Metro PCS 2010 Annual Report Download - page 38

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Risks Related to Our Business
Our business strategy may not succeed in the long term.
Our business strategy has been to offer unlimited wireless broadband mobile services predominately on a paid-in-
advance basis for flat monthly rates without requiring a long-term service contract or a credit check. Our service
plans may not continue to meet customer demands, competitive offers, or could prove to be unsuccessful in the long
term. A number of other wireless broadband mobile carriers, resellers and MVNOs are offering, or in the future may
offer, services plans similar to, or competitive with, our service plans with more extensive geographic coverage than
ours, more features, greater speeds, and other differentiating features. If our business strategy is unsuccessful, we
may be forced to alter our service offerings, cost structure and geographic focus, all of which may have a material
adverse effect on our business, financial condition and operating results. If we have a disproportionate number of
our customers on our lower priced service plans, if our customers do not purchase our service plans in the mix we
anticipate, or if our customers use more services, such as roaming, domestic or international long distance, that we
purchase from third parties than we anticipate, it could result in lower revenues, higher expenses, and lower
profitability, which could have a material adverse effect on our business, financial condition, or operating results.
From time to time, we evaluate our products, service offerings and the demands of our target customers and may, as
a result, amend, change, discontinue or adjust our products and service offerings or initiate or offer new permanent,
trial or promotional product or service offerings. These new or changed product and service offerings may not meet
customer demands, competitive offers, or may not succeed in the long term, or prove to be profitable. These new or
changed product and service offerings may result in reduced revenues, increased expenses, lower profitability, and
other adverse financial or operational consequences, which could have a material adverse effect on our business,
financial condition and operating results.
Our tax inclusive plans make us susceptible to increases in taxes and regulatory fees.
We offer service plans that include applicable taxes and regulatory fees for a flat fee. The government and
regulatory agencies may increase the taxes and regulatory fees payable on our services and we may currently be at a
greater risk from such increases because of budget shortfalls and regulatory policies. We do not have control over
changes in tax rates, laws, regulations or rulings, or federal and state tax assessments. If the government or
regulatory agencies increase the taxes or regulatory fees that are attributable to our services, or change the services
on which such taxes or regulatory fees are to be paid, it could negatively impact the profitability of our services. If
we attempted to pass through such increased taxes and regulatory fees to our customers, we could experience
increased churn, decreased revenues or fewer customer additions. If we experience lower profitability, lower
margins, increased churn, or lower sales, it could have a material adverse effect on our business, financial condition
and operating results.
Our inability to maintain or strengthen our brands may reduce our ability to retain and attract customers,
which could adversely affect our business, financial condition and operating results.
With increased competition in the wireless telecommunications industry, in particular in the fixed-price, unlimited
use of paid-in-advance services, we believe marketing and promotional activities are critical to the success of the
business and a strong brand and image is an essential part of our marketing activities. Developing, promoting and
maintaining our brand and image requires a consistent capital investment and expense and there can be no assurance
that this investment in our brand and image or the promotion of our brand and image will be successful. If we fail to
develop, promote and maintain a strong brand and image or we are unsuccessful in promoting our brands it could
have a material adverse effect on our business, financial condition and operating results.
A failure to meet the demands of our customers could adversely affect our business, financial condition and
operating results.
Customer demand for our products and services could be impacted by numerous factors including the different
types of products and services offered, service content, features, data speeds, technology, coverage, compatible
handset options, distribution, service areas, network operability and quality, customer perceptions, customer care
levels and the prices and range of service plans and products. Managing these factors and customers’ expectations of
these factors is essential in attracting and retaining customers. We continually incur costs in order to improve and
enhance our products and services to remain competitive and to keep up with our customer demand, which include
costs to expand the capacity and coverage of our network, costs to replace or migrate to new technology platforms,
vendors or services, costs to enhance or upgrade our networks, including costs to upgrade to long term evolution, or