Metro PCS 2010 Annual Report Download - page 53

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systems rely to some extent on the design, development and delivery of products, software, applications, 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, experience interruptions or other problems delivering quality
products, software, applications or services to us on a timely basis or at all, or enter bankruptcy, 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, applications, and services on our behalf also gives us less
control over the efficiency, timeliness and quality of these products, software and services.
The success of our business is dependent on the development of products compatible with the services deployed
by us.
We do not develop or manufacture any products and are dependent on the development of products, content,
applications and services by third parties for the services and technology we have deployed and provide on our
spectrum. We have elected to deploy 4G LTE on our AWS and PCS spectrum. Several of our competitors have
publicly indicated that they plan to deploy 4G LTE on 700 MHz spectrum. There can be no assurance that other
licensees, including the national wireless broadband mobile carriers, will not delay or ultimately not deploy 4G LTE
on AWS and PCS spectrum. If other wireless broadband mobile licensees, including the large national wireless
broadband mobile carriers, do not deploy 4G LTE on AWS and PCS, we may have to pay higher prices for the
products that we sell to our subscribers due to the limited number of users, we may not have products available to
us at all, or such products may be limited in nature and not have the features and functions our customers expect or
demand. In addition, such limitation could result in less technological development on network equipment that we
use to offer 4G LTE services, delays in any available technological developments and we could be forced to pay
higher prices for any such technological development. In addition, we are dependent on the national wireless
broadband carriers continuing to deploy handsets and handset operating systems to which we have access. If the
national wireless broadband carriers choose to deploy proprietary handsets or proprietary handset operating systems
in lieu of, or substantially in lieu of, handsets and handset operating systems to which we have access, we could
experience higher prices for handsets and development of applications for the handsets and handset operating
systems we deploy may lag the development on other handsets and handset operating systems. Further any handsets
and handset operating systems that we deploy may lag behind the development of other handsets and handset
operating systems with which we compete, or may not be developed at all. If we are unable to secure the necessary
products at prices which will allow us to be competitive with other carriers of 4G LTE services, we may not be able
to meet our customer expectations, demands, or needs, which could have a material adverse effect on our business,
financial condition, or operating results.
We rely heavily on indirect distribution channels.
Unlike many of our competitors that rely upon “big box” retailers and exclusive partners, 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. Approximately 90% of the sales of our handsets and services occur through these indirect
distribution channels. 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 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, employment rates, and the credit markets, which may continue for the foreseeable future, some of our
dealers and vendors have experienced, and may in the future, experience problems and may be unable to continue
their operations or secure funds for their continued operations or to grow their 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 location to replace closed operations. Moreover, since we rely on such third parties to provide some of our
services, any bankruptcy, termination, switch or disruption in service by such third parties or diminution in the
number of such third parties could be costly and affect operating efficiencies and our ability to attract and retain
customers which could have a material adverse effect on our business, financial condition and operating results.