Metro PCS 2010 Annual Report Download - page 52

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4G 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 4G
LTE infrastructure from another vendor. Further, our current agreement with Alcatel Lucent expires in December
2011, but we have the right to renew the agreement for three additional one year terms. 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 CDMA 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 CDMA
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.
Substantially all of our 4G 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
most of our 4G 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/4G LTE handset, which was used in the initial launch of our 4G LTE service. As 4G 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 any of our vendors fails to deliver or is delayed
in delivering the 4G LTE products, software and services we have contracted to purchase from it, we may be
delayed in launching additional 4G LTE services or markets. In addition, if our 4G LTE network infrastructure
providers ceases to develop, substantially delays the development of, new 4G LTE products or ceases to support
existing 4G LTE equipment and software, 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 additional 4G 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.
We use a single provider for most of our domestic and international long distance services.
We currently use a single provider for most of the domestic and international long distance services that we
provide to our customers under a long-term contract. This arrangement requires us to send a significant portion of
our domestic and international long distance traffic to the provider for transmission and termination. If the provider
experiences service outages or other problems affecting its services, our customers may have difficulty completing
domestic and international calls. As all of our service plans include domestic long distance services, any such
disruption could have a significant effect on our customers which may cause them to become dissatisfied with our
service. In addition, one of our services also includes international long distance and a disruption in that service or
the cessation of service to destinations which our customers want to call, could cause our customers to leave our
service. If substantial numbers of customers are dissatisfied or leave our service it could result in higher churn
which could have a material adverse effect on our business, financial condition and operating results.
We rely on third parties to provide products, software, applications 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, applications,
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