TeleNav 2010 Annual Report Download - page 32

• uncertainty of entry into markets in which we have limited or no prior experience and in which
competitors have stronger market positions;
• our dependence on unfamiliar affiliates and partners of the companies we acquire;
• insufficient revenue to offset our increased expenses associated with acquisitions;
• our responsibility for the liabilities of the businesses we acquire, including those which we may not
anticipate; and
• our inability to maintain internal standards, controls, procedures and policies.
We may be unable to secure the equity or debt funding necessary to finance future acquisitions on terms that
are acceptable to us. If we finance acquisitions by issuing equity or convertible debt securities, our existing
stockholders will likely experience dilution, and if we finance future acquisitions with debt funding, we will
incur interest expense and may have to comply with financial covenants and secure that debt obligation with our
assets.
If our end users increase their usage of our services, our net operating income may decline because the fees
we receive from our wireless carrier partners generally do not depend on usage.
With limited exceptions, our wireless carrier partners pay us fees that do not vary depending on whether or
how often an end user uses our services. Historically, end users using certain mobile phones or under certain
service plans tended to use our services more than other end users. We budget and operate our services by
making certain assumptions about usage patterns. Over time, usage by subscribers who have access to our
services under bundled plans has increased. If our end users were to further increase their usage of our services
substantially, we would incur additional expenses to expand our server capacity, operate additional data centers
and pay additional third party content fees. These additional costs would harm our operating results and financial
condition.
We may be required to incur unanticipated capital expenditures.
Circumstances may arise that require us to make unanticipated capital expenditures including:
• the implementation of our equipment at new data centers and expansion of our operations at data
centers;
• the replacement of outdated or failing equipment; and
• the acquisition of key technologies to support or expand our LBS.
We rely on network infrastructures provided by our wireless carrier partners and mobile phones for the
delivery of our LBS to end users.
We generally provide our services from our own servers, which require close integration with the wireless
carriers’ networks. We may be unable to provide high quality services if the wireless carriers’ networks perform
poorly or experience delayed response times. Our future success will depend on the availability and quality of
our wireless carrier partners’ networks in the United States and abroad to run our LBS. This includes deployment
and maintenance of reliable 2G, 3G and 4G networks with the speed, data capacity and security necessary to
provide reliable wireless communications services. We do not establish or maintain these wireless networks and
have no control over interruptions or failures in the deployment and maintenance by wireless carrier partners of
their network infrastructure. In addition, these wireless network infrastructures may be unable to support the
demands placed on them if the number of subscribers increases, or if existing or future subscribers increase their
use of limited bandwidth. Market acceptance of our LBS will depend in part on the quality of these wireless
networks and the ability of our wireless carrier partners to effectively manage their subscribers’ expectations.
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