Similarly, if our vendors deliver a product and service that does not work as anticipated, fails to meet customer
expectations, or fails to operate properly, we will have invested in deploying our LTE network without receiving
revenues. For example, if the handset is lacking in certain features that our customers expect, our existing and
potential customers may not purchase the handsets. Further, we presently provide limited subsidies for handsets to
our customers, so the price of the handset may also reduce the demand for the handsets. This could have a material
adverse effect on our business, financial condition and operating results.
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, product distribution, content development, financial reporting,
network management, network infrastructure equipment and services and 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 or two key vendors 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.
If our suppliers terminate their agreements with us or experience interruptions or other problems delivering
quality 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 (including sufficient
volume and types) 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.
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.