Filed pursuant to Rule 424(b)(3)
Registration No. 333-123383

PROSPECTUS

$125,000,000

Horizon PCS, Inc.
(as successor by merger to Horizon PCS Escrow Company)

OFFER TO EXCHANGE
Any and All of its Outstanding 11 3/8% Senior Notes due 2012
For Registered 11 3/8% Senior Notes due 2012

The Exchange Offer

-	The exchange offer will expire at 5:00 p.m., New York City time, on May 31, 2005, unless extended.
-	The exchange offer is subject to the condition that the exchange offer not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.
-	You may withdraw tenders of outstanding notes at any time before the exchange offer expires.
-	We will exchange all outstanding notes that are validly tendered and not withdrawn before the exchange offer expires for an equal principal amount of registered notes. We will issue the registered notes promptly after the exchange offer expires.
-	We believe that the exchange of outstanding notes will not be a taxable event for United States federal income tax purposes.
-	We will not receive any proceeds from the exchange offer.
-	The registered notes will not be listed on any securities exchange.

Registered Notes

-	The terms of the registered notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that we have registered the registered notes with the Securities and Exchange Commission. In addition, the registered notes will not be subject to the transfer restrictions applicable to the outstanding notes.
-	The registered notes, together with any outstanding notes not exchanged in the exchange offer, will constitute a single class of debt securities under the indenture.

-	Interest on the registered notes will accrue from the date of original issuance, or from the most recent date interest has been paid, and is payable semi-annually on January 15 and July 15, beginning on January 15, 2005.
-	Each broker-dealer that receives the registered notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the registered notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of the registered notes received in exchange for outstanding notes where the outstanding notes were acquired by the broker-dealer as a result of market-making activities or other trading activities. We have agreed that for a period of 180 days after the expiration of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”
-	The notes will mature on July 15, 2012.

               Before participating in the exchange offer, please refer to the section in this prospectus entitled “Risk Factors” beginning on page 15.

               Neither the SEC nor any state securities commission has approved or disapproved of the registered notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Date of this Prospectus is April 29, 2005

RISK FACTORS

     You should carefully consider the following risk factors in addition to the other information contained in this prospectus before electing to receive the registered notes. The forward-looking statements included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere herein should be read in conjunction with the cautionary statements set forth below and elsewhere in this prospectus.

Risks Related to the Exchange Offer

     You may not be able to sell your outstanding senior notes if you do not exchange them for registered senior notes in the exchange offer.

     If you do not exchange your outstanding senior notes for registered senior notes in the exchange offer, your outstanding notes will continue to be subject to the restrictions on transfer as stated in the legend on the outstanding senior notes. In general, you may not offer or sell the outstanding senior notes unless they are:

	•	registered under the Securities Act of 1933;
	•	offered or sold pursuant to an exemption from the Securities Act of 1933 and applicable state securities laws; or
	•	offered or sold in a transaction not subject to the Securities Act of 1933 and applicable state securities laws.

     We do not currently anticipate that we will register the outstanding senior notes under the Securities Act of 1933; thus, if you do not participate in this exchange offer, your notes will be restricted. In addition, holders who do not tender their outstanding notes, except for certain instances involving the initial purchasers or holders of outstanding notes who are not eligible to participate in the exchange offer or who do not receive freely transferable registered notes pursuant to the exchange offer, will not have any further registration rights under the registration rights agreement or otherwise and will not have rights to receive liquidated damages as provided in the registration rights agreement.

     Some persons who participate in this exchange offer must deliver a prospectus in connection with resales of the registered notes.

     Based on no-action letters issued by the staff of the SEC to third parties, we believe that you may offer for resale, resell or otherwise transfer the registered notes without compliance with the registration and prospectus delivery requirements of the Securities Act of 1933. However, in some instances described in this prospectus under “The Exchange Offer,” you will remain obligated to comply with the prospectus delivery requirements of the Securities Act of 1933 to transfer your registered notes. In these instances, if you transfer any registered note without delivering a prospectus meeting the requirements of the Securities Act of 1933 or without an exemption from registration of your registered notes under the Securities Act of 1933, you may incur liability under the Securities Act. We do not and will not assume, or indemnify you against, this liability.

     The market for outstanding notes may be significantly more limited after the exchange offer.

     If outstanding notes are tendered and accepted for exchange pursuant to the exchange offer, the trading market for outstanding notes that remain outstanding may be significantly more limited. As a result, the liquidity of the outstanding notes not tendered for exchange may be adversely affected. The extent of the market for outstanding notes and the availability of price quotations would depend upon a number of factors, including the number of holders of unexchanged outstanding notes after the exchange offer and the interest of securities firms in maintaining a market in the outstanding notes. An issue of securities with a similar outstanding market value available for trading, which is called the “float,” may command a lower price than would be comparable to an issue of securities with a greater float. As a result, the market price for outstanding notes that are not exchanged in the exchange offer may be affected adversely as outstanding notes exchanged pursuant to the exchange offer reduce the float. The reduced float also may make the trading price of the outstanding notes that are not exchanged more volatile.

15

     Restrictions on the exchange offer.

     Issuance of registered notes in exchange for outstanding notes pursuant to the exchange offer will be made only after timely receipt by the exchange agent of a properly completed and duly executed letter of transmittal, or an agent’s message in lieu thereof, including all other documents required by such letter of transmittal. Therefore, holders of outstanding notes desiring to tender such outstanding notes in exchange for registered notes should allow sufficient time to ensure timely delivery. We and the exchange agent are under no duty to give notification of defects or irregularities with respect to the tenders of outstanding notes for exchange. Each broker-dealer that receives registered notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such registered notes. See “The Exchange Offer—Resales of the Registered Notes” and “Plan of Distribution.”

Risks Related to the Registered Notes

     The terms of our debt place restrictions on us and our subsidiaries, which may limit our operating flexibility.

     The indenture that governs the senior notes imposes material operating and financial restrictions on us and our subsidiaries. These restrictions may limit our ability and the ability of our subsidiaries to, among other things:

	•	incur additional debt or, in the case of our restricted subsidiaries, issue capital stock to a third party;
	•	pay dividends, redeem capital stock or make other restricted payments or investments;
	•	create liens on assets;
	•	merge, consolidate or dispose of assets;
	•	enter into transactions with affiliates;
	•	place restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; and
	•	change our lines of business.

     These restrictions could limit our ability to obtain debt financing, repurchase stock, refinance or pay principal or interest on our outstanding debt, complete acquisitions for cash or debt or react to changes in our operating environment. Any future debt that we incur may contain similar or more restrictive covenants.

     We are a holding company and conduct all of our operations through our subsidiaries.

     The registered notes offered hereby are unsecured obligations of us. We are a holding company that derives all of our operating income from our subsidiaries. We are dependent on the earnings and cash flows of our subsidiaries to meet our obligations with respect to the registered notes. The terms of future indebtedness of our subsidiaries and the laws of the jurisdictions under which those subsidiaries are organized may limit the payment of dividends and other distributions to us.

     Federal and state statutes may allow courts, under specific circumstances, to void the guarantees of the senior notes by our subsidiaries, and thus you may not have the right to receive any money pursuant to the guarantees.

     Although the subsidiary guarantees of the senior notes provide you with a claim against the assets of the applicable subsidiary guarantor, creditors of a bankrupt subsidiary guarantor may challenge the guarantee. If a challenge were upheld, then the applicable guarantee would be invalid and unenforceable and junior to all creditors, including trade creditors, of that subsidiary guarantor.

     The creditors of a bankrupt subsidiary guarantor could challenge a guarantee on the ground that the guarantee constituted a fraudulent conveyance under bankruptcy laws or applicable state fraudulent conveyance law. If a court

16

were to rule that the guarantee constituted a fraudulent conveyance, then the court could void the obligations under the guarantee or subordinate the guarantee to other debt of the subsidiary guarantor or take other action detrimental to holders of the senior notes. In addition, any of the guarantees could be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of our subsidiary that provided the guarantee, the obligations of the applicable subsidiary guarantor were incurred for less than fair consideration.

     We may be unable to repurchase the senior notes upon a change of control.

     Upon the occurrence of a change of control event of Horizon PCS, as defined in the indenture governing the senior notes offered hereby, we would be required to offer to repurchase the senior notes for cash at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest and liquidated damages, if any. We may not have sufficient funds to repurchase the senior notes and satisfy other payment obligations that could be triggered upon a change of control. If we do not have sufficient financial resources to effect a change of control offer, we would be required to seek additional financing from outside sources to repurchase the senior notes. Financing may not be available to us on satisfactory terms, or at all. The change of control provisions of the indenture that will govern the senior notes offered hereby will not protect you if we engage in a reorganization, restructuring, merger or similar transaction, including a highly leveraged transaction, unless the transaction constitutes a change of control for purposes of the indenture, even if such transaction could adversely affect the holders of the senior notes.

     Debt that we may incur in the future may contain provisions prohibiting transactions that would constitute a change of control or requiring such debt to be repurchased upon a change of control. Moreover, the exercise by holders of the senior notes of their right to require us to repurchase their notes could cause a default under the other debt, even if the change of control itself does not result in a default under such debt, due to the financial effect of such repurchase on us.

     No public market exists for the senior notes and there are restrictions on your ability to sell the senior notes which could reduce their value.

     The registered notes are a new issue of securities for us for which there is currently no public market. We do not intend to list the registered notes on any national securities exchange or automated quotation system. Accordingly, no market for the registered notes may develop, and any market that develops may not last. If the registered notes are traded, they may trade at a discount from their face value, depending on prevailing interest rates, the market for similar securities, our performance and other factors. To the extent that an active trading market does not develop, you may not be able to resell your registered notes at their fair market value or at all.

     To the extent that not all of the outstanding notes are exchanged for registered notes, the trading market for the outstanding notes could be adversely affected due to the limited amount of outstanding notes that remain outstanding following the exchange offer. Generally, when there are fewer outstanding securities of an issue, there is less demand to purchase that security, which results in a lower price for the security. See “Plan of Distribution” and “The Exchange Offer” for further information regarding the distribution of the registered notes and the consequences of failure to participate in the exchange offer.

     Future trading prices of the senior notes will depend on many factors, including our operating performance and financial condition, prevailing interest rates and the market for similar securities. If a market for the senior notes does not develop, you will not be able to resell your senior notes for an extended period of time. Although we are obligated, subject to some exceptions, to exchange the senior notes for senior notes that will be registered with the SEC, we may not be able to comply with this obligation. Because the senior notes offered hereby have not been registered under the Securities Act, any state securities laws or the laws of any other jurisdiction, the senior notes are subject to additional restrictions on transfer. Absent such registration, the senior notes may be offered or sold only in transactions that are not subject to or that are exempt from the registration requirements of the Securities Act and other applicable securities laws.

17

     The market price for the senior notes may be volatile.

     Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the senior notes. The market for the senior notes, if any, may be subject to similar disruptions. Any such disruption may adversely affect the value of your senior notes.

     Because the notes and guarantees will be unsecured, if we borrow money on a senior secured basis in the future, you may not be fully repaid under the notes or guarantees if we become insolvent.

     The senior notes give us the right to borrow on a senior secured basis the greater of $30.0 million or an amount equal to 1.5 times our consolidated cash flow for a trailing four-quarter period. If we become insolvent, you may be repaid only after our obligations under any future senior secured credit facility are satisfied. It is likely that any such future senior secured credit facility would be secured by liens on substantially all of our assets and those of our current and future subsidiaries. If we were to default under any such future senior secured credit facility, the lenders could foreclose on the collateral regardless of any default with respect to the senior notes. These assets would first be used to repay in full all amounts outstanding under such senior secured credit facility.

     Certain business combinations with PCS Affiliates of Sprint may not result in a change of control that could obligate us to repurchase the senior notes.

     Under the senior notes, certain business combinations that might otherwise constitute a change of control that triggers your repurchase rights, would not trigger the repurchase rights if the business combination involved Sprint PCS or another Sprint PCS Affiliate. If the iPCS merger is consummated, it is not expected to trigger such repurchase rights.

Risks Related to Our Business, Strategy and Operations

      iPCS may fail to realize the anticipated benefits of the contemplated merger between iPCS and Horizon PCS, which could adversely affect the value of iPCS’ stock.

      The success of the merger will depend, in part, on the ability of iPCS, as the surviving entity, to realize the anticipated growth opportunities, economies of scale and other benefits from combining the business of iPCS with the business of Horizon PCS. To realize the anticipated benefits of this combination, the combined company’s management team must develop strategies and implement a business plan that will:

	•	effectively manage the networks and markets of iPCS and Horizon PCS;
	•	effectively manage both companies’ cash for use in financing future growth and working capital needs;
	•	effectively manage the marketing and sales of the services of iPCS and Horizon PCS;
	•	successfully retain and attract key employees of the combined company, including management, during a period of transition and in light of the competitive employment market; and
	•	maintain adequate focus on existing businesses and operations while working to integrate the two companies.

      The diversion of the combined company’s management’s attention from ongoing operations and any difficulties encountered in the transition and integration process could have a material adverse effect on our financial condition and results of operations. If iPCS does not realize economies of scale and other anticipated benefits as a result of the merger, the value of iPCS common stock, which our stockholders not exercising appraisal rights under the Delaware General Corporation Law of the State of Delaware will receive, may decline. There is no assurance that combining the businesses of iPCS and Horizon PCS, even if achieved in an efficient, effective and timely manner, will result in combined results of operations and financial conditions superior to what each of iPCS and Horizon PCS could have achieved independently.

      Failure to complete the merger could negatively impact our stock price and our future business and financial results.

      Although iPCS and Horizon PCS have agreed to use their reasonable best efforts to consummate the merger, there is no assurance the merger will be consummated. If the merger is not consummated for any reason, we will be subject to several risks, including, but not limited to, the following:

	•	being required, under certain circumstances, to pay iPCS a termination fee of $7.0 million;
	•	having incurred certain costs relating to the merger that are payable whether or not the merger is completed, including legal, accounting, financial advisor and printing fees; and
	•	having had the focus of our management directed toward the merger and integration planning instead of our core business and other opportunities that could have been beneficial to us.

      In addition, we would not realize any of the expected benefits of having completed the merger. If the merger is not completed, we cannot assure our stockholders that these risks will not materialize or materially adversely affect our business, financial results, financial condition and stock price.

We will incur significant costs associated with the merger.

      We will incur significant direct transaction costs associated with the merger, which we will expense as incurred.

      Because our stockholders will not be providing iPCS any indemnification following the merger, the combined company will become responsible for any of our undisclosed liabilities.

      We made certain representations and warranties to iPCS in the merger agreement concerning our business and operations. However, the merger agreement does not provide iPCS with any contractual indemnification from our stockholders following the merger for any breaches of our representations and warranties or any failure by us to comply with our obligations under the merger agreement. As a result, the combined company will become responsible for any of our liabilities, whether known or unknown. Any such liabilities for which the combined company becomes responsible may materially impact iPCS’ financial results and results of operations.

     Our substantial leverage could adversely affect our ability to raise additional capital if needed and to service our debt.

     We are highly leveraged. As of December 31, 2004, our total outstanding long-term debt was approximately $125.0 million. As of that date, such indebtedness represented approximately 49% of our total capitalization. In addition, if the merger with iPCS is consummated, iPCS’ total outstanding long-term indebtedness including capital lease obligations as of December 31, 2004, would have been $290.4 million. The indenture that governs our senior notes (which iPCS would assume in the contemplated merger) permits us and our subsidiaries to incur additional indebtedness subject to certain limitations. The incurrence of additional indebtedness could further exacerbate the risks associated with our leverage. If we incur additional indebtedness that ranks equally with the senior notes, the holders of that debt will be entitled to share ratably with the holders of the senior notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of our company.

     Our substantial indebtedness could adversely affect our financial health by, among other things:

	•	increasing our vulnerability to adverse economic and industry conditions;
	•	limiting our ability to obtain any additional financing we may need to operate, develop and expand our business;
	•	limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
	•	requiring us to dedicate a substantial portion of any cash flow from our operating activities to service our debt, which reduces the funds available for operations and future business opportunities; and
	•	potentially making us more highly leveraged than our competitors, which could decrease our ability to compete in our industry.

     The ability to make payments on our debt will depend upon our future operating performance and ability to generate cash, which are subject to general economic and competitive conditions and to financial, business and other factors, many of which we cannot control. If the cash flow from our operating activities is insufficient, we may take actions, such as delaying or reducing capital expenditures, attempting to restructure or refinance our debt, selling assets or operations or seeking additional equity capital. Any or all of these actions may not be sufficient to allow us

18

to service our debt obligations. Further, we may be unable to take any of these actions on satisfactory terms in a timely manner or at all. We may need to refinance all or a portion of our indebtedness, including the senior notes, on or before maturity. We may not be able to refinance any of our indebtedness on commercially reasonable terms, or at all. The indenture that governs the senior notes limits our ability to take several of these actions. Our failure to generate sufficient funds to pay our debts or to successfully undertake any of these actions could, among other things, materially adversely affect the market value of the senior notes and our ability to repay our obligations under the senior notes. The indenture that governs the senior notes permits us and our subsidiaries to incur additional indebtedness subject to certain limitations, which could further exacerbate the risks associated with our leverage.

     We recently emerged from bankruptcy and we have a history of net losses. We may incur additional losses in the future and our operating results could fluctuate significantly on a quarterly and annual basis. As a result, we may be unable to pay amounts due under the senior notes and you could lose all or part of your investment.

     We emerged from bankruptcy on October 1, 2004. We sustained net losses attributed to common stockholders of $24.0 million for the three months ended December 31, 2004. Our earnings were insufficient to cover fixed charges by $24.1 million for the three months ended December 31, 2004. Our future operating profitability and cash flow from operating activities will depend upon many factors, including, among others, our ability to market Sprint PCS products and services, achieve projected market penetration and manage subscriber turnover rates. If we do not achieve and maintain operating profitability and positive cash flow from operating activities, we may be unable to make interest or principal payments on the senior notes and you could lose all or part of your investment.

     In addition, our future operating results and cash flow will be subject to quarterly and annual fluctuations due to many factors, some of which are outside our control. These factors include increased costs we may incur in connection with the further development, expansion and upgrade of our wireless network and fluctuations in the demands for our services. We may not be able to achieve or sustain profitability. To the extent our quarterly or annual results of operations fluctuate significantly, we will be unable to pay amounts due under the senior notes and you could lose all or part of your investment.

     It is our strategy to resume building our subscriber base, which may negatively affect our near-term profitability.

     During our bankruptcy proceedings, we experienced overall reduced net subscriber growth as compared to prior periods. We limited new subscriber activation volume to ensure adequate liquidity to meet our financial obligations. As a means to conserve cash in 2003, we closed 20 company-owned retail stores and cancelled nine agreements with local third-party distributors, one of which accounted for 52 stores throughout our markets, thereby reducing our retail presence in a number of our markets. After October 1, 2004, the effective date of our Plan of Reorganization, we further reduced our stores to nine full service retail stores and two customer service stores. As we seek to resume building our subscriber base consistent with our new strategy, we will incur significant up-front subscriber acquisition expenses, which initially will result in reduced levels of net income and cash flow from operating activities as compared to our most recent prior periods.

     Our financial condition or results of operations will not be comparable to the financial condition or results of operations reflected in our historical financial statements.

     As a result of the Reorganization, we are operating our existing business under a new capital structure. In addition, we are subject to fresh-start accounting principles, and we no longer operate in the NTELOS markets. As required by fresh-start accounting, our assets have been recorded at fair value, with the enterprise value determined in connection with the Reorganization. Accordingly, our financial condition and results of operations from and after the effective date of the Plan of Reorganization are not comparable to the financial condition or results of operations reflected in our historical financial statements for periods prior to that date included elsewhere in this prospectus.

     The bankruptcy proceeding may adversely affect our ability to engage in transactions.

     Our past inability to meet our obligations that resulted in our bankruptcy filing, or the perception that we may not be able to meet our obligations since our emergence from bankruptcy, could adversely affect our relationships

19

with third parties, as well as our ability to retain or attract high-quality employees. For example, we may have difficulty entering into leases and other agreements related to our operations because of our bankruptcy filing.

     If we receive less revenues or incur more fees than we anticipate for PCS roaming from Sprint PCS, our results of operations may be negatively affected.

     We are paid a fee from Sprint PCS or Sprint PCS Affiliates for every voice minute and data kilobit that Sprint PCS’ or Sprint PCS Affiliates’ subscribers use on our network. Similarly, we pay a fee to Sprint PCS or another Sprint PCS Affiliate for every voice minute and data kilobit that our subscribers use on the Sprint PCS network outside our territory. The per minute and per kilobit rates that we receive from and pay to Sprint PCS or another Sprint PCS Affiliate are the same. Under the recent addendum to our affiliation agreements with Sprint PCS, we agreed with Sprint PCS that the voice rate would be $0.058 per minute until December 31, 2006, except with respect to several of our markets which, under our affiliation agreements with Sprint PCS, are subject to an exception that fixes the reciprocal voice rate at $0.10 per voice minute. Sprint PCS subscribers based in our territory may spend more time outside our territory than we anticipate, and wireless subscribers from outside our territory may spend less time in our territory or may use our services less than we anticipate. As a result, we may receive less Sprint PCS roaming revenue and/or have to pay more in Sprint PCS roaming fees than we collect in Sprint PCS roaming revenue.

     Roaming revenue from subscribers of wireless communications providers other than Sprint PCS and its PCS Affiliates may decline in the future.

     We derive a significant amount of roaming revenue from wireless communications providers other than Sprint PCS and PCS Affiliates of Sprint for permitting their subscribers to roam on our network when they are in our territory. For the period from January 1, 2004 through September 30, 2004, and the period from October 1, 2004 through December 31, 2004, approximately 14% and 19%, respectively, of our roaming revenue was attributable to revenue derived from these other wireless communications providers. We do not have agreements directly with these providers. Instead, we rely on roaming arrangements that Sprint PCS has negotiated. Sprint PCS may negotiate roaming arrangements with other wireless communications providers at rates that are lower than current rates, resulting in a decrease in our roaming revenue. If the rates offered by Sprint PCS are not attractive, these other wireless communications providers may decide to build-out their own networks in our territory and compete with us directly or enter into roaming arrangements with our competitors who also have networks in our territory. The loss of all or a significant portion of this roaming revenue would have a material adverse effect on our financial condition and operating results. Roaming revenue from subscribers of wireless communications providers other than Sprint PCS and PCS Affiliates of Sprint may also decline as a result of decreased roaming traffic in our territory if our quality of service does not continue to meet designated technical and quality standards or if we are unable to control fraudulent use.

     Our roaming arrangements may not be competitive with other wireless communications providers, which may restrict our ability to attract and retain subscribers and thus may adversely affect our operations.

     We do not have agreements directly with other wireless service providers for roaming coverage outside our territory. Instead, we rely on roaming arrangements that Sprint PCS has negotiated with other wireless communications providers for coverage in these areas. Some of the risks related to these arrangements include:

	•	the arrangements may not benefit us in the same manner that they benefit Sprint PCS;
	•	the quality of the service provided by another 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 charged by other wireless companies for roaming calls;
	•	subscribers must end a call in progress and initiate a new call when leaving the Sprint PCS network and entering another wireless network;

20

	•	Sprint PCS subscribers may not be able to use advanced PCS features from Sprint PCS, such as PCS Vision, while roaming;
	•	Sprint PCS or the carriers providing the service may not be able to provide us with accurate billing information on a timely basis; and
	•	if Sprint PCS subscribers do not have a similar wireless experience as when they are on the Sprint PCS network, we may lose current subscribers and Sprint PCS products and services may be less attractive to potential new subscribers.

     Unauthorized use of, or interference with, the Sprint PCS network in our territory could disrupt our service and increase our costs.

     We may incur costs associated with the unauthorized use of the Sprint PCS network in our territory, including administrative and capital costs associated with detecting, monitoring and reducing the incidence of fraud. Fraudulent use of our network may impact interconnection costs, capacity costs, administrative costs, fraud prevention costs and payments to other carriers for fraudulent roaming.

     If we lose the right to install our equipment on wireless towers or are unable to renew expiring leases for wireless towers on favorable terms, or at all, our business and results of operations could be adversely impacted.

     All of our base stations are installed on leased or licensed tower facilities. A large portion of these leased or licensed tower sites are owned or leased by a few tower companies. If a master agreement with one of these tower companies were to terminate, or if one of these tower companies were unable to support the use of its tower sites by us, we would have to find new sites or may be required to rebuild the affected portion of our network. In addition, the concentration of our tower leases with a limited number of tower companies could adversely affect our results of operations and financial condition if any of our operating subsidiaries are unable to renew their expiring leases with these tower companies either on favorable terms, or at all. If any of the tower leasing companies that we do business with should experience severe financial difficulties, or file for bankruptcy protection, our ability to use our towers could be adversely affected. That, in turn, would adversely affect our revenues and financial condition if a material number of towers were involved.

     We depend on other telecommunications companies for some services that, if delayed or interrupted, could delay our expected increases in subscribers and revenues.

     We depend on other telecommunications companies to provide facilities and transport to interconnect portions of our network and to connect our network with the landline telephone system. Without these services, we could not offer Sprint PCS services to our subscribers in some areas. From time to time, we have experienced delays in obtaining facilities and transport from some of these companies, and in obtaining local telephone numbers for use by our subscribers, which are sometimes in short supply, and we may continue to experience delays and interruptions in our network operations and our business may suffer. Delays or interruptions could also result in a breach of our affiliation agreements with Sprint PCS, subjecting these agreements to potential termination by Sprint PCS.

     The technology that we use may become obsolete, which would limit our ability to compete effectively within the wireless telecommunications industry which would negatively affect our operating results.

     The wireless telecommunications industry is experiencing significant technological change. We employ CDMA (code division multiple access), a digital spread-spectrum wireless technology that allows a large number of users to access a single frequency band by assigning a code to all transmission bits, sending a scrambled transmission of the encoded information over the air and reassembling the speech and data into its original format, which is the digital wireless communications technology selected by Sprint PCS and certain other carriers for their nationwide networks. Other carriers employ other technologies, such as TDMA (time division multiple access), a technology used in digital cellular telephone communication that divides each cellular channel into three time slots in order to increase the amount of data that can be carried, GSM (global system for mobile communication), a technology that digitizes and compresses data, then sends it down a channel with other streams of user data, each in its own time slot and iDEN (integrated digital enhanced network), a technology which includes the capabilities of a digital cellular

21

telephone, two-way radio, alphanumeric pager, and data/fax modem in a single network, for their nationwide networks. If another technology becomes the preferred industry standard, we would be at a competitive disadvantage and competitive pressures may require Sprint PCS to change its digital technology, which in turn could require us to make changes to our network at substantial cost. We may be unable to respond to these pressures and implement new technology on a timely basis or at an acceptable cost. Additionally, our substantial indebtedness, coupled with our recent emergence from bankruptcy, could limit our ability to obtain any additional financing that we may need in order to make changes to our network. This, in turn, may require us to dedicate a substantial portion of any cash flow from our operating activities to make such changes, thereby reducing funds available for future marketing activities and debt repayment. We may also lose subscribers if we fail to implement significant technological changes evidenced by the development and commercial acceptance of advanced wireless data services, shorter development cycles for new products and enhancements and changes in end-user requirements and preferences. If we lose subscribers, our ability to maintain and increase revenues will be impaired and our operating margin will deteriorate.

     The loss of the officers and skilled employees upon whom we depend to operate our business could adversely affect our operating results.

     Our business is managed by a small number of executive officers on whom we depend to operate our business. We believe that our future success will depend in part on our continued ability to retain these executive officers and to attract and retain other highly qualified technical and management personnel. We may not be successful in retaining key personnel or in attracting and retaining other highly qualified technical and management personnel. Moreover, our past inability to meet our obligations that resulted in our bankruptcy filing, or the perception that we may not be able to meet our obligations since the reorganization, could adversely affect our ability to retain or attract high quality personnel. The loss of the officers and skilled employees upon whom we depend to operate our business could adversely affect our operating results.

Risks Related to our Relationship with Sprint PCS

     The proposed merger between Sprint and Nextel may have an adverse effect on us in ways that would be beyond our control.

     On December 15, 2004, Sprint Corporation and Nextel Communications, Inc. announced that they had signed a merger agreement, pursuant to which Sprint Corporation and Nextel Communications, Inc. would merge and combine their operations. Nextel Communications, Inc. and an affiliated company, Nextel Partners, Inc., operate wireless telecommunications networks in portions of our service areas. Pursuant to our affiliation agreements with Sprint PCS, Sprint PCS has granted us certain exclusivity rights within our service areas. The pending merger between Sprint and Nextel and the operations of the combined company may result in a breach of the exclusivity provisions of our affiliation agreements with Sprint PCS, among others. Sprint has announced that it will pursue discussions with the Sprint PCS Affiliates directed toward a modification of our affiliation agreements as a result of the Sprint/Nextel merger. We do not know the terms of Sprint’s proposal, or whether we will ultimately reach agreement with Sprint on mutually satisfactory terms for a revised affiliation agreement. It is likely that such a revised affiliation agreement would materially change our business and operations and may result in us making significant payments to lease or acquire network assets and subscribers or to otherwise modify our network and marketing plans. There is no assurance that we will have adequate funds on hand or the ability to borrow such funds in order to acquire the network assets and subscribers or to otherwise modify our network. In addition, any borrowing would increase our existing substantial leverage. The announcement and closing of the Sprint/Nextel merger may give rise to a negative reaction by our existing and potential customers and a diminution in brand recognition or loyalty, which may have an adverse effect on our revenues. If necessary, we intend to enforce our rights, whether through seeking injunctive relief or otherwise, to the extent that Sprint PCS violates or threatens to violate the terms of our affiliation agreements with Sprint PCS. In the event that the Sprint/Nextel merger, or any other business combination involving Sprint PCS, is consummated, we may also incur significant costs associated with integrating Sprint PCS’ merger partner onto our network. In addition, the proposed Sprint/Nextel merger, or any other such business combination involving Sprint PCS, imposes a degree of uncertainty on the future of our business and operations insofar as it may lead to a change in Sprint PCS’ affiliate strategy, which may have an adverse effect on our share price and/or the value of our senior notes.

     If Sprint PCS does not succeed, our business may not succeed.

     If Sprint has a significant disruption to its business plan or network, fails to operate its business in an efficient manner or suffers a weakening of its brand name, our operations and profitability would likely be negatively impacted. If Sprint should have significant financial problems, including bankruptcy, our business would suffer material adverse consequences, which could include termination or revision of our affiliation agreements with Sprint PCS.

22

     Our ability to conduct our business would be severely restricted if Sprint PCS were to terminate our affiliation agreements.

     Our relationship with Sprint PCS is governed by our affiliation agreements with it. As we do not own the licenses that are used in our portion of the Sprint PCS network, our business depends on the continued effectiveness of these affiliation agreements. Sprint PCS may be able to terminate our affiliation agreements if we materially breach the terms of these agreements. These terms include operational and network requirements that are extremely technical and detailed and apply to each retail store, cell site and switch site. Under certain circumstances, many of these operational and network requirements, as well as the pricing of the services Sprint PCS renders to us, can be changed by Sprint PCS, in certain cases, with little notice. As a result, we may not always be in compliance with all requirements of our affiliation agreements with Sprint PCS. Sprint PCS conducts periodic audits of compliance with various aspects of its program guidelines and identifies issues it believes need to be addressed. We may need to incur substantial costs to remedy any noncompliance. The extent to which we are not in compliance with our affiliation agreements could limit our ability to obtain any additional financing that we may need in order to remedy such noncompliance. Additionally, our substantial indebtedness and our recent emergence from bankruptcy could further limit our ability to obtain additional financing. If we cannot obtain additional financing, we may be unable to remedy such noncompliance, thereby resulting in a material breach of our affiliation agreements, which could lead to their termination by Sprint. If Sprint PCS were to terminate or fail to renew our affiliation agreements or fail to perform its obligations under those agreements, our ability to conduct business would be severely restricted.

     If we materially breach our affiliation agreements with Sprint PCS, Sprint PCS may have the right to purchase our operating assets at a discount to market value.

     Our affiliation agreements with Sprint PCS require that we provide network coverage to a minimum network coverage area within specified time frames and that we meet and maintain Sprint PCS’ technical and customer service requirements. A failure by us to meet Sprint PCS’ technical or customer service requirements contained in the affiliation agreements, among other things, would constitute a material breach of the agreements, which could lead to their termination by Sprint PCS. Our affiliation agreements with Sprint PCS provide that upon the occurrence of an event of termination caused by our breach of such agreements, Sprint PCS has the right, among other things, to purchase our operating assets without stockholder approval and for a price equal to 72% of our “entire business value,” which is our appraised value determined using certain principles set forth in our affiliation agreements with Sprint PCS and based on the price a willing buyer would pay a willing seller for our entire business as a going concern. See “The Sprint PCS Agreements — The Management Agreement — Termination of management agreement” for a description of how we calculate our entire business value.

     Sprint PCS may make decisions that could increase our expenses and/or our capital expenditure requirements, reduce our revenues or make our affiliate relationships with Sprint PCS less advantageous than expected.

     Under our affiliation agreements with Sprint PCS, Sprint PCS has a substantial amount of control over factors that significantly affect the conduct of our business. Conflicts between us may arise and these conflicts may not be resolved in our favor. The conflicts and their resolution may harm our business. Sprint PCS may make decisions that adversely affect our business, such as the following:

	•	Sprint PCS may price its national calling plans based on its own objectives and could set price levels and subscriber credit policies or change other characteristics of its plans in a way that may not be economically advantageous for our business; and
	•	Sprint PCS may alter its network and technical requirements or request that we build-out additional areas within our territory, which could result in increased equipment and build-out costs or in Sprint PCS building out that area itself or assigning it to another Sprint PCS Affiliate.

23

     Certain provisions of our affiliation agreements with Sprint PCS may diminish our value and restrict the sale of our business.

     Sprint PCS must consent to any transaction pursuant to which Horizon PCS, Inc. is no longer the “ultimate parent” of Horizon Personal Communications, Inc. and Bright Personal Communications Services, LLC, our operating subsidiaries that are the parties to the affiliation agreements with Sprint PCS and must consent to any assignment by us of our affiliation agreements with it. Sprint PCS also has a right of first refusal if we decide to sell the operating assets of Bright Personal Communications Services, LLC to a third party. We are also subject to a number of restrictions on the transfer of our business, including a prohibition on the sale of our operating assets to competitors of Sprint PCS. These restrictions and the other restrictions contained in our affiliation agreements with Sprint PCS restrict our ability to sell our business, may reduce the value a buyer would be willing to pay for our business, and may reduce our “entire business value,” which is our appraised value determined using principles set forth in our affiliation agreements with Sprint PCS and based on the price a willing buyer would pay a willing seller for our entire business as a going concern.

     Problems experienced by Sprint PCS with its internal support systems could lead to subscriber dissatisfaction or increase our costs.

     We rely on Sprint PCS’ internal support systems, including customer care, billing and back-office support. As Sprint PCS has expanded its network and subscriber base, its internal support systems have been subject to increased demand and, in some cases, suffered degradation in service. Sprint PCS has entered into business process outsourcing agreements with third parties to provide these services. Sprint PCS may not be able to successfully add system capacity, that its internal support systems will be adequate or that third parties contracted with by Sprint PCS can perform their obligations. Problems with Sprint PCS’ internal support systems could cause:

	•	delays or problems in our operations or services;
	•	delays or difficulty in gaining access to subscriber and financial information;
	•	a loss of subscribers; and
	•	an increase in the costs of customer care, billing and back-office services.

     Should Sprint PCS fail to deliver timely and accurate information, this may lead to adverse short-term decisions and inaccurate assumptions in our business plan. It could also adversely affect our cash flows, because Sprint PCS collects our receivables and remits to us a net amount that is based on the financial information it produces for us.

     Our costs for internal support systems may increase if Sprint PCS terminates all or part of our service agreements with it.

     The costs for the services provided by Sprint PCS under our service agreements relative to billing, customer care and other back-office functions for the period from January 1, 2004 through September 30, 2004 and the period from October 1, 2004 through December 31, 2004 were approximately $58.0 million and $15.3 million, respectively. Because we incur the majority of these costs on a per subscriber basis, we expect the aggregate cost for such services to increase as our subscriber base increases. Sprint PCS may terminate any service provided under such agreements upon nine months’ prior written notice. However, if that service was a service that we were required to select under the services agreement and is a service we need to continue to operate our business, Sprint PCS has agreed that it will assist us in developing that function internally or locating a third-party vendor that will provide that service. If Sprint PCS terminates a service for which we have not developed or are unable to develop a cost-effective alternative, our operating costs may increase beyond our expectations and our operations may be interrupted or restricted. We do not currently have a contingency plan if Sprint PCS terminates a service we currently receive from it.

     If Sprint PCS does not maintain control over its licensed spectrum, our affiliation agreements with Sprint PCS may be terminated.

     Sprint PCS, not us, owns the licenses necessary to provide wireless services in our territory. The FCC requires that licensees like Sprint PCS maintain control of their licensed systems and not delegate control to third-party operators or managers without the FCC’s consent. Our affiliation agreements with Sprint PCS reflect an

24

arrangement that the parties believe meets the FCC requirements for licensee control of licensed spectrum. However, if the FCC were to determine that any of our affiliation agreements with Sprint PCS needed 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 to comply with applicable law. If we cannot agree with Sprint PCS on the modification of the agreements, those agreements may be terminated. If the agreements are terminated, we would no longer be a part of the Sprint PCS network and we would not be able to conduct our business.

     The FCC may fail to renew the Sprint PCS wireless licenses under certain circumstances, which would prevent us from providing wireless services.

     Sprint PCS’ wireless licenses are subject to renewal and revocation by the FCC. The Sprint PCS wireless licenses in our territory will expire in 2007 but may be renewed for additional ten-year terms. The FCC has adopted specific standards that apply to wireless personal communications services license renewals. Any failure by Sprint PCS or us to comply with these standards could result in the non-renewal of the Sprint PCS licenses for our territory. Additionally, if Sprint PCS does not demonstrate to the FCC that Sprint PCS has met the construction requirements for each of its wireless personal communications services licenses, it can lose those licenses. If Sprint PCS loses its licenses in our territory for any of these reasons, or any other reasons, neither we, nor our subsidiaries, would be able to provide wireless services without obtaining rights to other licenses. If Sprint PCS loses its licenses in another territory, Sprint PCS or the applicable Sprint PCS Affiliate would not be able to provide wireless services without obtaining rights to other licenses and our ability to offer nationwide calling plans would be diminished and potentially more costly.

     Parts of our territory have limited licensed spectrum, which may adversely affect the quality of our service.

     In the majority of our markets, Sprint PCS has licenses covering 20 MHz or 30 MHz of spectrum. However, Sprint PCS has licenses covering only 10 MHz in parts of our territory which represent 2.3 million in covered population out of a total population of over 2.6 million residents. In the future, as our subscriber base increases in those areas, 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. We may also have to increase our capital expenditures in an attempt to compensate for this lack of licensed spectrum.

     We rely on Sprint PCS for a substantial amount of our financial information. If that information is not accurate, our ability to report our financial data could be adversely affected and the investment community could lose confidence in us.

     Under our affiliation agreements with Sprint PCS, Sprint PCS performs our billing, manages our accounts receivable and provides a substantial amount of financial information that impacts our accounts. The data provided by Sprint related to these functions they perform for us is the primary source for our service revenue and for a significant portion of our cost of service and roaming, and selling and marketing expenses included in our statement of operations. We use this data to record our financial results and prepare our financial statements. If Sprint PCS fails to deliver timely and accurate information, this may lead us to make adverse decisions and inaccurate assumptions for future business plans and could also negatively affect our cash flows as Sprint PCS collects our receivables and remits a net amount to us that is based on the financial information it provides. In addition, delays and material inaccuracies could adversely affect the effectiveness of our disclosure controls and procedures and if we later identify material errors in that data provided to us, we may be required to restate our financial statements. The timing and nature of information we receive from Sprint PCS may adversely affect our ability to accurately report our financial data and to satisfy internal control requirements in the future. If that occurs, with respect to us or any other Sprint PCS Affiliate, investors and securities analysts may lose confidence in us.

     If other PCS Affiliates of Sprint have financial difficulties, the Sprint PCS network could be disrupted which may negatively affect our operating results.

     The Sprint PCS network is a combination of networks. The large metropolitan areas are operated by Sprint, and the areas in between them are operated by PCS Affiliates of Sprint, all of which are independent companies like us. We believe that most, if not all, of these companies have incurred substantial debt to pay the large cost of building out their networks and have experienced financial difficulties in the past. If other PCS

25

Affiliates of Sprint experience financial difficulties in the future, the Sprint PCS network could be disrupted in the territories of those PCS Affiliates of Sprint. Material disruptions in the Sprint PCS network could have a material adverse effect on our ability to attract and retain subscribers. If the affiliation agreements of those PCS Affiliates of Sprint were like ours, Sprint PCS would have the right to step in and operate the affected territory under certain circumstances. However, Sprint’s right to step in could be delayed or hindered by legal proceedings, including any bankruptcy proceeding related to the affected Sprint PCS Affiliate. In addition to us, two other Sprint PCS Affiliates have filed Chapter 11 proceedings.

     We may have difficulty in obtaining an adequate supply of certain handsets from Sprint PCS, which could adversely affect our results of operations.

     We depend on our relationship with Sprint PCS to obtain handsets and other wireless devices. Sprint PCS orders handsets and other wireless devices from various manufacturers. We could have difficulty obtaining specific types of handsets in a timely manner if:

	•	Sprint PCS does not adequately project the need for handsets for itself, the PCS Affiliates of Sprint and its other third-party distribution channels, particularly in transition to new technologies, such as third-generation, or “3G,” technology;
	•	Sprint PCS gives preference to other distribution channels;
	•	we do not adequately project our need for handsets or other wireless devices;
	•	Sprint PCS modifies its handset logistics and delivery plan in a manner that restricts or delays our access to handsets; or
	•	there is an adverse development in the relationship between Sprint PCS and its suppliers or vendors.

     The occurrence of any of the foregoing could disrupt our customer service and/or result in a decrease in our subscribers, which could adversely affect our results of operations.

Risks Related to the Wireless Telecommunications Industry

     We may continue to experience a high rate of subscriber turnover, which would adversely affect our financial performance.

     The wireless telecommunications industry in general, and Sprint PCS and PCS Affiliates of Sprint in particular, have experienced a high rate of subscriber turnover, commonly known as churn. We believe this higher churn rate has resulted from Sprint PCS’ programs for marketing its services to sub-prime credit subscribers and Sprint PCS’ focus on adding subscribers from the consumer segment of the industry, rather than the business segment.

     Significant competition in our industry and general economic conditions may cause our future churn rate to be higher than our historical rate. Factors that may contribute to higher churn include:

	•	inability or unwillingness of subscribers to pay, resulting in involuntary deactivations, which accounted for over 35% and 32% of our subscriber deactivations in the period from January 1, 2004 through September 30, 2004 and the period from October 1, 2004 through December 31, 2004, respectively;
	•	subscriber mix and credit class, particularly sub-prime credit subscribers, which accounted for approximately 23% and 25% of our gross subscriber additions for the period from January 1, 2004 through September 30, 2004 and the period from October 1, 2004 through December 31, 2004, respectively, and account for approximately 18% of our subscriber base as of December 31, 2004;
	•	greater attractiveness of our competitors’ products, services and pricing;
	•	our network performance and coverage relative to our competitors;

26

	•	the level of customer service provided by Sprint PCS;
	•	any increased prices for services in the future; and
	•	any future changes by us in the products and services we offer or in the terms under which we offer our products or services, especially to sub-prime credit subscribers.

     An additional factor that may contribute to a higher churn rate is implementation of the FCC’s wireless local number portability (or “WLNP”) requirement. The FCC’s WLNP requirement enables wireless subscribers to keep their telephone numbers when switching to another carrier. As of May 24, 2004, all covered Commercial Mobile Radio Service (“CMRS”) providers, including broadband PCS, cellular and certain specialized mobile radio (“SMR”) licensees, must allow subscribers to retain, subject to certain geographic limitations, their existing telephone number when switching from one telecommunications carrier to another. We anticipate that the WLNP mandate will impose increased operating costs on all CMRS providers, including us, and may result in higher churn rates and subscriber acquisition and retention costs. To date, WLNP has increased our total churn, and the ultimate impact is uncertain.

     A high rate of subscriber turnover could adversely affect our competitive position, liquidity, financial position, results of operations and our costs of, or losses incurred in, obtaining new subscribers, especially because we subsidize most of the costs of the initial purchases of handsets by subscribers.

     Regulation by government agencies and taxing authorities may increase our costs of providing service or require us to change our services.

     Our operations and those of Sprint PCS may be subject to varying degrees of regulation by the FCC, the Federal Trade Commission, the Federal Aviation Administration, the Environmental Protection Agency, the Occupational Safety and Health Administration and state and local regulatory agencies and legislative bodies. Adverse decisions or regulations of these regulatory bodies could negatively impact our operations and our costs of doing business. For example, changes in tax laws or the interpretation of existing tax laws by state and local authorities could subject us to increased taxes on income, sales, gross receipts or other tax costs or require us to alter the structure of our current relationship with Sprint PCS.

     Concerns over health risks and safety posed by the use of wireless handsets may reduce consumer demand for our services.

     Media reports have suggested that radio frequency emissions from wireless handsets may:

	•	be linked to various health problems resulting from continued or excessive use, including cancer;
	•	interfere with various electronic medical devices, including hearing aids and pacemakers; and
	•	cause explosions if used while fueling an automobile.

     Widespread concerns over radio frequency emissions may expose us to potential litigation, discourage the use of wireless handsets or result in additional regulation imposing restrictions or increasing requirements on the location and operation of cell sites or the use or design of wireless handsets. Any resulting decrease in demand for these services or increase in the cost of complying with additional regulations could impair our ability to profitably operate our business.

     Due to safety concerns, some state and local legislatures have passed or are considering legislation restricting the use of wireless telephones while driving automobiles. Concerns over safety risks and the effect of future legislation, if adopted and enforced in the areas we serve, could limit our ability to market and sell our wireless services. In addition, it may discourage use of our wireless devices and decrease our revenues from subscribers who now use their wireless telephones while driving. Further, litigation relating to accidents, deaths or serious bodily injuries allegedly incurred as a result of wireless telephone use while driving could result in damage awards, adverse publicity and further governmental regulations.

27

     Significant competition in the wireless telecommunications industry may result in our competitors offering new services or lower prices, which could prevent us from operating profitably and may cause prices for our services to continue to decline in the future.

     Competition in the wireless telecommunications industry is intense. Competition has caused, and we anticipate that competition will continue to cause, the market prices for two-way wireless products and services to decline. Our ability to compete will depend, in part, on our ability to anticipate and respond to various competitive factors affecting the wireless telecommunications industry. While we try to maintain and increase our average revenue per user (“ARPU”), we cannot assure you that we will be able to do so in the future. If prices for our services continue to decline, it could adversely affect our ability to increase revenue, which would have a material adverse effect on our financial condition, our results of operations and our ability to repay the senior notes. In addition, the viability of our business depends upon, among other thing, our ability to compete with other wireless providers on the basis of reliability, quality of service, availability of voice and data features and customer care. In addition, the pricing of our services may be affected by competition, including the entry of new service providers into our markets. Furthermore, there has been a recent trend in the wireless telecommunications industry towards consolidation of wireless service providers, which could, over time, increase the size, depth and financial resources of competitors.

     Our dependence on Sprint PCS to develop competitive products and services and the requirement that we obtain Sprint PCS’ consent for our subsidiaries to sell non-Sprint approved equipment may limit our ability to keep pace with our competitors on the introduction of new products, services and equipment. Some of our competitors are larger than us, possess greater resources, offer more extensive coverage areas and may market other services, such as landline telephone service, cable television and Internet access, along with their wireless communications services. A number of our cellular, PCS and other wireless competitors have access to more licensed spectrum than the amount licensed to Sprint in most of our territory and, therefore, will be able to provide greater network call volume capacity than our network to the extent that network usage begins to reach or exceed the capacity of our licensed spectrum. In addition, we may be at a competitive disadvantage since we may be more highly leveraged than some of our competitors.

     We also face competition from paging, dispatch and conventional mobile radio operations, enhanced specialized mobile radio, called ESMR, and mobile satellite services. In addition, future FCC regulation or federal legislation may create additional spectrum allocations that would have the effect of adding new entrants (and thus additional competitors) into the mobile telecommunications market.

     Market saturation could limit or decrease our rate of new subscriber additions and increase costs to keep our current subscribers.

     Intense competition in the wireless telecommunications industry could cause prices for wireless products and services to continue to decline. If prices drop, our rate of net subscriber additions will take on greater significance in improving our financial condition and results of operations. However, as our and our competitors’ penetration rates in our markets increase over time, our rate of adding net subscribers could decrease further. In addition, we may incur additional costs through equipment upgrades and other retention costs to keep our current subscribers from switching to our competitors. If price decreases were to occur, our liquidity, financial condition and results of operation could be materially adversely affected.

     Alternative technologies and current uncertainties in the wireless market may reduce demand for PCS products and services.

     The wireless telecommunications industry is experiencing significant and rapid technological change, as evidenced by the increasing pace of digital upgrades in existing analog wireless systems, evolving industry standards, ongoing 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. Technological advances and industry changes could cause the technology used in our network to become obsolete. We rely on Sprint PCS for research and development efforts with respect to Sprint PCS products and services and with respect to the technology used on our network. Sprint PCS may not be able to respond to such changes and implement new technology on a timely basis, or at an acceptable cost.

28

     If Sprint PCS is unable to keep pace with these technological changes or other changes in the wireless communications market, the technology used on our network may become obsolete. In addition, other carriers are in the process of completing, or have completed, upgrades to one times radio transmission technology, or “1xRTT,” or other 3G technologies. 3G technology provides high-speed, always-on Internet connectivity and high-quality video and audio. Other carriers may introduce these new technologies or other competing technologies more rapidly than we do, which could put us at a competitive disadvantage. Additional steps beyond 1xRTT, which could include enhancement to new EV-DO or EV-DV technology, may be taken as demand for more robust data services or as the need for additional capacity develops. These additional steps may significantly increase our capital expenditures.

     We are a consumer business and an economic downturn in the United States involving significantly reduced consumer spending could negatively affect our results of operation.

     Individual consumers represent the majority of our subscriber base. In the event that an economic downturn similar to the one recently experienced by the United States and other countries occurs, and spending by individual consumers drops significantly, our business may be negatively affected.

     Failure to achieve and maintain effective internal controls could have a material adverse effect on our business and operating results.

     We are in the process of documenting and testing our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, which requires annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our Independent Auditors addressing these assessments. During the course of our testing we may identify deficiencies which we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed and investors could lose confidence in our reported financial information.

29

THE REORGANIZATION

History of Horizon PCS, Inc.

     Horizon PCS, Inc. was formed in 2000 as the holding company of Horizon Personal Communications, Inc. and Bright Personal Communications Services, LLC, both of which are the parties to our affiliation agreements with Sprint PCS. In September 2000, we issued $295.0 million aggregate face amount of 14% senior discount notes, entered into our former senior secured credit facility and issued convertible preferred stock. In December 2001, we issued $175.0 million aggregate amount of 13 3/4% senior notes.

     On August 15, 2003, we filed voluntary petitions in the Bankruptcy Court seeking relief from our creditors pursuant to Chapter 11 of the Bankruptcy Code. Our decision to file was based on a combination of factors including weakness in the wireless telecommunications industry and the economy generally and increased operating losses that we believe were caused in part by actions of Sprint PCS, such as Sprint PCS’ decision in 2001 to require its PCS Affiliates to adopt the ClearPay program (see “Business — Products and Services — Account spending limits”). In addition, Sprint PCS decreased the roaming rate and imposed new and higher fees on us under the affiliation agreement. We believe actions by Sprint PCS made it difficult for us to comply with our debt service obligations, which resulted in a covenant default under our senior secured credit facility and the subsequent acceleration of the indebtedness under our senior secured credit facility. As a result, we filed for Chapter 11 protection in order to preserve, protect and maximize our assets while restructuring our business and financial obligations and addressing issues with Sprint PCS. Accordingly, in connection with our bankruptcy filing, we filed a complaint against Sprint Corporation and certain of its affiliates alleging several claims, including a claim that Sprint PCS breached its affiliation agreements with us. As part of the Sprint Transaction, we settled this litigation on June 15, 2004.

     In connection with our Chapter 11 proceeding, we took a number of steps to reposition our business for improved financial results, including:

	•	reducing the number of employees by 346, from 527 as of June 30, 2003 to 181 as of December 31, 2004;
	•	closing 25 of our company-owned retail stores and transferring 7 such stores to Sprint PCS; and
	•	negotiating an agreement with Sprint PCS that resulted in a net payment to us of approximately $33.0 million in connection with the discontinuation of our unprofitable operations in the NTELOS markets, the sale of our NTELOS market assets to Sprint PCS and the settlement of our litigation with Sprint PCS.

     Our bankruptcy also permitted us to implement a number of network cost savings initiatives:

	•	Network Reconfiguration. We changed the architecture of our network to make our backhaul network more efficient. Our backhaul network is the network of circuits that brings traffic from our towers to our switches. The changes we made to our backhaul network involved rejecting existing circuit leases and replacing them with new, more favorable circuit leases. Each of the new circuit leases has already been executed. As we migrated traffic onto new or surviving circuits, we rejected the unnecessary circuit leases.
	•	Network Grooming. We consolidated our traffic onto fewer circuits and rejected unnecessary circuit leases.
	•	Site Optimizations. We rejected leases for on-site back-up generators that we believed were unnecessary. We also rejected leases for several unlaunched tower sites.

     On June 1, 2004, the Bankruptcy Court authorized the offering of the senior notes. On June 27, 2004, we filed our Plan of Reorganization with the Bankruptcy Court. We filed an amended Plan of Reorganization on August 12, 2004 and on September 20, 2004. The Plan of Reorganization included a classification of claims against us and specified how each class of claims would be treated upon confirmation of the Plan of Reorganization.

     On September 21, 2004, the Bankruptcy Court confirmed the amended Plan of Reorganization, which became effective on October 1, 2004.

30

Material Terms of the Plan of Reorganization

     Under the Plan of Reorganization, the net proceeds from the senior notes were used to help fund, in full, the cash payment to the lenders under our former senior secured credit facility and to permanently retire the loans thereunder. The remaining net proceeds, together with other available cash, were used by us to satisfy other secured claims, administrative and other priority claims and unsecured convenience claims, and to pay fees and expenses related to the Reorganization. Additionally, all of our subordinated claims were discharged and all of our existing capital stock was cancelled.

     The Plan of Reorganization authorized us to issue 25 million shares of our common stock upon our emergence from bankruptcy. Approximately 9.0 million shares were issued, pursuant to an exemption provided by Section 1145 of the U.S. Bankruptcy Code, to holders of our former senior notes and senior discount notes, which were cancelled, and to certain of our general unsecured creditors in satisfaction and retirement of their respective claims. In addition, 986,702 shares were reserved under our 2004 Stock Incentive Plan for issuance to certain members of our management, directors and other employees post-Reorganization. As a result of these issuances, certain of our former noteholders became the principal equity holders of Horizon PCS, Inc. upon confirmation of the Plan of Reorganization. See “Principal Stockholders.”

     The Plan of Reorganization also provided for various other matters relating to our operations post-Reorganization, including the following:

	•	our assumption of our affiliation agreements with Sprint PCS (as they existed after the Sprint Transaction);
	•	our assumption of all other contracts and leases that were not previously rejected or rejected pursuant to the terms of the Plan of Reorganization;
	•	the appointment of our existing executive officers as the executive officers of the reorganized Horizon PCS;
	•	the appointment of five new directors to Horizon PCS, Inc.’s board of directors, designated by the Official Bondholders Committee, pursuant to which Lawrence Askowitz, Timothy G. Biltz, Anthony Civale, Jeffrey W. Jones and Robert A. Katz were appointed in October 2004. See “Management;” and
	•	our release of claims against (i) all of our officers, directors and employees, in each case, as of the date of the commencement of the hearing on the disclosure statement in their capacities as such; (ii) our Official Committee of Unsecured Creditors and Official Bondholders Committee and all of their respective members, in their capacities as such; (iii) the trustees under the indenture for our former senior discount notes and former senior notes, in their respective capacities as such; (iv) the lenders under our former senior secured credit facility, in their capacities as such; (v) the agent for the lenders under our former senior secured credit facility, in its capacity as such; (vi) the holders of the senior notes, in their capacity as such; and (vii) with respect to each of the above-named persons, such person’s present affiliates, principals, employees, agents, officers, directors, financial advisors, attorneys and other professionals, in their capacities as such.

Effect of the Reorganization

     As a result of the consummation of the Reorganization, our former senior secured credit facility was repaid in full and terminated, and the former senior discount notes and former senior notes were cancelled and holders thereof received shares of our new common stock.

     Under the Plan of Reorganization, all of our former equity securities, including our old convertible preferred stock and the obligation to pay dividends thereon, were cancelled.

     In connection with our bankruptcy, we defaulted on most of our pre-petition obligations, including our former secured credit facility, former senior notes, former senior discount notes, leases, accounts payable, taxes payable, and most other contractual obligations. In connection with confirmation of the Plan of Reorganization, we rejected many of these leases and other contracts. The pre-petition claims were discharged and cancelled and the unsecured creditors

31

received cash payments and/or distributions of new common stock, which were less than the full value of their claims.

Accounting Impact of the Reorganization

     Pursuant to American Institute of Certified Public Accountants, or “AICPA,” Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code,” or “SOP 90-7,” the accounting for the effects of the Reorganization occurred once the confirmation of our Plan of Reorganization by the Bankruptcy Court became effective on October 1, 2004. The fresh-start accounting principles pursuant to SOP 90-7 required, among other things, for us to determine the value assigned to the assets of reorganized Horizon PCS, Inc. as of the effective date.

     Under fresh-start accounting, our reorganization value was allocated to our assets based on their respective fair values in conformity with the purchase method of accounting for business combinations. For financial reporting purposes, we have applied fresh-start accounting as of October 1, 2004.

     Our assets prior to September 30, 2004 did not give effect to the adjustments that resulted from the adoption of fresh-start accounting, which caused our reported financial condition to change materially. Accordingly, our financial condition and results of operations from and after October 1, 2004, are not comparable to the financial condition or results of operations reflected in our historical financial statements included elsewhere in this prospectus.

32

USE OF PROCEEDS

     We will not receive any proceeds from the exchange offer. In consideration for issuing the registered notes, we will receive our outstanding notes in like original principal amount at maturity. All outstanding notes received in the exchange offer will be cancelled. Because we are exchanging the registered notes for the outstanding notes, which have substantially identical terms, the issuance of the registered notes will not result in any increase in our indebtedness. The exchange offer is intended to satisfy our obligations under the registration rights agreement.

33

CAPITALIZATION

     The following table shows our cash and cash equivalents, long-term debt, stockholders’ equity and capitalization as of December 31, 2004. You should read this table in conjunction with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and related notes and the other financial information included elsewhere in this prospectus.

34

SELECTED HISTORICAL FINANCIAL DATA

     We derived the following statement of operations and balance sheet data as of December 31, 2004 and 2003 and for the period from January 1, 2004 through September 30, 2004 and the period from October 1, 2004 through December 31, 2004 and each of the years ended December 31, 2003 and 2002, from our audited consolidated financial statements, included elsewhere in this prospectus. We derived the following statement of operations and balance sheet data as of December 31, 2001 and December 31, 2000, and for the years then ended from our audited consolidated financial statements, which are not included in this prospectus.

     In accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code,” we adopted fresh start accounting as of October 1, 2004, and our emergence from Chapter 11 resulted in a new reporting entity. The periods as of and prior to September 30, 2004 have been designated “Predecessor Company” and as of October 1, 2004 and the periods subsequent to September 30, 2004 have been designated as “Successor Company.” Under fresh start accounting, our reorganization equity value was allocated to the assets based on their respective fair values and was in conformity with SFAS No. 141, Business Combinations. As a result of the implementation of fresh start accounting, our financial statements after the effective date are not comparable to our financial statements for prior periods.

     Our financial statements as of December 31, 2004 and 2003 and for the period from January 1, 2004 through September 30, 2004 and the period from October 1, 2004 through December 31, 2004, and the years ended December 31, 2003 and 2002, were audited by KPMG LLP, independent registered public accounting firm.

      The report from KPMG for the year ended December 31, 2003, delivered to us in 2004, included an explanatory paragraph which states that there was substantial doubt about Horizon PCS’ ability to continue as a going concern. We believe that the issues that caused KPMG to doubt our ability to continue as a going concern, as well as the uncertainty related to the bankruptcy proceedings, were addressed by our reorganization. The report from KPMG for the year ended December 31, 2004 contained herein does not include any such reference to our ability to continue as a going concern.

     Our historical financial statements for the periods prior to June 15, 2004 reflect our financial position and results of operations inclusive of the operation of our NTELOS markets in Virginia and West Virginia. As a result of the June 15, 2004 closing of the Sprint Transaction, we no longer operate in, or own the assets associated with, those markets. See “The Sprint PCS Agreements.” Our historical financial statements for the periods ending prior to October 1, 2004 reflect our financial position and results of operations prior to emergence from bankruptcy. See “The Reorganization.”

     The selected historical financial information set forth below should be read in conjunction with our audited consolidated financial statements and any related notes thereto, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Selected Historical Financial Data” included elsewhere in this prospectus.

35

36

37

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The discussion in this section is based upon our historical financial statements. The financial statements as of and for the year ended December 31, 2004 reflect the effects of the Reorganization, the Sprint Transaction, the termination of our operations in the NTELOS markets, and related transactions that were completed during 2004. The financial statements for prior periods do not reflect these transactions, and therefore the 2004 financial results are not comparable to results for 2003 and 2002.

Business Overview

     We became one of the five charter PCS Affiliates of Sprint in June 1998, when we were awarded our initial seven markets in Ohio, West Virginia and Kentucky with a total population of approximately 1.6 million. Since then, we expanded our territory and our business and, as of December 31, 2004, we had a total population of approximately 7.4 million and a covered population of approximately 5.4 million residents in our territory with approximately 183,100 subscribers.

     We entered into affiliation agreements with Sprint PCS in June 1998 and launched Sprint PCS service in November 1998. As a Sprint PCS Affiliate, the pricing of services and handsets to our subscribers is generally established by Sprint PCS. In addition, the costs payable by us to Sprint PCS for our subscriber processing, customer care and subscriber billing are also established by Sprint PCS. As a result, we attempt to manage our results of operations largely by determining within parameters established by Sprint PCS the credit quality of the subscribers for whom we activate service and the number of our company-owned stores and local third-party distributors in our territory with which we enter into agreements to sell Sprint PCS products and services. As our network build-out is complete, the amount of capital expenditures that Sprint PCS can require us to incur for network operations relates primarily to upgrading our network to new technologies in order to maintain compatibility with Sprint PCS’ network and provide additional coverage within our territory at our discretion.

     A significant part of our subscriber acquisition costs relates to costs that we pay, as allocated to us by Sprint PCS, to subsidize the cost of the handsets purchased by our subscribers. As a result, we attempt to manage the rate at which we add new subscribers. We monitor the creditworthiness of our subscribers, as we bear the risk of the collectibility of their bills for Sprint PCS services and impose deposits where warranted by their credit profiles. Our results of operations are based on the collectibility of our subscribers’ monthly recurring charges, the charges for minutes of use on our network by our subscribers who exceed the minutes in their plan and the payments we receive from Sprint PCS for minutes of use on our network by Sprint PCS subscribers and non-Sprint PCS subscribers who are not based in our territory.

     On June 15, 2004, we completed our settlement agreements with Sprint and exited the markets in Virginia and West Virginia that were previously operated under a Network Services Agreement with NTELOS, Inc. The sale of our NTELOS markets included the economic interest in approximately 92,500 subscribers and seven retail stores.

     On March 17, 2005, we entered into an Agreement and Plan of Merger with iPCS, another Sprint PCS Affiliate. If the merger is consummated, we will be merged with and into iPCS and our results will be combined with those of iPCS.

Reorganization

     On August 15, 2003, we and our subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. In conjunction with the bankruptcy process, we reviewed all current contracts, rejected unfavorable agreements in accordance with Section 365 of the Bankruptcy Code, and negotiated more favorable terms with vendors, where appropriate. We filed an amended Plan of Reorganization on August 12, 2004, and the Bankruptcy Court confirmed our Plan on September 21, 2004. The Plan of Reorganization became effective on October 1, 2004.

38

Implementation of Fresh-Start Accounting

     Pursuant to American Institute of Certified Public Accountants, or “AICPA,” Statement of Position 90-7 “Financial Reporting by Entities in Reorganization under the Bankruptcy Code,” or “SOP 90-7,” the accounting for the effects of the Reorganization began once the Plan of Reorganization was confirmed by the Bankruptcy Court, which became effective on October 1, 2004. The fresh-start accounting principles pursuant to SOP 90-7 provide, among other things, for us to determine the value to be assigned to the assets of reorganized Horizon PCS, Inc. as of the confirmation date.

     We adopted fresh-start accounting as of October 1, 2004 and our emergence from Chapter 11 resulted in a new reporting entity. The periods as of September 30, 2004 and prior to October 1, 2004 have been designated “Predecessor Company” and the periods subsequent to September 30, 2004 have been designated “Successor Company”. Under fresh-start accounting, our reorganization value was allocated to our assets based on their respective fair values in conformity with the purchase method of accounting for business combinations. Intangible assets were identified and valued accordingly in conformity with the purchase method. As a result of the implementation of fresh-start accounting, our financial statements after the effective date are not comparable to our financial statements for prior periods.

     For periods prior to October 1, 2004, reported assets do not give effect to the adjustments that resulted from the adoption of fresh-start accounting. Accordingly, our financial condition and results of operations from and after the effective date of the Plan of Reorganization are not comparable to the financial condition or results of operations reflected in our historical financial statements included elsewhere in this prospectus.

     During this process, we identified three intangible assets to be reflected in our financial statements: $1.2 million for licensed spectrum, $63.2 million for the subscriber base and $56.0 million for the Sprint PCS affiliation agreements. The licensed spectrum has an indefinite life. The subscriber bases and Sprint PCS affiliation agreements are to be amortized over their estimated remaining useful lives of 24 months and 13.7 years, respectively.

Successor Company for the Three Months Ended December 31, 2004 Compared to the Predecessor Company Three Months Ended December 31, 2003

Key Metrics

     The following discussion details key operating metrics and financial performance for the three months ended December 31, 2004 (“Successor Company”), compared to the three months ended December 31, 2003 (“Predecessor Company”).

     We provide certain financial measures that are calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) to assess our financial performance. In addition, we also use non-financial terms, such as churn, which are metrics used in the wireless communications industry and are not measures of financial performance under GAAP.

     Subscriber Additions. For the three months ended December 31, 2004, our net subscribers decreased by approximately 1,300 subscribers. We expect our subscriber additions to begin increasing in 2005 as we resume building our subscriber base. Our subscriber base as of December 31, 2004 consisted of approximately 81% prime credit subscribers compared to approximately 79% as of December 31, 2003. Prime credit subscribers are those customers with a favorable credit rating.

     Churn. Churn is the monthly rate of subscriber turnover that results from both voluntarily and involuntarily discontinued service during the month. Churn is computed by dividing the number of subscribers that discontinued service during the month, net of 30-day returns, by the beginning subscriber base for the period. Churn for the three months ended December 31, 2004 was 3.5% compared to 3.3% for the three months ended December 31, 2003. We believe churn will increase in the first half of 2005, as our network is nearing capacity. In January 2005, we signed an agreement with Nortel to replace approximately half of our base stations with Nortel equipment, specifically in Ohio, Indiana and Tennessee. We believe this replacement will improve the quality of our network and lead to lower churn and higher subscriber additions later in 2005.

39

Results of Operations

     Revenues. The following table sets forth a breakdown of our revenues by type:

     Subscriber revenues. Subscriber revenues for the three months ended December 31, 2004 were approximately $28.1 million, compared to approximately $46.7 million for the three months ended December 31, 2003, a decrease of approximately $18.6 million. Approximately $16.1 million of the decline was due to the sale of the NTELOS markets in the Sprint Transaction. The balance of the decline, approximately $2.5 million, was in our basic service and minute sensitive revenues due to the decline in our subscriber base. We provided PCS service to approximately 183,100 subscribers at December 31, 2004, compared to approximately 292,600 at December 31, 2003.

     Roaming revenues. Roaming revenues decreased from approximately $18.3 million during the three months ended December 31, 2003, to approximately $15.5 million for the three months ended December 31, 2004, a decline of approximately $2.8 million. This decrease reflected the loss of roaming revenues of approximately $5.8 million from the sale of the NTELOS markets, and an increase of approximately $3.0 million from increased minutes of use, particularly in our $.10 markets.

     Equipment revenues. Equipment revenues for the three months ended December 31, 2004 were approximately $1.6 million, compared to approximately $600,000 for the three months ended December 31, 2003, representing an increase of approximately $1.0 million. The increase was attributable to selling a greater number of handsets at a higher sales price during the three months ended December 31, 2004 as compared to 2003. We sold approximately 12,400 handsets at our retail stores during the three months ended December 31, 2004 as compared to approximately 6,100 during the three months ended December 31, 2003.

     Cost of service. Cost of service for the three months ended December 31, 2004 was approximately $23.8 million, compared to approximately $43.0 million for the three months ended December 31, 2003, a decrease of approximately $19.2 million. Cost of service declined approximately $17.5 million in 2004 as a result of the sale of the NTELOS markets. Network operating expenses also declined approximately $1.7 million, including payroll and other benefits.

     Cost of equipment. Cost of equipment includes the cost of handsets and accessories sold to our subscribers by our stores and our direct sales force. Cost of equipment for the three months ended December 31, 2004 was approximately $2.3 million, compared to approximately $900,000 for the three months ended December 31, 2003, an increase of approximately $1.4 million. Cost of equipment increased as a result of more handsets and accessories sold during 2004. We sold approximately 12,400 handsets at our retail stores during the three months ended December 31, 2004 as compared to approximately 6,100 sold during the three months ended December 31, 2003.

     Selling and marketing expenses. Selling and marketing expenses were approximately $5.8 million for the three months ended December 31, 2004 compared to approximately $6.7 million for the three months ended December 31, 2003, a decrease of approximately $900,000. The sale of the NTELOS markets accounted for approximately $1.9 million of the decrease, offset by an increase of approximately $1.0 million attributable to increased spending on marketing and advertising since emerging from bankruptcy. Selling and marketing expenses include the costs associated with operating our retail stores, including marketing, advertising, payroll and sales commissions. Selling and marketing expenses also include commissions paid to national and local third-party distribution channels and

40

subsidies on handsets sold by third parties for which we do not record revenue. We expect selling and marketing expenses to continue increasing as we resume building our subscriber base.

     General and administrative expenses. General and administrative expenses for the three months ended December 31, 2004 were approximately $7.9 million compared to approximately $7.9 million for the three months ended December 31, 2003, essentially flat. The activity reflected a reduction in general and administrative expenses of $1.7 million related to the sale of the NTELOS markets, offset by an increase of approximately $1.1 million in legal and financial consulting expenses and approximately $600,000 of other general expenses.

     Reorganization items. Reorganization expenses for the three months ended December 31, 2003 were approximately $6.3 million consisting of approximately $5.7 million of professional fees and $600,000 of key employee retention plan payments.

     Non-cash compensation expense. We recorded approximately $641,000 and $155,000 for the three months ended December 31, 2004 and 2003, respectively, for stock options granted in October 2004 and November 1999, respectively. The increase was a result of the Predecessor’s options being cancelled as a result of the reorganization on October 1, 2004 and new options being granted in October 2004.

     Depreciation and amortization expense. Depreciation and amortization expenses increased by approximately $17.2 million to a total of approximately $25.5 million for the three months ended December 31, 2004. The increase was the result of revaluing the property, plant and equipment and intangible assets during the application of fresh-start accounting. The property, plant and equipment adjustments resulted in an increase of approximately $8.3 million for the three months ended December 31, 2004 as compared to the same period in 2003. Approximately $8.9 million of the increase was due to the revalued intangible assets. Under fresh-start accounting, the remaining useful lives were recasted, resulting in a shorter remaining life and thus greater depreciation expense. We expect the expense to continue at this pace in 2005.

     Interest income and other, net. Interest income and other income for the three months ended December 31, 2004 was approximately $300,000 compared to approximately $200,000 in 2003 and consisted primarily of interest income. This increase was due to lowering the balance of cash on hand and increasing the amount invested in corporate bonds and commercial paper.

     Interest expense, net. Interest expense for the three months ended December 31, 2004 was approximately $3.6 million, compared to approximately $2.1 million for the same period in 2003.

     We accrue interest at a rate of 11 3/8% annually on our $125.0 million senior notes issued in July 2004 and began making semi-annual payments on January 15, 2005. Interest expense on the $125.0 million senior notes was approximately $3.6 million for the three months ended December 31, 2004. For the three months ended December 31, 2003, interest expense on the $105.0 million term A and $50.0 term B loans was approximately $1.4 million and $700,000, respectively.

     Interest expense for the three months ended December 31, 2004 also includes approximately $100,000 in amortization of deferred financing fees related to our $125.0 million senior notes, offset by approximately $100,000 of capitalized interest.

     Preferred stock dividend. We recorded preferred stock dividend expense of approximately $3.3 million for the three months ended December 31, 2003 and no expense for the comparable quarter in 2004 due to the cancellation of our preferred stock as a result of our reorganization on October 1, 2004.

41

Results of Operations

For the Nine Months Ended September 30, 2004 Compared to the Nine Months Ended September 30, 2003

Key Metrics

     The following discussion details key operating metrics and financial performance of the Predecessor Company for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. This discussion includes the fresh-start adjustments and cancellation of debt resulting from the application of fresh-start accounting to the Predecessor Company.

     Subscriber Additions. For the nine months ended September 30, 2004, our net subscribers decreased by approximately 108,200 subscribers. This decrease included approximately 92,500 subscribers related to the NTELOS markets that were sold in June 2004. Gross activations during the first nine months of 2004 were 53% lower than the same period in 2003 due to restricted marketing activities in an effort to conserve cash during our bankruptcy. Our subscriber base as of September 30, 2004 consisted of approximately 81% prime credit subscribers compared to approximately 77% as of September 30, 2003.

     Churn. Churn for the nine months ended September 30, 2004 was 3.1% compared to 3.2% for the nine months ended September 30, 2003, essentially flat.

Results of Operations

Revenues. The following table sets forth a breakdown of our revenues by type:

     Subscriber revenues. Subscriber revenues for the nine months ended September 30, 2004 were approximately $119.3 million, compared to approximately $141.9 million for the nine months ended September 30, 2003, a decrease of approximately $22.6 million. Approximately $19.1 million of the decline in subscriber revenues was the result of the sale of the NTELOS markets in the Sprint Transaction. We provided PCS service to approximately 184,500 subscribers at September 30, 2004, compared to approximately 301,100 at September 30, 2003.

     Roaming revenues. Roaming revenues increased from approximately $43.4 million for the nine months ended September 30, 2003, to approximately $49.2 million for the nine months ended September 30, 2004, an increase of approximately $5.8 million. This increase reflected increased minutes of use, particularly in our $.10 markets.

     Equipment revenues. Equipment revenues for the nine months ended September 30, 2004 were approximately $4.0 million, compared to approximately $4.5 million for the nine months ended September 30, 2003, a decrease of approximately $500,000. The decrease was attributable to selling a lower number of handsets during the nine months ended September 30, 2004 as compared to 2003, offset by a higher selling price per handset during 2004. We sold approximately 24,200 handsets at our retail stores for the nine months ended September 30, 2004 as compared to approximately 67,300 sold for the nine months ended September 30, 2003.

     Cost of service. Cost of service for the nine months ended September 30, 2004 was approximately $107.1 million, compared to approximately $138.3 million for the nine months ended September 30, 2003, a decrease of approximately $31.2 million. Cost of service declined approximately $20.6 million due to the sale of the NTELOS markets. In addition, Sprint customer service expenses decreased by $4.5 million due to a lower subscriber base and network operations and customer care expenses decreased by $5.6 million and $500,000, respectively.

     Cost of equipment. Cost of equipment for the nine months ended September 30, 2004 was approximately $4.2 million, compared to approximately $12.4 million for the nine months ended September 30, 2003, a decrease of

42

approximately $8.2 million. Cost of equipment declined primarily as a result of less handsets and accessories sold during 2004. We sold approximately 24,200 handsets at our retail stores during the nine months ended September 30, 2004 compared to approximately 67,300 sold during the nine months ended September 30, 2003.

     Selling and marketing expenses. Selling and marketing expenses decreased to approximately $18.8 million for the nine months ended September 30, 2004, compared to approximately $32.9 million for the nine months ended September 30, 2003, a decrease of approximately $14.1 million. This decrease was attributable to the workforce reduction and lower spending to conserve cash during our reorganization. We expect selling and marketing expenses to increase as we resume building our subscriber base.

     General and administrative expenses. General and administrative expenses for the nine months ended September 30, 2004 were approximately $21.4 million compared to approximately $30.5 million for the nine months ended September 30, 2003, a decrease of approximately $9.1 million. The decrease reflected a reduction of $2.7 million in Sprint management fees and bad debt expense resulting from the sale of our NTELOS markets. The decrease in 2004 general and administrative expenses also included approximately $3.9 million reduction in legal and financial consulting fees, a $400,000 decrease in the Sprint PCS management fees, a decrease of approximately $200,000 in the other general expenses and a decrease of $1.9 million for our provision for doubtful accounts, reflecting the positive effects of the increased credit quality of our subscriber base.

     Reorganization items. Reorganization income, net of expense, was approximately $74.6 million for the period from January 1, 2004 to October 1, 2004 consisting of approximately $92.4 million of income from fresh-start adjustments, and expenses of $17.8 million, including: $15.1 million of professional fees, $300,000 of expenses related to store closings, $1.6 million of key employee retention plan payments and $800,000 of employee separation expenses. Reorganization expenses for the nine months ended September 30, 2003 were $112.5 million, consisting of $18.1 million of amortization of debt issuance fees, $16.1 million of amortization of warrants, $73.8 million of accelerated accretion of the senior notes, $2.8 million related to store closings and $1.7 million of employee separation expenses.

     Non-cash compensation expense. We recorded non-cash compensation expense of approximately $145,000 and $465,000 for the nine months ended September 30, 2004 and 2003, respectively, for stock options granted in November 1999. These options were cancelled as a result of the reorganization on October 1, 2004.

     Depreciation and amortization expense. Depreciation and amortization expenses decreased by approximately $4.7 million to a total of approximately $24.6 million for the nine months ended September 30, 2004. The decrease was the result of the impairment of intangible assets and property and equipment recorded in June 2003.

     Impairment of intangible assets and property and equipment. We were not in compliance with the loan covenants under our senior credit facility as of June 30, 2003. As a result, we completed an impairment assessment of our intangible assets and property and equipment in accordance with SFAS No. 144. This assessment resulted in the Company recording impairment charges of approximately $39.2 million on its intangible assets and approximately $34.6 million on its property and equipment in June 2003. We performed these valuations utilizing the current market information available.

     Gain (loss) on sale of property and equipment. In June, 2004 we completed the sale of our NTELOS markets to Sprint, which included the economic interest in approximately 92,500 subscribers and seven retail stores. This transaction resulted in a gain of approximately $42.1 million. For the nine months ended September 30, 2003, we incurred a loss of approximately $200,000 related to the disposal of assets from two of our closed retail stores and a planned store that never opened.

     Interest income and other, net. Interest income and other income for the nine months ended September 30, 2004 was approximately $800,000 compared to approximately $700,000 in 2003 and consisted primarily of interest income. This increase was due primarily from income received on increased restricted cash.

     Interest expense, net. Interest expense for the nine months ended September 30, 2004 was approximately $8.7 million, compared to approximately $42.6 million for the same period in 2003.

43

     At September 30, 2004, the interest rate on the $105.0 million term loan A borrowed under our secured credit facility was 5.64%, while the interest rate on the $50.0 million term loan B was 6.14%. Interest expense on the secured credit facility was $5.8 million and $6.9 million for the nine months ended September 30, 2004 and 2003, respectively.

     We accrue interest at a rate of 11 3/8% annually on our $125.0 million senior notes issued in July 2004 and began making semi-annual interest payments on January 15, 2005. Interest expense on the $125.0 million senior notes was $2.9 million for the nine months ended September 30, 2004.

     Upon the bankruptcy filing, we fully accreted our 14.00% discount notes to their face value of $295.0 million. Interest expense on the 14.00% discount notes was approximately $18.8 million for the nine months ended September 30, 2003. In addition, interest expense for the $175.0 million senior notes was approximately $14.9 million during the nine months ended September 30, 2003, compared to no accrual for the comparable period in 2004 due to the suspension of interest on the notes as of our bankruptcy petition date.

     Interest expense for the nine months ended September 30, 2003 also included approximately $1.9 million in amortization of deferred financing fees related to our secured credit facility, our discount notes and our senior notes. We also recorded approximately $800,000 in interest expense in the 2003 nine month period related to commitment fees we paid on the unused portion of our secured credit facility.

     Capitalized interest for the nine months ended September 30, 2003 was approximately $700,000.

     Cancellation of Debt. Cancellation of debt consisted of approximately $321.9 million of adjustments to liabilities subject to compromise and equity in conjunction with the Plan of Reorganization on October 1, 2004.

     Income tax benefit. As a result of the impairment charge recorded in 2003, we recorded a tax benefit of approximately $6.0 million due to the reduction of a deferred tax liability related to intangible assets.

     Preferred stock dividend. We recorded preferred stock dividend expense of approximately $10.1 million for the nine months ended September 30, 2004 compared to $9.4 million for the nine months ended September 30, 2003. The preferred stock was cancelled as a result of our reorganization on October 1, 2004.

     Other comprehensive income (loss). Other comprehensive income of approximately $400,000 was recorded in the nine months ended September 30, 2003, reflecting gains on interest rate swap contracts that expired in 2003. During 2001, we entered into two separate two-year interest rate swap contracts, effectively fixing $50.0 million of the term loan B borrowed under the secured credit facility. Both swaps expired in 2003, and were not renewed.

Predecessor Company Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

44

Key Metrics

     The following discussion details key operating metrics and focuses on the details of our financial performance for the 12 months ended December 31, 2003, compared to the 12 months ended December 31, 2002.

     Subscriber additions. As of December 31, 2003, we provided personal communication service to approximately 292,600 subscribers, compared to approximately 270,900 subscribers as of December 31, 2002. For the years ended December 31, 2003 and 2002, our net subscribers increased by approximately 21,700 and 78,600 subscribers, respectively. Gross activations slowed considerably during 2003, as we closed 20 of our retail stores by late July to conserve cash during the reorganization period.

     Churn. Churn for the year ended December 31, 2003 was 3.0% compared to 3.5% for the year ended December 31, 2002. During 2002, we experienced increased churn as a result of an increase in the number of sub-prime credit subscribers we added whose service was involuntarily discontinued during the period.

Results of Operations

     Revenues. The following table sets forth a breakdown of our revenues by type:

     Subscriber revenues. Subscriber revenues for the year ended December 31, 2003 were $188.7 million, compared to $152.4 million for the year ended December 31, 2002, an increase of $36.3 million. Of the $188.7 million in 2003 revenues, $64.6 million related to subscribers in the NTELOS markets we divested in June, 2004. The growth in subscriber revenues was primarily the result of growth in our subscriber base.

     Roaming revenues. Roaming revenues increased to $61.7 million for the year ended December 31, 2003 from $55.8 million for the year ended December 31, 2002, an increase of $5.9 million. This increase resulted from the continued expansion of our service territory as well as expanding roaming agreements with wireless carriers. $20.7 million of our roaming revenue related to revenue from the NTELOS markets we sold in June, 2004.

     Equipment revenues. Equipment revenues for the year ended December 31, 2003 were $5.2 million, compared to $7.8 million for the year ended December 31, 2002, a decrease of approximately $2.6 million. The decrease in equipment revenues was the result of our efforts to conserve cash during our reorganization period. We activated approximately 51,207 handsets at our retail stores in 2003, compared to approximately 75,726 activations in 2002.

     Cost of service. Cost of service for the year ended December 31, 2003 was $181.3 million, compared to $167.1 million for the year ended December 31, 2002, an increase of $14.2 million. This increase reflected an increase of $4.7 million in roaming expense and long-distance charges and the increase of $8.6 million in costs incurred under our network services agreement with NTELOS, both the result of our subscriber growth during 2003. Our cost of service expense related to NTELOS was approximately $41.6 million in 2003, compared to $33.0 million in 2002. Network operations payroll expense decreased by approximately $1.4 million in 2003 as a result of the reduction in work force implemented in July 2003. Customer care, activation and billing expenses increased by approximately $2.2 million in 2003 due to the increase in our subscriber base. Variable connectivity expenses, including interconnection and national platform expenses, decreased by approximately $400,000, reflecting our ongoing efforts to reduce interconnection charges by negotiating more favorable terms with our vendors. Other costs of service expenses increased in the aggregate by approximately $500,000 in 2003.

     Cost of equipment. Cost of equipment for the year ended December 31, 2003 was $13.4 million, compared to $19.2 million for the year ended December 31, 2002, a decrease of $5.8 million. As stated earlier, we activated fewer handsets at our retail stores in 2003 to conserve cash during our reorganization period.

     Selling and marketing expenses. Selling and marketing expenses were $39.6 million for the year ended December 31, 2003, compared to $52.6 million for the year ended December 31, 2002, a decrease of $13.0 million. We closed 20 of our retail stores by late July 2003, thus incurring approximately $900,000 less in retail store costs during 2003. In addition, we decreased our advertising in 2003, resulting in savings of approximately $7.0 million. Commissions paid to third parties declined by approximately $1.8 million in 2003, and subsidies on handsets sold by third parties decreased $3.3 million.

     General and administrative expenses. General and administrative expenses for the year ended December 31, 2003 were approximately $38.4 million, compared to approximately $41.7 million in 2002, a decrease of approximately $3.3 million. The decrease reflected an approximate $8.0 million reduction in our provision for

45

doubtful accounts, due primarily to the write-off of ClearPay and certain other sub-prime subscribers (defined in “Business — Products and Services — Account spending limits”) in 2002; an approximate $3.0 million increase in Sprint management fees, due to higher subscriber revenues in 2003; and an increase of approximately $1.7 million in other general expenses due primarily to higher professional fees.

     Reorganization expenses. We recorded approximately $118.8 million of reorganization expenses for the year ended December 31, 2003 related to both the closing of our retail stores and filing for bankruptcy protection on August 15, 2003. These expenses include approximately $1.7 million for employee separations, $2.0 million related to the closing of our stores, $800,000 in lease commitments, $5.7 million of professional fees, $600,000 in payments to employees under our key employee retention plan and $108.0 million related to the write-off of our debt-related expenses, including $89.9 million in accelerated accretion of the senior discount notes and $18.1 million of debt issuance costs.

     Non-cash compensation expense. For the years ended December 31, 2003 and 2002, we recorded stock-based compensation expense of approximately $600,000 and $700,000, respectively. Prior to the bankruptcy filing, the scheduled annual non-cash compensation expense for these stock options was to be approximately $620,000 in 2003, $193,000 in 2004 and $71,000 in 2005. However, under the Plan of Reorganization, the stock options were cancelled and under fresh-start accounting the recognition of the expense ceased.

     Depreciation and amortization expenses. For the years ended December 31, 2003 and 2002, depreciation and amortization expenses were $111.3 million and $40.3 million, respectively, or an increase of $71.0 million. The increase in 2003 reflected approximately $34.6 million related to the impairment of property and equipment and $39.2 million related to the impairment of intangible assets. These charges resulted from an asset impairment assessment in accordance with SFAS No. 144.

     For the year ended December 31, 2003, depreciation and amortization expenses included $900,000 of expense related to the intangible asset associated with the Bright PCS acquisition, compared to $1.7 million recorded in the year ended December 31, 2002. Additionally, in accordance with the adoption of SFAS No. 144, the remaining intangible asset value of approximately $27.9 million associated with the Bright PCS acquisition was considered impaired and was written off in 2003.

     Depreciation and amortization expenses for the years ended December 31, 2003 and 2002 also included approximately $400,000 and $800,000, respectively, related to a marketing agreement established between Sprint and us in 2000. In September, 2000, we negotiated an agreement with Sprint that gave us the rights to provide services in certain new markets in exchange for stock warrants, which were to be issued by us to Sprint the earlier of an initial public offering or July 31, 2003. As a result of this agreement, we established an intangible asset that was to be amortized over the life of the management agreement with Sprint, which represented approximately $800,000 in annual amortization expense. The remaining intangible asset value of $11.3 million was considered impaired in accordance with SFAS No. 144 and written off in 2003. As part of the Plan of Reorganization, the warrants were cancelled.

     Depreciation and amortization expenses for 2002 included approximately $3.5 million of expenses related to accelerated depreciation on impaired assets. During 2002, we launched switches in Tennessee and Pennsylvania to replace certain switching equipment in Chillicothe, Ohio, which was disconnected and taken out of service As a result, the disconnected switching equipment was considered an impaired asset as defined by SFAS No. 144 and the non-depreciated portion of the asset value was written off in 2002.

     Depreciation and amortization expenses for 2002 also included goodwill amortization of approximately $13.2 million, which reflected the write off of the remaining goodwill balance on the Company’s balance sheet as a result of the adoption of SFAS No. 142 as of December 31, 2001.

     Loss on disposal of PCS assets. For the years ended December 31, 2003 and 2002, we incurred losses of approximately $200,000 and $600,000, respectively, related to the sale of network equipment and corporate-owned vehicles.

46

     Impairment of goodwill and impact of acquisition-related deferred taxes. On December 31, 2002, we performed the annual valuation assessment of goodwill in accordance with SFAS No. 142. As a result of this valuation, we recorded goodwill impairment of approximately $13.2 million, which eliminated the entire balance of goodwill as of December 31, 2002. The fair value was measured based on projected discounted future operating cash flow using a discount rate reflecting our average cost of funds.

     Interest income and other, net. Interest income and other for the year ended December 31, 2003 was approximately $900,000, compared to approximately $3.0 million in 2002. This decrease in 2003 was due primarily to a lower average balance of short-term investments during 2003 and lower short-term interest rates.

     Interest expense, net. Interest expense for the year ended December 31, 2003 was approximately $44.7 million, compared to approximately $60.6 million in 2002. The decrease in interest expense was principally the result of elimination of the annual accretion on our discount notes in 2003. Upon the bankruptcy filing, we fully accreted the discount notes to their face value of $295.0 million, accounting for this as reorganization expense, as described above. In addition, interest on the $175.0 million notes was also suspended as of the bankruptcy petition date, August 15, 2003.

     Interest expense on the senior secured credit facility was $9.0 million and $9.3 million during the years ended December 31, 2003 and 2002, respectively. Interest on the outstanding balance of our senior secured credit facility accrued at LIBOR plus a specified margin. On June 29, 2002, we agreed to several changes in the senior secured credit facility including a 25 basis point increase in the margin on the annual interest rate. As of December 31, 2003, the interest rate on the $105.0 million term loan A borrowed under our senior secured credit facility was 5.12%, while the interest rate on the $50.0 million term loan B was 5.62%.

     Interest expense on the discount notes was approximately $18.8 million and $27.2 million during the years ended December 31, 2003 and 2002, respectively. We accrued interest at a rate of 14% annually on our senior discount notes issued in September 2000 and, absent our bankruptcy filing, would have been required to pay interest semi-annually in cash beginning in October 2005. Unaccreted interest expense on the discount notes was approximately $108.7 million as of December 31, 2002. Unaccreted interest expense of approximately $89.9 million was expensed to reorganization expense at the time of the bankruptcy filing.

     Interest expense on the 13.75% senior notes was approximately $14.9 million in 2003 and approximately $24.1 million in 2002. On June 15, 2002, we began making semi-annual interest payments on our senior notes issued in December 2001 at an annual rate of 13.75%. Under the terms of the senior notes, cash to cover the first four semi-annual interest payments was placed in an escrow account. The last interest payment was not paid from the escrow account in December 2003 as scheduled. Thus we retained $12.0 million of restricted cash on our balance sheet as of December 31, 2003. The $12.0 million of restricted cash was distributed to the bondholders in October 2004 as part of the Plan of Reorganization.

     Interest expense for the years ended December 31, 2003 and 2002, also included approximately $1.9 million and $2.8 million, respectively, in amortization of deferred financing fees related to our senior secured credit facility, our senior discount notes and our senior notes. As a result of our bankruptcy filing, we expensed the remaining balance of approximately $18.1 million in debt issuance costs, to reorganization expense, as described above. Interest expense for 2003 and 2002 also included approximately $800,000 and $1.6 million, respectively, in commitment fees paid on the unused portion of our senior secured credit facility.

     Capitalized interest for the years ended December 31, 2003 and 2002 was approximately $700,000 and $4.4 million, respectively.

     Income tax (expense) benefit. In 2003, we recorded an income tax benefit of approximately $6.0 million related to a deferred tax liability. In conjunction with the write off of the intangible assets in accordance with SFAS No. 144 as describer earlier, the deferred tax liability created from the intangible assets associated with the Bright acquisition was eliminated, resulting in the tax benefit. We did not record any income tax benefit for the year ended December 31, 2002 because of the uncertainty of generating future taxable income to be able to recognize current net operating loss carryforwards.

47

     Net loss. Our net loss for the year ended December 31, 2003 was $285.8 million, compared to $176.9 million for the year ended December 31, 2002. The increase in our net loss reflected reorganization expenses and the write-off of impaired assets.

     Preferred stock dividend. Our convertible preferred stock paid a stock dividend at the rate of 7.5% per annum, payable semi-annually commencing May 1, 2001. The dividends were to be paid with additional shares of convertible preferred stock. Through December 31, 2003, we paid a cumulative total of $35,941,922 of dividends in additional shares of convertible preferred stock. As of December 31, 2003, there were 32,757,537 shares of convertible preferred stock outstanding. Under our Plan of Reorganization, the convertible preferred stock was cancelled. During our bankruptcy proceedings, we continued to accrue the dividend but did not pay the dividend.

     Other comprehensive income (loss). During 2001, we entered into two separate two-year interest rate swap contracts, effectively fixing $50.0 million of the term loan B borrowed under the senior secured credit facility. The swap contracts expired in 2003 and were not renewed. Other comprehensive income of approximately $395,000 and $443,000 was recorded for the years ended December 31, 2003 and 2002, respectively.

Liquidity and Capital Resources

     As of December 31, 2004 (Successor Company), we had $55.5 million in cash and cash equivalents compared to $70.7 million as of December 31, 2003 (Predecessor Company).

     With the net proceeds from the offering of the senior notes and subject to our ability to manage subscriber growth and achieve operating efficiencies, cash and cash equivalents, combined with cash flows from operations, are expected to be sufficient to fund any operating losses and working capital and to meet capital expenditure needs and debt service requirements for the next twelve months.

     Statement of cash flow for the year ended December 31, 2004. Net cash used in operating activities for the period October 1, 2004 to December 31, 2004 was approximately $2.1 million. This reflects the continuing use of cash for our operations to enroll subscribers and operate our network. The net loss of approximately $24.0 million was offset by approximately $25.5 million in depreciation, offset by approximately $3.6 million in other working capital changes. Net cash used in operating activities for the nine month period ended September 30, 2004 was approximately $7.6 million. This reflects the application of fresh-start accounting, the gain from the sale of the NTELOS markets, and the continuing use of cash for our operations to enroll subscribers and operate our network. Net income of approximately $427.1 million, which included approximately $17.8 million of reorganization expenses related to the bankruptcy filing, was offset by approximately $321.9 million from the cancellation of debt, $92.4 million from the gain on fresh-start adjustments, $42.1 million from the gain on Sprint Transaction and other working capital changes of approximately $2.9 million. These adjustments were offset by approximately $24.6 million in depreciation.

     Net cash provided by investing activities for the period October 1, 2004 to December 31, 2004 was approximately $9.4 million, consisting of approximately $12.0 million in restricted cash that was distributed according to the Plan of Reorganization offset by $2.6 million of capital expenditures to upgrade our network. Net cash provided by investing activities for the nine month period ended September 30, 2004 was approximately $31.5 million, consisting of approximately $33.0 million of proceeds received from the Sprint Transaction and $100,000 of proceeds from the sale of property and equipment, offset by approximately $1.6 million of capital expenditures for network equipment. We expect capital expenditures to increase in 2005 as we replace and upgrade equipment in our Ohio, Indiana and Tennessee markets with Nortel equipment. This replacement should be completed during 2005 and is estimated to cost approximately $13.0 million, less approximately $4.5 million from the sale of old equipment. Total capital expenditures anticipated during 2005 is estimated to be approximately $19.0 million, less approximately $4.5 million from the sale of old equipment for a net expenditure of $14.5 million.

     Net cash used by financing activities for the period October 1, 2004 to December 31, 2004 was approximately $12.1 million consisting of restricted cash and accrued interest that was distributed according to the Plan of Reorganization. Net cash used by financing activities for the period ended September 30, 2004 was approximately $34.2 million, consisting of $125.0 million of senior notes, offset by $155.0 million in repayments on the secured

48

     credit facilities and approximately $4.2 million in deferred financing fees on the $125.0 million senior notes. At this time, we do not plan on any significant financing activities in 2005.

     Statement of cash flow for the year ended December 31, 2003. Net cash used in operating activities for the year ended December 31, 2003 was approximately $10.3 million. This reflects the continuing use of cash for our operations to develop our subscriber base, including but not limited to providing service in our markets and the costs of acquiring new subscribers. The net loss of approximately $285.8 million was partially offset by approximately $110.1 million of non-cash restructuring charges, $37.5 million of depreciation expense, $73.8 million write-off related to impaired assets, as well as increases in accrued liabilities and the payable to Sprint.

     Net cash used in investing activities for the year ended December 31, 2003 was approximately $5.2 million and consisted entirely of capital expenditures for network equipment.

     Net cash provided by financing activities for the year ended December 31, 2003 was $24 and consisted of 200 shares of stock options exercised.

     Debt covenants. The indenture for the senior notes established new debt covenants. As of December 31, 2004, we were in compliance with such covenants.

Contractual Obligations

     We are obligated to make future payments under various contracts we have entered into, including amounts pursuant to non-cancelable operating lease agreements for office space, cell sites, vehicles and office equipment. Future minimum contractual cash obligations for the next five years and in the aggregate as of December 31, 2004, are as follows:

     Our total current liabilities were $27.8 million as of December 31, 2004. Interest payments are expected to be approximately $14.2 million per year during the term of the notes.

     On March 17, 2005, we entered into an Agreement and Plan of Merger with iPCS, another Sprint PCS Affiliate. If the merger is consummated, we will be merged with and into iPCS and the senior notes will become the direct obligation of iPCS. As of April 28, 2005, assuming the merger had been consummated prior to such date, iPCS, as the surviving company, would have had $290.0 million of indebtedness for borrowed money.

Inflation

     We believe that inflation has not had and will not have a material adverse effect on our results of operations.

Critical Accounting Policies and Estimates

     Allowance for doubtful accounts. Estimates are used in determining our allowance for doubtful accounts receivable, which are based on a percentage of our accounts receivables by aging category. The percentage is

49

derived by considering our historical collections and write-off experience, and current aging of our accounts receivable and credit-quality trends, as well as Sprint’s credit policy. A change in the actual write-offs experienced could have a material impact on our financial statements. The following table provides certain statistics on our allowance for doubtful accounts receivable:

     Reliance on the timeliness and accuracy of data received from Sprint PCS. We place significant reliance on Sprint PCS as a service provider in terms of the timeliness and accuracy of financial and statistical data related to our subscribers that we receive on a periodic basis from Sprint PCS and use in the preparation of our financial statements. We make estimates in terms of cash flow, revenue, cost of service, selling and marketing costs and the adequacy of our allowance for uncollectible accounts based on this data we receive from Sprint PCS. We obtain assurance as to the accuracy of the data through analytical review and reliance on the service auditor’s report on Sprint PCS’ internal control processing prepared by Sprint PCS’ external service auditor. Inaccurate, incomplete or untimely data from Sprint PCS could have a material adverse effect on our results of operations and cash flow, as well as on our ability to report our results.

     Revenue recognition. We recognize revenues when persuasive evidence of an arrangement exists, services have been rendered, the price to the buyer is fixed or determinable, and collectibility is reasonably assured. We recognize service revenue from our subscribers as they use the service. We pro-rate monthly subscriber revenue over the billing period and record airtime usage in excess of the pre-subscribed usage plan. Our subscribers pay an activation fee when they initiate service. We reduce recorded service revenue for billing adjustments. Effective July 1, 2003, we adopted EITF No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. This EITF guidance addresses accounting for arrangements that involve multiple revenue-generating activities. In applying this guidance, separate contracts with the same party, entered into at or near the same time, will be presumed to be a bundled transaction, and the consideration will be measured and allocated to the separate units of the arrangement based on their relative fair values. The guidance in EITF 00-21 became effective for revenue arrangements entered into for quarters beginning after June 15, 2003. We elected to apply this guidance prospectively from July 1, 2003. Prior to the adoption of EITF 00-21, under the provisions of SAB No. 101, we accounted for the sale of our handsets and our subsequent service to the customer as a single unit of accounting because our wireless service is essential to the functionality of our handsets. Accordingly, we deferred all activation fee revenue and its associated direct costs and amortized these revenues and costs over the average life of our subscribers, which we estimate to be 24 months. Under EITF 00-21 we no longer need to consider whether customers can use their handsets without our wireless service provided to them. Because we meet the criteria stipulated in EITF 00-21, the adoption of EITF 00-21 requires us to account for the sale of the handset as a separate unit of accounting from the subsequent service to the customer. With the adoption of EITF 00-21, we now recognize activation fee revenue generated from our retail stores as equipment revenue. In addition, we recognize the portion of the direct activation fee costs related to the handsets sold in our retail stores. Subsequent to July 1, 2003, we have continued to apply the provisions of SAB No. 101 and have deferred and amortized activation fee revenue and costs generated by subscribers activated other than through our retail stores.

     We participate in the Sprint PCS national and regional distribution program in which national retailers such as RadioShack and Best Buy sell Sprint PCS products and services. In order to facilitate the sale of Sprint PCS products and services, national retailers purchase wireless handsets from Sprint for resale and receive compensation from Sprint PCS for products and services sold. For industry competitive reasons, Sprint PCS subsidizes the price of these handsets by selling the handsets at a price below cost. Under our affiliation agreements with Sprint PCS, when a national retailer sells a handset purchased from Sprint PCS to a subscriber in our territory, we are obligated to reimburse Sprint PCS for the handset subsidy that Sprint originally incurred. The national retailers sell Sprint

50

wireless services under the Sprint and Sprint PCS brands and marks. We do not receive any revenues from the sale of wireless handsets by national retailers. We classify these Sprint PCS wireless handset subsidy charges as a sales and marketing expense for a wireless handset sale to a new subscriber and classify these subsidies as a cost of service for a wireless handset upgrade to an existing subscriber.

     We recognized approximately $19,000 for the period October 1, 2004 to December 31, 2004, $2,560,000 for the period January 1, 2004 to September 30, 2004, $5,182,000 in 2003 and $2,992,000 in 2002 of both activation fee revenue and customer activation expense, and had deferred approximately $279,000 and $3,749,000 of activation fee revenue and direct customer activation expense as of December 31, 2004 and 2003, respectively. In applying fresh-start reporting, the deferred activation revenue and expense were deemed to have a zero value and were eliminated in the fresh-start adjustments.

     A management fee of 8% of collected PCS revenues from Sprint PCS subscribers based in our territory is accrued as services are provided, remitted to Sprint PCS and recorded as general and administrative expense. Revenues generated from the sale of handsets and accessories, inbound and outbound Sprint PCS roaming fees, and roaming services provided to Sprint PCS customers who are not based in our territory are not subject to the 8% affiliation fee. Expense related to the management fees charged under the agreement was approximately $2,421,000 for the period October 1, 2004 to December 31, 2004, $9,559,000 for the period January 1, 2004 to September 30, 2004, $15,020,000 for the year ended December 31, 2003 and $12,027,000 for the year ended December 31, 2002.

     Impairment of long-lived assets and goodwill. We account for long-lived assets and goodwill in accordance with the provisions of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 144 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. At December 31, 2004, our assets were not deemed to be impaired. We recorded approximately $3.5 million related to accelerated depreciation on an impaired asset for the year ended December 31, 2002. SFAS No. 142 requires annual tests for impairment of goodwill and intangible assets that have indefinite useful lives and interim tests when an event has occurred that more likely than not has reduced the fair value of such assets. We recorded a goodwill impairment of $13.2 million during the year ended December 31, 2002.

     We were not in compliance with the loan covenants under our senior secured credit facility as of June 30, 2003. This created the need for an impairment assessment of our intangible assets and property and equipment as required by SFAS No. 144. Therefore, we projected future undiscounted cash flows and determined they were insufficient to recover the carrying amounts for the intangible assets and property and equipment. This required us to recognize an impairment loss for the excess of carrying value over fair value. To determine fair value, we performed a valuation utilizing a cost approach adjusted for items such as technological and functional obsolescence as appropriate.

     We determined that the carrying value of the intangible assets exceeded the fair value of the assets. As a result, we recorded impairment on the intangible assets of approximately $39.2 million. As a result of the impairment charge, we recorded a tax benefit of $6.0 million due to the reduction of a deferred tax liability related to the intangibles. As of June 30, 2003, net deferred income taxes were zero.

     Additionally, we determined that the fair market value of the property and equipment was less than the carrying value of the assets. As a result, we recorded an impairment on property and equipment of approximately $34.6 million.

     Deferred taxes. As part of the process of preparing our consolidated financial statements, we are required to estimate our taxes in each of the jurisdictions of our operations. This process involves management estimating the actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. We must then assess the likelihood that the deferred tax assets will be

51

received from future taxable income and to the extent recovery is not likely, we must establish a valuation allowance. Future taxable income depends on the ability to generate income in excess of allowable deductions. To the extent we establish a valuation allowance or increase this allowance in a period, an expense is recorded within the tax provision in the consolidated statement of operations. As of December 31, 2003 and December 31, 2004, we have recognized a valuation allowance for the full amount of the net deferred tax asset, causing it to be reported with a net balance of zero. See Note 8 in the Notes to Consolidated Financial Statements for the year ended December 31, 2004 included elsewhere in this prospectus. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. In the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to establish an additional valuation allowance that could materially impact our financial condition and results of operations. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Recent Accounting Pronouncements

     In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment, which replaces SFAS No. 123, Accounting for Stock-Based Compensation and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under SOP 90-7, pronouncements required to be implemented within 12 months of adopting fresh-start accounting should be implemented as of the fresh-start date. Thus we adopted SFAS No. 123R. We recorded approximately $641,000 in compensation expense and expect to record $3.3 million in each of 2005 and 2006. The pro forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. SFAS No. 123R is discussed further in Note 3 and did not have a material effect on our consolidated financial statements.

     In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4. The amendments made by SFAS No. 151 clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. The adoption of SFAS No. 151 is not expected to have a material impact on the Company’s financial position and results of operations.

Quantitative and Qualitative Disclosure About Market Risk

     We do not engage in commodity futures trading activities and do not enter into derivative financial instruments for speculative trading purposes. We also do not engage in transactions in foreign currencies that would expose us to additional market risk. Although in the past we have managed interest rate risk on our outstanding long-term debt through the use of fixed and variable-rate debt and interest rate swaps, we currently have no outstanding swaps.

     In the normal course of business, our operations are exposed to interest rate risk. Our primary interest rate risk exposure relates to (i) our ability to refinance our fixed-rate notes at maturity at market rates, and (ii) the impact of interest rate movements on our ability to meet interest expense requirements and financial covenants under our debt instruments.

     As of December 31, 2004, we had outstanding borrowings of approximately $125.0 million under our senior notes issued in 2004. The rate of interest on the senior notes is fixed at 11 3/8%. To the extent that we incur any floating rate financing in the future, we would be exposed to interest rate risk on such indebtedness, as variable interest rates may increase substantially.

Off-Balance Sheet Arrangements

     Other than operating lease commitments discussed in the notes to our audited consolidated financial statements included elsewhere in this prospectus, we have no off-balance sheet arrangements that would have a current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

     As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (“SPEs”), which would have been established for the purpose of facilitating off-balance sheet

52

arrangements or other contractually narrow or limited purposes. As of December 31, 2004, we were not involved in any material unconsolidated SPE transaction.

53

FORWARD-LOOKING STATEMENTS

     This prospectus contains statements about future events and expectations that are “forward-looking statements.” These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or the negative use of these terms or other comparable terminology. Any statement in this prospectus that is not a statement of historical fact may be deemed to be a forward-looking statement. These forward-looking statements include:

	•	statements regarding our anticipated revenues, expense levels, liquidity and capital resources and operating losses;
	•	statements regarding our business strategy; and
	•	statements regarding expectations or projections about markets in our territory.

          Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that such expectations will prove to be correct or that our goals will be achieved. Given these uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this prospectus. We assume no obligation to update or revise them or provide reasons why actual results may differ. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from our expectations, include, but are not limited to:

	•	the impact of our proposed merger with iPCS, Inc. and any effects of a failure of the proposed merger to be consummated;
	•	the impact of the proposed merger of Sprint and Nextel;
	•	the impact of the recent modification of our affiliation agreements with Sprint PCS;
	•	the impact of our recently completed bankruptcy proceedings;
	•	our dependence on our affiliation with Sprint PCS;
	•	the ability of Sprint PCS to alter the terms of our affiliation agreements with it, including fees paid or charged to us and other program requirements;
	•	our dependence on back-office services, such as billing and customer care, provided by Sprint PCS;
	•	changes or advances in technology;
	•	competition in the industry and markets in which we operate;
	•	our ability to attract and retain skilled personnel;
	•	our potential need for additional capital or the need to refinance any existing indebtedness;
	•	our potential inability to expand our services and related products in the event of substantial increases in demand for these services and related products;
	•	the potential impact of wireless local number portability;
	•	changes in government regulation;
	•	future acquisitions;

54

	•	the competitiveness and impact on us of Sprint PCS’ pricing plans and Sprint PCS products and services;
	•	our subscriber credit quality;
	•	continued high rate of subscriber turnover;
	•	the potential for inaccuracies in the financial information provided to us by Sprint PCS;
	•	our rates of penetration in the wireless industry and in our markets;
	•	our significant level of indebtedness;
	•	the impact and outcome of legal proceedings between other Sprint PCS network partners and Sprint PCS;
	•	adequacy of bad debt and other reserves;
	•	our anticipated future losses;
	•	our subscriber purchasing patterns;
	•	subscriber satisfaction with our network and operations;
	•	risks related to future growth and expansion, including subscriber growth;
	•	general economic and business conditions;
	•	possible risks associated with eventual compliance with Section 404 of the Sarbanes-Oxley Act; and
	•	effects of mergers and consolidations within the wireless telecommunications industry, particularly business combinations involving Sprint or affiliates of Sprint, and unexpected announcements or developments from others in the wireless telecommunications industry.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. For a discussion of some of these factors, see “Risk Factors,” beginning on page 15 of this prospectus.

55

BUSINESS

Overview

     We are a Sprint PCS Affiliate with the exclusive right to provide digital wireless personal communications services, or PCS, under the Sprint brand name to a total population of approximately 7.4 million in our licensed territory. Our territory is generally located between Sprint PCS’ Chicago, New York and Knoxville markets and connects 12 major Sprint PCS markets. We offer national and local calling plans designed by Sprint PCS. As a Sprint PCS Affiliate, we market Sprint PCS products and services through a number of distribution outlets located in our territory, including our own retail stores, major national distributors such as RadioShack and Best Buy, and our local third-party distributors. At December 31, 2004, our licensed territory had a total population of approximately 7.4 million residents, of which our wireless network covered approximately 5.4 million residents. This estimate is based upon the U.S. Census Bureau 2000 population count, adjusted by estimated growth rates from third party proprietary demographic databases. At December 31, 2004, we had approximately 183,100 subscribers in all our markets.

     We own and are responsible for building, operating and managing our portion of the Sprint PCS network located in our territory. Sprint PCS, along with the PCS Affiliates of Sprint, operates one of the largest 100% digital, nationwide wireless networks in the United States. Our portion of the Sprint PCS network is designed to offer a seamless connection with the rest of the nationwide wireless network of Sprint PCS. Like Sprint PCS, we utilize code division multiple access, or CDMA, technology across our territory. We are in compliance with applicable Sprint PCS build-out requirements for our networks. We do not own any of the FCC licenses that we use to operate our wireless network, and our operations and revenues are substantially dependent on the continuation of our affiliation with Sprint PCS. Additionally, our affiliation agreements with Sprint PCS give Sprint PCS a substantial amount of control over factors that significantly affect the conduct of our business.

     For the period from October 1, 2004 to December 31, 2004, we had total revenue of $45.2 million and a net loss of $24.0 million.

     Horizon PCS, Inc. was formed in 2000 as the holding company of Horizon Personal Communications, Inc. and Bright Personal Communications Services, LLC, both of which are the parties to our affiliation agreements with Sprint PCS.

Our Relationship With Sprint

     Sprint PCS directly operates its PCS network which utilizes CDMA in major markets throughout the United States and has entered into independent agreements with various companies such as us, under which each has become a Sprint PCS Affiliate and has agreed to construct and manage PCS networks which utilize CDMA in smaller metropolitan areas and along major highways designed to operate seamlessly with the Sprint PCS network. CDMA is a digital spread-spectrum wireless technology that allows a large number of users to access a single frequency band by assigning a code to all speech bits, sending a scrambled transmission of the encoded speech over the air and reassembling the speech into its original format. Sprint PCS, together with its affiliates, operates PCS systems in over 300 metropolitan markets, including the 100 largest U.S. metropolitan areas. Sprint PCS’ service, including third party affiliates like us, reaches approximately a quarter billion people.

     Pursuant to our affiliation agreements with Sprint PCS, we agreed to offer PCS services using Sprint’s spectrum licenses under the Sprint brand name on our wireless network that we built and operate at our own expense. A network build-out consists of installing radio base stations, switches and other PCS transmission equipment and software in order to operate a wireless network in accordance with the requirements of our affiliation agreements with Sprint PCS. We also agreed to provide network coverage to a minimum percentage of the population in our territory within specified time periods. We believe that we are in compliance with all applicable build-out requirements.

56

Competitive Strengths

Strategic Relationship with Sprint PCS

          Our strategic relationship with Sprint PCS allows us to offer high-quality, nationally branded wireless voice and data services and provides us a high-margin roaming revenue stream from Sprint PCS and other wireless carriers that contract with Sprint PCS for roaming services in our territory. For example, we benefit from Sprint PCS’:

	•	Strong brand recognition and nationwide advertising. Sprint PCS conducts national and regional television, radio, print, outdoor and other advertising campaigns.
	•	National retailer sales. National retailers with existing distribution relationships with Sprint PCS market Sprint PCS products and services under the highly recognizable Sprint and Sprint PCS brand names in their stores in our territory.
	•	Sprint PCS network. Our subscribers can immediately access Sprint PCS’ network system in over 300 major metropolitan areas, including the 100 largest metropolitan areas.
	•	Advanced technology. We believe that the CDMA technology used by Sprint PCS offers advantages in capacity and voice quality, as well as access to advanced features, such as Sprint PCS’ suite of PCS Vision products.
	•	Handset availability and pricing. Sprint PCS’ purchasing leverage allows us to acquire the latest innovative handsets more quickly and at a lower cost than we could if we did not have an affiliation with Sprint PCS.

Sprint PCS’ National Reseller Agreements

     We currently receive additional revenue as a result of Sprint PCS’ relationships with certain wireless resellers whose subscribers, whether based within or outside our territory, use our portion of the Sprint PCS network. For the year ended December 31, 2004, resale subscribers incurred approximately 94.7 million minutes of use on our network, primarily under a resale agreement we entered into with Virgin Mobile under the terms of an agreement between Sprint PCS and Virgin Mobile. Pursuant to our recently amended affiliation agreements with Sprint PCS, we will participate in all resale arrangements between Sprint PCS and resellers that are entered into, renewed or extended by Sprint PCS prior to December 31, 2006, subject to certain limitations.

Attractive Markets

     We believe our markets are attractive for a number of reasons:

	•	Fewer competitors. Because we generally operate in less populated markets, we believe that we face fewer competitors in most of our markets than wireless providers operating in more urban areas.
	•	Attractive Roaming Characteristics. We benefit from a favorable roaming ratio and a favorable contractual roaming rate of $0.10 per minute with Sprint PCS and its PCS Affiliates in several of our markets in Pennsylvania and New York. This special rate will terminate on the earlier of December 31, 2011 or the first day of the calendar month which follows the first calendar quarter during which we achieve a subscriber penetration rate of at least 7% or our covered POPs. During the three-month period ended December 31, 2004, our ratio of inbound travel and roaming revenues to outbound travel and roaming expenses was approximately 1.7 to 1. We attribute our attractive roaming characteristics to the following features of our markets:

	—	our territory is generally located between Sprint PCS’ Chicago, New York and Knoxville markets and connects 12 major Sprint PCS markets;
	—	we have network coverage of the major and secondary highways in our territory, including 1,581 miles of interstate highways comprising the principal travel corridors between large urban centers; and
	—	our territory includes 18 colleges and universities with a total enrollment of approximately 133,860 students. We believe that the colleges and universities in our markets result in additional subscribers and increased roaming revenue from wireless subscribers using our portion of the Sprint PCS network.

57

Strategy

     Our key business strategies include the following:

Target High-Quality Subscribers

     We are refocusing our sales and distribution channels on obtaining subscribers with a high anticipated “lifetime” value to us. The lifetime value of a subscriber is a function of the subscriber’s ARPU, churn and bad debt, considered in light of the cost per gross addition (“CPGA”) and cost of service associated with that subscriber. We will focus on adding subscribers with higher-priced plans, such as our 3G data service, which is called PCS Vision, favorable roaming characteristics, lower anticipated churn rates and lower anticipated bad debt expense. This strategy will have an impact on our entire operation, including our marketing and advertising strategies, our deposit requirements and other approaches to sub-prime credit subscribers, the location of our retail stores and the commission structure for sales compensation. As a result of these and other activities, the prime segment of our subscriber base has increased from 78.8% as of December 31, 2003 to 81.0% as of December 31, 2004. In addition, our bad debt expense as a percent of subscriber revenue has declined from 4.0% for the twelve months ended December 31, 2003 to 3.3% for the twelve months ended December 31, 2004.

Maintain and Enhance Historical Efficiency in Subscriber Acquisition Costs

     We intend to manage our distribution channel mix to sustain a favorable CPGA while supporting the acquisition of high-quality subscribers. The performance of our retail store channel will be continually evaluated based upon CPGA targets, historical or expected attainment of minimum sales productivity levels and subscriber lifetime value. This ongoing evaluation of our retail store portfolio has resulted in the closure of certain locations, the relocation of others and the potential opening of incremental locations where market opportunities exist. As a result of the rejection or termination of many of our retail store leases before and during our Chapter 11 proceeding, we now operate nine full-service stores and two customer-services stores. We plan to add most new subscribers through national third-party distribution arrangements, through local third-party distributors, and through efficient Sprint-controlled channels such as telesales and e-commerce. We plan to spend fewer dollars per gross subscriber additions on local marketing support, either in the form of advertising or sales incentives. We plan to continue to manage our handset assortment and upgrade policies to optimize subsidy costs and will maintain commission plans that create and compensate for a balance between sales quality and sales volume. We believe we can sustain a favorable rate of higher quality subscriber acquisitions with this more targeted marketing approach.

Leverage Our Third-Generation Network Platform

     Our 1xRTT network platform, which is our 3G network platform, enables us to derive recurring data revenue and to handle more subscribers with fewer blocked and dropped calls. We began offering PCS Vision during August 2002. During the three months ended December 31, 2004, new subscribers choosing our PCS Vision service represented approximately 47.0% of our gross subscriber activations. Approximately 47,300 subscribers as of December 31, 2004, or 26.0% of our subscriber base, were using a PCS Vision plan. PCS Vision contributed $2.94 to our ARPU during the three months ended December 31, 2004 compared to $1.57 during the three months ended December 31, 2003. Also, our 1xRTT network platform is more efficient than prior platforms in processing voice calls, which we believe will help us drive down capital expenditures associated with maintaining our quality of service. Our overall blocked call rates have increased from approximately 2.1% for the twelve months ended December 31, 2003 to 2.3% for the period ended December 31, 2004. Our overall dropped call rates have declined from approximately 2.2% for the twelve months ended December 31, 2003 to 2.0% for the twelve month period ended December 31, 2004.

Continue to Realize the Benefit of Roaming, Travel and Wholesale Arrangements

     We intend to continue to take advantage of our favorable roaming, travel and wholesale arrangements to generate high-margin revenues. Our most significant reseller arrangement is with Virgin Mobile. In the third quarter of 2003, Sprint PCS completed a resale agreement with Qwest Communications that added Qwest’s wireless subscribers to the Sprint PCS network. We will evaluate these and future wholesaling opportunities from Sprint, and we will opt-in to new wholesale arrangements when the economics are favorable. Even if we do not opt-in to a new wholesale arrangement, we will nonetheless receive revenue when the subscribers of a new reseller roam into our territory.

58

Markets

     We believe we operate in attractive markets with favorable roaming and travel characteristics. Our territory is generally located between Sprint PCS’ Chicago, New York and Knoxville markets and connects 12 major Sprint PCS markets. We have network coverage of the major and secondary highways in our territory, including 1,581 miles of interstate highways comprising the principal travel corridors between large urban centers. As a result of our extensive network coverage of the major and secondary highways in our territory, we have consistently received significant roaming revenue from wireless subscribers using our portion of the Sprint PCS network. In addition, our markets include 18 colleges and universities with a total enrollment of approximately 133,860 students. We believe that the colleges and universities in our markets result in additional subscribers and increased roaming revenue from wireless subscribers using our portion of the Sprint PCS network. These market characteristics have led to a favorable ratio of Sprint PCS subscribers from outside our territory and subscribers of other wireless service providers using our portion of the Sprint PCS network as compared to our subscribers using wireless communications networks outside our territory.

     Our territory covers 40 markets in parts of Indiana, Kentucky, Maryland, Michigan, New York, Ohio, Pennsylvania, Tennessee and West Virginia. The following table lists the location, BTA number, megahertz of spectrum licensed and estimated total residents for each of the markets that comprise our territory under our affiliation agreements with Sprint PCS as of December 31, 2004. The number of estimated covered residents for each basic trading area does not represent the number of our subscribers in such basic trading area, nor does it represent the number of subscriber that we expect to be based in such basic trading area. At December 31, 2004, we had an aggregate of approximately 183,100 subscribers in all our markets.