Sprint - Nextel 2014 Annual Report Download - page 19

Table of Contents
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• announcements by us or our competitors, or market speculation, of acquisitions, spectrum acquisitions, new
products, technologies, significant contracts, commercial relationships, or capital commitments;
• the performance of SoftBank and SoftBank’s ordinary shares or speculation about the possibility of future
actions SoftBank may take in connection with us;
• disruption to our operations or those of other companies critical to our network operations;
• our ability to develop and market new and enhanced technologies, products and services on a timely and cost-
effective basis, including implementation of our network modernization;
• recommendations by securities analysts or changes in their estimates concerning us;
• litigation;
• changes in governmental actions, regulations, or approvals; and
• perceptions of general market conditions in the technology and communications industries, the U.S. economy,
and global market conditions.
We have entered into, or may enter into, agreements with various parties for certain business operations. Any difficulties
experienced by us in these arrangements could result in additional expense, loss of subscribers and revenue, interruption
of our services, or a delay in the roll-out of new technology.
We have entered into, and may in the future enter into, agreements with various third parties for the day-to-day
execution of services, provisioning, maintenance, and modernization of our wireless and wireline networks, including leases
and subleases for space on communications towers; the development and maintenance of certain systems necessary for the
operation of our business; customer service, related support to our wireless subscribers, outsourcing aspects of our wireline
network and back office functions; and to provide network equipment, handsets, devices, and other equipment. For example,
we depend heavily on local access facilities obtained from incumbent local exchange carriers (ILECs) to serve our data and
voice subscribers, and payments to ILECs for these facilities are a significant cost of service for our Wireline segment. We
also expect our dependence on key suppliers to continue as more advanced technologies are developed, which may lead to
additional significant costs. If our key vendors fail to meet their contractual obligations or experience financial difficulty, we
may experience disruptions to our business operations or incur significant costs implementing alternative arrangements.
The products and services utilized by us and our suppliers and service providers may infringe on intellectual property
rights owned by others.
Some of our products and services use intellectual property that we own. We also purchase products from
suppliers, including device suppliers, and outsource services to service providers, including billing and customer care
functions, that incorporate or utilize intellectual property. We and some of our suppliers and service providers have received,
and may receive in the future, assertions and claims from third parties that the products or software utilized by us or our
suppliers and service providers infringe on the patents or other intellectual property rights of these third parties. These claims
could require us or an infringing supplier or service provider to cease certain activities or to cease selling the relevant
products and services. These claims can be time-consuming and costly to defend and divert management resources. If these
claims are successful, we could be forced to pay significant damages or stop selling certain products or services or stop using
certain trademarks, which could adversely affect our results of operations.
Negative outcomes of legal proceedings may adversely affect our business and financial condition.
We are regularly involved in a number of legal proceedings before various state and federal courts, the FCC, the
FTC, the CFPB, and state and local regulatory agencies. These proceedings may be complicated, costly, and disruptive to our
business operations. We may incur significant expenses in defending these matters and may be required to pay significant
fines, awards, or settlements. In addition, litigation or other proceedings could result in restrictions on our current or future
manner of doing business. Any of these potential outcomes, such as judgments, awards, settlements, or orders could have a
material adverse effect on our business, financial condition, operating results, or ability to do business.
Our reputation and business may be harmed and we may be subject to legal claims if there is a loss, disclosure,
misappropriation of, unauthorized access to, or other security breach of our proprietary or sensitive information.
Our information technology and other systems-including those of our third-party service providers-that maintain
and transmit our proprietary information and our subscribers’ information, including credit card information, location data, or
other personal information may be compromised by a malicious third-party penetration of our network security or impacted
by advertent or inadvertent actions or inactions by our employees and agents. As a result, our subscribers’ information may be