Tucows 2015 Annual Report Download - page 17

ITEM 1A. RISK FACTORS
Our business faces significant risks. Some of the following risks relate principally to our business and the industry
and statutory and regulatory environment in which we operate. Other risks relate principally to the securities markets and
ownership of our stock. The risks described below may not be the only risks we face. Additional risks that we do not yet
know of or that we currently think are immaterial may also impair our business operations. If any of the events or
circumstances described in the following risk factors actually occur, our business, financial condition or results of
operations could suffer, and the trading price of our common stock could decline.
Risks Related to Our Business and Industry
Risks Related to Network Access Services
Competition in the wireless industry could adversely affect Ting’s revenues and profitability.
The wireless communications market is extremely competitive, and competition for customers is increasing.
We compete with (1) facilities-based wireless communications providers and their prepaid affiliates or brands,
including Verizon, AT&T, Sprint and T-Mobile; and (2) other MVNOs.
Most of our competitors have substantially greater financial, technical, personnel and marketing resources and
a larger market share than we do, and we may not be able to compete successfully against them or other wireless
communications providers. Due to their size and bargaining power, our larger competitors obtain discounts for
facilities, equipment, handsets, content, and services, potentially placing us at a competitive disadvantage. As
consolidation in the industry creates even larger competitors, our competitors’ purchasing advantages may increase
further, hampering our efforts to attract and retain customers. Certain of our competitors may also use their ownership
of local wireline and wireless telecommunications facilities to introduce service features and calling plans, such as free
wireless-to-landline calls, that we are unable to offer at similar cost. Their larger wireless customer bases may make
discounted or free in-network calling (that we do not offer currently) more attractive than any similar service that we
may offer. This may adversely affect our ability to compete against these competitors in the longer term.
Ting has a short operating history which may not be indicative of our future performance and, if our revenue and
earnings growth are not sustainable, we may not be able to generate the earnings necessary to fund our operations or
continue to grow our business.
We launched Ting nationally in February 2012. Consequently, Ting has a limited operating and financial history
upon which to evaluate its business model, financial performance and ability to succeed in the future. You should consider
its prospects in light of the risks it may encounter, including risks and expenses faced by a new business competing in
rapidly evolving and highly competitive markets. Ting cannot be certain that its Mobile Virtual Network Operator
(“MVNO”) business model or any specific products or services will be profitable or competitive in the long-term against
larger, facilities-based wireless providers or other MVNOs. Ting also cannot predict whether its MVNO model will allow
it to offer the wireless services that customers may demand in the future. If Ting is unable to achieve sufficient revenues
and earnings from operations, its financial results will be adversely affected and it may not have sufficient cash to fund its
current operations or sustain its continued growth.
Ting’s service offerings may not be successful in the long term if it is unable to retain customers or attract new
customers.
Ting services may not prove to be successful or profitable in the long term. Ting’s long-term success is dependent
upon its sustained ability to generate sufficient revenue from its subscribers based on their use of its services and its ability
to respond to churn by adding new customers. If Ting is unable to sustain or increase the revenue that it generates from its
existing customers or obtain new customers to replace churned customers, our operational performance and financial
results may be adversely affected.
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