<SUBMISSION>
<ACCESSION-NUMBER>0000950144-01-502210
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20010331
<FILING-DATE>20010514
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AIRGATE PCS INC /DE/
<CIK>0001086844
<ASSIGNED-SIC>4813
<IRS-NUMBER>582422929
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-27455
<FILM-NUMBER>1634048
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>233 PEACHTREE ST NE
<STREET2>SUITE 1700
<CITY>ATLANTA
<STATE>GA
<ZIP>30303
<PHONE>4045257272
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>233 PEACHTREE ST
<STREET2>SUITE 1700
<CITY>ATLANTA
<STATE>GA
<ZIP>30303
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>g69373e10-q.htm
<DESCRIPTION>AIRGATE PCS, INC.
<TEXT>

<HTML>
<HEAD>
<TITLE>e10-q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><B>SECURITIES AND EXCHANGE COMMISSION<BR>
WASHINGTON, D.C. 20549</B>

<P align="center"><B>Form&nbsp;10-Q</B>

<P>(Mark One)

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="92%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top">[X]</TD>
        <TD></TD>
        <TD  align="left" valign="top">
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)&nbsp;OF THE SECURITIES
EXCHANGE<BR> ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001.</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD  colspan="3" align="center" valign="top">OR</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top">[&nbsp;&nbsp;]</TD>
        <TD></TD>
        <TD  align="left" valign="top">
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)&nbsp;OF THE SECURITIES
EXCHANGE<BR>ACT OF 1934.</TD>
</TR>
</TABLE>
</CENTER>
<P align="center">COMMISSION FILE NUMBER: 027455

<p align="center"><B>AirGate PCS, Inc.</B>
<div><HR size="1" align="center" width="35%"></div>

<DIV align="center">(Exact name of registrant as<BR> specified in its charter)</DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="51%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="44%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center">DELAWARE</TD>
        <TD></TD>
        <TD nowrap align="center">58-2422929</TD>
</TR>

<TR valign="bottom">
        <TD><HR size="1" noshade></TD>
        <TD></TD>
        <TD><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
        <TD align="center" valign="top">(STATE OR OTHER JURISDICTION OF<BR>
INCORPORATION OR ORGANIZATION)</TD>
        <TD></TD>
        <TD  align="center" valign="top">
(I.R.S. EMPLOYER<BR>
IDENTIFICATION NUMBER)</TD>
</TR>


<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
        <TD align="center" valign="top">Harris Tower, 233 Peachtree St. NE,

Suite&nbsp;1700,</TD>
</TR>
<TR valign="bottom">
        <TD align="center" valign="top">Atlanta, Georgia</TD>
        <TD></TD>
        <TD  align="center" valign="top">
30303</TD>
</TR>

<TR valign="bottom">
        <TD><HR size="1" noshade></TD>
        <TD></TD>
        <TD><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD align="center" valign="top">(ADDRESS OF PRINCIPAL<BR>
EXECUTIVE OFFICES)</TD>
        <TD></TD>
        <TD  align="center" valign="top">
(ZIP CODE)</TD>
</TR>
</TABLE>
</CENTER>
<P align="center">Registrant&#146;s telephone number, including area code: (404)&nbsp;525-7272

<P>Indicate by a check mark whether the registrant (1)&nbsp;has filed all reports
required to be filed by section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports) and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days. Yes [X] &nbsp;&nbsp;&nbsp;No [&nbsp; ]

<P>13,166,681 shares of Common Stock, $0.01 par value per share, were outstanding
as of May&nbsp;10, 2001.

<P align="right"><I>Page 1</I>
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<P><HR noshade><P>
<!-- TOC -->
<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PART I. FINANCIAL INFORMATION<BR>
Item&nbsp;I &#150; FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">CONSOLIDATED BALANCE SHEETS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">CONSOLIDATED STATEMENTS OF OPERATIONS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">CONSOLIDATED STATEMENTS OF CASH FLOWS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">ITEM 2 &#151; MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">ITEM 3 &#150; QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">PART II. OTHER INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">ITEM 5. OTHER INFORMATION</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P align="center">AIRGATE PCS, INC.

<P align="center">SECOND QUARTER REPORT

<P align="center">Table of Contents

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="10%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><B>PART I</B></TD>
        <TD></TD>
        <TD  align="left" valign="top">
<B>Financial Information</B></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
        <TD valign="top">Item&nbsp;1.</TD>
        <TD></TD>
        <TD  align="left" valign="top">
Financial Statements</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD  align="left" valign="top">
Consolidated Balance Sheets (unaudited)&nbsp;at March&nbsp;31, 2001 and September&nbsp;30,

2000</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD  align="left" valign="top">
Consolidated Statements of Operations (unaudited)&nbsp;for the three and six months ended March&nbsp;31,

2001</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD  align="left" valign="top">
Consolidated Statements of Cash Flows (unaudited)&nbsp;for the six months ended March&nbsp;31,

2001</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD  align="left" valign="top">
Notes to the Consolidated Financial Statements (unaudited)</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top">Item&nbsp;2.</TD>
        <TD></TD>
        <TD  align="left" valign="top">
Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top">Item&nbsp;3.</TD>
        <TD></TD>
        <TD  align="left" valign="top">
Quantitative and Qualitative Disclosures About Market Risk</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><B>PART II</B></TD>
        <TD></TD>
        <TD  align="left" valign="top">
<B>Other Information</B></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top">Item&nbsp;2.</TD>
        <TD></TD>
        <TD  align="left" valign="top">
Changes in Securities and Use of Proceeds</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top">Item&nbsp;5.</TD>
        <TD></TD>
        <TD  align="left" valign="top">
Other Information</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top">Item&nbsp;6.</TD>
        <TD></TD>
        <TD  align="left" valign="top">
Exhibits and Reports on Form&nbsp;8-K</TD>
</TR>
</TABLE>
</CENTER>
<P align="right"><I>Page 2</I>
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PART I. FINANCIAL INFORMATION<BR>
Item&nbsp;I &#150; FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="000"></A></DIV>
<DIV align="left"><A name="000"></A></DIV>
<P align="center"><B>PART I. FINANCIAL INFORMATION<BR>
Item&nbsp;I &#150; FINANCIAL STATEMENTS</B>

<P align="center"><B>AIRGATE PCS, INC. AND SUBSIDIARIES</B>

<!-- link2 "CONSOLIDATED BALANCE SHEETS" -->
<DIV align="left"><A NAME="001"></A></DIV>
<DIV align="left"><A name="001"></A></DIV>
<P align="center">CONSOLIDATED BALANCE SHEETS

<DIV align="center">(unaudited)<BR>
(dollars in thousands, except share and per share amounts)</DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="48%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>March 31,</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>September 30,</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Assets</B></FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current assets:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">39,877</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">58,384</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trade receivables, net</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">22,397</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">8,696</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inventories</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,777</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,902</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepaid expenses</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">4,393</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,106</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other current assets</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">4,449</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,227</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total current assets</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">72,893</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">74,315</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Property and equipment, net</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">192,903</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">183,581</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financing costs</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">8,609</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">9,098</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other assets</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">626</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,954</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">275,031</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">268,948</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Liabilities and Stockholders&#146; Equity (Deficit)</B></FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current liabilities:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accounts payable</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">10,856</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">21,009</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accrued expenses</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">14,917</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">9,548</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payable to Sprint PCS</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">14,549</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">5,292</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred revenue</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">7,447</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,828</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total current liabilities</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">47,769</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">37,677</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred revenue</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">244</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">671</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long-term debt</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">235,387</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">180,727</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total liabilities</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">283,400</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">219,075</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stockholders&#146; equity (deficit):</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Preferred stock, par value, $.01 per share;<BR>
5,000,000 shares authorized; no shares
issued and outstanding</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common stock, par value, $.01 per share;<BR>
150,000,000 shares authorized; 13,087,381 and
12,816,783 shares issued and outstanding at
March&nbsp;31, 2001 and September&nbsp;30, 2000, respectively</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">131</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">128</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additional paid-in capital</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">164,639</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">161,575</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated deficit</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(170,812</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(108,577</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unearned stock option compensation</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,327</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,253</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total stockholders&#146; equity (deficit)</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(8,369</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">49,873</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Commitments and contingencies</FONT></DIV></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">275,031</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">268,948</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left">See accompanying notes to consolidated financial statements

<P align="right"><I>Page 3</I>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P align="center"><B>AIRGATE PCS, INC. AND SUBSIDIARIES</B>

<!-- link2 "CONSOLIDATED STATEMENTS OF OPERATIONS" -->
<DIV align="left"><A NAME="002"></A></DIV>
<DIV align="left"><A name="002"></A></DIV>
<P align="center">CONSOLIDATED STATEMENTS OF OPERATIONS

<DIV align="center">(unaudited)<BR>
(dollars in thousands, except share and per share amounts)</DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="34%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Three Months</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Six Months</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Ended</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Ended</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">March 31,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">March 31,</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="7"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Service revenue</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">21,541</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">460</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">33,825</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">460</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Roaming revenue</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">10,997</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">816</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">18,385</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">946</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equipment revenue</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,675</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">304</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">4,965</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">304</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total revenues</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">35,213</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,580</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">57,175</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,710</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating expenses:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost of service and roaming</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(24,632</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(5,509</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(40,545</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(8,427</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost of equipment</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(4,592</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(1,093</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(9,664</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(1,093</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Selling and marketing</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(16,061</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,419</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(32,739</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(4,552</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">General and administrative</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,572</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,189</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(8,281</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(4,677</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Noncash stock option compensation</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(594</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(309</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(926</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(713</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortization</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(7,100</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,042</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(13,762</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,560</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating loss</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(21,338</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(13,981</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(48,742</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(20,312</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest income</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">724</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,722</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,013</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">6,192</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest expense</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(7,758</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(5,845</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(15,506</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(12,812</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(28,372</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(17,104</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(62,235</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(26,932</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic and diluted net loss per
share of common stock</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(2.18</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(1.40</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(4.82</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(2.23</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Weighted-average outstanding
common shares</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,008,461</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,237,483</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,920,925</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,101,507</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left">See accompanying notes to consolidated financial statements

<P align="right"><I>Page 4</I>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><B>AIRGATE PCS, INC. AND SUBSIDIARIES</B>

<!-- link2 "CONSOLIDATED STATEMENTS OF CASH FLOWS" -->
<DIV align="left"><A NAME="003"></A></DIV>
<DIV align="left"><A name="003"></A></DIV>
<P align="center">CONSOLIDATED STATEMENTS OF CASH FLOWS

<DIV align="center">(unaudited)<BR>
(dollars in thousands)</DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="66%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Six Months</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Ended March 31,</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flows from operating activities:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(62,235</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(26,932</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Adjustments to reconcile net loss to net cash</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(used in) provided by operating activities:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortization</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,762</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,560</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of financing costs</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">605</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">591</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provision for doubtful accounts</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,922</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">24</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest expense associated with accretion</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">of discount and beneficial conversion feature</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,660</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">11,155</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stock option compensation</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">926</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">713</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Increase) decrease in:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trade receivables</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(16,623</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(674</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inventories</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,125</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(736</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepaid expenses</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,287</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,124</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other assets</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(827</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(473</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Increase (decrease)&nbsp;in:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accounts payable</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">3,625</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">10,540</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accrued expenses</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">6,723</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">7,284</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payable to Sprint PCS</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">9,257</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred revenue</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">5,192</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash (used in) provided by operating activities</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(25,175</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">1,928</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flows from investing activities:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Capital expenditures</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(37,988</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(105,631</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Acquisition of assets</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(411</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash used in investing activities</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(38,399</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(105,631</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flows from financing activities:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds from Senior Credit Facility</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">42,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payment on notes payable to Sprint PCS</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(7,700</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds from exercise of stock purchase warrants</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">4</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>

<TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exercise of stock options</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">3,067</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash provided by (used in) financing activities</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">45,067</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(7,696</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net decrease in cash and cash equivalents</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(18,507</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(111,399</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents at beginning of period</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">58,384</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">258,900</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents at end of period</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">39,877</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">147,501</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Supplemental disclosure of cash flow information -</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">cash paid for interest</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,930</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,929</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="5"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Supplemental disclosure of noncash investing and financing activities:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Capitalized interest</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,417</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">3,618</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Grant of compensatory stock options</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,231</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Notes payable and accrued interest converted to equity</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">102</FONT></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left">See accompanying notes to consolidated financial statements

<P align="right"><I>Page 5</I>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P align="center"><B>AIRGATE PCS, INC. AND SUBSIDIARIES</B>

<!-- link2 "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="004"></A></DIV>
<DIV align="left"><A name="004"></A></DIV>
<P align="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<DIV align="center">March&nbsp;31, 2001<BR>
(unaudited)</DIV>

<P align="left">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Presentation

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>The accompanying consolidated financial statements are unaudited and have
been prepared by management. The consolidated financial statements
included herein include the accounts of AirGate PCS, Inc. and its
wholly-owned subsidiaries, AGW Leasing Company, Inc. (&#147;AGW&#148;) and AirGate
Network Services, LLC (&#147;ANS&#148;), for all periods presented. In the opinion
of management, these consolidated financial statements contain all of the
adjustments, consisting of normal recurring adjustments, necessary to
present fairly, in summarized form, the financial position and the
results of operations of AirGate PCS, Inc. and subsidiaries
(collectively &#147;AirGate&#148; or the &#147;Company&#148;). The results of operations for
the three and six months ended March&nbsp;31, 2001 are not indicative of the
results that may be expected for the full fiscal year of 2001. The
financial information presented herein should be read in conjunction with
the Company&#146;s Form&nbsp;10-K for the year ended September&nbsp;30, 2000 which
includes information and disclosures not included herein. All
significant intercompany accounts or balances have been eliminated in
consolidation. Certain amounts have been reclassified to conform to the
current year presentation.</TD>
</TR>
</TABLE>
<P align="left">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Loss Per Share

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>The Company computes net loss per common share in accordance with
Statement of Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;128 &#147;Earnings
per Share.&#148; Basic and diluted net loss per share of common stock is
computed by dividing net loss for each period by the weighted-average
outstanding common shares. No conversion of common stock equivalents has
been assumed in the calculations since the effect would be antidilutive.
As a result, the number of weighted-average outstanding common shares as
well as the amount of net loss per share are the same for both the basic
and diluted net loss per share calculations for all periods presented.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>The reconciliation of weighted-average outstanding common shares to
weighted-average outstanding shares including potentially dilutive common
stock equivalents is set forth below:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="42%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Three Months</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Six Months</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Ended</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">Ended</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">March 31,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="7"><FONT size="2">March 31,</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="7"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Weighted-average outstanding common</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,008,461</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,237,483</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,920,925</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,101,507</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">shares</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Weighted-average potentially dilutive</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">common stock equivalents:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common stock options</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">540,124</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">992,268</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">497,173</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">875,995</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stock purchase warrants</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">93,895</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">517,891</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">93,342</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">496,668</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Weighted-average outstanding shares</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">including potentially dilutive common
stock equivalents</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,642,480</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,747,642</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,511,440</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">13,474,170</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="right"><I>Page 6</I>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition and Customer Activation Cost

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>The accounting policy for the recognition of activation fee revenue is to
record the revenue over the periods such revenue is earned in accordance
with the current interpretations of Staff Accounting Bulletin No.&nbsp;101
(SAB 101), &#147;Revenue Recognition in Financial Statements.&#148; Accordingly,
activation fee revenue and direct customer activation costs have been
deferred and are recorded either: over the average life for those
customers (30&nbsp;months) that do not commit to a fixed service term or the
contractual service term (generally 12&nbsp;months) for those customers that
do commit to a fixed service term. For the three months ended March&nbsp;31,
2001, the Company has recognized approximately $0.6&nbsp;million of activation
fee revenue and $0.5&nbsp;million of direct customer activation costs. For the
six months ended March&nbsp;31, 2001, the Company recognized approximately
$0.8&nbsp;million of activation fee revenue and $0.6&nbsp;million of direct
customer activation costs and as of March&nbsp;31, 2001, the Company has
deferred $3.5&nbsp;million of activation fee revenue and $3.0&nbsp;million of
direct customer activation costs to future periods.</TD>
</TR>
</TABLE>
<P align="left">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade Receivables, net

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Trade receivables, net, including $6.8&nbsp;million due
from Sprint PCS,
relates to roaming revenues, amounts from customers with respect to
airtime service charges and amounts from local third party resellers
relating to the sale of handsets and accessories. For the three months
ended March&nbsp;31, 2001, roaming revenues from Sprint PCS totaled $11.0
million, or 31% of total revenues. For the six months ended March&nbsp;31,
2001, roaming revenues from Sprint PCS totaled $18.4&nbsp;million.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>The Company records an allowance for doubtful accounts to reflect the
expected loss on the collection of receivables. Such allowance is
recorded for accounts receivables from customers and third party vendors
and totaled $3.5&nbsp;million at March&nbsp;31, 2001 compared to $0.6&nbsp;million at
September&nbsp;30, 2000.</TD>
</TR>
</TABLE>
<P align="left">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Current Assets

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Other current assets consist of the following at March&nbsp;31, 2001 and
September&nbsp;30, 2000 (dollars in thousands):</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="67%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">March 31,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">September 30,</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current portion of financing costs</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,215</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,215</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Direct customer activation costs</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">2,835</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">627</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest receivable and other</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">399</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">385</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other current assets</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">4,449</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,227</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="right"><I>Page 7</I>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and Equipment

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Property and equipment consist of the following at March&nbsp;31, 2001 and
September&nbsp;30, 2000 (dollars in thousands):</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="67%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">March 31,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">September 30,</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Network assets</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">179,749</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">158,720</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Computer equipment</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">3,239</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">3,081</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Furniture, leasehold improvement, and
office equipment</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">8,836</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">6,800</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">191,824</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">168,601</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less accumulated depreciation and amortization</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(26,765</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(13,005</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">165,059</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">155,596</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Construction in progress (network build-out)</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">27,844</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">27,985</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Property and equipment, net</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">192,903</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">183,581</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payable to Sprint PCS

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>The payable to Sprint PCS consists of amounts owed to Sprint PCS related
to purchases of handsets and accessories, services provided including
customer care and customer billing, equipment subsidies payable to third
party national retailers and the 8% affiliation fee. At March&nbsp;31, 2001,
the amount payable to Sprint PCS totaled $14.5&nbsp;million.</TD>
</TR>
</TABLE>
<P align="left">(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term Debt

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>Long-term debt consists of the following at March&nbsp;31, 2001 and September
30, 2000 (dollars in thousands):</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="63%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">March 31,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">September 30,</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Senior Credit Facility:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gross borrowings</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">55,500</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">13,500</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unaccreted original issue discount</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(673</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(772</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net Senior Credit Facility</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">54,827</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">12,728</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Senior Subordinated Discount Notes:</FONT></DIV></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding borrowings</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">189,866</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">177,852</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unaccreted original issue discount</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(9,306</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(9,853</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net Senior Subordinated Discount Notes</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">180,560</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">167,999</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long-term debt</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">235,387</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">180,727</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left">(9)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock Purchase Warrants

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>(a)&nbsp;Senior Credit Facility</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>On June&nbsp;1, 2000, the Company issued stock purchase warrants to Lucent
Technologies in consideration of the Senior Credit Facility (see
Subsequent Events &#150; 12(a)). The exercise price of the warrants equals
$20.40 per share, and the warrants are exercisable for an aggregate of
10,175 shares of the Company&#146;s common stock at any time. The warrants
expire on the earlier of August&nbsp;15, 2004 or August&nbsp;15, 2001, if, as of
such date, the Company has paid in full all outstanding amounts under the
Senior Credit Facility and</TD>
</TR>
</TABLE>
<P align="right"><I>Page 8</I>
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>has terminated the remaining unused portion of the commitments. The
Company recorded a discount on the associated credit facility of $0.3
million which represents the fair value of the warrants on the date of
grant using the Black-Scholes option pricing model. The discount is
recognized as interest expense over the period from the date of issuance
to maturity using the effective interest method. All of these warrants
remain outstanding at March&nbsp;31, 2001.</TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>(b)&nbsp;Senior Subordinated Discount Notes</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>On January&nbsp;3, 2000, the Company&#146;s registration statement on Form&nbsp;S-1,
relating to warrants to purchase 644,400 shares of common stock issued
together, as units, with the Company&#146;s $300&nbsp;million of 13.5% senior
subordinated discount notes due 2009, was declared effective by the
Securities and Exchange Commission. On September&nbsp;30, 1999, the Company
received gross proceeds of $156.1&nbsp;million from the issuance of 300,000
units, each unit consisting of a $1,000 principal amount at maturity
13.5% senior subordinated discount note due 2009 and one warrant to
purchase 2.148 shares of common stock at a price of $0.01 per share. The
warrants were exercisable beginning upon the effective date of the
registration statement registering such warrants, for an aggregate of
644,400 shares of common stock. The warrants expire October&nbsp;1, 2009. As
of March&nbsp;31, 2001, warrants representing 555,843 shares of common stock
had been exercised, and warrants representing 88,557 shares of common
stock remain outstanding. On February&nbsp;14, 2001, the registration
statement on Form&nbsp;S-1 expired. On March&nbsp;23, 2001, the Company&#146;s
registration statement on Form&nbsp;S-3, file number 333-56928, relating to
warrants to purchase the outstanding 88,557 shares of common stock was
declared effective by the Securities and Exchange Commission.</TD>
</TR>
</TABLE>
<P align="left">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition of Assets

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>On February&nbsp;28, 2001, certain operating assets and intangibles were
acquired to convert one of the Company&#146;s resellers into Company owned
retail outlets. The Company paid a total purchase price of approximately
$0.4&nbsp;million, representing $0.3&nbsp;million of operating equipment and
leasehold improvements for eight retail stores and two mall kiosks and
$0.1&nbsp;million assigned to a two year non-compete agreement. The
non-compete agreement will be amortized over the contractual period.</TD>
</TR>
</TABLE>
<P align="left">(11)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Financial Information

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>AGW Leasing Company, Inc. (&#147;AGW&#148;) and AirGate Network Services LLC
(&#147;ANS&#148;) are wholly-owned subsidiaries of AirGate PCS, Inc. Both AGW and
ANS have jointly, fully and unconditionally guaranteed the Company&#146;s
senior subordinated discount notes and Senior Credit Facility. AGW was
formed to hold the real estate interests for the Company&#146;s PCS network.
ANS was formed to provide construction management services for the
Company&#146;s PCS network.</TD>
</TR>
</TABLE>
<P align="right"><I>Page 9</I>
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>




<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="41%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">AGW Leasing</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">AirGate</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">AirGate PCS,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Company,</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Network</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Inc.</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Inc.</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Services, LLC</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Eliminations</FONT></TD>
        <TD></TD>
        <TD nowrap align="center" colspan="3"><FONT size="2">Consolidated</FONT></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">39,877</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">39,877</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trade receivables and other current assets</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">33,016</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">33,016</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Property and equipment, net</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">145,629</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">47,274</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">192,903</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other assets</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">73,530</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(64,295</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">9,235</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total assets</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">292,052</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">47,274</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(64,295</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">275,031</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current liabilities</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">46,345</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">14,591</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">51,128</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(64,295</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">47,769</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long-term deferred revenue</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">244</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">244</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long-term debt</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">235,387</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">235,387</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total liabilities</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">281,976</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">14,591</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">51,128</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(64,295</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">283,400</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common stock</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">131</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">131</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additional paid-in capital</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">164,639</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">164,639</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated deficit</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(152,367</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(14,591</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,854</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(170,812</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unearned stock option compensation</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,327</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(2,327</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total liabilities and stockholders&#146;
equity(deficit)</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">292,052</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">47,274</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(64,295</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">275,031</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total revenues</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">57,175</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">57,175</FONT></TD>
        <TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total expenses</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(115,549</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,458</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(403</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(119,410</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(58,374</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(3,458</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(403</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">(62,235</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating activities, net</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(28,447</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">3,272</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(25,175</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Investing activities, net</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(35,379</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(3,020</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(38,399</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financing activities, net</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">45,067</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">45,067</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Decrease) increase in cash
and cash equivalents</FONT></DIV></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(18,759</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">252</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(18,507</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents at
beginning of period</FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">58,636</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right"></TD>
        <TD align="right"><FONT size="2">(252</FONT></TD>
        <TD nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">58,384</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="1"></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents at end of period</FONT></DIV></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">39,877</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">39,877</FONT></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD><HR size="4" noshade></TD>
        <TD></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
</TABLE>
</CENTER>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left">(12)</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">&nbsp;&nbsp;&nbsp;&nbsp;Subsequent Events</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="3%">&nbsp;</TD>
        <TD width="1%" align="left">a)</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="93%">On April&nbsp;26, 2001, Lehman Brothers Commercial Paper, Inc., a
subsidiary of Lehman Brothers, Inc., has assumed the responsibilities
of Lucent Technologies Inc. as Administrative Agent under the $153.5
Senior Credit Facility (formerly the Lucent Financing). Lucent
Technologies Inc. has fully syndicated the Senior Credit Facility and
no longer holds a financial position in the Senior Credit Facility.</TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD width="3%">&nbsp;</TD>
        <TD width="1%" align="left">b)</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="93%">On April&nbsp;27, 2001, the Company and Sprint PCS announced that they
had reached an agreement in principle to reduce the reciprocal rate
exchanged between Sprint PCS and AirGate for customers who roam into
the other party&#146;s territory. Under the announced agreement in
principle, the rate will be reduced from the current 20 cents per
minute of use to 15 cents per minute of use beginning June&nbsp;1, 2001, and
to 12 cents per minute of use beginning October&nbsp;1, 2001. Beginning
January&nbsp;1, 2002, and for the remainder of the term of the management
agreement with Sprint PCS, the rate will be adjusted to provide a fair
and reasonable return on the cost of the underlying network, or
approximately 10 cents.</TD>
</TR>
</TABLE>

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<!-- link1 "ITEM 2 &#151; MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF" -->
<DIV align="left"><A NAME="005"></A></DIV>
<DIV align="left"><A name="005"></A></DIV>
<P align="center"><B>ITEM 2 &#151; MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF</B>

<DIV align="center"><B>FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></DIV>

<P align="left">FORWARD-LOOKING STATEMENTS

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements contained herein regarding expected financial results and other
planned events are forward-looking statements that involve risk and
uncertainties. Actual future events or results may differ materially from
these statements. Readers are referred to the documents filed by AirGate with
the Securities and Exchange Commission, specifically the most recent filings
which identify important risk factors that could cause actual results to differ
from those contained in the forward-looking statements, including potential
fluctuations in quarterly results, our dependence on our affiliation with
Sprint PCS, an adequate supply of infrastructure and subscriber equipment,
dependence on new product development, rapid technological and market change,
risks related to future growth and expansion, our significant level of
indebtedness and volatility of stock prices. These and other applicable risks
are summarized under the caption &#147;Risk Factors&#148; included under Item&nbsp;5 &#150; Other
Information of this quarterly report.

<P align="left"><B>Overview</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;22, 1998, we entered into a management agreement with Sprint PCS
whereby we became the Sprint PCS affiliate with the exclusive right to provide
100% digital, 100% PCS services under the Sprint and Sprint PCS brand names in
our territory in the southeastern United States. We completed our radio
frequency design, network design and substantial site acquisition and cell site
engineering, and commenced construction of our PCS network in November&nbsp;1998.
In January&nbsp;2000 we began commercial operations with the launch of four markets
covering 2.2&nbsp;million residents in our Sprint PCS territory. By September&nbsp;30,
2000, we had launched commercial PCS service in all of the 21 markets that
comprise our Sprint PCS territory. At March&nbsp;31, 2001, we provided Sprint PCS
services to 143,548 subscribers.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sprint PCS has invested $44.6&nbsp;million to purchase the PCS licenses in our
territory and incurred additional costs for microwave clearing. Under our
long-term agreements with Sprint PCS, we manage the network on Sprint PCS&#146;
licensed spectrum and use the Sprint and Sprint PCS brand names royalty-free
during our affiliation with Sprint PCS. We also have access to Sprint PCS&#146;
national marketing support and distribution programs and are entitled to buy
network and subscriber equipment and handsets at the same discounted rates
offered by vendors to Sprint PCS based on its large volume purchases. In
exchange for these and other benefits, we are entitled to receive 92%, and
Sprint PCS is entitled to retain 8%, of collected service revenues from
customers in our Sprint PCS territory. We are entitled to 100% of revenues
collected from the sale of handsets and accessories and on roaming revenues
received when Sprint PCS customers from a different territory make a wireless
call on our PCS network.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through March&nbsp;31, 2001, we have incurred $207.6&nbsp;million of capital
expenditures related to the build-out of our PCS network. In the three months
ended March&nbsp;31, 2000, we launched commercial PCS operations in the
Greenville-Spartanburg, Anderson and Myrtle Beach, South Carolina markets and
the Hickory, Asheville, Wilmington and Rocky Mount, North Carolina markets. In
the three months ended June&nbsp;30, 2000, we launched commercial PCS operations in
the Charleston, Columbia and Florence, South Carolina markets, the Augusta and
Savannah, Georgia markets and the Goldsboro, Jacksonville, New Bern,
Orangeburg, Roanoke Rapids and Greenville-Washington, North Carolina markets.
In the three months ended September&nbsp;30, 2000, we launched commercial PCS
operations in the Greenwood and Sumter, South Carolina markets and the Outer
Banks, North Carolina market. At March&nbsp;31, 2001, our Sprint PCS network
covered 5.7&nbsp;million of the 7.1&nbsp;million residents in our Sprint PCS territory
based on 2000 U.S. Census Department data.

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<P align="left"><B>Results of Operations</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>For the three months ended March&nbsp;31, 2001 compared to the three months
ended March&nbsp;31, 2000:</I></B>

<P align="left">Customer Additions

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2001, the Company provided personal communication services
to 143,548 customers, a net increase of 40,108 during the three months then
ended. As of March&nbsp;31, 2000, the Company provided personal communication
service to 6,378 customers. The increased customers are attributable to the
launching of the remaining 14 of the Company&#146;s 21 markets since March&nbsp;31, 2000.

<P align="left">Average Revenue Per User (ARPU)

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An important operating metric in the wireless industry is Average Revenue
Per User (ARPU). ARPU summarizes the average monthly service revenue per
customer, net of the provision for doubtful accounts. ARPU is computed by
deducting the provision for doubtful accounts from service revenue and dividing
the result by the average subscribers for the period. For the three months
ended March&nbsp;31, 2001, ARPU was $58. For the three months ended March&nbsp;31, 2000,
ARPU was $54. The increase in ARPU primarily resulted from customers selecting
rate plans with higher monthly recurring charges.

<P align="left">Revenues

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service revenue and equipment revenue were $21.5&nbsp;million and $2.7
million, respectively, for the three months ended March&nbsp;31, 2001, compared to
$.5&nbsp;million and $.3&nbsp;million, respectively, for the three months ended March&nbsp;31,
2000. These increased revenues reflect the launch of commercial operations in
21 markets during fiscal 2000 and the resultant customer growth. Service
revenue consists of monthly recurring access and feature charges and monthly
non-recurring charges for local, long distance and roaming airtime usage in
excess of the pre-subscribed usage plan. Equipment revenue is derived from
the sale of handsets and accessories, net of an allowance for returns. Our
handset return policy allows customers to return their handsets for a full
refund within 14&nbsp;days of purchase. When handsets are returned to us, we may be
able to reissue the handsets to customers at little additional cost to us.
However, when handsets are returned to Sprint PCS for refurbishing, we receive
a credit from Sprint PCS, which is less than the amount we originally paid for
the handset.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The company recorded roaming revenue of $11.0&nbsp;million during the three
months ended March&nbsp;31, 2001 compared to $0.8&nbsp;million for the three months ended
March&nbsp;31, 2000, an increase of $10.2&nbsp;million. The increase is attributable to
the completion of the initial network build-out. We receive Sprint PCS roaming
revenue at a per-minute rate from Sprint PCS or another Sprint PCS affiliate
when Sprint PCS subscribers outside of our territory use our network. For the
three months ended March&nbsp;31, 2001, such roaming revenue was $10.7&nbsp;million, or
98% of the $11.0&nbsp;million in roaming revenue recorded in the period. We also
receive non-Sprint PCS roaming revenue when subscribers of other wireless
service providers roam on our network.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;27, 2001, the Company and Sprint PCS announced that they had
reached an agreement in principle to reduce the reciprocal roaming rate
exchanged between Sprint PCS and AirGate PCS for customers who roam into the
other party&#146;s territory. The rate will be reduced from the current $0.20 per
minute of use to $0.15 per minute of use beginning June&nbsp;1, 2001, and to $0.12
per minute of use beginning October&nbsp;1, 2001. Beginning January&nbsp;1, 2002, and
for the remainder of the term of the management agreement with Sprint PCS, the
rate will be adjusted to provide a fair and reasonable return on the cost of
the underlying network, or approximately $0.10 per minute. Increasing inbound
roaming minutes from increasing network coverage and a growing Sprint PCS
subscriber base will be partially offset by the lower per minute rate.

<P align="left">Cost of Service and Roaming

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of service and roaming was $24.6&nbsp;million for the three months
ended March&nbsp;31, 2001, compared to $5.5&nbsp;million for the three months ended March
31, 2000, an increase of $19.1&nbsp;million. Cost of service and roaming represents
network operating costs (including salaries, cell site lease payments, fees
related to data transfer via T-1 and other transport lines, inter-connect fees
and other expenses related to network operations), roaming expense when AirGate
customers place calls on Sprint PCS&#146;s network, back office services provided by
Sprint PCS such as
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<P> customer care, billing and activation, long distance expense relating to
inbound roaming revenue and our own customer&#146;s usage, and the 8% of collected
service revenue representing the Sprint Affiliation fee.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Roaming expense was $7.4&nbsp;million for the three months ended March&nbsp;31,
2001, compared to $0.1&nbsp;million for the three months ended March&nbsp;31, 2000. As
discussed above, the per minute rate we pay Sprint PCS when AirGate customers
roam onto the Sprint PCS network will decrease beginning June&nbsp;1, 2001. The
increased roaming minutes resulting from increasing AirGate PCS subscriber
levels will be partially offset by the lower per minute rate paid to Sprint
PCS. The Sprint affiliation fee totaled $1.8&nbsp;million in the three month period
ended March&nbsp;31, 2001. The Company was supporting 143,548 customers at March
31, 2001, compared to 6,378 customers at March&nbsp;31, 2000. At March&nbsp;31, 2000,
the Company&#146;s network consisted of 296 active cell sites and two switches. At
March&nbsp;31, 2001, the Company&#146;s network was built-out to include 633 active cell
sites and three switches. There were approximately 65 employees performing
network operations functions at March&nbsp;31, 2001, compared to 38 employees at
March&nbsp;31, 2000.

<P align="left">Cost of Equipment

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of equipment was $4.6&nbsp;million for the three months ended March&nbsp;31,
2001, and $1.1&nbsp;million for the three months ended March&nbsp;31, 2000, an increase
of $3.5&nbsp;million. This increase is largely attributable to the dramatic
increase in the number of customers over the same period, as cost of equipment
includes the cost of handsets and accessories sold to customers. The cost of
handsets exceeds the retail price received from customers because we subsidize
the price of handsets to remain competitive in the marketplace.

<P align="left">Selling and Marketing

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incurred selling and marketing expenses of $16.1&nbsp;million during the
three month period ended March&nbsp;31, 2001 compared to $3.4&nbsp;million in the three
month period ended March&nbsp;31, 2000, an increase of $12.7&nbsp;million. A net 40,108
customers were added in the three months ended March&nbsp;31, 2001 compared to 6,378
net customers added in the three months ended March&nbsp;31, 2000. These amounts
include retail store costs such as salaries and rent in addition to promotion,
advertising and commission costs, and handset subsidies on units sold by third
parties for which we do not record revenue. These handsets subsidies totaled
$2.2&nbsp;million for the three months ended March&nbsp;31, 2001, compared to $0.5
million for the three months ended March&nbsp;31, 2000. At March&nbsp;31, 2001, there
were approximately 306 employees performing sales and marketing functions,
compared to 90 employees as of March&nbsp;31, 2000.

<P align="left">General and Administrative

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March&nbsp;31, 2001, we incurred expenses of $3.6
million, compared to $3.2&nbsp;million for the three months ended March&nbsp;31, 2000, an
increase of $0.4&nbsp;million. The increase is primarily comprised of compensation
and benefits relating to growth in the number of employees, partially offset by
lower professional fees. Of the 422 employees at March&nbsp;31, 2001, approximately
51 employees were performing corporate support functions compared to 34
employees as of March&nbsp;31, 2000.

<P align="left">Noncash Stock Option Compensation

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncash stock option compensation expense was $0.6&nbsp;million for the three
months ended March&nbsp;31, 2001, compared to $0.3&nbsp;million for the three months
ended March&nbsp;31, 2000, an increase of $0.3&nbsp;million. The increase from the prior
year period is attributable to the accelerated vesting of options for two
terminated executives pursuant to the 1999 Stock Option Plan. For the three
months ended March&nbsp;31, 2001, $0.5&nbsp;million related to general and
administrative, $40,000 to cost of service, and $20,000 to selling and
marketing. The Company applies the provisions of APB Opinion No.&nbsp;25 and
related interpretations in accounting for its stock option plan. Unearned
stock option compensation is recorded for the difference between the exercise
price and the fair market value of the Company&#146;s common stock at the date of
grant and is recognized as noncash stock option compensation expense in the
period in which the related services are rendered.

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<P align="left">Depreciation and Amortization

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March&nbsp;31, 2001, depreciation and amortization
expense increased to $7.1&nbsp;million, compared to $2.0&nbsp;million for the three
months ended March&nbsp;31, 2000, an increase of $5.1&nbsp;million. The increase in
depreciation and amortization expense relates primarily to the completion of
our initial network build-out during fiscal year 2000 to support our commercial
launch. Depreciation and amortization will continue to increase modestly as
additional portions of our network are placed into service. We incurred
capital expenditures of $12.1&nbsp;million in the three months ended March&nbsp;31, 2001,
which included approximately $0.7&nbsp;million of capitalized interest, as the
Company the continued the build-out of the PCS network. The Company incurred
capital expenditures of $58.3&nbsp;million and capitalized interest of $2.0&nbsp;million
in the three months ended March&nbsp;31, 2000.

<P align="left">Interest Income

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March&nbsp;31, 2001, interest income was $0.7
million, compared to $2.7&nbsp;million for the three months ended March&nbsp;31, 2000, a
decrease of $2.0&nbsp;million. The Company had higher cash and cash equivalent
balances for the three months ended March&nbsp;31, 2000, as proceeds from the
Company&#146;s September&nbsp;1999 equity and debt offerings were just beginning to be
utilized. As capital expenditures are required to complete the
build-out of
our PCS network, and as working capital and operating losses are funded,
decreasing cash balances are expected to result in lower interest income for
the remainder of fiscal 2001.

<P align="left">Interest Expense

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March&nbsp;31, 2001, interest expense was $7.8
million, compared to $5.9&nbsp;million for the three month ended March&nbsp;31, 2000 an
increase of $1.9&nbsp;million. The increase is primarily attributable to increased
debt related to accreted interest on the senior subordinated discount notes and
increased borrowings under the senior credit facility, partially offset by
lower commitment fees on undrawn balances of the senior credit facility and
lower capitalized interest. The Company had borrowings of $235.4&nbsp;million as of
March&nbsp;31, 2001, compared to $180.7&nbsp;million at September&nbsp;30, 2000 and $169.1
million at March&nbsp;31, 2000.

<P align="left">Net Loss

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March&nbsp;31, 2001, the net loss was $28.4&nbsp;million,
an increase of $11.3&nbsp;million over a net loss of $17.1&nbsp;million for the three
months ended March&nbsp;31, 2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>For the six months ended March&nbsp;31, 2001 compared to the six months ended
March&nbsp;31, 2000:</I></B>

<P align="left">Revenues

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service revenue and equipment revenue were $33.8&nbsp;million and $5.0&nbsp;million
for the six months ended March&nbsp;31, 2001, respectively, compared to $0.5&nbsp;million
and $0.3&nbsp;million, respectively, for the six months ended March&nbsp;31, 2000. The
increased revenues reflect the launch of the Company&#146;s commercial operations in
21 markets during fiscal 2000. The Company recorded roaming revenue of $18.4
million the six months ended March&nbsp;31, 2001, compared to roaming revenue of
$0.9&nbsp;million during the six months ended March&nbsp;31, 2000, an increase of $17.5
million.

<P align="left">Cost of Service and Roaming

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of service and roaming was $40.5&nbsp;million for the six months ended
March&nbsp;31, 2001, compared to $8.4&nbsp;million for the six months ended March&nbsp;31,
2000, an increase of $32.1&nbsp;million. Roaming expense was $10.9&nbsp;million for the
six months ended March&nbsp;31, 2001, compared to $0.1&nbsp;million for the six months
ended March&nbsp;31, 2000, an increase of $10.8&nbsp;million. The Sprint affiliation fee
totaled $2.8&nbsp;million in the six month period ended March&nbsp;31, 2001, compared to
$39,000 for the six months ended March&nbsp;31, 2000, an increase of $2.8&nbsp;million.

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<P align="left">Cost of Equipment

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of equipment was $9.7&nbsp;million for the six months ended March&nbsp;31,
2001, compared to $1.1 for the six months ended March&nbsp;31, 2000, an increase of
$8.6&nbsp;million. This increase corresponds with the dramatic increase in the
number of customers since March&nbsp;31, 2000, as cost of equipment includes the
cost of handsets and accessories sold to customers. The cost of handsets
exceeds the retail price received from customers because we subsidize the price
of handsets to remain competitive in the marketplace.

<P align="left">Selling and Marketing

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incurred selling and marketing expenses of $32.7&nbsp;million during the six
month period ended March&nbsp;31, 2001, compared to $4.6&nbsp;million during the six
month period ended March&nbsp;31, 2000, an increase of $26.1&nbsp;million. The increase
is primarily comprised of compensation and benefits relating to growth in the
number of employees and handset subsidies on units sold by third parties. In
the six months ended March&nbsp;31, 2001, we added 86,859 net additional customers
compared to 6,378 net additional customers in the six months ended March&nbsp;31,
2000.

<P align="left">General and Administrative

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended March&nbsp;31, 2001, we incurred expenses of $8.3
million, compared to $4.7&nbsp;million for the six months ended March&nbsp;31, 2000, an
increase of $3.6&nbsp;million. The increase is primarily comprised of compensation
and benefits relating to growth in the number of new employees.

<P align="left">Noncash Stock Option Compensation

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncash stock option compensation expense was $0.9&nbsp;million for the six
months ended March&nbsp;31, 2001, compared to $0.7&nbsp;million for the six months ended
March&nbsp;31, 2000, an increase of $0.2&nbsp;million. For the six months ended March
31, 2001, $0.8&nbsp;million related to general and administrative, $90,000 to cost
of service, and $50,000 to selling and marketing. The Company applies the
provisions of APB Opinion No.&nbsp;25 and related interpretations in accounting for
its stock option plan. Unearned stock option compensation is recorded for the
difference between the exercise price and the fair market value of the
Company&#146;s common stock at the date of grant and is recognized as noncash stock
option compensation expense in the period in which the related services are
rendered.

<P align="left">Depreciation and Amortization

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended March&nbsp;31, 2001, depreciation and amortization
expense was $13.8&nbsp;million, compared to $2.6&nbsp;million for the six months ended
March&nbsp;31, 2000, an increase of $11.2&nbsp;million. The increase in depreciation and
amortization expense relates primarily to network equipment placed in service
to support our commercial launch. Depreciation and amortization will continue
to increase as additional portions of our network are placed into service. We
incurred capital expenditures of $22.7&nbsp;million in the six months ended March
31, 2001 related to the continued build-out of our PCS network, which included
approximately $1.4&nbsp;million of capitalized interest. During the six months
ended March&nbsp;31, 2000, we incurred capital expenditures of $92.2&nbsp;million, which
included approximately $3.6&nbsp;million of capitalized interest.

<P align="left">Interest Income

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended March&nbsp;31, 2001, interest income was $2.0&nbsp;million
compared to $6.2&nbsp;million for the six months ended March&nbsp;31, 2000. Interest
income is generated from investment of the cash proceeds from our initial
public equity and units offering completed on September&nbsp;30, 1999.

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<P align="left">Interest Expense

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended March&nbsp;31, 2001, interest expense was $15.5
million, compared to $12.8&nbsp;million for the six months ended march 31, 2000, an
increase of $2.7&nbsp;million. The increase is primarily attributable to an increase
in average outstanding borrowings and includes $1.2&nbsp;million accretion of
original issue discount on the senior subordinated discount notes and $1.5
million associated with additional borrowings under the senior credit facility.
The Company had borrowings of $235.4&nbsp;million as of March&nbsp;31, 2001, compared to
$180.7&nbsp;million at September&nbsp;30, 2000 and $169.1&nbsp;million at March&nbsp;31, 2000.

<P align="left">Net Loss

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended March&nbsp;31, 2001, the net loss was $62.2&nbsp;million,
compared to a net loss of $26.9&nbsp;million for the six months ended March&nbsp;31,
2000, an increase of $35.3&nbsp;million.

<P align="left"><B>Liquidity and Capital Resources</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2001, the Company had $39.9&nbsp;million in cash and cash
equivalents, as compared to $58.4&nbsp;million in cash and cash equivalents at
September&nbsp;30, 2000. Working capital was $25.1&nbsp;million at March&nbsp;31, 2001 as
compared to working capital of $36.6&nbsp;million at September&nbsp;30, 2000.

<P align="left">Net Cash Used In Operating Activities

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company used $25.2&nbsp;million of cash in operating activities in the six
months ended March&nbsp;31, 2001. This was the result of the Company&#146;s $62.2
million net loss that was partially offset by a net $9.1&nbsp;million in cash
provided by changes in working capital and by depreciation and amortization of
note discounts and other non-cash items totaling $28.0&nbsp;million.

<P align="left">Net Cash Used in Investing Activities

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The $38.4&nbsp;million of cash used in investing activities represents cash
outlays of $38.0&nbsp;million for capital expenditures and $0.4&nbsp;million to purchase
certain assets of one of Company&#146;s resellers during the six months ended March
31, 2001. Further, cash payments of $15.3&nbsp;million were made for equipment
purchases made through accounts payable and accrued expenses at September&nbsp;30,
2000. We made a total of $22.7&nbsp;million of capital expenditures in the six
months ended March&nbsp;31, 2001, compare to $92.2&nbsp;million of capital expenditures
made in the six months ended March&nbsp;31, 2000.

<P align="left">Net Cash Provided By Financing Activities

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The $45.1&nbsp;million in cash provided by financing activities during the six
month period ended March&nbsp;31, 2001 consisted of a $42.0&nbsp;million borrowing under
the senior credit facility and $3.1&nbsp;million of proceeds received from the
exercise of options to purchase common stock by employees.

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<P align="left">Liquidity

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We closed our offerings of equity and debt funding on September&nbsp;30, 1999
with net proceeds of $269.9&nbsp;million. The senior subordinated discount notes
due 2009 will require cash payments of interest beginning on April&nbsp;1, 2005.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our $153.5&nbsp;million senior credit facility provides for a $13.5&nbsp;million
senior secured term loan which matures on June&nbsp;6, 2007, which is the first
installment of the loan, or tranche I. The second installment, or tranche II,
under the senior credit agreement is for a $140.0&nbsp;million senior secured term
loan which matures on September&nbsp;30, 2008. The credit agreement requires us to
make quarterly payments of principal beginning December&nbsp;31, 2002 for tranche I
and March&nbsp;31, 2004 for tranche II initially in the amount of 3.75% of the loan
balance then outstanding and increasing thereafter. The commitment fee on
unused borrowings is 1.50%, payable quarterly. As of March&nbsp;31, 2001, $98
million remained available for borrowing under our senior credit facility. Our
obligations under the credit agreement are secured by all of our assets. We
expect that cash and cash equivalents together with future advances under the
senior credit facility will fund our capital expenditures and our working
capital requirements through 2002 at which time we anticipate we will be
operational cash flow positive. The senior credit facility is subject to
certain restrictive covenants including maintaining certain financial ratios,
reaching defined subscriber growth and network covered population goals, and
limiting annual capital expenditures. Further, the senior credit facility
restricts the payment of dividends on our common stock.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2001, management believes that we are in compliance with
all financial and operational covenants associated with our senior
credit facility, senior subordinated discount notes, and Sprint Agreements.

<P align="left"><B>Seasonality</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business is subject to seasonality because the wireless industry is
heavily dependent on fourth calendar quarter results. Among other things, the
industry relies on significantly higher customer additions and handset sales in
the fourth calendar quarter as compared to the other three calendar quarters. A
number of factors contribute to this trend, including: the increasing use of
retail distribution, which is heavily dependent upon the year-end holiday
shopping season; the timing of new product and service announcements and
introductions; competitive pricing pressures; and aggressive marketing and
promotions. The increased level of activity requires a greater use of the
Company&#146;s available financial resources during this period.
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<P align="center"><B>ITEM 3 &#150; QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended March&nbsp;31, 2001, we did not experience any
material change in market risk exposures that effect the quantitative and
qualitative disclosures presented in the Company&#146;s Annual Report on Form&nbsp;10-K
for the year ended September&nbsp;30, 2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the normal course of business, our operations are exposed to interest
rate risk on our senior credit facility and any future financing requirements.
Our fixed rate debt consists primarily of the accreted carrying value of the
senior subordinated discount notes ($189.9&nbsp;million at March&nbsp;31, 2001). Our
variable rate debt consists of borrowings made under the senior credit facility
($55.5&nbsp;million at March&nbsp;31, 2001). The Company&#146;s primary interest rate risk
exposures relate to (i)&nbsp;the interest rate on the Company&#146;s long-term
borrowings; (ii)&nbsp;the Company&#146;s ability to refinance its senior subordinated
discount notes at maturity at market rates; and (iii)&nbsp;the impact of interest
rate movements on the Company&#146;s ability to meet interest expense requirements
and financial covenants under the Company&#146;s debt instruments.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We manage the interest rate risk on our outstanding long-term debt through
the use of fixed and variable rate debt and expect in the future to use
interest rate swaps. While we cannot predict our ability to refinance existing
debt or the impact interest rate movements will have on our existing debt, we
continue to evaluate our interest rate risk on an ongoing basis.

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<P align="center"><B>PART II. OTHER INFORMATION</B>

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<P align="left"><B>ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;30, 1999, we completed the concurrent offerings of equity and
debt funding with total net proceeds of approximately $269.9&nbsp;million. In the
period from September&nbsp;30, 1999 to March&nbsp;31, 2001, we have used $190.7&nbsp;million
to fund capital expenditures relating to the build-out of our PCS network and
$7.7&nbsp;million to repay indebtedness.

<P align="left"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is made to Item&nbsp;4 of the Company&#146;s Form&nbsp;10-Q for the period
ended December&nbsp;31, 2000 filed with the Commission on February&nbsp;14, 2001.

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<P align="left"><B>ITEM 5. OTHER INFORMATION</B>

<P align="left"><B>Investment Considerations</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following investment considerations update the investment
considerations contained in our Annual Report on Form&nbsp;10-K for the year ended
September&nbsp;30, 2000.

<P align="left"><B>Risks Particular to AirGate PCS</B>

<P><I>The termination of our affiliation with Sprint PCS or Sprint PCS&#146; failure to
perform its obligations under our agreements would severely restrict our
ability to conduct our business</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to offer Sprint PCS products and services and our PCS
network&#146;s operation are dependent on our Sprint PCS agreements being renewed
and not terminated. Each of these agreements can be terminated for breach of
any material terms. We are dependent on Sprint PCS&#146; ability to perform its
obligations under the Sprint PCS agreements. The non-renewal or termination of
any of the Sprint PCS agreements or the failure of Sprint PCS to perform its
obligations under the Sprint PCS agreements would severely restrict our ability
to conduct our business.
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<P><I>We may not receive as much Sprint PCS roaming revenue in the future because
Sprint PCS can change the rate we receive or fewer people may travel in our
network area</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are paid a fee from Sprint PCS for every minute that a Sprint PCS
subscriber based outside of our territory uses our network; we refer to such
fees as roaming revenue. Similarly, we pay a fee to Sprint PCS for every
minute that our customers use the Sprint PCS network outside of our markets; we
refer to such fees as roaming fees. Roaming revenue will continue to represent
a significant, but decreasing, portion of our revenue in the near future.
Under our agreements with Sprint PCS, Sprint PCS can change the fee we receive
for each Sprint PCS roaming minute or pay for each roaming minute and Sprint
PCS has announced reductions from the current $0.20 per minute to $0.15 per
minute on June&nbsp;1, 2001, $0.12 per minute on October&nbsp;1, 2001, and approximately
$0.10 per minute on January&nbsp;1, 2002. The change made by Sprint PCS in the
roaming revenue we are paid and any future changes, could substantially
decrease our revenues and net income. In addition, our customers may spend
more time in other Sprint PCS coverage areas than Sprint PCS customers from
outside our Sprint PCS territory spend in our Sprint PCS territory or may not
use our services. As a result, we may not receive a substantial amount of
Sprint PCS roaming revenue or we may have to pay more Sprint PCS roaming fees
than the roaming revenue we collect.

<P><I>If Sprint PCS does not complete the construction of its nationwide PCS network,
we may not be able to attract and retain customers</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sprint PCS&#146; network may not provide nationwide coverage to the same extent
as its competitors, which could adversely affect our ability to attract and
retain customers. Sprint PCS has entered into affiliation agreements similar
to ours with companies in other territories pursuant to its nationwide PCS
build-out strategy. Today, Sprint PCS and its affiliates are still
constructing their nationwide network and do not offer PCS services, either on
their own network or through roaming agreements, in every city in the United
States. Our results of operations are dependent on Sprint PCS&#146; national
network and, to a lesser extent, on the networks of its other affiliates.
Sprint PCS and its affiliate program are subject, to varying degrees, to the
economic, administrative, logistical, regulatory and other risks described in
other risk factors contained below. Sprint PCS&#146; and its other affiliates&#146; PCS
operations may not be successful.

<P><I>We have a limited operating history and if we do not successfully manage our
anticipated rapid growth, our operating performance may be adversely impacted</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We launched commercial operations in January&nbsp;2000 and have grown our
employee base to 422 employees as of March&nbsp;31, 2001. Our performance as a PCS
provider depends on our ability to implement operational and administrative
systems, including the training and management of our engineering, marketing
and sales personnel. These activities are expected to place demands on our
managerial, operational and financial resources.

<P><I>The inability to use Sprint PCS&#146; back office services and third party vendors&#146;
back office systems could disrupt our business</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations could be disrupted if Sprint PCS is unable to maintain and
expand its back office services such as customer activation, billing and
customer care, or to efficiently outsource those services and systems through
third party vendors. The rapid expansion of Sprint PCS&#146; business is expected
to continue to pose a significant challenge to its internal support systems.
Additionally, Sprint PCS has relied on third-party vendors for a significant
number of important functions and components of its internal support systems
and may continue to rely on these vendors in the future. We depend on Sprint
PCS&#146; willingness to continue to offer such services to us and to provide these
services at competitive costs. Our Sprint PCS agreements provide that, upon
nine months&#146; prior written notice, Sprint PCS may elect to terminate any such
service beginning January&nbsp;1, 2002. If Sprint PCS terminates a service for which
we have not developed a cost-effective alternative, our operating costs may
increase and may restrict our ability to operate successfully.
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<P><I>We have substantial debt that we may not be able to service and a failure to
service our debt may result in our lenders controlling our assets.</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our substantial debt will have a number of important consequences for our
operations and our investors, including the following:

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left">&#149;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">we will have to dedicate a substantial portion of any cash flow from
operations to the payment of interest on, and principal of, our debt,
which will reduce funds available for other purposes;</TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left">&#149;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">we have a fully-financed business plan, but we may not be able to
obtain additional financing for currently unanticipated capital
requirements, capital expenditures, working capital requirements and
other corporate purposes;</TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left">&#149;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">some of our debt, including our senior credit facility, will be at
variable rates of interest, which could result in higher interest
expense in the event of increases in market interest rates; and</TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left">&#149;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">due to the liens on substantially all of our assets and the pledges of
stock of our existing and future subsidiaries that secure our senior
debt and our senior subordinated discount notes, lenders or holders of
our senior subordinated discount notes may control our assets or our
subsidiaries&#146; assets in the event of a default.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2001, our outstanding long-term debt totaled $235.4
million. Under our current business plan, we expect to incur additional debt
before achieving break-even operating cash flow. Accordingly, we will utilize
some portion, if not all, of the $98.0&nbsp;million of additional available
borrowings under our senior credit facility.

<P><I>If we do not meet all of the conditions required under our Senior credit
facility documents, we may not be able to draw down all of the funds we
anticipate receiving from the Senior credit facility and may not be able to
fund operating losses and working capital needs</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2001, we had borrowed $55.5&nbsp;million under our senior
credit facility. The remaining $98.0&nbsp;million, which we expect to borrow a
portion of in the future, is subject to our meeting all of the conditions
specified in the financing documents and, in addition, is subject at each
funding date to the following conditions:

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left">&#149;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">that the representations and warranties in the loan documents are true and correct; and</TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left">&#149;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="96%">the absence of a default under our loan documents.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we do not meet these and other conditions at each funding date, the
lenders may not lend any or all of the remaining amounts, and if other sources
of funds are not available, we may not be in a position to meet the operating
cash needs of our business. As of March&nbsp;31, 2001, management believes that we
are in compliance with all covenants governing our senior credit facility.

<P><I>We may have difficulty in obtaining subscriber equipment required in order to
attract customers</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We depend on equipment vendors for an adequate supply of subscriber
equipment, including handsets. If the supply of subscriber equipment is
inadequate or delayed, we may have difficulty in attracting customers.

<P><I>Conflicts with Sprint PCS may not be resolved in our favor which could restrict
our ability to manage our business and provide Sprint PCS products and services</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conflicts between us and Sprint PCS may arise and their resolution may
harm our business. For example, Sprint PCS prices its national plans based on
its own objectives and could set price levels that may not be economically
sufficient for our business. In addition, upon expiration of the initial term
in July&nbsp;2018, Sprint PCS could decide to not renew the Sprint PCS agreements
which would not be in our best interest or the interest of our stockholders.
There may be other conflicts such as the setting of the price we pay for back
office services and the focus of Sprint PCS&#146; management and resources.
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<P><I>If we fail to pay our debt, our lenders have the option of selling our loans to
Sprint PCS, giving Sprint PCS certain rights of a creditor to foreclose on our
assets</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sprint PCS has contractual rights, triggered by an acceleration of the
maturity of our financing under the Senior credit facility, pursuant to which
Sprint PCS may purchase our obligations to the lenders under the financing and
obtain the rights of a senior lender. To the extent Sprint PCS purchases these
obligations, Sprint PCS&#146; interests as a creditor could conflict with ours.
Sprint PCS&#146; rights as a senior lender would enable it to exercise rights with
respect to our assets and continuing relationship with Sprint PCS in a manner
not otherwise permitted under our Sprint PCS agreements.

<P><I>Certain provisions of our agreements with Sprint PCS may diminish the valuation
of our company</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions of our Sprint PCS agreements could affect the valuation of our
company, thereby, among other things, reducing the market prices of our
securities and decreasing our ability to raise additional capital necessary to
operate our business. Under our agreements with Sprint PCS, subject to the
requirements of applicable law, there are circumstances under which Sprint PCS
may purchase our operating assets or capital stock for 72% of the &#147;entire
business value&#148; of our company, as defined in our management agreement with
Sprint PCS. In addition, Sprint PCS must approve any change of control of our
ownership and consent to any assignment of our agreements with Sprint PCS.
Sprint PCS also has been granted a right of first refusal if we decide to sell
our operating assets. We are also subject to a number of restrictions on the
transfer of our business including the prohibition on selling our company or
our operating assets to a number of identified and as yet to be identified
competitors of Sprint PCS or Sprint. These and other restrictions in our
Sprint PCS agreements may limit the saleability and/or reduce the value a buyer
may be willing to pay for our business and may operate to reduce the &#147;entire
business value&#148; of our company.

<P><I>We may not be able to compete with larger, more established businesses offering
similar products and services</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to compete depends, in part, on our ability to anticipate and
respond to various competitive factors affecting the telecommunications
industry, including new services that may be introduced, changes in consumer
preferences, demographic trends, economic conditions and discount pricing
strategies by competitors. We compete in our territory with at least four other
wireless service providers, each of which have an infrastructure in place and
have been operational for a number of years. They have significantly greater
financial and technical resources than we do, could offer attractive pricing
options and may have a wider variety of handset options. We expect that
existing cellular providers will upgrade their systems and provide expanded,
digital services to compete with the Sprint PCS products and services that we
offer. These wireless providers require their customers to enter into long-term
contracts, which may make it more difficult for us to attract customers away
from them. We also compete with several PCS providers and other existing
communications companies in our Sprint PCS territory. A number of our cellular
and PCS competitors have access to more licensed spectrum than the 10 MHz
licensed to Sprint PCS and used by us in our Sprint PCS territory. In addition,
any competitive difficulties that Sprint PCS may experience could also harm our
competitive position and success.

<P><I>The technology we use has limitations and could become obsolete</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We employ digital wireless communications technology selected by Sprint
PCS for its network. Code division multiple access, CDMA, technology is a
relatively new technology. CDMA may not provide the advantages expected by
Sprint PCS. If another technology becomes the preferred industry standard, we
may be at a competitive disadvantage and competitive pressures may require
Sprint PCS to change its digital technology which, in turn, may require us to
make changes at substantially increased costs. We may not be able to respond to
such pressures and implement new technology on a timely basis, or at an
acceptable cost.

<P><I>If Sprint PCS customers are not able to roam instantaneously or efficiently
onto other wireless networks, prospective customers could be deterred from
subscribing for our Sprint PCS services</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sprint PCS network operates at a different frequency and uses or may
use a different technology than many analog cellular and other digital systems.
To access another provider&#146;s analog cellular or digital system outside of the
Sprint PCS network, a Sprint PCS customer is required to utilize a
dual-band/dual-mode handset compatible with that provider&#146;s system. Generally,
because dual-band/dual-mode handsets incorporate two radios rather than
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<P> one, they are more expensive and are larger and heavier than
single-band/single-mode handsets. The Sprint PCS network does not allow for
call hand-off between the Sprint PCS network and another wireless network, thus
requiring a customer to end a call in progress and initiate a new call when
leaving the Sprint PCS network and entering another wireless network. In
addition, the quality of the service provided by a network provider during a
roaming call may not approximate the quality of the service provided by Sprint
PCS. The price of a roaming call may not be competitive with prices of other
wireless companies for roaming calls, and Sprint PCS customers may not be able
to use Sprint PCS advanced features, such as voicemail notification, while
roaming.

<P><I>Our territory has limited licensed spectrum, and this may affect the quality of
our service, which could impair our ability to attract or retain customers</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sprint PCS has licenses covering only 10 MHz in our territory. In the
future, as our customers in those areas increase in number, this limited
licensed spectrum may not be able to accommodate increases in call volume and
may lead to increased dropped calls and may limit our ability to offer enhanced
services.

<P><I>Non-renewal or revocation by the FCC of the Sprint PCS licenses would
significantly harm our business</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PCS licenses are subject to renewal and revocation. Sprint PCS&#146; licenses
in our territory will expire in 2007 but may be renewed for additional ten year
terms. There may be opposition to renewal of Sprint PCS&#146; licenses upon their
expiration and the Sprint PCS licenses may not be renewed. The FCC has adopted
specific standards to apply to PCS license renewals. Failure by Sprint PCS to
comply with these standards in our territory could cause revocation or
forfeiture of the Sprint PCS licenses for our territory or the imposition of
fines on Sprint PCS by the FCC.

<P><I>If we lose the right to install our equipment on wireless towers owned by other
carriers or fail to obtain zoning approval for our cell sites, we may have to
rebuild our network</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;More than 99% of our cell sites are co-located on facilities shared with
one or more wireless providers. We co-locate a large portion of our sites on
facilities that are owned by only a few tower companies. If our master
collocation agreements with one of those tower companies were to terminate, or
if one of those tower companies were otherwise not able to support our use of
its tower sites, we would have to find new sites, and if the equipment had
already been installed, we might have to rebuild that portion of our network.
Some of the cell sites are likely to require us to obtain zoning variances or
other local governmental or third party approvals or permits. We may also have
to make changes to our radio frequency design as a result of difficulties in
the site acquisition process.

<P><I>The loss of our officers and skilled employees that we depend upon to operate
our business could reduce our ability to offer Sprint PCS products and services</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The loss of one or more key officers could impair our ability to offer
Sprint PCS products and services. Our business is managed by a small number of
executive officers. We believe that our future success will also depend in
large part on our continued ability to attract and retain highly qualified
technical and management personnel. We believe that there is and will continue
to be intense competition for qualified personnel in the PCS equipment and
services industry as the PCS market continues to develop. We may not be
successful in retaining our key personnel or in attracting and retaining other
highly qualified technical and management personnel. We currently have &#147;key
man&#148; life insurance for our chief executive officer.

<P><I>We may not achieve or sustain operating profitability or positive cash flow
from operating activities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to incur significant operating losses and to generate
significant negative cash flow from operating activities until the third
quarter of fiscal year 2002 while we develop and construct our PCS network and
build our customer base. Our operating profitability will depend upon many
factors, including, among others, our ability to market our services, achieve
our projected market penetration and manage customer turnover rates. If we do
not achieve and maintain operating profitability and positive cash flow from
operating activities on a timely basis, we may not be able to meet our debt
service requirements.

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<P><I>Unauthorized use of our Sprint PCS network could disrupt our business</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will likely incur costs associated with the unauthorized use of our PCS
network, including administrative and capital costs associated with detecting,
monitoring and reducing the incidence of fraud. Fraud impacts interconnection
costs, capacity costs, administrative costs, fraud prevention costs and
payments to other carriers for unbillable fraudulent roaming.

<P><I>Our agreements with Sprint PCS, our certificate of incorporation and our bylaws
include provisions that may discourage, delay and/or restrict any sale of our
operating assets or common stock to the possible detriment of our stockholders</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our agreements with Sprint PCS restrict our ability to sell our operating
assets and common stock. Generally, Sprint PCS must approve a change of control
of our ownership and consent to any assignment of our agreements with Sprint
PCS. The agreements also give Sprint PCS a right of first refusal if we decide
to sell our operating assets to a third party. These restrictions, among other
things, could discourage, delay or make more difficult any sale of our
operating assets or common stock. This could have a material adverse effect on
the value of our common stock and could reduce the price of our company in the
event of a sale. Provisions of our certificate of incorporation and bylaws
could also operate to discourage, delay or make more difficult a change in
control of our company. Our certificate of incorporation, which contains a
provision acknowledging the terms under the management agreement and a consent
and agreement pursuant to which Sprint PCS may buy our operating assets, has
been duly authorized and approved by our board of directors and our
stockholders. This provision is intended to permit the sale of our operating
assets pursuant to the terms of the management agreement or a consent and
agreement with our lenders without further stockholder approval.

<P align="left"><B>Industry Risks</B>

<P><I>Wireless service providers generally experience a high rate of customer
turnover which would increase our costs of operations and reduce our revenue</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our strategy to reduce customer turnover, commonly known as churn, may not
be successful. Our average monthly churn (net of 30&nbsp;day returns) for the three
months ended March&nbsp;31, 2001 was 2.6%. As a result of customer turnover, we
lose the revenue attributable to these customers and increase the costs of
establishing and growing our customer base. The rate of customer turnover may
be the result of several factors, including network coverage; reliability
issues such as blocked calls, dropped calls and handset problems; customer care
concerns; non-use of phones; non-use of customer contracts; pricing;
involuntary termination due to non-payment of services and other competitive
factors.

<P><I>Wireless providers offering services based on lower cost structures may reduce
demand for PCS</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other wireless providers enjoy economies of scale that can result in a
lower cost structure for providing wireless services. Rapid technological
changes and improvements in the telecommunications market could lower other
wireless providers&#146; cost structures in the future. These factors could reduce
demand for PCS because of competitors&#146; ability to provide other wireless
services at a lower price. There is also uncertainty as to the extent of
customer demand as well as the extent to which airtime and monthly recurring
charges may continue to decline. As a result, our future prospects, those of
our industry, and the success of PCS and other competitive services, remain
uncertain.

<P><I>Alternative technologies and current uncertainties in the wireless market may
reduce demand for PCS</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technological advances and industry changes could cause the technology
used on our network to become obsolete. We may not be able to respond to such
changes and implement new technology on a timely basis, or at an acceptable
cost.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The wireless telecommunications industry is experiencing significant
technological change, as evidenced by the increasing pace of digital upgrades
in existing analog wireless systems, evolving industry standards, ongoing
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<P> improvements in the capacity and quality of digital technology, shorter
development cycles for new products and enhancements and changes in end-user
requirements and preferences.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we were unable to keep pace with these technological changes or changes
in the telecommunications market based on the effects of consolidation from the
Telecommunications Act of 1996 or from the uncertainty of future government
regulation, the technology used on our network or our current business strategy
may become obsolete. In addition, wireless carriers are seeking to implement a
new &#147;third generation,&#148; or &#147;3G,&#148; technology throughout the industry. There can
be no assurance that we can implement the new 3G technology successfully on a
cost-effective basis.

<P><I>Regulation by government agencies may increase our costs of providing service
or require us to change our services, either of which could impair our
financial performance</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The licensing, construction, use, operation, sale and interconnection
arrangements of wireless telecommunications systems are regulated to varying
degrees by the FCC, the Federal Aviation Administration and, depending on the
jurisdiction, state and local regulatory agencies and legislative bodies.
Adverse decisions regarding these regulatory requirements could negatively
impact our operations and our cost of doing business. Our Sprint PCS
agreements reflect an affiliation that the parties believe meets the FCC
requirements for licensee control of licensed spectrum. If the FCC were to
determine that our Sprint PCS agreements need to be modified to increase the
level of licensee control, we have agreed with Sprint PCS to use our best
efforts to modify the agreements as necessary to cause the agreements to comply
with applicable law and to preserve to the extent possible the economic
arrangements set forth in the Sprint PCS agreements. If the Sprint PCS
agreements cannot be modified, the Sprint PCS agreements may be terminated
pursuant to their terms.

<P><I>Use of hand-held phones may pose health risks, which could result in the
reduced use of our services or liability for personal injury claims</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Media reports have suggested that certain radio frequency emissions from
wireless handsets may be linked to various health problems, including cancer,
and may interfere with various electronic medical devices, including hearing
aids and pacemakers. Concerns over radio frequency emissions may discourage
use of wireless handsets or expose us to potential litigation. Any resulting
decrease in demand for our services, or costs of litigation and damage awards,
could impair our ability to profitably operate our business.

<P><I>Use of hand-held phones while operating a vehicle may pose public safety risks,
which could result in increased regulation by government agencies which could
limit or result in the reduced use of our services</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The use of hand-held phones while operating a moving vehicle may pose
public safety risks. Several local jurisdictions in the United States, have
proposed laws to limit or eliminate the use of hand-held phones while operating
a moving vehicle. Such laws, if enacted, could result in the reduced use of
our services which would impair our ability to profitably operate our business.

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<P align="left"><B>ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K</B>

<CENTER>
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        <TD width="8%">&nbsp;</TD>
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        <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><I>(a)</I></TD>
        <TD></TD>
        <TD  align="left" valign="top">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</I></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD  align="left" valign="top">
None</TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><I>(b)</I></TD>
        <TD></TD>
        <TD  align="left" valign="top">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reports on Form&nbsp;8-K</I></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD  align="left" valign="top">
On February&nbsp;8, 2001, the Company filed a Current Report on Form&nbsp;8-K with
the Securities and Exchange Commission that provided information under
Item&nbsp;9 &#150; Regulation&nbsp;FD Disclosure, which is not incorporated by
reference.</TD>
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        <TD>&nbsp;</TD>
</TR>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned officer thereunto duly authorized.

<CENTER>
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        <TD width="1%">&nbsp;</TD>
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        <TD width="23%">&nbsp;</TD>
        <TD width="24%">&nbsp;</TD>
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        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
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        <TD></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD  align="left" valign="top">AirGate PCS, Inc.</TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD align="right" valign="top">By:</TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD  colspan="3" align="left" valign="top">/s/ Alan B. Catherall</TD>
</TR>

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        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>

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        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD align="left" valign="top">Name:</TD>
        <TD  align="left" valign="top">Alan B. Catherall</TD>
</TR>
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        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD align="left" valign="top">Title:</TD>
        <TD  align="left" valign="top">Chief Financial Officer<BR><I>(Duly Authorized Officer)</I></TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR><TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
        <TD valign="top">Date:</TD>
        <TD></TD>
        <TD align="right" valign="top">May&nbsp;14, 2001</TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD  colspan="3" align="left" valign="top">/s/ Alan B. Catherall</TD>
</TR>
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        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
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        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD valign="top"></TD>
        <TD></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD  align="left" valign="top">Alan B. Catherall</TD>
</TR>
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        <TD valign="top"></TD>
        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
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        <TD></TD>
        <TD nowrap align="right" valign="top"></TD>
        <TD align="right" valign="top"></TD>
        <TD valign="top"></TD>
        <TD  align="left" valign="top">Chief Financial Officer<BR><I>(Principal Financial and</I><BR><I>Chief Accounting Officer)</I></TD>
</TR>
</TABLE>
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<P align="right"><I>Page 25</I>

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