Tucows 2014 Annual Report Download - page 43

Ting may be limited in its ability to grow its business and customer base unless it can continue to obtain network
capacity at favorable rates and meet the growing demands on its business systems and processes.
To further expand our MVNO business, we must continue to obtain wireless network capacity at favorable rates
and terms, provide adequate customer service and acquire and market a sufficient quantity and mix of handsets and
related accessories. Our operating performance and ability to attract new customers may be adversely affected if we are
unable to meet the increasing demands for our services in a timely and efficient manner, while adequately addressing the
growing demands on our customer service, billing, and other back- office functions. Any change in our ability, or the
ability of third parties with whom we contract, to provide these services also could adversely affect our operations and
financial performance.
As an MVNO, Ting is dependent on its Network Operators’ for its wireless network and any disruptions to their
networks may adversely affect its business and financial results.
We are dependent on our Network Operators’ physical networks. As an MVNO, we do not own or operate a
physical network, but rather utilize the nationwide wireless communication networks of two major mobile Network
Operators (“Network Operators”). To be successful, we will need to continue to provide our customers with reliable
service over their nationwide wireless communication networks. We rely on them and their third-party affiliates to
maintain their wireless facilities and government authorizations and to comply with government policies and regulations.
If they fail to do so, we may incur substantial losses. Delays or failure to add network capacity, or increased costs of
adding capacity or operating the network, could limit our ability to increase our customer base, limit our ability to
increase our revenues, or cause a deterioration of our operating margin. Some of the risks related to their nationwide
wireless communication networks and infrastructure include: major equipment failures, breaches of network or
information technology security that affect their wireless networks, including transport facilities, communications
switches, routers, microwave links, cell sites or other equipment or third-party owned local and long-distance networks
on which we rely, power surges or outages, software defects and disruptions beyond their control, such as natural
disasters and acts of terrorism, among others. The Master Services Agreements “MSA” with our Network operators does
not contain any contractual indemnification provisions relating to network outages or other disruptions. Any impact on
their nationwide wireless communication networks could disrupt Ting’s operations, require significant resources, result in
a loss of subscribers or impair our ability to attract new subscribers, which in turn could have a material adverse effect on
our business, results of operations and financial condition.
We are dependent on technology used by our Network operators. Wireless communications technology is
evolving rapidly. A significant change in current wireless network technologies or the emergence of alternative
technologies could reduce significantly our ability to offer a full range of data services, as compared to our competitors. If
our Network Operators fails to keep up with these changes, we may lose customers or may not be able to attract new
customers.
If our Network Operators terminate or determine that they do not wish to renew their Master Services
Agreements on expiration for any reason, we may be unable to obtain the wireless services necessary to operate our
business. In addition, transition to an alternative provider may be limited to a provider with a CDMA or GSM network as
certain of our handsets are not capable of operating on all networks. Such a transition could be time-consuming and costly
and we could lose a substantial number of customers during the transition period.
Our dependence on our Network Operators is not limited to our use of their nationwide networks. We rely on
them and their third-party affiliates for other critical operational matters, including:
●continued expansion and improvement of their nationwide networks and their third-party affiliates’
networks, which is expected to require additional investment;
●deployment of upgrades and maintenance of their nationwide networks;
●maintenance by our Network Operators of their relationships with their third-party affiliates;
Page 4
3
of 20
2
tcx20141231_10k.ht
m
9
/
13
/
201
6
https://www.sec.gov/Archives/edgar/data/909494/000143774915004707/tcx20141231_10...