UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

Commission file number    000-27743



Pac-West Telecomm, Inc.



|California                                                     | 68-0383568                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

1776 W. March Lane, Suite 250
Stockton, California     95207

(209) 926-3300







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [   ]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).  YES [  ]  NO [X]

As of March 31, 2003, the Company had an aggregate of 36,449,326 shares of common stock issued and outstanding.









Pac-West Telecomm, Inc.

Report on Form 10-Q For the Quarterly Period Ended March 31, 2003
Table of Contents



|PART I.   FINANCIAL INFORMATION                                                                                        | Page No.
|---------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                       |         
|Item 1.   Interim Financial Statements
                  (unaudited):                                                  |         
|                                                                                                                       |         
|Consolidated Balance Sheets as of March 31, 2003
         and December 31, 2002                                        | 3       
|                                                                                                                       |         
|Consolidated Statements of Operations for the three months
          
         ended March 31, 2003 and 2002           | 4       
|                                                                                                                       |         
|Condensed Consolidated Statements of Cash Flows
          
         for the three months ended March 31, 2003 and 2002 | 5       
|                                                                                                                       |         
|Notes to Consolidated Financial Statements                                                                             | 6       
|                                                                                                                       |         
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations  | 12      
|                                                                                                                       |         
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                   | 22      
|                                                                                                                       |         
|Item 4.   Controls and Procedures                                                                                      | 23      
|                                                                                                                       |         
|PART II.  OTHER INFORMATION                                                                                            |         
|                                                                                                                       |         
|Item 1.   Legal Proceedings                                                                                            | 24      
|                                                                                                                       |         
|Item 6.   Exhibits and Reports on Form 8-K                                                                             | 24      
|                                                                                                                       |         
|Signatures                                                                                                             | 25      
|                                                                                                                       |         
|Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                     | 26      
|                                                                                                                       |         
|Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                     | 27      

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Part I

ITEM 1. FINANCIAL STATEMENTS



---

PAC-WEST TELECOMM, INC.

                     Condensed Consolidated Balance Sheets

                                (Unaudited)

`March 31,     December 31,
                                                               2003           2002
                                                           -------------  -------------

                           ASSETS
Current Assets:
   Cash and cash equivalents............................. $  47,880,000  $  28,050,000
   Short-term investments................................     4,004,000     29,209,000
   Trade accounts receivable, net of allowances of
      $1,402,000 and $1,660,000, respectively ...........    11,837,000     12,624,000
   Prepaid expenses and other current assets.............     5,064,000      4,304,000
   Deferred tax assets...................................     4,569,000      4,569,000
                                                           -------------  -------------
       Total current assets..............................    73,354,000     78,756,000
Property and equipment, net..............................   148,127,000    160,768,000
Other assets, net........................................     3,412,000      3,492,000
                                                           -------------  -------------
       Total assets...................................... $ 224,893,000  $ 243,016,000
                                                           =============  =============

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable...................................... $   8,983,000  $  10,058,000
   Current obligations under capital leases..............     7,881,000      7,881,000
   Fiber IRU liability...................................     4,200,000      4,200,000
   Accrued interest on Senior Notes......................     2,378,000      5,522,000
   Current portion deferred tax liability................            --         70,000
   Other accrued liabilities ............................    20,025,000     19,579,000
   Deferred revenues.....................................       746,000        755,000
                                                           -------------  -------------
       Total current liabilities.........................    44,213,000     48,065,000
                                                           -------------  -------------
Senior Notes.............................................    95,102,000     95,102,000
Notes payable............................................        70,000         30,000
Capital leases, less current portion.....................       346,000      2,311,000
Deferred revenues, less current portion..................       517,000        527,000
Deferred income taxes....................................     7,806,000      9,745,000
                                                           -------------  -------------
       Total liabilities.................................   148,054,000    155,780,000
                                                           -------------  -------------
Commitments and Contingencies (Note 10)
Stockholders' Equity:
   Common stock, $.001 par value; 100,000,000 shares
       authorized 36,449,326 and 36,444,094 shares issued
       and outstanding, respectively.....................        36,000         36,000
   Additional paid-in capital............................   183,601,000    183,668,000
   Note receivable from stockholder......................      (200,000)      (200,000)
   Accumulated deficit...................................  (106,350,000)   (96,026,000)
   Accumulated other comprehensive loss..................      (248,000)      (156,000)
   Deferred stock compensation...........................            --        (86,000)
                                                           -------------  -------------
       Total stockholders' equity........................    76,839,000     87,236,000
                                                           -------------  -------------
       Total liabilities and stockholders' equity........ $ 224,893,000  $ 243,016,000
                                                           =============  =============`

See accompanying notes to unaudited condensed consolidated financial statements.



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PAC-WEST TELECOMM, INC.

               Condensed Consolidated Statements of Operations

                      and Comprehensive Gain (Loss)

                               (Unaudited)

`Three Month Period Ended
                                                            March 31,
                                                    --------------------------
                                                        2003          2002
                                                    ------------  ------------
Revenues.......................................... $ 30,515,000  $ 43,092,000

Costs and Expenses:
    Cost of sales.................................   10,698,000    13,760,000
    Selling, general and administrative...........   14,922,000    14,333,000
    Depreciation and amortization.................   14,148,000     9,960,000
                                                    ------------  ------------
      Total operating expenses....................   39,768,000    38,053,000
                                                    ------------  ------------
        Income (loss) from operations.............   (9,253,000)    5,039,000
                                                    ------------  ------------
Other (Income) Expense:
    Interest expense, net.........................    2,990,000     4,674,000
    Gain on repurchase of bonds...................           --   (11,942,000)
    Other expense.................................        9,000            --
                                                    ------------  ------------
      Total other (income) expense, net...........    2,999,000    (7,268,000)
                                                    ------------  ------------
      Income (loss) before provision
      (benefit) from income taxes ................  (12,252,000)   12,307,000
Income tax expense (benefit)......................   (1,928,000)    4,923,000
                                                    ------------  ------------
      Net income (loss) .......................... $(10,324,000) $  7,384,000
                                                    ============  ============

Basic and diluted income (loss) per share......... $      (0.28) $       0.20

Basic weighted average shares outstanding.........   36,449,326    36,148,487

Diluted weighted average shares
    outstanding...................................   36,449,326    36,205,308

Comprehensive gain (loss):
    Net income (loss)............................. $(10,324,000) $  7,384,000
      Other comprehensive loss....................      (92,000)     (141,000)
                                                    ------------  ------------
      Comprehensive income (loss)................. $(10,416,000) $  7,243,000
                                                    ============  ============`

See accompanying notes to unaudited condensed consolidated financial statements.



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PAC-WEST TELECOMM, INC.

          Condensed Consolidated Statements of Cash Flows

                         (Unaudited)

`Three Month Period Ended
                                                                        March 31,
                                                                ----------------------------
                                                                   2003           2002
                                                                -------------  -------------
Operating activities:
    Net income (loss)......................................... $ (10,324,000) $   7,384,000
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
        Depreciation and amortization.........................    14,148,000      9,960,000
        Amortization of deferred financing costs..............       105,000        226,000
        Amortization of deferred stock compensation...........            --         26,000
        Gain on redemption of bonds...........................            --    (11,942,000)
        Deferred income taxes ................................    (2,008,000)     4,923,000
        Loss on disposal of property and equipment............         9,000             --
        Changes in operating assets and liabilities:
            Accounts receivable...............................       787,000     (2,272,000)
            Inventories.......................................       268,000       (148,000)
            Prepaid expenses and other current assets.........      (760,000)       590,000
            Other assets......................................       (80,000)        55,000
            Accounts payable and other accrued liabilities....      (653,000)    (3,054,000)
            Accrued interest .................................    (3,144,000)    (5,292,000)
                                                                -------------  -------------
        Net cash provided by (used in) operating activities...    (1,652,000)       456,000
                                                                -------------  -------------
Investing activities:
    Purchase of property and equipment........................    (1,750,000)    (7,488,000)
    Proceeds from disposal of property and equipment..........        20,000         15,000
    (Purchases) redemptions of short-term investments, net....    25,113,000     (5,207,000)
                                                                -------------  -------------
        Net cash provided by (used in) investing activities...    23,383,000    (12,680,000)
                                                                -------------  -------------
Financing activities:
    Net proceeds from borrowings under notes payable..........        45,000             --
    Proceeds from stock option exercises......................        19,000             --
    Principal payments on capital leases......................    (1,965,000)    (1,972,000)
    Payments for deferred financing costs.....................            --       (200,000)
    Repurchase of Senior Notes payable........................            --     (8,288,000)
                                                                -------------  -------------
        Net cash used in financing activities.................    (1,901,000)   (10,460,000)
                                                                -------------  -------------
        Net increase (decrease) in cash and cash equivalents..    19,830,000    (22,684,000)
Cash and cash equivalents:
    Beginning of period.......................................    28,050,000     64,029,000
                                                                -------------  -------------
    End of period............................................. $  47,880,000  $  41,345,000
                                                                =============  =============
Supplemental Disclosure of Cash Flow Information:
    Cash paid for interest.................................... $   6,463,000  $   5,000,000`

See accompanying notes to unaudited condensed consolidated financial statements.



---

PAC-WEST TELECOMM, INC.

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

       AS OF AND FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2003

The terms "the Company," "Pac-West," "we," "our," "us," and similar terms
used in this Form 10-Q, refer to Pac-West Telecomm, Inc.

1. Organization and Basis of Presentation:
2. Description and Summary of Significant Accounting Policies:
3. Concentration of Customers and Suppliers

|                                                                                                            | March 31, 2003 | March 31, 2002
|----------------------------------------------------------------------------------------------------------- | -------------- | --------------
|Revenues (percent of revenues): Incumbent Local
Exchange Carriers (ILECs)                                   | 30.8%          | 54.5%         
|Expenses (percent of cost of sales): largest
supplier (largest source of operating costs was also one ILEC) | 44.2%          | 20.2%         



During the quarters ended March 31, 2003 and 2002, revenue
from SP customers accounted for approximately 33.6% and 23.5%, respectively, of
our total revenues, and accounted for approximately 31.5% and 51.3%,
respectively of our accounts receivable as of March 31, 2003 and 2002. This
revenue does not include reciprocal compensation related to terminating calls to
SPs, long distance services and dedicated transport services.

A summary of the restructuring expenses and the
associated remaining liability pertaining to the Company's previously announced
2001 and 2002 restructuring plans, which is included in other accrued
liabilities in the accompanying condensed consolidated balance sheet as of March
31, 2003, consist of the following:

`Remaining                                             Balance of
                                          Restructuring  Additional    Non-Cash       Cash      Restructuring
                                           Liability    Restructuring   Charges     Payments      Liability
                                             as of        Expense     Applied to   Charged to       as of
                                          Dec. 31, 2002   Incurred     Liability    Liability   Mar. 31, 2003
                                          ------------  ------------  -----------  -----------  -------------
Rent expense for vacated premises....... $  3,476,000  $         --  $        --  $  (179,000) $   3,297,000
Circuit obligations.....................    2,800,000            --           --     (273,000)     2,527,000
Other charges...........................       87,000            --           --        1,000         88,000
                                          ------------  ------------  -----------  -----------  -------------
                                         $  6,363,000  $         --  $        --  $  (451,000) $   5,912,000
                                          ============  ============  ===========  ===========  =============`



During the quarter ended March 31, 2002, the Company
purchased from holders of its Senior Notes an aggregate of approximately $21.0
million principal amount of Senior Notes at a substantial discount to face
value. The differences between the amounts paid to the holders of the Senior
Notes and the face values of the amounts purchased and costs paid to outside
parties to complete the transaction, were recorded as gains on repurchase of
bonds of approximately $11.9 million for the quarter ended March 31, 2002.



The Company's effective income tax rates for the quarters
ended March 31, 2003 and 2002 reflect the applicable federal and state statutory
income tax rates.  For the quarters ended March 31, 2003 and 2002, the Company's
effective income tax rate was 15.7% and 40.0%, respectively.

For the quarters ended March 31, 2003 and 2002, there was
$92,000 and $141,000, respectively, of other comprehensive loss pertaining to
the net unrealized investment losses on available-for-sale marketable
securities.

Property and equipment is stated at cost and includes network
and other communication equipment, equipment under capital leases, office
furniture, business software and computer equipment, vehicles, leasehold
improvements, and projects in progress. Expenditures for repairs and
maintenance, which do not extend the useful life of the property and equipment,
are charged to expense as incurred. Depreciation of the asset does not commence
until the asset is placed into service. Upon retirement, the asset cost and
related accumulated depreciation are written off. Gains and losses associated
with dispositions or impairment of property and equipment are reflected in Other
(income) expense in the accompanying condensed consolidated statements of
operations. Depreciation and amortization is computed using the straight-line
method.  Estimated useful lives range from 3 to 20 years.



During the quarter ended March 31, 2003, the Company reduced the useful life for phone equipment provided to
customers and computer hardware from 5 years to 3 years. In addition, the
Company extended the useful life of certain leasehold improvements from 10 years
to up to 20 years. For phone equipment provided to customers and computer
hardware that had already been depreciated three years or longer as of January
2003, the change in the estimated useful lives resulted in those assets being
written off in the quarter ended March 31, 2003. Total equipment written off in
the quarter was approximately $2.5 million. For phone equipment provided to
customers and computer hardware that had not been depreciated three years or
longer as of January 2003, the change in the estimated useful lives resulted in
an increase in monthly depreciation expense. The change in depreciation expense
is prospective only as the increase in depreciation expense only applies to
current and future periods. The increase in depreciation expense related to the
useful life change was approximately $1.6 million for the quarter ended March
31, 2003, but will decrease over time as assets become fully depreciated. The
change in the useful life of the leasehold improvements resulted in a decrease
in amortization expense on a prospective basis of less than $0.1 million for the
quarter.



For the quarter ended March 31, 2003, the Company included
the value of undeployed telephone systems and equipment previously shown as
inventory as a component of property and equipment.  The Company has
reclassified the prior year's balance to conform to the current year
presentation. The effect of this reclassification was an increase in property
and equipment of $1.2 million and a corresponding decrease in inventory for the
period ended December 31, 2002, as reflected in the accompanying condensed
consolidated balance sheets.

On January 29, 1999, the Company issued $150 million of
Senior Notes at par.  The Senior Notes bear interest at 13.5 percent per annum
payable in semiannual installments, with all principal due in full on February
1, 2009.  During the first, third and fourth quarters of 2002, the Company paid
approximately $20.7 million to repurchase approximately $54.9 million principal
amount of Senior Notes resulting in a gain of $33.8 million, net of the write-
off of related capitalized debt issuance costs and costs paid to outside parties
to complete the transaction.  As of March 31, 2003, the principal amount due on
the Senior Notes was $95.1 million.



In 2001 and 2000, the Company leased $23.3 million of
networking products manufactured by Cisco Systems, Inc.  Equipment financed
under this lease facility is being leased for a term of 36 months at which time
the Company may purchase the equipment at its fair market value.  These
networking products have been accounted for as a capital lease.  During the
quarters ended March 31, 2003 and 2002, the Company made principal payments and
recorded depreciation expense of approximately $2.0 million in each of the
quarters, related to this leased equipment. As of March 31, 2003, the Company
has future obligations, excluding interest, of $8.2 million that will be paid
over the remaining terms of the leased equipment.







Purchase Commitments



The Company purchases its switching equipment and products
from several suppliers.  During the normal course of business, the Company may
enter into agreements with certain of its suppliers, which allow these suppliers
to have equipment or inventory available for purchase based upon criteria as
defined by the Company.   As of March 31, 2003, the Company did not have any
material future purchase commitments to purchase equipment or inventory from any
of its vendors.



On June 30, 2000, the Company entered into an Indefeasible
Right of Use (IRU) agreement with Qwest Communications (Qwest) to acquire rights
of use of dedicated fiber optics circuits of OC-48 capacity connecting major
metropolitan areas in California.  The IRU agreement is for a term of 20 years
and includes bargain purchase options at the end of the term.  The total cost of
the IRU is approximately $23.0 million of which $5.8 million was paid on July
28, 2000. During the second quarter of 2002, the Company amended the IRU
Agreement with Qwest and entered into a short-term note payable, which extended
the payment terms beyond the date the IRU became operational.  In accordance
with the new agreement, the Company paid Qwest $8.6 million on May 15, 2002 and
$4.4 million on December 15, 2002, with the remaining balance of $4.2 million
due and payable on May 15, 2003.  Per the terms of the new agreement, the
payment due May 15, 2003 accrues interest at a variable rate, equal to the Prime
Rate plus 2% per annum, which was 6.25% as of March 31, 2003. The IRU is
included in network and other communications equipment.



Reciprocal Compensation, and Legal Proceedings

The Company has established interconnection agreements
(ICAs) with certain ILECs. The Telecommunications Act of 1996 requires ILECs to
enter into ICAs with CLECs, such as the Company, and other competitors and
requires state Public Utilities Commissions (PUCs) to arbitrate such agreements
if the parties cannot reach agreement.

The ICAs outline, among other items, reciprocal compensation
arrangements for calls originating or terminating in the other party's switching
equipment, payment terms, and level of services.



The Company is a party to several consolidated appeals before
the Ninth Circuit United States Court of Appeals which involve decisions of the
California Public Utilities Commission (CPUC) holding that local telephone calls
placed to ISPs are local calls entitled to reciprocal compensation, and that
Pac-West's ICAs with SBC-California and Verizon-California may provide for the
payment of reciprocal compensation for calls destined for ISP customers of Pac-
West.  The lower courts have upheld the decisions of the CPUC.  These appeals
have been consolidated with appeals concerning reciprocal compensation arising
from district court decisions in Oregon and Washington state in cases in which
the Company is not a party.



On March 29, 2002, SBC-California filed a Petition for
Arbitration with the CPUC with respect to its ICA with the Company, which would
replace the similar agreement which expired in June of 2001, but which continues
in effect until replaced pursuant to its terms.  The matter is now pending
before the CPUC for final decision. Two alternative decisions have been proposed
for consideration by the CPUC.  The decisions are identical except that one
alternate decision would require the Company to pay SBC-California certain
charges when SBC-California carries a category of telephone calls referred to as
"VNXX Calls" from its customers to certain customers of the Company not
physically located in the same local calling area as the calling party.  We have
previously estimated that these charges would approximate $40 million per year
for the three year term of the agreement. Through further studies we have
estimated that the Company could extend the geographic scope of its network to
avoid such charges through expenditures of approximately $4.0 million per year.
Both alternate decisions approve the continued payment of reciprocal
compensation for all local calls, including those to ISP customers of the
Company, which was voluntarily agreed to by the parties.



On June 12, 2002, Verizon California filed a Petition for
Arbitration with the CPUC with respect to its ICA with the Company which would
replace the similar agreement which expired in April of 2002, but which has
continued in effect until replaced pursuant to an order of the CPUC.  The matter
is now pending before the CPUC for final decision. Two alternative decisions
have been proposed for consideration by the CPUC, which raise the same issue as
described above with respect to the SBC-California arbitration, except that the
potential financial impact of the proposed charges on VNXX calls would be
significantly smaller.



The Company cannot predict the outcome of the CPUC Commission
proceedings, future appeals or additional pending cases involving related
issues, or of the applicability of such proceedings to our ICA with these two or
other ILECs.  As a result, no assurance can be given that we will continue to
collect reciprocal compensation in the future, or that additional charges may
not be imposed upon the Company under such agreements in the future.  ISPs
currently form a significant part of our customer base in California and adverse
decisions in these or related FCC proceedings could limit our ability to serve
this group of customers profitably and have a material adverse effect on us.



The Company is currently negotiating and implementing new
ICAs and the terms including reciprocal compensation. The Company expects that
reciprocal compensation will continue to represent a significant portion of our
revenues in the future and we expect the per minute reciprocal compensation rate
to be relatively stable. Furthermore, the policies of the CPUC and other
regulatory bodies are subject to change with respect to issues which affect the
economic structure of interconnection agreements in other ways, and these issues
can differ from time to time.

Other Legal Proceedings



On December 6, 2001, a complaint captioned Krim v Pac-West
Telecomm, Inc., et. al., Civil Action No. 01-CV-11217, was filed in United
States District Court for the Southern District of New York against the Company,
certain executive officers, and various underwriters in connection with our
initial public offering.   An amended complaint was filed on April 19, 2002.
The plaintiffs allege undisclosed improper underwriting practices concerning the
allocation of shares of the Company's common stock in exchange for excessive
brokerage commissions or agreements to purchase shares at higher prices in the
aftermarket, in violation of Section 11 of the Securities Act of 1933.  The
complaint also included a claim for securities fraud under Section 10(b) of the
Securities Exchange Act of 1934.   Substantially similar actions have been filed
concerning the initial public offerings for more than 300 different issuers, and
the cases have been coordinated as In re Initial Public Offering Securities
Litigation, 21 MC 92.  The complaint against the Company seeks unspecified
damages on behalf of a purported class of purchasers of its common stock.
Management believes that the plaintiff's claims against the Company are without
merit and is defending the case vigorously utilizing experienced counsel
retained by a number of issuers and individual defendants in the cases in order
to syndicate cost of defense as to common issues.  The cost of defense is bourn
by insurance. Insurance coverage exists for most of the claims asserted to date
against the Company and the Company may have indemnification rights against its
underwriters depending on the outcome of the case as against those underwriters.
In October 2002, the executive officers of the Company were dismissed from the
action by agreement with the plaintiffs which also resulted in tolling of the
statute of limitations.  The court recently dismissed the Section 10(b) claim
against the Company.



From time to time, the Company is a party to litigation that
arises in the ordinary course of business.  The Company believes that the
resolution of this litigation, and any other litigation the Company may be
involved with in the ordinary course of business, will not materially harm its
business, financial condition or results of operations.











In December 2002, FASB issued Statement of Financial
Accounting Standards No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure" (SFAS 148). SFAS 148 amends Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), to provide alternative methods of transition for
companies that voluntarily change to a fair value-based method of accounting for
stock-based employee compensation. SFAS 148 also amends the disclosure
provisions of SFAS 123. The Company adopted the disclosure provisions of SFAS
148, as of December 31, 2002.



The Company follows Accounting Principles Board Opinion No.
25, "Accounting for Stock Issues to Employees" (APB 25) for its stock
based compensation plans.  The Company has adopted the disclosure-only
provisions of SFAS 123, "Accounting for Stock-Based Compensation", to disclose
pro forma information regarding options granted to its employees based on
specified valuation techniques that produce estimated compensation charges.
Amounts related to APB 25 have not been reflected in the Company's condensed
consolidated statements of operations because no compensation arises when the
price of the employees' stock options equals the market value of the underlying
stock at the date of grant, as is the case for options granted under our plans.



The Company uses the Black-Scholes option-pricing model to
derive the theoretical fair value of employee stock option grants. The fair
value of each option was estimated on the date of grant using the Black-Scholes
option pricing model with the following assumptions used for the grants:
expected dividend yield of 0 percent for each of the periods in 2002 and 2003;
expected volatility of 100% for each of the periods in 2002 and 2003; weighted
average risk-free interest rates ranging of 3.39% and 2.55% for the periods in
2002 and 2003, respectively; and expected lives of four years for the periods in
2002 and 2003.



Basic and diluted net income (loss) per share for the
quarters ended March 31, 2003 and 2002 has been determined as follows:

`Three Month Period Ended
                                                            March 31,
                                                    --------------------------
                                                        2003          2002
                                                    ------------  ------------
                                                    (unaudited)   (unaudited)
Net income (loss) available to common shareholders:

 As reported...................................... $(10,324,000) $  7,384,000
 Total stock based employee compensation (expense)
  benefit included in reported net income, net of      (662,714)     (485,269)
                                                    ------------  ------------
 Pro forma........................................ $(10,986,714) $  6,898,731

Basic earnings (loss) per common share
 As reported...................................... $      (0.28) $       0.20
 Pro forma........................................ $      (0.30) $       0.19

Diluted earnings (loss) per common share
 As reported...................................... $      (0.28) $       0.20
 Pro forma........................................ $      (0.30) $       0.19

                                                    ============  ============`



In June 2002, the FASB issued Statement of Financial
Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" (SFAS 143). This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement applies to all
entities. It applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and/or the normal operation of a long-lived asset, except for certain
obligations of lessees. As used in this Statement, a legal obligation is an
obligation that a party is required to settle as a result of an existing or
enacted law, statute, ordinance, or written or oral contract or by legal
construction of a contract under the doctrine of promissory estoppel.  The
Company has adopted SFAS No. 143 as of January 1, 2003 as required and the
adoption of this statement did not significantly impact its financial position,
results of operations and cash flows.

In January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities (FIN No. 46). FIN No. 46 addresses
the consolidation and financial reporting of variable interest entities. FIN No.
46 is effective for financial statements of interim or annual periods beginning
after June 15, 2003, for variable interest entities created before February 1,
2003, or immediately for variable interest entities created after February 1,
2003. The Company does not anticipate the adoption of this statement to
significantly impact its financial position, results of operations and cash
flows.

Bay Alarm Company (Bay Alarm)

Bay Alarm (a stockholder of the Company) and its
subsidiary, InReach Internet, LLC, are collectively a large customer of the
Company, comprising approximately 1.3% and 1.4%, or $398,000 and $610,000 of the
Company's total revenues for the quarters ended March 31, 2003 and 2002,
respectively. As of March 31, 2003 and 2002 the Company had amounts due from Bay
Alarm of $24,000 and $25,000, respectively.  These amounts are included in trade
accounts receivable, net, in the accompanying condensed consolidated balance
sheets.

Bay Alarm provides the Company with security monitoring
services at its normal commercial rates. The Company has recorded approximately
$20,000 and $5,000 of expenses for these services for the quarters ended March
31, 2003 and 2002, respectively. The Company also leases a facility in Oakland
from Bay Alarm. Rents paid under this lease were approximately $81,000 and
$42,000 for the quarters ended March 31 2003 and 2002, respectively. All
expenses paid to Bay Alarm are included in selling, general and administrative
expenses in the accompanying condensed consolidated statements of operations.









ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except for the historical information contained herein,
this report contains forward-looking statements, subject to uncertainties and
risks. In this Quarterly Report on Form 10-Q, our use of the words "outlook,"
"expect," "anticipate," "estimate," "forecast," "project," "likely,"
"objective," "plan," "designed," "goal," "target," and similar expressions is
intended to identify forward-looking statements. While these statements
represent our current judgment on what the future may hold, and we believe these
judgments are reasonable, actual results may differ materially due to numerous
important risk factors that are described in our Annual Report on Form 10-K for
the period ended December 31, 2002, as filed with the SEC on March 31, 2003,
which may be revised or supplemented in subsequent reports filed by us with the
SEC.  Such risk factors include, but are not limited to: our substantial
indebtedness; an inability to generate sufficient cash to service our
indebtedness; the declining rate at which reciprocal compensation payments are
determined; regulatory and legal uncertainty with respect to reciprocal
compensation payments received by us; the inability to expand our business as a
result of the unavailability of funds to do so; failure to successfully
implement our restructuring plan; the possible delisting of our common shares
from the Nasdaq SmallCap Market; adverse affects on our operations as a result
of the covenants in our senior notes indenture; competition from the ILECs and
other competitors and potential competitors, including those competitors with
lower cost structures.









Overview

Pac-West is a provider of integrated communications
services in the western United States. Our customers include Internet service
providers and enhanced communications service providers, collectively referred
to as service providers (SPs), and small and medium-sized enterprise (SME)
businesses, many of which are communications intensive users.

We built our facilities-based network to capitalize on the
significant growth in Internet usage and in the related demand for local
telephone service by SPs, as well as the increasing demand of SME businesses for
customized and integrated voice and data communications services. We believe the
statewide footprint of our network, which encompasses all of the major
metropolitan areas of California, provides us with a significant competitive
advantage over ILECs and other CLECs, particularly with regard to SP customers.
Our ubiquitous network within the State of California enables SPs to provide
their business and residential customers with access to Internet, paging and
other data and voice services from almost any point in the state through a local
call. We believe the breadth of our product offerings and the structure of our
network enable us to generate high network utilization, and strong gross profit
margins.

For the quarters ended March 31, 2003 and 2002, we had net
revenues of approximately $30.5million and $43.1 million, respectively.
Included in net revenues for the quarter ended March 31, 2002 were $4.8 million
of amounts collected in settlement for amounts owed but withheld by certain
ILECs during 2001 and years prior. The amounts collected in the settlement
represented 11.1% of our total revenues for the quarter ended March 31, 2002.
Operating expenses for the quarters ended March 31, 2003 and 2002 were $39.8
million and $38.1 million, respectively. Net income (loss) for the quarters
ended March 31, 2003 and 2002 were ($10.3) million and $7.4 million,
respectively.  Net income for the quarter ended March 31, 2002 includes a gain
on repurchase of bonds of $11.9 million.



EBITDA for the quarters ended March 31, 2003 and 2002 were
$4.9 million and $26.9 million, respectively.  EBITDA represents earnings before
interest, net; income taxes; depreciation and amortization. Although EBITDA is
not a measure of financial performance under generally accepted accounting
principles, we believe it is a common measure used by analysts and investors in
comparing our Company's results with those of our competitors as well as a means
to evaluate our capacity to meet our service obligations. The Company uses
EBITDA as an internal measurement tool and has also included EBITDA performance
goals in its 2003 compensation plans. Accordingly, we are including EBITDA in
our discussion of financial performance as we believe that its presentation
provides useful and relevant information. The tables below reconcile EBITDA to
the Company's net income (loss) and to the Company's net cash provided by (used
in) operating activities as determined in accordance with generally accepted
accounting principles for each of the periods presented.

`Three Month Period Ended
                                                            March 31,
                                                    --------------------------
                                                        2003          2002
                                                    ------------  ------------
                                                    (unaudited)   (unaudited)
EBITDA............................................ $  4,886,000  $ 26,941,000
Less:
    Depreciation and amortization.................   14,148,000     9,960,000
    Interest expense, net.........................    2,990,000     4,674,000
    Income tax expense (benefit)..................   (1,928,000)    4,923,000
                                                    ------------  ------------
      Net income (loss) .......................... $(10,324,000) $  7,384,000
                                                    ============  ============


                                                     Three Month Period Ended
                                                            March 31,
                                                    --------------------------
                                                        2003          2002
                                                    ------------  ------------
                                                    (unaudited)   (unaudited)
EBITDA............................................ $  4,886,000  $ 26,941,000
Less:
    Net gain on bond repurchase...................           --    11,942,000
    Change in operating assets and liabilities....    3,653,000    10,882,000
    Interest expense, net.........................    2,990,000     4,674,000
    Allowance for doubtful accounts receivable....           --      (761,000)
    Amortization of deferred financing costs......     (105,000)     (226,000)
    Amortization of deferred stock compensation...           --       (26,000)
                                                    ------------  ------------
      Net cash provided by (used in) operating act $ (1,652,000) $    456,000
                                                    ============  ============`



As of March 31, 2003, we had 337,294 total DS-0 (digital
signal level of 64,000 bits per second) equivalent lines in service, referred to
as "lines" going forward, an increase of 79,688 or 30.9% from March
31, 2002.  Total lines in service include wholesale and on-network retail line
equivalents. Our total lines in service include wholesale and on-network retail
line equivalents. The Company has also segregated small to medium-size lines
into on-network and off-network components as related to the Company's decision
to exit a number of off-network lines of business.  For the quarters ended March
31, 2003 and 2002 our minutes of use were 9.394 billion and 7.714 billion,
respectively. The corresponding percentage increase in minutes of use on a year
over year period for the quarter ended March 31, 2003 as compared to the same
period in 2002 is 21.8%.



In August 2001, in response to a weakening economy and
increasing competitive pressure resulting from lower than expected demand for
telecommunications services and overcapacity in our industry, we shifted our
strategy to margin improvement, cost containment and cash conservation rather
than top-line growth. As a result of this shift in strategy the Company approved
and announced a restructuring plan. Among the initiatives included in the
restructuring plan was the suspension of its expansion plans in certain states,
exiting of certain lower margin products and services, including residential
resale and customer owned and maintained (COAM) equipment, and undertaking
certain cost reduction initiatives. In addition to restructuring certain product
offerings, the Company closed its switch facility in Utah, consolidated six
sales offices, and completed a workforce reduction of approximately 200
employees as part of the restructuring initiative. As a result of these
restructuring initiatives, the Company recorded an $8.8 million restructuring
charge in the third quarter of 2001, of which $5.0 million was related to the
write-off of leasehold improvements and other equipment in Utah, which could not
be redeployed to other locations. Amounts expensed totaling $2.4 million relate
to future rent payments due (net of estimated sublease payments) for abandoned
premises, primarily in Utah and San Diego, to be paid over the respective lease
terms. The workforce reduction was completed during the fourth quarter, with all
severance payments being made as of December 31, 2001.



In June 2002, we approved a restructuring plan that contained
additional business initiatives to those approved and announced in August 2001.
The 2002 restructuring plan was approved in response to further weakening of the
economy, additional competitive pressure from competitors who had reorganized
and lowered their cost structure, overcapacity in our industry and lower demand
from customers for our products and services. Among other initiatives, the 2002
restructuring plan provided for the closure of our switch facility in Colorado.
In connection with such closing, the Company recorded a $9.3 million
restructuring charge in the second quarter of 2002.  Of this amount, $3.2
million related to the write-off of the net book value of leasehold improvements
and equipment which could not be redeployed to other locations and, in
management's best estimate, had a fair market value of zero; $2.8 million
related to circuit commitment obligations; and $3.2 million related to future
rent payments due for the abandoned premise in Colorado which will be paid over
the lease term, which ends in fiscal year 2010.  In order to estimate rent
expense related to this premise, and those premises discussed in the preceeding
paragraph, the Company made certain assumptions including;  (1) the time period
over which the premises would remain vacant, (2) sublease terms, and (3)
estimated sublease rents.  In the case of the Colorado switching facility and
the Utah switching facility described in the following paragraph, no sublease
income was estimated due to the specialized nature of these facilities and
current economic conditions.  Accordingly, the Company believed the net book
value of the leasehold improvements for the facilities had a fair market value
of zero.



In the third quarter of 2002, the Company recorded an
additional restructuring charge of $0.02 million, net representing the net
difference between the amount estimated and the actual net book value of
impaired leasehold improvements.  In the fourth quarter of 2002, the Company
reduced its restructuring accrual for future rent payments for the Colorado
switch facility by $0.2 million as the Company had to use the facility longer
than anticipated due to a delay in transferring one of its customers to another
carrier.  As of March 31, 2003, the Company has a remaining liability for this
restructuring activity of approximately $5.4 million.



In the fourth quarter of 2002, the Company negotiated and
paid an early termination penalty to satisfy all future rent payments due for
its switch facility in Utah.  Accordingly, the Company reversed previous charges
of $0.5 million to bring the accrual related to the Utah facility to zero.  As
of March 31, 2003, the Company has a remaining liability of $0.5 million for
this restructuring reserve relating to facilities located in San Diego and San
Francisco.



During the second quarter of fiscal year 2002, as a result
of the continuing competitive pressures in the telecommunications industry, the
Company made certain business decisions that adversely affected the undiscounted
cash flows for specific markets in which the Company competes.  These decisions
included refocusing the Company's sales and marketing efforts primarily within
California, not filling open positions outside of California, the preservation
of cash for servicing and repurchasing of the Company's outstanding debt and
closing the Company's switch facility in Colorado for which the Company recorded
a restructuring reserve.  These decisions, which limited the resources available
to grow the markets outside of California, combined with slower sales growth
forecasts, caused the carrying value of the Company's assets located in the
markets outside of California which could not be redeployed in California to no
longer be recoverable from the estimated future undiscounted cash flows. At that
time, in accordance with SFAS No. 144, the Company recorded an impairment charge
of $7.2 million that represented the difference between the net book value of
the identified fixed assets and the estimated discounted future cash flows the
Company expected to be generated from the use of these assets over the average
remaining useful lives.  The Company's cash flow projections for each of the
Company's geographic locations were developed using each locations historical
growth rate.  Certain locations outside of the Company's primary business
locations had negative cash flows over the estimated useful lives of the assets
under evaluation.  Due to an excess of commercial real estate availability
existing in the identified markets where the Company's impaired leasehold
improvements existed and a remote possibility of being able to sublease the
facilities, the Company assigned a fair value of zero for the impaired leasehold
improvements.



In the fourth quarter of 2002, due to changes in technology
and the design of the Company's next generation switching equipment, certain
equipment that had previously been identified as eligible for redeployment
within positive cash flow markets, was no longer eligible for redeployment.  As
a result, these specific assets were impaired and written down to their fair
market value of $5.6 million in accordance with SFAS No. 144.  The Company
employed the services of a professional appraisal firm to determine the fair
market value of the specific assets identified as impaired.  Accordingly, in the
fourth quarter of 2002, the Company recorded an impairment charge of $9.4
million.  To the extent actual market conditions differ significantly from
management's estimates, the estimated fair market value of our long-lived assets
could change, which may result in a future impairment charge and such charge, if
any, may be material.



On May 28, 2002, our common stock ceased being quoted on the
Nasdaq National Market and began being quoted on the Nasdaq SmallCap Market. We
are currently not in compliance with the Nasdaq's minimum bid price requirement.
To regain compliance with this requirement, the minimum closing bid price of our
stock must close at $1.00 or above per share for a period of 10 consecutive
business days. The bid price for our common stock has not closed above $1.00 per
share since August 6, 2001.  On March 19, 2003 we were notified by Nasdaq that
we will be provided with an additional 90 days from the expiration of a prior
extension, or until May 12, 2003, to regain compliance with the minimum bid
price requirement.  If we are unable to regain compliance with the Nasdaq's
minimum bid price requirements, we expect to receive notification that our
securities will be delisted from the Nasdaq SmallCap Market. If this happens, we
may appeal the decision to a Listing Qualifications Panel, however there can be
no assurance that we will be afforded any additional time to regain compliance.



On or about April 29, 2003, we mailed to our shareholders a
proxy statement, which, among other things, solicited their proxies with respect
to a proposal to amend our articles of incorporation to provide for a reverse
share split. As described in our proxy statement, the purpose of the reverse
share split is to increase the market price of our common shares above $2.00 per
share, which is above the Nasdaq minimum bid requirement of $1.00, in order to
maintain our listing on the Nasdaq Small Cap Market. If approved by our
shareholders, our board of directors will have the authority to subsequently
approve the amendment and implement the reverse share split at its discretion
based upon its evaluation as to if and when such action would be most
advantageous to us and our shareholders. However, if we are delisted from the
Nasdaq SmallCap Market, there may be a further reduction in the liquidity of the
market for our common stock, which may cause a material adverse effect on the
price of our common stock. Delisting could reduce the ability of holders of our
common stock to purchase or sell shares as quickly and as inexpensively as they
could have done in the past. This lack of liquidity would make it more difficult
for us to raise capital in the future.



Factors Affecting Operations:

Revenues.   We derive our revenues from monthly
recurring charges, usage charges and amortization of initial non-recurring
charges . Monthly recurring charges include the fees paid by customers for lines
in service and additional features on those lines, as well as equipment
collocation services. Usage charges consist of fees paid by end users for each
call made, fees paid by ILECs as reciprocal compensation for completion of their
customers' calls through our network, and access charges paid by carriers for
long distance traffic terminated on our network. Initial non-recurring charges
consist of fees paid by end users for the installation of our service. These
payments, and related costs up to the amount of revenues, are recognized as
revenue and expense ratably over the term of the service contracts, generally 24
to 36 months. In accordance with Staff Accounting Bulletin No. 101 "Revenue
Recognition in Financial Statements," the Company recognizes revenue when there
is persuasive evidence of an arrangement, delivery of the product or performance
of the service has occurred, the selling price is fixed or determinable and
collectibility is reasonably assured.



A substantial portion of our revenues is derived from
reciprocal compensation paid by ILECs with which we have interconnection
agreements (ICAs). The revenues from these carriers are the result of ICAs we
have entered into with them that provide for the transport and termination of
local telecommunication traffic.  Reciprocal compensation payments are currently
an important source of revenue for the Company, and as a result, the failure,
for any reason, of one or more ILECs from which we receive reciprocal
compensation payments to make all or a significant portion of such payments in
the future could adversely affect our financial condition. Reciprocal
compensation revenue key drivers are the number of calls we terminate, the
minutes of use associated with such calls and the rates we are compensated at by
the ILECs. During 2002, we experienced a decrease of approximately 57.6% in the
rate at which we are compensated  by the ILECs. However to date, the Company has
been successful in partially offsetting the impact of the rate reductions on its
revenues due to increases in both the number of calls we terminate and in the
total minutes of use associated with such calls. The right of CLECs, such as the
Company, to receive reciprocal compensation is the subject of numerous
regulatory and legal challenges, further described below. During the quarter
ended March 31, 2003, the Company received cash payments from a carrier that is
currently disputing the charges and we have accordingly recorded an accrued
liability for the amounts received rather than record the revenue. Until such
time that clarity is achieved on the treatment of the amounts being disputed, we
will continue to accrue additional liabilities for any further cash payments
received on the issue. For instances when the reciprocal compensation payments
are not in dispute, the Company will continue to recognize reciprocal
compensation as revenue when received in cash or when collectibility is
reasonably assured. Consolidated revenues for the quarter ended March 31, 2003
decreased by $12.6 million, or 29.2%, to $30.5 million from $43.1 million for
the quarter ended March 31, 2002. The decrease in revenues is primarily the
result of a decrease of $14.1 million in reciprocal compensation, which includes
$4.8 million of previously withheld reciprocal compensation billings in
negotiated settlements that were recorded in the quarter ended March 31, 2002 as
discussed previously. For the quarters ended March 31, 2003 and 2002, reciprocal
compensation was $9.4 million and $23.5 million, respectively, and accounted for
approximately 30.8% and 54.5%, respectively, of our total revenues. The
remainder of the variance from the quarters ended March 31, 2003 and 2002 is
comprised of increases in switched access revenues and direct billings to SME
and SP customers, mostly offset by decreases in dedicated transport and local
and long distance revenues. Reciprocal compensation revenue recorded in the
quarter ended March 31, 2002 includes a settlement of $4.8 million received from
Verizon California (Verizon), formerly known as GTE, related to previously
withheld reciprocal compensation billings.



On May 16, 2002, the California Public Utilities Commission
implemented an Unbundled Network Element (UNE) pricing structure for local
traffic exchanged with SBC in California. A regulatory hearing is underway to
determine the appropriate rate elements and costs for interconnecting local
traffic between carriers in the State of California. The impact of this pricing
structure has reduced the Company's reciprocal compensation revenues by
approximately $2.0 million per month from previous billings.  We expect that
reciprocal compensation will continue to represent a significant portion of our
revenues in the future. We are currently negotiating and implementing new
interconnection agreements and the terms including reciprocal compensation. The
per minute reciprocal compensation rate we receive from SBC under our current
agreement is significantly lower than it was under our previous agreement as a
result of the new UNE pricing structure. The Company expects that reciprocal
compensation will continue to represent a significant portion of our revenues in
the future and we expect the per minute reciprocal compensation rate to be
relatively stable.



Cost of Sales.  Costs of sales are comprised primarily
of leased transport charges, usage charges for long distance and intrastate
calls and, to a lesser extent, reciprocal compensation we pay to other companies
related to calls that originate with a Pac-West customer and terminate on the
network of an ILEC or other CLEC. Our leased transport charges include the lease
payments we incur for the transmission facilities, or circuits, used to connect
our customers to our switches and to connect to the ILEC and other CLEC
networks.  Due to our strategy of leasing rather than building our own transport
facilities our operating costs provide for gross margins in excess of 50%. Our
lease commitments often have initial lease terms in excess of one-year from the
commitment date. When the lease commitment is fulfilled, the lease often
converts to a month-to-month agreement and thus reduces our future lease
commitments. Although we continue to look for ways to continue to reduce our
operating costs, we cannot guarantee that our operating costs will continue to
decline in the future.



Selling, General and Administrative Expenses. Our
selling, general and administrative expenses include network development,
administration and maintenance costs, selling and marketing, customer service,
provisions for doubtful accounts, information technology, billing, corporate
administration and personnel.





Quarterly Operating and Statistical Data:

The following tables summarize the unaudited results of
operations as a percentage of revenues for the quarters ended March 31, 2003 and
2002. Revenues for the quarter ended March 31, 2002 include a payment received
in the first quarter in connection with previously withheld reciprocal
compensation of $4.8 million.  The following data should be read in conjunction
with the unaudited condensed consolidated financial statements and notes thereto
included elsewhere in this report:

`Three Month Period Ended
                                                            March 31,
                                                    --------------------------
                                                        2003          2002
                                                    ------------  ------------
                                                    (unaudited)   (unaudited)
Consolidated Statements of Operations Data:

Revenue...........................................        100.0 %       100.0 %
Cost of sales and operating expenses..............         35.1 %        31.9 %
Selling, general and administrative expenses......         48.9 %        33.3 %
Depreciation and amortization expenses............         46.4 %        23.1 %
Income (loss) from operations.....................        (30.3)%        11.7 %
Gain on repurchase of bonds.......................           -- %       (27.7)%
Net income (loss) ................................        (33.8)%        17.1 %`









The following table sets forth unaudited statistical data
for each of the specified quarters of 2003 and 2002. The operating and
statistical data for any quarter are not necessarily indicative of results for
any future period.

`Quarter Ended
                                     -----------------------------------------------------
                                       2003                         2002
                                     ---------  ------------------------------------------
                                     March 31,   Dec 31,   Sept. 30,  June 30,   March 31,
                                     ---------  ---------  ---------  ---------  ---------

Ports equipped.....................   940,800    940,800    944,644    944,644    768,000
Lines sold to date.................   341,494    335,851    328,649    323,249    322,939
Lines in service to date...........   337,294    327,021    324,100    320,042    257,606
Quarterly minutes of use
 switched (in millions)............     9,394      8,532      8,211      7,656      7,714
Capital expenditures
 (in thousands).................... $   1,750  $   2,733  $   3,511  $   6,461  $   7,488
Employees..........................       402        414        402        406        402`







Quarter Ended March 31, 2003 Compared to the Quarter Ended March 31,
2002

The significant revenue components and operational
metrics of the Company for the quarters ended March 31, 2003 and 2002, are as
follows:

`Revenues:                                               2003          2002        % Change
                                                    ------------  ------------  ------------
                                                    (unaudited)   (unaudited)

Reciprocal compensation........................... $  9,401,642  $ 23,491,310         (60.0)%
Direct billings to SP customers...................   10,267,216    10,114,975           1.5
Direct billings to SME customers..................    3,597,281     2,907,215          23.7
Outbound local and long distance..................    3,235,245     3,375,504          (4.2)
Dedicated transport...............................    1,787,504     2,298,359         (22.2)
Switched access...................................    1,700,000       500,000         240.0
COAM..............................................      172,614       238,550         (27.6)
Other.............................................      353,145       165,766         113.0
                                                    ------------  ------------
Total revenues.................................... $ 30,514,647  $ 43,091,679         (29.2)%
                                                    ============  ============

Operational metrics:
DS-0 equivalent lines in service .................      337,294       257,606          30.9 %
Minutes of use (in billions) .....................        9.394         7.714          21.8 %`



Consolidated revenues for the quarter ended March 31,
2003 decreased by $12.6 million, or 29.2%, to $30.5 million from $43.1 million
for the quarter ended March 31, 2002. The decrease in revenues is primarily the
result of a decrease of $14.1 million in reciprocal compensation, which includes
$4.8 million of previously withheld reciprocal compensation billings in
negotiated settlements that were recorded in the quarter ended March 31, 2002 as
discussed above. The remainder of the variance from the quarters ended March 31,
2003 and 2002 is comprised of increases in switched access revenues and direct
billings to SME and SP customers, mostly offset by decreases in dedicated
transport and local and long distance revenues.  During 2002, we experienced a
decrease of approximately 57.6% in the reciprocal compensation rate at which we
are compensated at by the ILECs. However, to date, the Company has been
successful in partially offsetting the impact of the rate reductions on its
revenues due to increases in both the number of calls we terminate and in the
total minutes of use associated with such calls.



The total lines in service increased by 79,688 or 30.9% to
337,294 as of March 31, 2003 from 257,606 lines as of March 31, 2002. Billable
minutes of use were 9.4 billion for the quarter ended March 31, 2003, an
increase of 1.7 billion or 21.8% from 7.7 billion billed minutes during the
quarter ended March 31, 2002. The Company has also segregated SME lines into on-
network and off-network components as related to the Company's decision to exit
a number of off-network lines of business.



The number of inbound local minutes subject to reciprocal
compensation revenues in accordance with ICAs were 9.2 billion and 7.5 billion
for the quarters ended March 31, 2003 and 2002, respectively, while the year
over year increase of 1.7 billion billable minutes of use from March 31, 2002 to
2003 represented a 22.4% increase.  However, the favorable increase in inbound
local minutes was offset by a decline in the reciprocal compensation rates from
March 31, 2002 to 2003. Net of the effect of the negotiated settlements for
reciprocal compensation of $4.8 million during the quarter ended March 31, 2002,
reciprocal compensation revenues decreased $9.3 million or 49.7% from $18.7
million in the quarter ended March 31, 2002 to $9.4 million for the quarter
ended March 31, 2003. Total reciprocal compensation revenue, inclusive of
settlement amounts, for the quarter ended March 31, 2002 was $23.5 million.



Switched access revenues increased in the quarter ended March
31, 2003 from the same period in 2002 by $1.2 million, or 240.0% to $1.7 million
from $0.5 million in the quarter ended March 31, 2002. The increase in switched
access revenue is primarily the result of increased collections for cumualtive billings.



Direct billings to SME business customers increased in the
quarter ended March 31, 2003 from the same period in 2002 by $0.7 million, or
23.7% to $3.6 million from $2.9 million during the quarter ended March 31, 2002.
This change was due to the increase in lines in service from 43,461 lines at
March 31, 2002 to 58,889 lines in service at March 31, 2003, an increase in
lines of 15,428, or 35.5%.



Direct billings to SP customers increased during the quarter
ended March 31, 2003 from the same period in 2002 by $0.2 million, or 1.5%, to
$10.3 million from $10.1 million during the quarter ended March 31, 2002. This
change was due to the increase in lines in service to this market from 214,145
lines at March 31, 2002 to 278,405 lines in service at March 31, 2003, an
increase in lines of 64,260, or 30.0%.



The $0.5 million, or 22.2%, decrease in dedicated transport
revenues to $1.8 million during the quarter ended March 31, 2003 from $2.3
million during the quarter ended March 31, 2002 primarily relates to decreases
in the number of SP customers who collocate their equipment at our
facilities.



Outbound local and long distance revenues, including 800,
888, and 877 numbers and travel card calls, decreased during the quarter ended
March 31, 2003 from the same period in 2002 by $0.2 million or 4.2% to $3.2
million from $3.4 million during the quarter ended March 31, 2002. The decrease
in revenues was the result of two factors. First, total minutes of local and
long distance billed decreased from 75,061 in the quarter ended March 31, 2002
to 71,293 in the quarter ended March 31, 2003 as the Company made business
decisions to exit certain lines of business such as residential, certain 800
numbers and the suspension of service in states outside the Company's network
footprint. Secondly, the average rate per minute charged to customers declined
in part to a change in the mix between local and long distance calls made by
customers during these periods.  During the quarter ended March 31,
2003, approximately 46.1% of minutes billed to customers were charges for local
minutes compared to approximately 44.2% in the same period ended 2002.

The significant costs and expenses of the Company for the quarters ended
March 31, are as follows:

`Costs and expenses (in millions):                       2003          2002        % Change
                                                    ------------  ------------  ------------
                                                    (unaudited)   (unaudited)

Cost of sales..................................... $ 10,698,000  $ 13,760,000         (22.3)%
Selling, general and administrative...............   14,922,000    14,333,000           4.1
Depreciation and amortization.....................   14,148,000     9,960,000          42.0
                                                    ------------  ------------
Total costs and expenses.......................... $ 39,768,000  $ 38,053,000           4.5 %
                                                    ============  ============`

Our consolidated cost of sales for the quarter ended
March 31, 2003 decreased $3.1 million, or 22.3%, to $10.7 million from $13.8
million for the corresponding period in 2002.  Although we continue to
experience an increase in network operations associated with a higher level of
telecommunications activity our operating costs are declining from prior periods
as a result of discontinuing certain low-margin products and services,
specifically products and services related to COAM equipment and DSL, and
improving capital utilization. Although we continue to look for ways to continue to reduce our
operating costs, we cannot guarantee that our operating costs will continue to
decline in the future.



Our consolidated selling, general and administrative expenses
for the quarter ended March 31, 2003 increased $0.6 million, or 4.1%, to $14.9
million from $14.3 million for the corresponding period in 2002. The increase is
primarily the result of increases in personnel expenses and maintenance
expenses, partially offset by lower expenses related to provisions for doubtful
accounts.  Selling, general and administrative expenses were 48.9% and 33.3% of
revenues for the quarters ended March 31, 2003 and 2002, respectively.  The
increase in selling, general and administrative expenses as a percentage of
revenues is due to the decrease in gross revenues from the quarter ended March
31, 2002 to the quarter ended March 31, 2003.



Our consolidated depreciation and amortization expense
for the quarter ended March 31, 2003 increased $4.2 million to $14.2 million,
from $10.0 million for the same period in 2002.  Depreciation and amortization
as a percentage of revenues increased to 46.4% for the quarter ended March 31,
2003 from 23.1% from the same period ended 2002.  The increase in depreciation
and amortization expense is primarily related to the fact that during the
quarter ended March 31, 2003, the Company reduced the useful life for phone
equipment provided to customers and computer hardware from 5 years to 3 years.
In addition, the Company extended the useful life of certain leasehold
improvements from 10 years to up to 20 years. For phone equipment provided to
customers and computer hardware that had already been depreciated three years or
longer as of January 2003, the change in the estimated useful lives resulted in
those assets being written off in the quarter ended March 31, 2003. Total
equipment written off in the quarter was approximately $2.5 million. For phone
equipment provided to customers and computer hardware that had not been
depreciated three years or longer as of January 2003, the change in the
estimated useful lives resulted in an increase in monthly depreciation expense.
The change in depreciation expense is prospective only as the increase in
depreciation expense only applies to current and future periods. The increase in
depreciation expense related to the useful life change was approximately $1.6
million for the quarter ended March 31, 2003, but will decrease over time as
assets become fully depreciated. The change in the useful life of the leasehold
improvements resulted in a decrease in amortization expense on a prospective
basis of less than $0.1 million for the quarter.



Our consolidated interest expense, net for the quarter
ended March 31, 2003 decreased $1.7 million, or 38.3%, to $2.9 million from $4.7
million for the same period ended 2002. Interest expense is net of capitalized
interest.  Interest expense over these two periods is primarily related to our
Senior Notes issued on January 29, 1999, including amortization of related
deferred financing costs associated with the offering over a period of ten
years.  As a result of repurchasing some of our Senior Notes during 2002,
interest expense declined between quarters.  During both of the quarters ended
March 31, 2003 and 2002, the Company capitalized interest of $0.1 million.



The Company's effective income tax rates for the quarters
ended March 31, 2003 and 2002 reflect the applicable Federal and state statutory
income tax rates. For the quarters ended March 31, 2003 and 2002, the Company's
effective income tax rate was 15.7% and 40.0%, respectively.





Liquidity and Capital Resources:

Net cash used in operating activities was $1.7
million for the quarter ended March 31, 2003 as compared to net cash provided by
operating activities of $0.5 million for the same period ended in 2002. One of
the primary differences between the periods was attributable to settlements
received from ILECs for amounts previously owed, but withheld, during 2002 that
totaled $4.8 million. Excluding this transaction the net cash used in operating
activities decreased $2.7 million for the quarter ended March 31, 2003 over
2002. The significant activities which comprised this change were: an increase
in our depreciation and amortization expenses of $4.2 million due primarily to
the Company's decision to reduce the useful life for phone equipment provided to
customers and computer hardware from 5 years to 3 years, a reduction of $3.1
million in net accounts receivable, an increase of $2.4 million in accounts
payable and an increase of $2.2 million in accrued interest payable. Included in
accrued liabilities is $2.8 million that was paid to us by a customer for
services provided during the quarter ended March 31, 2003. The amount has not
been recognized as revenue as the customer has disputed the amount billed to
them. The operating cash provided was partially offset by a $5.0 million
reduction in deferred income tax benefits, a $1.4 million increase in prepaid
expenses and reduced operating profits resulting primarily from lower revenues
for the quarter ended March 31, 2003 compared to March 31, 2002.



Net cash provided by investing activities was $23.4
million for the quarter ended March 31, 2003 compared to a net use of cash by
investing activities of $12.7 million for the quarter ended March 31, 2002.
During the quarter ended March 31, 2003 the Company redeemed $25.2 million of
short-term investments as compared to $5.2 million of purchases of short-term
investments during the quarter ended March 31, 2002. The short-term investments
were redeemed and moved to cash and cash-related accounts during the quarter
ended March 31, 2003. Purchases of property and equipment decreased to $1.8
million during the quarter ended March 31, 2003 as compared to $7.5 million
during the same period in 2002 as the Company was able to re-deploy equipment
rather than purchase new equipment.



Net cash used in financing activities was $1.9 million
for the quarter ended March 31, 2003 compared to $10.5 million for the same
period ended 2002. During the quarter ended March 31, 2002 the Company paid $8.3
million to repurchase some of its outstanding Senior Notes.



The telecommunications service business is capital intensive.
Our operations have required substantial capital investment for the design,
acquisition, construction and implementation of our network. Capital
expenditures, including amounts financed under capital leases, were $1.8 million
and $7.5 million for the quarters ended March 31, 2003 and 2002,
respectively.Approximately $1.6 million of capital expenditures are
included in construction projects in progress as of March 31, 2003 and therefore
are not being depreciated until they are placed in service later in 2003. In
response to the weakening economy and the significant negative industry trends
including bankruptcies and depressed valuations of public telecommunication
companies, we have undertaken various initiatives intended to not only maximize
our performance, but to take advantage of emerging opportunities. Our business
plan, as currently contemplated, anticipates capital expenditures, excluding
acquisitions, of approximately $15.4 million in 2003. However, the actual cost
of capital expenditures during 2003 will depend on a variety of factors.
Accordingly, our actual capital requirements may exceed, or fall below, the
amounts described above.



We continue to review all of our debt obligations and are
considering various alternatives to continue to reduce such obligations,
including, among other things, the repurchase of additional Senior Notes in the
open market and in privately negotiated transactions. In addition, we are
currently considering various alternatives to replace our senior credit facility
which expired in 2002. However, there can be no assurance we will be successful
in obtaining additional capital sources at rates and terms acceptable to the
Company. Our principal sources of funds for 2003 are anticipated to be current
cash and short-term investment balances and cash flows from operating
activities. We believe that these funds will provide us with sufficient
liquidity and capital resources for us to fund our business plan for the next 12
months. No assurance can be given, however, that this will be the case. As
currently contemplated, we expect to fund, among other things, our semi-annual
interest payments of approximately $6.4 million each, anticipated capital
expenditures of approximately $15.4 million, capital lease payments (including
interest) of approximately $8.1 million and repayment of our Fiber IRU
obligation of $4.2 million. The foregoing statements do not take into account
additional acquisitions which, if made, are expected to be funded through a
combination of cash and equity or the repurchase of any of our remaining
outstanding senior notes.  Depending upon our rate of growth and profitability,
among other things, we may require additional equity or debt financing to meet
our working capital requirements or capital needs.  There can be no assurance
that additional financing will be available when required, or, if available,
will be on terms satisfactory to us. Key factors with could affect our liquidity
include: future demand of our services; financial stability of our customers;
outcomes of regulatory proceedings involving reciprocal compensation; capital
expenditures; and our debt payments.



Our senior notes indenture contain financial and other
covenants that restrict, among other things, our ability to incur additional
indebtedness, incur liens, pay dividends or make certain other restricted
payments, consummate certain asset sales, enter into certain transactions with
affiliates, merge or consolidate with any other person or sell, assign,
transfer, lease, convey or otherwise dispose of substantially all of our assets.
Such limitations could limit corporate and operating activities, including our
ability to respond to market conditions to provide for unanticipated capital
investments or to take advantage of business opportunities. The Company is in
compliance with its financial covenants.



The Company purchases its switching equipment and products
from several suppliers.  During the normal course of business, the Company may
enter into agreements with certain of its suppliers, which allow these suppliers
to have equipment or inventory available for purchase based upon criteria as
defined by the Company.   As of March 31, 2003, the Company did not have any
material future purchase commitments to purchase equipment or inventory from any
of its vendors.





ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS



The SEC's rule related to market risk disclosure requires
that we describe and quantify our potential losses from market risk sensitive
instruments attributable to reasonably possible market changes. Market risk
sensitive instruments include all financial or commodity instruments and other
financial instruments that are sensitive to future changes in interest rates,
currency exchange rates, commodity prices or other market factors. We are not
exposed to market risks from changes in foreign currency exchange rates or
commodity prices. We do not hold derivative financial instruments nor do we hold
securities for trading or speculative purposes. At March 31, 2003, we had an
outstanding $95.1 million principal amount of fixed rate notes due 2009, and
consequently we currently have no risk exposure associated with increasing
interest rates on our debt.   Additionally, we are exposed to changes in
interest rates on our investments in cash equivalents and short-term
investments.  Substantially all of our investments in cash equivalents and
short-term investments are in money market funds that hold short-term investment
grade commercial paper, treasury bills or other U.S. government obligations.
Currently this reduces our exposure to long-term interest rate changes.  We do
not use interest rate derivative instruments to manage our exposure to interest
rate changes. A hypothetical 100 basis point decline in short-term interest
rates would reduce the annualized earnings on our $51.9
million of cash and cash equivalents and short-term investments at March 31,
2003 by approximately $0.5 million.





ITEM 4.	CONTROLS AND PROCEDURES

Within 90 days prior to the filing of this Report, the
Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the Company's "disclosure controls and procedures" (as defined in Rule
13a-14(c) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), in accordance with Rule 13a-15 of the Exchange Act. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer, together
with the other members of management participating in the evaluation, concluded
that the Company is in compliance with the requirements of Rule 13a-15(a) of the
Exchange Act and that the Company's disclosure controls and procedures are
effective.



There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of the Company's evaluation of its disclosure
controls and procedures. It should be recognized that the design of any system
of controls is based upon certain assumptions about the scope of the tasks to be
performed and the environment in which the tasks are to be performed. As such,
the Company's internal controls provide the Company with a reasonable assurance
of achieving their intended effect.













PART II

OTHER INFORMATION

ITEM 1. Legal Proceedings

See Note 10 to the Unaudited Condensed Consolidated
Financial Statements included elsewhere in this Form 10-Q and "Management's
Discussion and Analysis of Financial Condition and Results of Operations-Factors
Affecting Operations-Revenues" for a description of certain legal
proceedings involving the Company.



ITEM 6. Exhibits and Reports on Form 8-K

1. Exhibits

99.1Certification of Periodic Report by Wallace W. Griffin
pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.



99.2	Certification of Periodic Report by H. Ravi Brar pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.



(b)	Reports on Form 8-K

On March 30, 2003, we furnished pursuant to Item 9 of Form 8-K
a copy of our press release issued on March 30, 2003, containing our 2003
first quarter earnings results.

Note:  ITEMS 2, 3, 4 and 5 are not applicable and have been omitted.













SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on May 8, 2003.









PAC-WEST TELECOMM, INC.

/s/ Wallace W. Griffin

_____________________________

Wallace W. Griffin

Chairman and Chief Executive Officer



/s/ H. Ravi Brar

______________________________

H. Ravi Brar

Chief Financial Officer

| | 
| | 
| | 
| | 

Certification Pursuant
to Rule 13a-14 and Rule 15d-14

of the Securities and Exchange Act of 1934



I, Wallace W. Griffin certify that:

1. I have reviewed this quarterly report on Form 10-Q of
Pac-West Telecomm, Inc.
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this quarterly
report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Rules 13a-14 and 15d-14) for the registrant and
have:
5. designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
6. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and
7. presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
8. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent function):
9. all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
10. any fraud, whether or not material, that involves
management or other employees who have  a significant role in the registrant's
internal controls: and



6.   The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date:  May 8, 2003





/s/ Wallace W. Griffin

________________________________

Wallace W. Griffin

Chairman and Chief Executive Officer



Certification Pursuant to Rule 13a-14
and Rule 15d-14

of the Securities and Exchange Act of 1934



I, H. Ravi Brar certify that:

1. I have reviewed this quarterly report on Form 10-Q of
Pac-West Telecomm, Inc.
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this quarterly
report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Rules 13a-14 and 15d-14) for the registrant and
have:
5. designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
6. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and
7. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent function):
8. all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls;
and

(b)	any fraud, whether or not material, that involves
management or other employees who have  a significant role in the registrant's
internal controls: and



6.   The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date:  May 8, 2003





/s/ H. Ravi Brar

________________________________

H. Ravi Brar

Chief Financial Officer