1111634--3/31/2010--XO_HOLDINGS

related topics

{system, service, information}

{product, market, service}

{customer, product, revenue}

{cost, contract, operation}

{personnel, key, retain}

{condition, economic, financial}

{property, intellectual, protect}

{stock, price, share}

{stock, price, operating}

{acquisition, growth, future}

The continuing effects of recent economic conditions could negatively impact our operating results and financial condition. Our rights to use the fiber that makes up our network may be affected by the financial health of, or disputes with, our fiber providers. We depend on third-parties for the performance of certain network services and business operations. The failure of one or more of our operations support centers could impair our ability to retain customers, provision their services, or result in increased capital expenditures. We may not be able to continue to connect our network to ILEC networks or to maintain Internet peering arrangements on favorable terms, which could impair our growth and performance. We may not be able to adequately protect our intellectual property or rights to licenses for use of third-party intellectual property, and may be subject to claims that we infringe the intellectual property of others, which could substantially harm our business. Our spectrum licenses may not be renewed upon expiration, which could harm our business. The telecommunications industry is highly competitive, and has experienced the consolidation of many existing competitors and the introduction of significant new competitors. If we are not able to successfully compete against existing and new competitors, our financial condition could be materially and adversely affected. We face intense price competition in the market for network services which could result in adverse effects on our revenues, future cash flows, growth and profitability. Our success is highly dependent on our ability to retain and recruit talented employees. We have substantial business relationships with several large telecommunications carriers, and some of our customer agreements may not continue due to bankruptcies, acquisitions, non-renewal, or other factors, which could materially and adversely affect our revenue and results of operations. Technological advances and regulatory changes are eroding traditional barriers between formerly distinct telecommunications markets, which could increase the competition we face and put downward pressure on prices, which could impair our results. We are subject to comprehensive and continually evolving regulation, which could increase our costs and adversely affect our ability to implement our business plan. An entity owned and controlled by our Chairman is our majority stockholder. Future sales or issuances of our common stock could adversely affect our stock price and/or our ability to raise capital.

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1111634--3/31/2010--XO_HOLDINGS_INC