Sprint - Nextel 2011 Annual Report Download - page 24

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service providers. The secure maintenance and transmission of customer information is an important element of our operations. Our information technology and other
systems that maintain and transmit customer information, or those of service providers, may be compromised by a malicious third-party penetration of our network
security, or that of a third-party service provider, or impacted by advertent or inadvertent actions or inactions by our employees, or those of a third-party service provider.
As a result, our subscribers' information may be lost, disclosed, accessed or taken without the subscribers' consent.
In addition, we, and third-party service providers process and maintain our proprietary business information and data related to our business-to-business
customers or suppliers. Our information technology and other systems that maintain and transmit this information, or those of service providers, may also be compromised
by a malicious third-party penetration of our network security or that of a third-party service provider, or impacted by advertent or inadvertent actions or inactions by our
employees or those of a third-party service provider. As a result, our business information, or subscriber or supplier data may be lost, disclosed, accessed or taken without
consent.
Any loss, disclosure or misappropriation of, or access to, subscribers' information or other breach of our information security can result in legal claims or
proceedings, including regulatory investigations and actions, may have an adverse impact on our reputation and may adversely affect our business, operating results and
financial condition.
Our business could be negatively impacted by threats and other disruptions.
Major equipment failures, natural disasters, including severe weather, terrorist acts or other breaches of network or information technology security that affect
our wireline and 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, could have a material adverse effect on our operations.
These events could disrupt our 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.
Concerns about health risks associated with wireless equipment may reduce the demand for our services.
Portable communications devices have been alleged to have adverse health affects, due to radio frequency emissions from these devices. The actual or
perceived risk of using mobile communications devices could adversely affect us through a reduction in subscribers, reduced network usage per subscriber or reduced
financing available to the mobile communications industry. Although the FDA and FCC have both noted that the weight of the scientific evidence does not link cell phone
use to cancer or any health problems, further research and studies are ongoing; we have no reason to expect those studies to reach a different conclusion, but we cannot
guarantee that additional studies will not demonstrate a link between radio frequency emissions and health concerns.
Risks Related to our Investment in Clearwire
We are a major shareholder of Clearwire, a term we use to refer to the consolidated entity of Clearwire Corporation and its subsidiary Clearwire
Communications LLC. Under this section, we have included certain important risk factors with respect to our investment in Clearwire. For more discussion of Clearwire
and the risks affecting Clearwire, you should refer to Clearwire's annual report on Form 10-K for the year ended December 31, 2011. The contents of Clearwire's SEC
f
ilings are expressly not incorporated by reference into this Form 10-K.
Our investment in Clearwire exposes us to risks because we do not control the board, determine the strategies, manage operations or control management, including
decisions relating to the operation and build-out of its 4G networks, and the value of our investment in Clearwire or our financial performance may be adversely
affected by decisions made by Clearwire or other large investors in Clearwire that are adverse to our interests.
We do not control Clearwire's board, nor do we manage the operations of Clearwire or control management. Clearwire has a group of investors that are
represented on Clearwire's board of directors. These investors may have interests that diverge from ours or Clearwire's. Differences in views among the large investors
could result in delayed decisions by Clearwire's board of directors or failure to agree on major issues. Any such delay or failure to agree with respect to the operation of
Clearwire could have a material adverse effect on the value
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