Metro PCS 2011 Annual Report Download - page 51

40
no indemnification rights from any of our vendors or suppliers. Whether or not an infringement or misappropriation claim is
valid or successful, it could adversely affect our business by diverting management's attention, involve us in costly and time-
consuming litigation, require us to enter into royalty or licensing agreements (which may not be available on acceptable terms,
or at all), require us to pay royalties for prior periods, require us or our suppliers to redesign our or their business operations,
processes, systems, software, applications, services or products to avoid claims of infringement or misappropriation, preclude
our ability to offer certain products, software, applications, content, and services at all, or require us to purchase products,
software, applications, content, and services from different vendors or not sell certain products, software, applications, content,
or services. If a claim is found to be valid or if we or our suppliers cannot successfully negotiate a required royalty or license
agreement, we could be forced to pay substantial damages, including potentially treble damages, and we could be subject to an
injunction that could disrupt our business, prevent us from offering some or all of our products, content, software, applications
or services and cause us to incur losses of customers or revenues, any or all of which could be material and could materially
adversely affect our business, financial condition and operating results.
We do not manufacture or develop the products sold by us and generally rely upon our suppliers to provide us with products
that meet all regulatory and safety requirements. We could be held liable along with the manufacturers of the products for any
harm caused by products we sell if such products are later found to have design or manufacturing defects. For example, there
have been claims made, and lawsuits filed that allege, that the rechargeable batteries in handsets may explode or catch on fire,
including ones filed naming us as a party. Our agreements with our manufacturers, suppliers and vendors providing us with
such products contain indemnification agreements to protect us from direct losses associated with product liability, but we
cannot guarantee that the manufacturers, suppliers and vendors will honor the indemnification upon an assertion of a claim, that
we will be able to enforce the indemnification, or that we will be fully protected against all losses associated with the product
found to be defective. Any claim could result in losses, divert management's attention, or otherwise disrupt our business which
could result in a material adverse effect on our business, financial condition or operating results.
We currently have an exclusive arrangement with our billing services vendor.
A single billing provider, subject to certain exclusions, is our exclusive vendor for billing services in North America. If this
provider does not perform its obligations under the agreement, or ceases to continue to develop, or substantially delays
development of, new features or billing services, or ceases to support its existing billing systems, we may be unable to secure
alternative billing services from another provider or providers in a timely manner, for a reasonable cost or otherwise, which
could cause us, among other things, not to be able to bill our customers, provide customer care, grow our business, report
financial results, or manage our business and we may have increased churn, all of which could have a material adverse effect
on our business, financial condition and operating results.
Substantially all of our network infrastructure equipment on each technology is manufactured or provided by a single
network infrastructure vendor.
Substantially all of our broadband PCS and AWS, 1xRTT CDMA network infrastructure equipment is manufactured or
provided by a single network infrastructure vendor. We have entered into a non-exclusive agreement with that vendor to
provide us with PCS and AWS 1xRTT CDMA system products and services, including without limitation, wireless base
stations, switches, power, cable and transmission equipment and services. A substantial portion of the equipment manufactured
or provided by this vendor is proprietary, which means that equipment and software from other manufacturers may not work
with this vendor'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. As a result, this vendor may not develop new products or services necessary to us
or offer the same level of support as it has done in the past.
We also 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 vendor. As 4G LTE is new, complex technology, we cannot assure
you that this vendor will be successful in its continuing development efforts. In the event that this vendor 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 upgrading or enhancing our 4G LTE services.
If any of our CDMA or 4G LTE network infrastructure vendors ceases to develop, substantially delays the development of,
new products or ceases to support existing products, 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 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.