Metro PCS 2011 Annual Report Download - page 40

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expectations in connection with the performance of our CDMA or 4G LTE services. As a result, we may be required to spend
additional capital to increase the capacity of our CDMA and 4G LTE networks or purchase additional spectrum or limit usage
by our customers of CDMA and 4G LTE services. Since we have limited spectrum in some of our metropolitan areas, we may
be unable to meet customer demand for service, which may lead to us having to limit service in those metropolitan areas, limit
the handsets sold or limit usage or applications usable by customers, adopt tiered pricing service plans or lower our prices, or
engage in network management technologies and practices our customers may not want or like. If we are unable to meet the
customer demand for our CDMA and 4G LTE data services, it could have a material adverse effect on our business, financial
condition and operating results.
Additionally, certain of our content contracts currently have, and future content contracts may have, minimum purchase
commitments or require us to purchase content exclusively from a single provider. If we fail to accurately predict the type and
amount of content our customers will demand or prefer, it could result in excess costs and expenses we cannot recover from our
customers, which could have a material adverse effect on our business, financial condition and operating results.
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 products, content, applications and services we have deployed, including access to most data,
music and video content, applications, and access to new handsets to deliver these advanced services. As a distributor and not a
manufacturer of products, content and applications, we do not control the availability, retail price, design, function, quality,
reliability, customer service or branding of these products, content, applications and services, nor do we directly control all of
the marketing and promotion of these products and services. Thus the decisions of these third parties could negatively impact
our ability to market and sell our products and services, our business plans and reputation. Further, if we are unable to obtain
access to such services, content, or applications, incorporate such services, content, or applications into our service offerings, or
purchase handsets, applications, content or services from third parties at a reasonable cost and on a timely basis in the future, it
could have a material adverse effect on our business, financial condition and operating results. For example, we launched
Rhapsody in our markets in mid-2011 which requires us to license music and other intellectual property rights of third parties.
We cannot guarantee that these licenses will remain available on commercially reasonable terms or at all as our licensing
arrangements with these third parties are generally short-term. Thus, our inability to offer customers a wide variety of content at
reasonable costs could limit the success of this product.
We may have difficulty meeting the demands placed on our network by data products.
We are increasingly selling, and may in the future sell even larger numbers of, handsets and devices, such as devices using
the Android operating system, services and content that are placing, and may in the future place, a higher demand on our
existing CDMA and 4G LTE networks than handsets, services and content we have historically sold. We may not be able to
satisfy the demands that these devices, services and content placed on our network, we may not be able to profitably provide
the data services used by these devices, and these devices, services and content may cause network congestion, network
management and other issues with respect to our existing customers. We predominately offer data services using 1xRTT
CDMA while most of our competitors use EVDO or other technologies which offer higher data speeds. In addition, because of
our limited bandwidths for 4G LTE, our 4G LTE data speeds will not be as fast as those competitors who as using wider
channels to offer 4G LTE or other high speed services. As a result, customers may not find our data services as attractive as
those of our competitors. If we are unable to satisfy the demands of these new devices, services and content on our existing
CDMA and 4G LTE networks, we may be unable to offer these services profitably, or these devices, services and content may
cause network congestion and issues with respect to our existing customers such that we may lose customers and may have
difficulty attracting new customers. In addition, in order to meet the capacity demands of these new devices, services and
content for data usage we may be required to spend significant capital to build additional network capacity, lease additional
sites, build additional DAS systems, purchase additional spectrum, redeploy spectrum from 4G LTE to CDMA or EVDO, or
undertake other expenses which could increase our costs. These demands also may require us to engage in network
management technologies and practices which customers may find undesirable. All of the above could have a material adverse
effect on our business, financial condition and operating results.
Our operations require continued capital expenditures and a failure to make such capital expenditures could have a
material adverse effect on our business, financial condition and operating results.
Our business strategy involves expanding into and competing in major metropolitan areas, all of which have significant
established competition from other providers. To compete effectively, we must continue to upgrade and enhance our network
and services. If we fail to do so, or our customers or potential customers develop a perception that our services are not on par
with our competitors, it could reduce our growth or increase our churn. As a result, we have invested, and expect to continue to
invest a significant amount of capital in the future to, construct, maintain, upgrade and operate our network, billing, customer
care and information systems, to implement our business plans, including our 4G LTE network, and to support future growth of