<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

<TABLE>
<C>               <S>
   (MARK ONE)
      [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2000
      [  ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE TRANSITION PERIOD FROM                TO
</TABLE>

                        Commission File Number: 0-19179

                            CT COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
               NORTH CAROLINA                                   56-1837282
---------------------------------------------  ---------------------------------------------
       (State or other jurisdiction of                (I.R.S. Employer Identification
       incorporation or organization)                             Number)
</TABLE>

<TABLE>
<S>                                            <C>
          68 CABARRUS AVENUE, EAST
           CONCORD, NORTH CAROLINA                                 28025
---------------------------------------------  ---------------------------------------------
  (Address of principal executive offices)                      (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: (704) 722-2500

          Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
            TITLE OF EACH CLASS:                   NAME OF EXCHANGE ON WHICH REGISTERED:
            --------------------                   -------------------------------------
<S>                                            <C>
                    None                                           None
</TABLE>

          Securities registered pursuant to Section 12(g) of the Act:
                                  COMMON STOCK
                        RIGHTS TO PURCHASE COMMON STOCK

Indicate by check mark whether the Company (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 Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]     No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

     The aggregate market value of the voting stock held by nonaffiliates of the
Company is approximately $205,769,124 (based on the March 20, 2001 closing price
of the Common Stock of $12.375 per share). As of March 20, 2001, there were
18,867,555 shares of the Company's Common Stock outstanding.

                      Documents Incorporated by Reference

<TABLE>
<CAPTION>
           DOCUMENT OF THE COMPANY                     FORM 10-K REFERENCE LOCATION
           -----------------------                     ----------------------------
<S>                                            <C>
  Certain portions of the Annual Report to
   Shareholders for the fiscal year ended
              December 31, 2000                               PARTS I and II

     2001 Annual Meeting Proxy Statement                         PART III
</TABLE>

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<PAGE>   2

                            CT COMMUNICATIONS, INC.
                         AND CONSOLIDATED SUBSIDIARIES

             FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                               TABLE OF CONTENTS

<TABLE>
<S>       <C>                                                           <C>
                                  PART I
Item 1.   Business....................................................    1
Item 2.   Properties..................................................   18
Item 3.   Legal Proceedings...........................................   18
Item 4.   Submission of Matters to a Vote of Security Holders.........   18

                                  PART II
Item 5.   Market for the Company's Common Equity and Related
          Shareholder Matters.........................................   19
Item 6.   Selected Financial Data.....................................   20
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................   20
Item 7A.  Quantitative and Qualitative Disclosures about Market
          Risk........................................................   26
Item 8.   Financial Statements and Supplementary Data.................   26
Item 9.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure....................................   26

                                 PART III
Item 10.  Directors and Executive Officers of the Company.............   26
Item 11.  Executive Compensation......................................   27
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management..................................................   27
Item 13.  Certain Relationships and Related Transactions..............   27

                                  PART IV
Item 14.  Exhibits, Financial Statement Schedules and Reports on Form
          8-K.........................................................   27
</TABLE>
<PAGE>   3

                                     PART I

ITEM 1.  BUSINESS

     Some of the statements contained in this Form 10-K discuss future
expectations, contain projections of results of operations or financial
condition or state other forward-looking information. These statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual events to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and was
derived using numerous assumptions. In some cases, these so-called "forward-
looking statements" can be identified by the use of words such as "may," "will,"
"should," "expect," "plan," "anticipate," "believe," "estimate," "predict,"
"project," "intend" or "potential" or the negative of those words and other
comparable words. Those statements however only reflect our predictions. Actual
events or results may differ substantially. Important factors that could cause
actual events or results to be materially different from the forward-looking
statements include those discussed under the heading "Business -- Risk Factors"
and throughout this Form 10-K.

     References in this Form 10-K to "we," "us," "our" and "CT Communications"
mean CT Communications, Inc. and our subsidiaries and predecessors, unless the
context suggests otherwise.

GENERAL

     CT Communications, Inc. is a holding company that, through its operating
subsidiaries, provides integrated telecommunications services to residential and
business customers located primarily in North Carolina. We offer a comprehensive
package of telecommunications services, including local and long distance
telephone, Internet and data services and digital wireless services.

     We began operations in 1897 as the Concord Telephone Company. Concord
Telephone continues to operate as an incumbent local exchange carrier ("ILEC")
in a territory covering approximately 705 square miles in Cabarrus, Stanly and
Rowan Counties, North Carolina. This area is located just northeast of
Charlotte, North Carolina along the Interstate 85 corridor, a major north/south
connector between Atlanta, Georgia and Washington, D.C. Our ILEC offers a full
range of local telephone, long distance and other enhanced services.

     In 1998, we began to operate as a competitive local exchange carrier
("CLEC") in the northern Charlotte markets contiguous to our ILEC service area.
Our CLEC business focuses on small-to-medium-sized companies along the I-85
corridor, between Charlotte and Greensboro. In 2000, we expanded our
geographical focus with the opening of a CLEC office in the Greensboro, North
Carolina market. Our CLEC offers services substantially similar to those offered
by our ILEC.

     In 2000, we continued our Greenfield strategy, serving as a Satellite Local
Exchange Carrier (SLEC) in high growth communities, including those surrounding
Charlotte and Raleigh, North Carolina. We are working with developers and
builders to become the "official telecommunications provider" for their
developments, similar to the Concord Mills agreement signed with the Mills
Corporation. Under these agreements, we provide the telecommunication
infrastructure within these developments. By clustering our projects, we are
able to gain capital and service efficiencies.

     We provide long distance telephone service in the areas served by our ILEC
and CLEC. We have agreements with several interexchange carriers to terminate
traffic that originates on our network, and our switching platform enables us to
route traffic to the lowest cost provider.

     We offer Internet and data services to both ILEC and CLEC business and
residential customers. These services include dial-up and high speed dedicated
Internet access, Web hosting, Web design, electronic commerce applications and
digital subscriber line ("DSL") services. In May 1998, we significantly expanded
this business through our strategic acquisition of Vnet, a business-oriented
Internet service provider based in Charlotte. In March 2000, we acquired
Internet of Concord, a local Internet service provider within our ILEC
territory. In December 2000, we further expanded our Internet and Data
<PAGE>   4

Services Division through the acquisition of WebServe, Inc., a provider of Web
hosting, development and programming services.

     We offer our own branded digital wireless services through a resale
arrangement with BellSouth Corporation's Carolinas' PCS Limited Partnership (the
"DCS Partnership"). The DCS Partnership offers service throughout most of North
Carolina and South Carolina and is one of the largest regional digital wireless
networks in the Southeast. In 2000, we entered into an agreement to partition
our predefined area of the DCS Partnership, which will significantly increase
our number of wireless subscribers. The partitioning will occur in the second
quarter of 2001. Roaming agreements with other wireless carriers enable our
customers to utilize their digital wireless services throughout the United
States and in a number of foreign countries. At the end of 2000, BellSouth
Mobility merged its wireless operations with SBC to form a new wireless company
called Cingular.

     The operations of Concord Telephone are our primary business segment.
Concord Telephone accounted for approximately 71% of our operating revenues in
2000. Despite anticipated growth of other products and services, as described
below, we expect that Concord Telephone will continue to account for a
significant portion of our revenue and earnings in 2001. Additional business,
financial and competitive information about our operations is discussed below.
For other information regarding our business segments, see the Note entitled
"Segment Information" in the Notes to Consolidated Financial Statements in our
2000 Annual Report to Shareholders, which information is incorporated into this
report by reference.

     On February 24, 2000, the Board of Directors declared a two-for-one stock
dividend payable on April 5, 2000 to shareholders of record on March 15, 2000.

     Effective January 28, 1999, our Voting Common Stock and Class B Nonvoting
Common Stock were converted into a single class of Common Stock (the
"Recapitalization"). Pursuant to the Recapitalization, our Articles of
Incorporation were amended to (i) provide for one class of Common Stock,
consisting of 100 million authorized shares, and (ii) reclassify each issued and
outstanding share of Voting Common Stock into 4.4 shares of Common Stock and
each issued and outstanding share of Class B Nonvoting Common Stock into 4.0
shares of Common Stock. Cash was paid in lieu of issuing any fractional shares.
On July 24, 1997, the Board of Directors declared a three-for-two stock dividend
payable August 29, 1997.

     All share and per share amounts in this Annual Report on Form 10-K have
been adjusted to reflect the two-for-one stock dividend, Recapitalization and
the 1997 stock dividend.

     CT Communications, Inc. is incorporated under the laws of North Carolina
and was organized in 1993 pursuant to the corporate reorganization of Concord
Telephone into a holding company structure. Our principal executive offices are
located at 68 Cabarrus Avenue, East, Concord, North Carolina 28025 (telephone
number: (704) 722-2500.)

OPERATIONS

     Our five primary business segments are described in more detail below.

     ILEC SERVICES

     Concord Telephone offers integrated telecommunications services as an ILEC
to customers served by nearly 123,000 access lines in Cabarrus, Stanly and Rowan
Counties in North Carolina. Our ILEC network facilities include nearly 15,000
fiber miles, serving nine exchanges in a host-remote switch architecture.

                                        2
<PAGE>   5

     Our access line growth rate has remained strong, with growth in the
business market continuing to outpace that of the residential market. As a
result of this strong growth in the business market, we expect the percentage of
total access lines represented by business customers to continue to increase.
The following table details access line growth over the past five years:

<TABLE>
<CAPTION>
                                                           YEARS ENDED DECEMBER 31,
                                                ----------------------------------------------
                                                 2000      1999      1998      1997      1996
                                                -------   -------   -------   -------   ------
<S>                                             <C>       <C>       <C>       <C>       <C>
ACCESS LINES
  Residential.................................   91,159    87,857    83,612    79,398   75,915
  Business....................................   31,339    29,078    25,535    23,175   20,632
                                                -------   -------   -------   -------   ------
  Total ILEC..................................  122,498   116,935   109,147   102,573   96,547
                                                =======   =======   =======   =======   ======
PERCENTAGE GROWTH
  Residential.................................     3.8%      5.1%      5.3%      4.6%     3.8%
  Business....................................     7.8%     13.9%     10.2%     12.3%    11.5%
  Total ILEC..................................     4.8%      7.1%      6.4%      6.2%     5.4%
PERCENT OF TOTAL
  Residential.................................    74.4%     75.1%     76.6%     77.4%    78.6%
  Business....................................    25.6%     24.9%     23.4%     22.6%    21.4%
</TABLE>

     Continued high customer satisfaction remains a top priority, and our
efforts are directed accordingly. We have implemented a number of performance
and satisfaction measures in our operations and continue to survey customers
monthly to gauge loyalty and satisfaction. We hold all of our employees
accountable for service quality, and a portion of their compensation depends
upon customer survey results.

     Our ILEC sales team is structured to provide maximum flexibility for our
customers. Residential customers may personally meet with a sales and service
representative in one of our four business offices or can alternatively take
advantage of the convenience of calling into our centralized customer care
center. Our sales team provides "one-stop" shopping and residential customer
service representatives are trained in all residential applications, including
Internet and data services, digital wireless and paging services, and telephone
equipment, and will additionally address any follow-up sales and billing
concerns.

     Business customers are served by a specialized group that is trained to
manage the specialized products and services unique to the business market.
Customers with less complex needs are supported by a specialized telephone
customer care group, which develops solutions and schedules service
installations. Major business customers are assigned dedicated account
executives that are familiar with their complex applications and service
requirements.

     A centralized operations service center coordinates provisioning and
maintenance for all ILEC customers. In addition to receiving maintenance
requests, this center dispatches field personnel and monitors the status of all
service orders and maintenance requests. To ensure continued customer
satisfaction, the center is measured against targeted time intervals and the
ability to meet customer commitment dates.

     Our core ILEC network is comprised of modern digital switching equipment
and fiber optic cable with self-healing SONET ring topology. In 1996, we began
conversion to a Nortel DMS 100/200 network switching platform. We continue to
upgrade our distribution network by moving fiber and electronics closer to the
customer through the use of remote switching units. The customer care service
center operations are supported by an AS400-based service order,
trouble-ticketing, billing and collection system and a Mitel private branch
exchange with automated call distribution capabilities. At the heart of our
network is a network operations center that identifies problems as they occur
and diagnoses potential network problems before customers are impacted.

     Regulation.  Our ILEC is subject to regulation by various federal, state
and local governmental bodies. We voluntarily opened our markets to competition
for local dial tone in 1997. As a result, federal regulations have required us
to permit interconnection with our network and have established our

                                        3
<PAGE>   6

obligations with respect to reciprocal compensation for completion of calls, the
resale of telecommunications services, the interconnection of facilities, the
provision of nondiscriminatory access to unbundled network elements, number
portability, dialing parity and access to poles, ducts, conduits and
rights-of-way. As a general matter, this ongoing regulation increases our ILEC's
business risks and may have a substantial impact on our ILEC's future operating
results. Among recent Federal Communications Commission regulatory developments
is the FCC's Third Report and Order in CC Docket No. 96-98 (the "UNE Remand
Order"), which was released on November 5, 1999. The UNE Remand Order
established a new set of unbundled network elements ("UNEs") that ILECs are
obligated to provide to competing carriers under Sections 251(e)(3) and
251(d)(2) of the Telecommunications Act. Among other things, the UNE Remand
Order effectively requires ILECs to permit competing carriers to "convert"
resold local exchange services and, in certain circumstances, special access
services, to "combinations" of UNEs at reduced prices. On December 9, 1999, the
FCC released its Fourth Report and Order in CC Docket No. 96-98 and Third Report
and Order in CC Docket No. 98-147 ("Line Sharing Order"). The Line Sharing Order
is designed to promote competitive entry into broadband services by requiring
ILECs to provide competing carriers with access to the high frequency portion of
the telephone lines, or loops, that an ILEC uses to provide voice communication
services to its customers. This requirement will enable competing carriers to
offer advanced data services, such as DSL services used for high-speed access to
the Internet, to the ILEC's customers, using the same telephone lines as the
ILEC.

     The Federal Communications Commission (FCC) governs our ILEC's rates for
interstate access services. The Multi-Association Group Plan (MAG) proceeding is
pending with the FCC and could materially change both the manner in which our
ILEC imposes interstate access charges and the level of those charges. This plan
would lower interstate access rates charged to interexchange carriers, while
increasing the subscriber line charge to end users, and create new flat rate per
line explicit charges on interexchange carriers. We believe this plan will not
materially impact earnings if adopted in its present format, but that may change
before the plan is adopted. This plan is similar to The Coalition for Affordable
Local and Long Distance Service Plan (i.e., CALLS), adopted for larger price cap
ILEC's, but it was proposed to address smaller rate-of-return carriers.

     The FCC is also considering the Rural Task Force proposal by the
Federal-State Joint Board on Universal Service that would create a new explicit
universal service High Cost Fund III subsidy, which in addition to existing
universal service subsidies, would be portable to competing carriers. Our
Company currently only receives Long Term Cost Loop support and Local Switching
support.

     The outcome of all of these proceedings could have a substantial, and
potentially adverse, impact on the structure of our ILEC's access charges and
universal service subsidies and the associated revenues that our ILEC collects.

     State laws and regulations require us to comply with North Carolina pricing
regulations, file periodic reports, pay various fees and comply with rules
governing quality of service, consumer protection and similar matters. Local
regulations require us to obtain municipal franchises and to comply with various
building codes and business license requirements. These federal, state and local
regulations are discussed in more detail under "Legislative and Regulatory
Developments" under this Item 1.

     Since September 1997, our ILEC's rates for local exchange services have
been established under a price regulation plan approved by the North Carolina
Utilities Commission. Under the price regulation plan, our charges are no longer
subject to rate-base, rate-of-return regulation. Instead, the charges for most
of our local exchange services may be adjusted to reflect changes in inflation
reduced by a 2% assumed productivity offset. The price regulation plan is also
subject to adjustment for certain exogenous events outside of our control, such
as jurisdictional cost shifts or legislative mandates. In September 2000, we
received approval to rebalance our rates under the price regulation plan.

                                        4
<PAGE>   7

     Competition.  Several factors have resulted in rapid change and increased
competition in the local telephone market, including:

     - growing customer demand for alternative products and services,

     - technological advances in transmitting voice, data and video,

     - development of fiber optics and digital electronic technology,

     - a decline in the level of access charges paid by interexchange carriers
       to local telephone companies to access their local networks, and

     - legislation and regulations designed to promote competition.

     We agreed to open our traditional service area to competition for local
dial tone service in 1997. In exchange for rate rebalancing, pricing flexibility
and simplification of rate plans in our price regulation plans. We entered into
interconnection agreements with Time Warner Communications of North Carolina,
L.P., US LEC of North Carolina, LLC, and a resale agreement with Empire
Communications Corp., to provide access to our local telephone service market.
We have received interconnection requests from several other CLEC's. Some or all
of these agreements may be finalized in 2001.

     Cable operators are also entering the local exchange market. Time Warner
currently offers telephony services in its major markets and cable service in
our core service area. Another major source of competition is the wireless
service providers serving our traditional service area.

     On January 11, 2001, the merger between Time Warner and America Online,
Inc. ("AOL"), the country's largest internet service provider, was consummated.
The post-merger company could become a formidable competitor to our ILEC and may
seek to provide consumers with a "one-stop" source for a broad array of
telecommunications, information and Internet services. AOL/Time Warner has
already stated that their proposed service offerings post-merger will include a
communications platform that combines AOL's instant messaging service with local
telephony over cable. According to AOL/Time Warner, the merger will accelerate
the availability of broadband interactive services to consumers and drive
further growth in electronic commerce. The merger may also spur further
consolidation involving telecommunications, cable and information services
providers.

     CLEC SERVICES

     Our CLEC business began in 1998 through our interconnection agreement with
BellSouth Telecommunications, Inc. in Salisbury, North Carolina and northern
Charlotte. In January 2000, we obtained approval to provide competitive local
access in South Carolina. We have entered into interconnection agreements with
BellSouth, Verizon, Sprint, and ALLTEL Carolinas. At December 31, 2000, we were
providing competitive local access to customers served by nearly 12,000 access
lines in these markets.

     Our CLEC business group employs the same sales strategy as our ILEC
business group, using locally based account executives who meet face-to-face
with business customers. Our CLEC offers an integrated combination of
communications services, including local service, long distance and enhanced
voice services, and Internet and data services. Our CLEC uses the same billing
platform as our ILEC. A significant portion of compensation for our CLEC's sales
organization is based on individual and group sales results.

     Our CLEC manages our own network elements and those elements leased from
the incumbent local carrier, utilizing the MetaSolv TBS ordering and
provisioning system. The CLEC's customer care group has received specialized
training specific to interconnection ordering and provisioning processes. We
hold these employees to the same high standards for service quality as our ILEC
customer care groups.

     We deploy a facilities-based network in our expansion markets, collocating
our own remote switching equipment with the incumbent telephone company. We
connect the local remote switches in each of our expansion markets using a
variety of fiber optic links. We typically lease appropriate network elements
from the incumbent carrier to give us greater control over the service quality
and platform for rapid
                                        5
<PAGE>   8

expansion in the future. We expanded our facilities-based service into the
northern Charlotte markets in 1999 with the opening of the Concord Mills Mall.
As we develop a critical mass of customers in a specific market, we will
evaluate the economics of pushing our own network elements closer to our
customer base, providing even more control and flexibility. In 1996, we
installed a Nortel DMS 500 switch in Charlotte that permits us to switch the
local traffic from our CLEC and all of our long distance traffic. The percentage
of customers served on our facilities and via Unbundled Network Elements (UNE's)
has increased to 75.7% at December 31,2000 as compared to 38.7% for the same
period in 1999.

     In our Greenfield markets, Charlotte and Raleigh, North Carolina, we deploy
our own remote switching equipment, as well as build a distribution system to in
effect, become the local telephone company for each new development. We connect
to our network via leased or owned fiber optic lines back to our Nortel DMS 500
switch in Charlotte. Our focus is on the fastest growing areas surrounding the
high growth Charlotte and Raleigh markets. By clustering several projects, we
gain capital and service efficiencies that contribute to increased
profitability.

     Regulation.  In general, our CLEC establishes its own rates and charges for
local services and is subject to less extensive regulation as compared to our
ILEC. However, like the ILEC, our CLEC must comply with various rules of the
North Carolina Utilities Commission governing quality of service, consumer
protection and similar matters. The FCC has jurisdiction over our CLEC
interstate services, such as access service. There are several proceedings at
the FCC that could impact the interstate access rates charged by CLEC's.

     Competition.  Our CLEC competes primarily with local incumbent telephone
companies and, to a lesser extent, with other CLEC's. We also face, and will
continue to face, competition from other current and potential future market
entrants, including other CLEC's, cable television companies, electric
utilities, microwave carriers, wireless telecommunications providers, Internet
service providers and private networks built by large end-users.

     LONG DISTANCE SERVICES

     We began offering long distance services to our ILEC customers in 1992 and
now provide that service to approximately 82,000 access lines. We have
agreements with several interexchange carriers to terminate traffic that
originates on our network, and our switching platform enables us to route the
traffic to the lowest cost provider. In our ILEC service area, approximately 69%
of the total lines are subscribed to our own branded long distance service.

     The long distance market has become significantly more competitive. New
competitors have entered the market and prices have declined, resulting in
increased consumer demand and significant market growth. Increased competition
has also led to increased consolidation among long distance service providers.
Major long distance competitors include AT&T, Sprint and WorldCom, Inc.

     Verizon Corporation recently obtained approval to provide long distance
services in New York, and SBC Communications, Inc. has obtained approval in
Oklahoma, Kansas, and Texas. BellSouth is expected by many industry analysts to
obtain similar approvals to provide long distance service in some southern
states during 2001. These newer competitors benefit from established local
market share and from established trade names through nationwide advertising.

     Internet telephony, a potential competitor for low cost telephone service,
is also developing. This could threaten long distance revenues as well as ILEC
and CLEC access revenues.

     INTERNET AND DATA SERVICES

     In 1997, we began providing dial-up Internet access to residential and
business customers. In May 1998, we acquired Vnet, a business-oriented Internet
service provider based in Charlotte, North Carolina. The Vnet acquisition added
approximately 5,000 Internet accounts, including 400 business accounts. In
September 1999, we added approximately 900 Internet accounts through the
acquisition of Catawba Valley Internet Partnership, an Internet service provider
based in Cherryville, North Carolina. In February 2000,
                                        6
<PAGE>   9

we purchased substantially all of the business assets of Internet of Concord,
including 1,845 dial-up and Web hosting accounts. On December 13, 2000 we
purchased WebServe, Inc., a Charlotte, North Carolina based provider of Web
design, hosting, and programming services that expands our Web related product
line. At December 31, 2000, we had approximately 18,000 Internet customers.

     Internet Access Service.  We offer a variety of dial-up and dedicated
access solutions which provide access to the Internet. We also offer a full
range of customer premise equipment required to connect to the Internet. Our
access services include:

     - Dedicated Access.  We offer a broad line of high-speed dedicated access
       utilizing frame relay and dedicated circuits, which provide business
       customers with direct access to a full range of Internet applications.

     - DSL Access.  In late 1999, we began to offer high-speed Internet access
       service using DSL technology. DSL technology permits high speed digital
       transmission over the existing copper wiring of regular telephone lines.
       Our DSL service is available at speeds up to 768 Kbps. Our DSL services
       are designed for residential users and small-to-medium sized businesses
       to provide high quality Internet access at speeds faster than an
       integrated services digital network ("ISDN") and at flat-rate prices that
       are lower than traditional dedicated access charges.

     - Dial-up Access.  Our dial-up services provide access to the Internet
       through ordinary telephone lines at speeds of up to 56 Kbps and through
       digital ISDN lines at speeds of up to 128 Kbps.

     Web Services.  We offer a variety of value-added services, including Web
hosting, Web design, collocation, virtual private networks or intranets, remote
access and security solutions, and video conferencing.

     Electronic Commerce.  We provide software solutions that enable companies
to conduct electronic commerce. We offer electronic data interchange/extraNet
solutions consisting of software and services that are designed to help
businesses connect to their suppliers and customers. We also provide Internet
commerce software to allow businesses to build Web applications for
commerce-enabled Web sites, intranets and extranets. Common features of this
software include the ability to build electronic catalogs to conduct
transactions and to integrate with business systems, including purchasing,
accounting and inventory systems.

     Account executives sell Internet and data services directly to business
customers in the Charlotte and Greensboro metropolitan areas. Our technical
support staff is available 24 hours a day, seven days a week. Our technicians
design, order, configure, install and maintain all of our equipment to suit the
customer's needs. We have a customer care group dedicated to Internet and data
services.

     We provide Internet and data services primarily through our own network in
our ILEC and CLEC territories. In other areas, we use the network of the local
telephone company. We purchase access to the Internet from national Internet
backbone providers, which provide DS-3 access at all major national access
points.

     Regulation.  In general, Internet and data services are not regulated at
the federal level. However, an important regulatory issue currently pending
before both the FCC and federal courts is how Internet traffic will be
classified and treated for purposes of interstate access charges and reciprocal
compensation related to local traffic. Internet service providers currently
obtain access services from local exchange carriers without having to pay the
access charges that interexchange carriers pay for equivalent service.
Currently, calls placed by end-users to Internet service providers are subject
to reciprocal compensation payments under existing interconnection agreements.
On February 26, 1999, the FCC decided that these calls are primarily
jurisdictionally interstate traffic and that the Telecommunications Act does not
require reciprocal compensation to be paid on them. The decision asserts that
because no federal rules governing inter-carrier compensation for this traffic
currently exist, the determination of whether it is subject to reciprocal
compensation may be made by state regulatory commissions. The FCC's decision
states that state commission decisions mandating the payment of reciprocal
compensation for Internet service providers'

                                        7
<PAGE>   10

traffic may conform with federal law. Although the FCC may re-assert
jurisdictional authority and preempt state commission findings regarding
reciprocal compensation, it has not yet shown an inclination to do so. We are
uncertain as to the outcome of these matters or the impact on our Internet
business.

     In cases between BellSouth and US LEC Corp. and between BellSouth and ICG
Communications, Inc., the North Carolina Utilities Commission has ruled that
Internet traffic originating and terminating in the same calling area is subject
to local reciprocal compensation as specified in existing interconnection
agreements. Commissions in numerous other states have made similar rulings.

     Another significant issue facing Internet service providers is whether they
will be given access to broadband systems operated by cable television
companies. Internet service providers generally believe that such mandatory
access is appropriate and would allow them to provide competitive high-speed
broadband service to more customers. For example, AOL, as the world's largest
Internet service provider, strongly advocates "open access," although it is not
currently supporting the need for government intervention to mandate open
access. Time Warner and AOL recently agreed, as part of their merger, to open
Time Warner's cable systems to competing Internet service providers. AT&T and
Mindspring Enterprise, Inc. recently have reached a similar agreement. The issue
continues to be debated and legislation has been introduced in Congress to
mandate access to broadband cable networks. However, the FCC has thus far
declined to take action on the matter. The ultimate outcome of this issue could
have a significant impact on the success of Internet service providers.

     Competition.  The Internet and data services market is extremely
competitive, highly fragmented and has grown dramatically in recent years. The
market is characterized by the absence of significant barriers to entry and the
rapid growth in Internet usage among customers. Sources of competition are:

     - access and content providers, such as AOL, the Microsoft Network and
       Prodigy;

     - local, regional and national Internet service providers, such as PSINet,
       EarthLink, and Mindspring;

     - the Internet services of regional, national and international
       telecommunications companies, such as AT&T, BellSouth, and WorldCom;

     - online services offered by incumbent cable providers, such as Time
       Warner; and

     - DSL providers, such as COVAD and Northpoint.

     The recent merger of AOL/Time Warner creates further, formidable
competitive threats in the Internet and data services market. AOL/Time Warner
has announced plans to leverage their combined assets and resources post-merger
to offer a wide variety of Internet and data-related services.

     DIGITAL WIRELESS SERVICES

     Under our existing agreements with the DCS Partnership, we have the ability
to offer digital wireless services as part of our integrated services package to
customers anywhere in North Carolina and South Carolina. We offer digital
wireless services in Cabarrus, Stanly, Rowan and Iredell Counties in North
Carolina through a branded resale arrangement with the DCS Partnership. We sell
digital wireless services and products, including service packages, long
distance, features, handsets, prepaid plans, and accessories, through four
retail outlets in Concord (2), Statesville and Salisbury, North Carolina.
Digital wireless products and services are also sold through our ILEC business
offices and our direct sales force. At December 31, 2000, we served
approximately 16,300 customers, a 53% increase over the approximately 10,700
customers served at December 31, 1999. Customer attrition for 2000 averaged 2.5%
per month.

     Until September 2000, we owned a limited partner interest in the DCS
Partnership, which included BellSouth Telecommunications, a subsidiary of Duke
Energy Company, a subsidiary of Progress Energy and approximately 30 other
independent telephone companies. The DCS Partnership owns a 100% digital
communications network in North Carolina and South Carolina, an area covering
approximately 12 million people. The DCS Partnership's digital wireless network
is based on Global System for Mobile Communications ("GSM") wireless technology,
which offers advanced services and functionality, secure

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communications, digital voice quality and national and international roaming.
GSM technology is proven technology used by more than 390 service providers in
over 164 countries and by more than 470 million customers worldwide. GSM
provides our customers with extensive roaming capabilities both nationally and
internationally.

     The DCS Partnership is primarily responsible for the marketing function of
our digital wireless business. It develops and implements promotions, develops
and advertises pricing plans, conducts market research, develops collateral
materials, and otherwise markets the DCS Partnership's digital wireless service
throughout most of North Carolina and South Carolina. We support the DCS
Partnership's service plans and promotions through local advertising and
distribution efforts.

     Customer service is provided by specialized service representatives trained
to handle the specific requirements of our digital wireless customers. The
ordering and provisioning of digital wireless service can be performed at our
store locations or by the customer through a toll-free 800 number.

     Each independent telephone company limited partner in the DCS Partnership
had the option to partition a pre-defined service area. Our pre-defined service
area includes Cabarrus, Rowan and Stanly Counties and the southern portion of
Iredell County. Partitioning allows us to purchase the license, base station
sites, and any customers the DCS Partnership has acquired in the area. After
partitioning, we would continue to purchase pre-defined services from the DCS
Partnership, such as switching, under an operating agreement. The operating
agreement also provides customer service and technical performance requirements
for the DCS Partnership and the partitioning telephone company.

     In July 2000 we elected to exercise our right to partition. Once the
partitioning is effected, which will likely occur in the spring of 2001, we will
acquire 47 cell sites, approximately 10,000 additional subscribers and a license
for spectrum for Cabarrus, Rowan, and Stanly Counties and the southern portion
of Iredell County. This partitioned area contains a population of approximately
440,000 people. The cost of partitioning is estimated to be $20 million to $25
million at the effective time of partitioning. We expect to finance the costs
associated with partitioning through additional borrowings. While we will have
ownership of the assets and customers within our partitioned area, we will
continue to purchase pre-defined services from the DCS Partnership, such as
switching, and will remain subject to certain conditions including certain
branding requirements, offering partnership service plans and adherence to
partnership technical and customer care standards.

     Regulation.  The construction, operation, management and transfer of
digital wireless systems in the United States is regulated by the FCC. Digital
wireless carriers are exempt from regulation by the North Carolina Utilities
Commission. The regulation of wireless services is discussed in more detail
under "Legislative and Regulatory Developments" in this Item 1.

     Competition.  Many wireless carriers compete in the Charlotte metropolitan
area, including AT&T, Nextel, Sprint PCS, ALLTEL Mobile, Verizon, Cricket
Wireless and Cingular. This competition has led to intense pressure on the
pricing of services. In 1998, several providers introduced "flat rate" pricing
which eliminated roaming charges and further reduced unit prices. We intend to
compete by providing extensive geographical coverage, high quality technology
and service, competitive pricing and capitalizing on the strength of customers'
loyalty to us based on multiple service relationships.

INVESTMENTS

     We have made several strategic investments designed to contribute to the
execution of our business strategy. The investments are described below.

     Palmetto MobileNet.  In January 1998, we merged our cellular telephone
interests with Palmetto MobileNet, L.P. We own 19.8% of Palmetto MobileNet,
which holds 50% general partnership interests in 10 rural service areas covering
more than two million people in North Carolina and South Carolina. ALLTEL Mobile
is the managing partner of the 10 cellular rural service area general
partnerships.

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     Maxcom.  In 1996, we participated with Grupo Radio Centro in forming Maxcom
Telecomunicaciones, S.A. de C.V. (formerly Amaritel), a competitive
telecommunications company offering local, long distance and network
telecommunications services in Mexico. During 1998, we participated in an
additional $49 million private equity financing of Maxcom. The participants were
the original investors and a group of investors with international
telecommunications experience, including BankAmerica International Investment
Corporation, BancBoston Investments, Inc. and Bachow Investments Partners III,
L.P. The 1998 financing increased Maxcom's equity to $70 million, which combined
with a $100 million loan from an international bank, provided Maxcom with up to
$170 million to build the initial phases of its system. On March 10, 2000,
Maxcom privately issued $275 million of senior notes, the proceeds of which were
used to prepay vendor financing and construct its next generation platform. The
system is being built primarily by Lucent Technologies, Inc., which is using a
wide spectrum of technology, ranging from microwave to wired fiber optic
networks. Maxcom began offering commercial services in Mexico City and Puebla,
Mexico in April 1999 and had approximately 27,000 access lines at December 31,
2000.

     On March 8, 2000, we entered into a Capital Contribution Agreement with
Maxcom and its shareholders. Under this agreement, the shareholders of Maxcom
were obligated to contribute a total of $35 million to Maxcom in exchange for
capital stock and warrants to purchase additional stock. In connection with this
agreement, we contributed $6.0 million in August 2000.

     In October 1997, we entered into an operating agreement with Maxcom, under
which we provided management expertise and strategic advice for the venture. The
operating agreement was amended as of October 1, 1999 to accelerate the
transition of management responsibilities from our employees to Maxcom
employees. The operating agreement expired on December 31, 2000. We now
primarily provide support and advisory services as requested by Maxcom. In
addition to certain advisory fees, during the term of the operating agreement,
we could earn an additional $450,000 each year plus options to acquire 250,000
shares of Maxcom Common Stock if certain operating and financial performance
goals are met.

     Wireless One.  In 1995, we participated with Wireless One, Inc. in forming
Wireless One of North Carolina, LLC to develop and launch wireless cable systems
in North Carolina. Wireless One of North Carolina entered into contracts with
approximately 45 community colleges, several private schools in North Carolina
and the University of North Carolina system to provide wireless cable services
and holds the majority of the spectrum rights covering North Carolina. In late
1998, the FCC liberalized the use of these frequencies to include two-way data
and telephone service. Wireless One of North Carolina continuously evaluates
potential uses of its frequency spectrum, including digital video, high speed
Internet and other traditional telephony services.

     In December 1999, WorldCom purchased Wireless One, Inc., which owns a 50.0%
interest in Wireless One of North Carolina, for cash and stock plus the
assumption of certain liabilities. We continue to own a 49.6% interest in
Wireless One of North Carolina. We are evaluating our various alternatives with
respect to our ownership interest in Wireless One of North Carolina, including a
possible sale of our interest. We currently have no arrangements or agreement to
sell our interest.

     DCS Partnership.  In 1994, we purchased a limited partner interest in the
DCS Partnership. In September of 2000, BellSouth purchased our interest for
$39.2 million.

     Passive Investments.  Our passive investments consist of equity interests
in several private and public companies. We own 3.8% of ITC Holding Company,
which participated in the formation of a number of successful telecommunications
companies, including ITC-DeltaCom, Inc. (Nasdaq: "ITCD"), Powertel, Inc.
(Nasdaq: "PTEL") and MindSpring Enterprise, Inc., subsequently acquired by
EarthLink (Nasdaq: "ELNK").

     As a result of the corporate reorganization of ITC Holding Company in 1997,
we received shares of ITC-DeltaCom and currently own more than 820,000 shares of
ITC-DeltaCom. We sold an aggregate of 140,000 shares of ITC-DeltaCom from time
to time during 2000 and expect to continue to sell shares in 2001 as we deem
appropriate.

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     During 2000, ITC Holding announced a further reorganization pursuant to
which we received 1.6 million shares of Knology, Inc. in April 2000, in a
tax-free spin-off. To maintain the tax-free nature of this transaction, we, and
other ITC Holding Company shareholders, have agreed not to sell or transfer the
Knology shares for two years following the distribution date of the shares.

     In addition, we own approximately 640,000 shares of Illuminet Holdings,
Inc., which was formed by a group of independent telephone companies, including
our ILEC, to provide billing and collection services and a national SS7 network
and now markets these services to other carriers. Illuminet completed its
initial public offering of Common Stock in October 1999 and now trades on the
Nasdaq National Market ("ILUM"). Our Illuminet shares were subject to certain
sale restrictions that expired in April 2000. We sold an aggregate of 290,000
shares of Illuminet from time to time during 2000 and expect to continue to sell
shares in 2001 as we deem appropriate.

LEGISLATIVE AND REGULATORY DEVELOPMENTS

     The telecommunications industry is subject to federal, state and local
regulation. The application of these regulations to our business segments is
discussed above. A more general description is set forth below.

     Federal Regulations.  The FCC regulates interstate and international
telecommunications services, which includes using local telephone facilities to
originate and terminate interstate and international calls. The
Telecommunications Act is intended to promote competitive development of new
service offerings, to expand public availability of telecommunications services
and to streamline regulation of the industry. Implementation of its legislative
objectives is the task of the FCC, state public utilities commissions and a
federal-state joint board. The Telecommunications Act makes all state and local
barriers to competitive entry unlawful, whether they are direct or indirect. The
Telecommunications Act directs the FCC to hold notice and comment proceedings
and to preempt all inconsistent state and local laws and regulations. Among the
numerous pending FCC proceedings are its Implementation of the Local Competition
Provisions of the Telecommunications Act of 1996 proceeding (CC Docket No.
96-98), its Deployment of Wireline Services Offering Advanced Telecommunications
Capability proceeding (CC Docket No. 98-147), and at least four proceedings
relating to universal service and access charge reform (CC Docket Nos. 94-1,
96-45, 96-262, 99-249).

     In addition to opening up local exchange markets, the Telecommunications
Act contains provisions for:

     - updating and expanding telecommunications service guarantees;

     - removing certain restrictions relating to former AT&T operating companies
       (the Regional Bell Operating Companies) resulting from the federal court
       antitrust consent decree issued in 1984;

     - the entry of telephone companies into video services;

     - the entry of cable television operators into other telecommunications
       industries;

     - changes in the rules for ownership of broadcasting and cable television
       operations; and

     - changes in the regulations governing cable television.

     Each state retains the power to impose "competitively neutral" requirements
that are both consistent with the Telecommunications Act's universal service
provision and necessary for universal service, public safety and welfare,
continued service quality and consumer rights. Although a state may not impose
requirements that effectively function as barriers to entry or create a
competitive disadvantage, the scope of state authority to maintain existing or
adopt new requirements under this section is not clear. In addition, before it
preempts a state or local requirement as violating the entry barrier
prohibition, the FCC must hold a notice and comment proceeding.

     The FCC may forbear from applying any statutory or regulatory provision
that is not necessary to keep telecommunications rates and terms reasonable or
to protect consumers. A state may not apply a
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<PAGE>   14

statutory or regulatory provision that the FCC decides to forbear from applying.
In addition, the FCC must review its telecommunications regulations every two
years and repeal or modify any that it deems to be no longer in the public
interest.

     Although certain interpretive issues under the Telecommunications Act have
not yet been resolved, it is apparent that the requirements of the
Telecommunications Act have led to increased competition among providers of
local telecommunications services and have simplified the process of switching
from incumbent local exchange carrier services to those offered by competitive
access providers and competitive local exchange carriers.

     The FCC regulates wireless services through its Wireless Telecommunications
Bureau. Providers of wireless mobile radio services are considered "common
carriers" and are subject to the obligations of such carriers, except where
specifically exempted by the FCC. As a result, our wireless operations and
business plans may be impacted by FCC regulatory activity. For example, the FCC
has concluded that commercial mobile radio service providers are entitled to
enter into reciprocal compensation arrangements with local exchange carriers.
The FCC has declined at this time to classify commercial mobile radio service
providers themselves as local exchange carriers subject to the obligations of
the Telecommunications Act, but could do so at some point in the future. Other
regulatory issues currently facing wireless carriers include issues relating to
telephone number administration. Because they are common carriers, wireless
carriers are subject to FCC and state actions regarding exhaustion, conservation
or expansion of telephone numbers and area codes. Programs to conserve or expand
telephone number and area code resources may possibly have a disproportionate
impact on wireless carriers because such carriers may not have a large reserve
of spare numbers, as wireline carriers may have, and so-called "area code
overlay" programs are sometimes imposed on wireless carriers alone, which forces
their customers to dial more digits for most local calls than wireline callers
in the same area. Within the past year, the FCC has issued an order asserting
jurisdiction over nearly all telephone numbering issues.

     A cellular licensee must apply for FCC authority to use additional
frequencies, to modify the technical parameters of existing licenses, to expand
its service territory and to provide new services. In addition to regulation by
the FCC, cellular systems are subject to certain Federal Aviation Administration
tower height regulations with respect to the siting and construction of cellular
transmitter towers and antennas. The FCC also has a rulemaking proceeding
pending to update the guidelines and methods it uses for evaluating acceptable
levels of radio frequency emissions from radio equipment, including cellular
telephones, which could result in more restrictive standards for such devices.

     State and Local Regulation.  We are also regulated by the North Carolina
Utilities Commission because we provide intrastate telephone services within
North Carolina. As a result, we must comply with North Carolina pricing
regulations, file periodic reports, pay various fees and comply with rules
governing quality of service, consumer protection and similar matters. The rules
and regulations are designed primarily to promote the public's interest in
receiving quality telephone service at reasonable prices. Our networks are
subject to numerous local regulations such as requirements for franchises,
building codes and licensing. Such regulations vary on a city by city and county
by county basis.

RISK FACTORS

     In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, set forth below are cautionary statements
identifying important factors that could cause actual events or results to
differ materially from any forward-looking statements made by or on behalf of
us, whether oral or written. We wish to ensure that any forward-looking
statements are accompanied by meaningful cautionary statements in order to
maximize to the fullest extent possible the protections of the safe harbor
established in the Private Securities Litigation Reform Act of 1995.
Accordingly, any such statements are qualified in their entirety by reference
to, and are accompanied by, the following important factors that could cause
actual events or results to differ materially from our forward-looking
statements. For additional information regarding forward-looking statements,
please read the "Cautionary Note Regarding Forward-Looking Statements" section
beginning on page 25.

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     OUR SUCCESS DEPENDS UPON OUR ABILITY TO MANAGE OUR EXPANSION.

     Our ability to continue to expand and develop our business will depend on
whether we can successfully do the following in a timely manner, at reasonable
costs and on satisfactory terms and conditions:

     - acquire necessary equipment, software, and facilities, and integrate them
       into our systems,

     - evaluate markets,

     - monitor operations,

     - control costs,

     - maintain effective quality controls,

     - hire and train qualified personnel,

     - expand internal management,

     - enhance operating and accounting systems, and

     - obtain any required government authorizations.

     We are making significant operating and capital investments and will have
to address numerous operating challenges. We are currently developing new
processes and operating support systems. We will need to continue developing new
marketing initiatives and hiring and training sales people responsible for
selling our services. We will also need to continue developing the billing and
collection systems necessary to integrate these services. We cannot assure you
that we can design, install, and implement these products and systems in a
timely manner to permit us to offer our new services as planned.

     In order to establish new operations, we may be required to spend
considerable amounts of capital before we generate related revenue. If these
services fail to be profitable or if we fail in any of these respects, this
failure may have a material adverse effect on our business and the price of our
Common Stock.

     OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL.

     The efforts of a small number of key management and operating personnel
will largely determine our success. Our success also depends in part upon our
ability to hire and retain highly skilled and qualified operating, marketing,
sales, financial and technical personnel. The competition for qualified
personnel in the telecommunications services industry is intense and,
accordingly, we cannot assure you that we will be able to hire or retain
necessary personnel. If we lose the services of key personnel or if we are
unable to attract additional qualified personnel, our business and the price of
our Common Stock could be materially and adversely affected.

     WE EXPECT TO CONTINUE TO FACE SIGNIFICANT COMPETITION IN THE
TELECOMMUNICATIONS INDUSTRY.

     We operate in an increasingly competitive environment. Our current
competitors include:

     - incumbent local exchange carriers,

     - competitive local exchange carriers,

     - interexchange carriers,

     - Internet service providers,

     - wireless telecommunications providers,

     - cable television companies,

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<PAGE>   16

     - local and regional system integrators, and

     - resellers of telecommunications services and enhanced services providers.

     The trend toward business combinations and strategic alliances within the
telecommunications industry could further increase competition. In addition, the
development of new technologies could increase competition. One of the primary
purposes of the Telecommunications Act, enacted February 8, 1996, is to promote
competition, particularly in the local telephone market. Since the enactment of
the Telecommunications Act, several telecommunications companies have indicated
their intention to aggressively expand their ability to compete in many segments
of the telecommunications industry, including segments in which we participate
and expect to participate. This expansion, should it occur, may result in more
participants than can ultimately be successful in a given market.

     We expect that increased competition will result in more competitive
pricing. Some of the companies with whom we compete are, or are affiliated with,
major telecommunications companies. Companies that have the resources to sustain
losses for some time have an advantage over those companies without access to
these resources. We cannot assure you that we will be able to achieve or
maintain adequate market share or revenue or compete effectively in any of our
markets. Any of these factors could materially adversely affect our business and
the price of our Common Stock.

     WE MUST SECURE UNBUNDLED NETWORK ELEMENTS.

     In connection with our CLEC operations, we interconnect with and use
incumbent telephone companies' networks to access our customers. Accordingly, we
depend upon the technology and capabilities of incumbent telephone companies to
meet the telecommunications needs of our CLEC customers and to maintain our
service standards. Our CLEC operations depend significantly on the quality and
availability of the incumbent telephone companies' copper lines and the
incumbent telephone companies' maintenance of these lines. We must also maintain
efficient procedures for ordering, provisioning, maintaining and repairing lines
from the incumbent telephone companies. We may not be able to obtain the copper
lines and services we require from the incumbent telephone companies at
satisfactory quality levels, rates, terms and conditions. Our inability to do so
could delay the expansion of our CLEC networks and degrade the quality of our
services to our CLEC customers. If these events occur, we may experience a
material adverse effect on our CLEC business and the price of our Common Stock.

     Late in 1999, we began offering our DSL product to customers. To provide
unbundled DSL-capable lines that connect each end-user to our equipment, we will
rely on incumbent telephone companies. The Telecommunications Act generally
requires that charges for these unbundled network elements be cost-based and
nondiscriminatory. Charges for DSL-capable lines and other unbundled network
elements may vary based on rates proposed by incumbent telephone companies and
approved by state regulatory commissions. Increases in these rates could result
in a material adverse effect on our CLEC business and the price of our Common
Stock.

     WE ARE DEPENDENT ON OUR OPERATING SUPPORT SYSTEMS.

     Sophisticated information and processing systems are vital to our growth
and our ability to monitor costs, bill customers, process customer orders and
achieve operating efficiencies. Billing and information systems have
historically been produced by outside vendors. These systems have generally met
our needs. As we continue providing more services, we will need more
sophisticated billing and information systems. Our failure, or the failure of
vendors, to adequately identify all of our information and processing needs or
to upgrade systems as necessary could have a material adverse effect on our
business and the price of our Common Stock.

     WE MUST ADAPT TO RAPID TECHNOLOGICAL CHANGE.

     The telecommunications industry is subject to rapid and significant changes
in technology, and we rely on third parties for the development of and access to
new technology. The effect of technological changes

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on our business cannot be predicted. We believe our future success will depend,
in part, on our ability to anticipate or adapt to such changes and to offer, on
a timely basis, services that meet customer demands. We cannot assure you that
we will obtain access to new technology on a timely basis or on satisfactory
terms. Our failure to obtain access to this new technology could have a material
adverse effect on our business and the price of our Common Stock.

     WE ARE SUBJECT TO A COMPLEX AND UNCERTAIN REGULATORY ENVIRONMENT.

     The telecommunications industry is regulated by the FCC, state regulatory
commissions and municipalities. Federal and state regulations and regulatory
trends in the direction of reduced regulation have had, and are likely to have,
both positive and negative effects on us and our ability to compete. Federal or
state regulatory changes and any resulting increase in competition may have a
material adverse effect on our businesses and on the price of our Common Stock.

     WE ARE DEPENDENT ON INTERCONNECTION AGREEMENTS, PERMITS AND RIGHTS-OF-WAY.

     Our success will depend, in part, on our ability to implement existing
interconnection agreements and enter into and implement new interconnection
agreements as we expand into new markets. Interconnection agreements are subject
to negotiation and interpretation by the parties to the agreements and are
subject to state regulatory commission, FCC and judicial oversight. We cannot
assure you that we will be able to enter into interconnection agreements in a
timely manner on terms favorable to us. We must also maintain existing and
obtain new local permits, including rights to utilize underground conduit and
pole space and other rights-of-way. We cannot assure you that we will be able to
maintain our existing permits and rights or to obtain and maintain other permits
and rights needed to implement our business plan on acceptable terms.
Cancellation or non-renewal of our interconnection agreements, permits,
rights-of-way or other arrangements could materially adversely affect our
business and the price of our Common Stock. In addition, the failure to enter
into and maintain any required arrangements for a new market may affect our
ability to develop that market.

     THE SUCCESS OF OUR INTERNET AND DATA SERVICES BUSINESS DEPENDS ON
     MAINTAINING "PEERING" AND OTHER ARRANGEMENTS.

     The profitability of our Internet and data services, such as Internet
access, may be adversely affected if we are unable to maintain "peering"
arrangements with Internet service providers on favorable terms. In the past,
major Internet service providers routinely exchanged traffic with other Internet
service providers that met technical criteria on a "peering" basis. This means
that each Internet service provider accepted traffic routed to Internet
addresses on their system from their "peers" on a reciprocal basis, without
payment of compensation. Recently, Internet service providers have been
restricting the use of peering arrangements with other providers and have been
imposing charges for accepting traffic from providers other than their "peers."
Although we currently have peering arrangements with national Internet backbone
providers, we cannot assure you that we will be able to maintain "peer" status
with these providers, or that we will be able to terminate traffic on their
networks at favorable prices. A failure to maintain adequate and favorable
"peering" arrangements may have a material adverse effect on our Internet
business and the price of our Common Stock.

     OUR LONG DISTANCE SERVICES ARE AFFECTED BY OUR ABILITY TO ESTABLISH
EFFECTIVE TERMINATION AGREEMENTS.

     We offer long distance services as part of the integrated package of
telecommunications services that we provide our customers. We have relied on and
will continue to rely on other carriers to provide transport and termination
services for portions of our long distance traffic. These agreements typically
provide for the termination of long distance services on a per-minute basis and
may contain minimum volume commitments. Negotiation of these agreements involves
estimates of future supply and demand for transport capacity, as well as
estimates of the calling patterns and traffic levels of our future customers. If
we fail to meet our minimum volume commitments, we may be obligated to pay
underutilization charges. If we underestimate our need for transport capacity,
we may be required to obtain capacity through more
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expensive means. These failures may result in a material adverse effect on our
business and the price of our Common Stock.

     THE MARKET PRICE OF OUR COMMON STOCK HAS BEEN AND MAY BE VOLATILE.

     Our Common Stock has traded on the Nasdaq National Market only since
January 29, 1999. Since that time, the trading market for our Common Stock has
been characterized by limited liquidity, low volume and price volatility.

     In addition, the following factors, among others, may cause the price of
our Common Stock to fluctuate:

     - sales by our current shareholders of large amounts of our Common Stock,

     - new legislation or regulation,

     - variations in our revenue, net income and cash flows,

     - the difference between our actual results and the results expected by
       investors and analysts,

     - announcements of new service offerings, marketing plans or price
       reductions by us or our competitors,

     - technological innovations, and

     - mergers, acquisitions or strategic alliances.

     Further, stock markets recently have experienced significant price and
volume fluctuations that have affected growth companies such as
telecommunications companies. The fluctuations in the market prices of the
stocks of many companies have not been directly related to the operating
performance of those companies. These market fluctuations may materially
adversely affect the price of our Common Stock.

     OUR ACQUISITIONS, JOINT VENTURES AND STRATEGIC ALLIANCES MAY NOT BE
SUCCESSFUL.

     We may acquire other companies as a means of expanding into new markets,
developing new services or supplementing existing businesses. We cannot predict
whether or when any acquisitions may occur or the likelihood of a material
transaction being completed on favorable terms. These types of transactions
involve risks, including:

     - difficulties assimilating acquired operations and personnel,

     - disruptions of our ongoing businesses,

     - diversion of resources and management time,

     - the possibility that uniform management and operating systems and
       procedures may not be maintained,

     - increased regulatory burdens,

     - new markets in which we may have limited or no experience, and

     - possible impairment of relationships with employees or customers.

     Also, we cannot assure you that we could obtain financing for an
acquisition on satisfactory terms or that the acquired business would perform as
expected.

     We have formed and may in the future form various strategic alliances,
joint ventures and other similar arrangements. The other parties to these
existing or future arrangements, however, may at times have economic, business
or legal interests or goals that are inconsistent with our goals or those of the
strategic alliance, joint venture or similar arrangement. In addition, a joint
venture partner may be unable to meet its economic or other obligations to the
venture. A disagreement with our strategic allies or joint

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venture partners over certain business actions or the failure of a partner to
meet its obligations to the venture could adversely affect our business and the
price of our Common Stock.

     ANTI-TAKEOVER PROVISIONS MAY LIMIT THE ABILITY OF SHAREHOLDERS TO EFFECT A
     CHANGE IN CONTROL OF CT COMMUNICATIONS.

     Our articles of incorporation contain provisions for staggered terms of
directors, removal of directors for cause only, supermajority voting for certain
business combinations and the availability of authorized but unissued shares of
Common Stock. Also, we have adopted a shareholders' rights plan in which each
stockholder is entitled to purchase additional shares of Common Stock at a
specified purchase price upon the occurrence of certain events related to a
potential change in our control. These provisions may have the effect of
deterring transactions involving a change in our control or management,
including transactions in which shareholders might receive a premium for their
shares.

EMPLOYEES

     At December 31, 2000, we had approximately 687 employees. None of our
employees are represented by a labor union, and we consider relations with our
employees to be good.

EXECUTIVE OFFICERS OF THE COMPANY

     The following is a list of our executive officers as of March 1, 2001,
including such person's name, age, positions and offices held with CT
Communications, the period served in such positions or offices and, if such
person served in such position or office for less than five years, the prior
employment of such person.

     L. D. Coltrane, III, age 82, has been a director since 1965 and became
President and Chairman of the Board in 1986. He retired as President in 1988. He
is the father of Michael R. Coltrane.

     Michael R. Coltrane, age 54, has been President, Chief Executive Officer
and a director since 1988. Prior to joining us in 1988, Mr. Coltrane served as
Executive Vice President of First Charter National Bank for more than six years
and as Vice President of a large regional bank for more than 10 years. Mr.
Coltrane is Vice Chairman of Maxcom Telecomunicaciones, S.A. de C.V., a director
of the general partner of Palmetto MobileNet, L.P., a director of Northeast
Medical Center, Vice Chairman of First Charter Corporation, the parent company
of First Charter National Bank and Chairman of the United States Telecom
Association. Mr. Coltrane is the son of L.D. Coltrane, III.

     Barry R. Rubens, age 41, has been a Senior Vice President, the Chief
Financial Officer, Secretary and Treasurer since 1995. He was Vice
President-External Affairs from 1992 to 1995. Mr. Rubens serves on the executive
committee of BellSouth Carolinas PCS, LLC, as a director of Maxcom, as a
director of Carolinas FiberNet and as an officer and board member of Wireless
One of North Carolina, LLC. Prior to joining us, Mr. Rubens was a senior manager
with Ernst & Young's telecommunications practice in Washington, D.C.

     Michael R. Nash, age 48, has been a Senior Vice President since January
1999 and has primary responsibility for our network technology and network
operations. From 1995 to 1998, he was a Vice President of Standard Telephone
Company. From 1974 to 1995, he was an operations director of BellSouth
Telecommunications, Inc.

     Amy M. Justis, age 36, has been Vice President of Finance since September
1999. From March 1999 to September 1999, she was the Director of Finance of the
Network and Carrier Services Division (North Operations) of BellSouth
Telecommunications, Inc., a telecommunications provider. From 1994 to March
1999, she was the Manager of Finance of the Network and Carrier Services
Division of BellSouth Telecommunications, Inc.

                                        17
<PAGE>   20

ITEM 2.  PROPERTIES

     Our properties consist of land, buildings, central office equipment,
exchange and toll switches, data transmission equipment, underground conduits
and cable, aerial cable, poles, wires, telephone instruments and other
equipment. Our principal operations are conducted in a building we own at 68
Cabarrus Avenue East, Concord, North Carolina. This headquarters facility was
built in 1956 and expanded in 1967. More recently, in 1999 and 2000 we made
substantial interior renovations to the Cabarrus Avenue facility. This
headquarters building has approximately 53,000 square feet of floor space.

     We own approximately 16 acres of property north of Concord adjoining
Interstate 85 for use as a campus-style business office center. Between 1996 and
1998 we constructed two buildings at this site. During 2000, we broke ground on
a new corporate center also located on this property. This new headquarters is
anticipated to be occupied during 2002.

     We also own a general warehouse located in Concord. This facility was
completely renovated in 1991 and has approximately 12,300 square feet of floor
space. We enlarged our warehouse storage facilities by adding approximately
9,760 square feet of warehouse space in 1995.

     In November 1997, we purchased a one-third interest in 22.4 acres of
undeveloped property located on Weddington Road Extension and Speedway Boulevard
in the King's Grant Development. This property may be used for future
development if needed.

     All of our central office switching equipment is digital. In mid-1997, we
began replacing Concord Telephone's digital switching platform by changing from
AG switches to state-of-the-art Nortel DMS switches. This replacement process
will continue as business conditions warrant. In 1997, we also replaced the DOTS
operator workstations used by Concord Telephone with TOPS workstations from
Nortel. In 1998, we installed and co-located a Reltec digital loop carrier at
the BellSouth central office in Salisbury, North Carolina.

     In connection with our PCS operations, we have entered into five real
property leases to house our retail outlets in Concord, Concord Mills Mall,
Mooresville, Statesville and Salisbury, North Carolina. We also lease office
space on Cabarrus Avenue West, Copperfield and Penny Lane, Northeast, in
Concord, North Carolina and on University Executive Park Drive and East Ninth
Street in Charlotte, North Carolina. Our CLEC operations lease space in
Greensboro, Hickory and Raleigh, North Carolina. These leases are not material
to our operations or financial condition.

     As of December 31, 2000, 18% of our telephone plant in service was
represented by land, buildings and general equipment; 39% by central office
equipment; and 39% by wires, cables, conduits, poles and related equipment.
These connecting lines, poles, wires, cables and conduits and related equipment
are located on streets and public highways that we do not own, pursuant to
consents of various governmental bodies or to leases, permits, easements,
agreements, or licenses, express or implied through use without objection by the
owners.

     We utilize approximately 158 motor vehicles in our operations, all but 3 of
which we own.

ITEM 3.  LEGAL PROCEEDINGS

     CT Communications and Concord Telephone are named as defendants, in
addition to numerous other named defendants, in a lawsuit filed by six former
employees of US Telecom and US Telecom East, Inc. CT Communications, through its
subsidiaries, previously participated as a financial investor in US Telecom
Holdings, Inc. We anticipate settlement of this claim will occur in Spring of
2001 and do not expect the result to have a material effect to the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth
quarter of 2000.

                                        18
<PAGE>   21

                                    PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     Prior to January 29, 1999, both our Voting Common Stock and our Class B
Nonvoting Common Stock traded principally in local transactions without the
benefit of an established public trading market, although a Charlotte-based
brokerage firm made a market as shares of the Class B Nonvoting Common Stock
were offered for sale. During 1998, the last reported sale prices for the Class
B Nonvoting Common Stock ranged from $15.75 to $25.00 per share, as adjusted to
reflect the Recapitalization and 2-for-1 stock dividend. On January 29, 1999,
the Recapitalization became effective and our Common Stock began trading on the
Nasdaq National Market under the symbol "CTCI."

     The following table shows the high and low last reported sale prices per
share of our Common Stock as reported on the Nasdaq National Market for the
periods indicated.

<TABLE>
<CAPTION>
                                                              HIGH        LOW
                                                              -----      -----
<S>                                                           <C>        <C>
Year Ended December 31, 1999
  First Quarter (from January 29, 1999).....................  28.38      19.38
  Second Quarter............................................  22.25      18.50
  Third Quarter.............................................  24.69      20.25
  Fourth Quarter............................................  29.75      22.50
Year Ended December 31, 2000
  First Quarter.............................................  31.08      24.74
  Second Quarter............................................  31.65      20.97
  Third Quarter.............................................  30.16      20.14
  Fourth Quarter............................................  20.57      14.00
</TABLE>

     We paid the following cash dividends per share during the past two calendar
years:

<TABLE>
<CAPTION>
                                                              DIVIDEND
                                                              --------
<S>                                                           <C>
Year Ended December 31, 1999
  First Quarter.............................................   $.065
  Second Quarter............................................    .065
  Third Quarter.............................................    .065
  Fourth Quarter............................................    .065
Year Ended December 31, 2000
  First Quarter.............................................   $.065
  Second Quarter............................................    .065
  Third Quarter.............................................    .065
  Fourth Quarter............................................    .065
</TABLE>

     Dividends are paid only as and when declared by our board of directors, in
its sole discretion, based on our financial condition, results of operations,
market conditions and such other factors as it may deem appropriate. Under the
terms of a credit agreement, the amount of cash dividends payable on our Common
Stock in any fiscal year may not exceed 100% of our consolidated net earnings
for the immediately preceding fiscal year and may not have a material adverse
effect on our properties, business, prospects, operations or condition
(financial or otherwise). In addition, we may not pay dividends on our Common
Stock if any dividends on our Preferred Stock are in arrears. These provisions
are not expected to have a material effect on our ability to pay dividends.

     The number of holders of record of our Common Stock as of March 20, 2001,
was 1,723. This number does not include beneficial owners of Common Stock whose
shares are held in the name of various dealers, depositories, banks, brokers or
other fiduciaries.

     The foregoing stock prices and dividend amounts have been adjusted to
reflect the Recapitalization and the two-for-one stock dividend on April 5,
2000.

                                        19
<PAGE>   22

ITEM 6.  SELECTED FINANCIAL DATA

     The following table sets forth our selected historical consolidated
financial data. We derived the data as of and for the five years ended December
31, 2000, 1999, 1998, 1997 and 1996 from our audited consolidated financial
statements and related notes. This data should be read in conjunction with our
audited consolidated financial statements and related notes for the years ended
December 31, 2000, 1999 and 1998 included in our 2000 Annual Report to
Shareholders, incorporated herein by reference, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained herein.

<TABLE>
<CAPTION>
                                                     YEARS ENDED DECEMBER 31,
                             ------------------------------------------------------------------------
                                 2000           1999           1998           1997           1996
                             ------------   ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>            <C>            <C>
Income Statement Data
  Operating revenues.......  $115,655,333   $105,591,594   $ 91,725,394   $ 78,483,514   $ 67,054,006
  Operating expenses.......   100,149,049     83,223,191     70,272,414     58,390,372     51,349,967
                             ------------   ------------   ------------   ------------   ------------
     Operating income......    15,506,284     22,368,403     21,452,980     20,093,142     15,704,039
  Other income
     (expense)(1)..........    52,501,742     16,397,523        855,899      1,645,866      1,341,053
  Income taxes.............   (27,228,578)   (15,697,657)    (8,926,469)    (7,898,159)    (6,583,671)
                             ------------   ------------   ------------   ------------   ------------
Net income.................    40,779,448     23,068,269     13,382,410     13,840,849     10,461,421
  Dividends on preferred
     stock.................        26,518         26,210         28,457         73,073         92,535
                             ------------   ------------   ------------   ------------   ------------
Earnings for Common Stock..  $ 40,752,930   $ 23,042,059   $ 13,353,953   $ 13,767,776   $ 10,368,886
                             ============   ============   ============   ============   ============
Diluted Per Share Data(2)
  Weighted average common
     shares outstanding....    18,930,980     18,857,726     18,553,008     18,222,878     18,156,770
  Earnings.................  $       2.15   $       1.22   $        .72   $      .76(1)  $        .57
  Dividends................  $        .26   $        .26   $        .24   $        .24   $        .23
Balance Sheet Data (end of
  period)
  Book value -- year end...  $       9.28   $       9.32   $       6.41   $       5.31   $       4.42
  Total assets.............  $259,522,281   $257,695,210   $183,634,358   $147,339,429   $115,063,963
  Long-term debt (excluding
     current maturities)...  $ 34,000,000   $ 20,000,000   $ 20,000,000   $ 11,239,000   $  2,014,000
  Redeemable preferred
     stock (excluding
     current maturities)...  $    100,000   $    112,500   $    125,000   $    137,500   $    150,000
</TABLE>

---------------

(1) Other income in 1997 includes an extraordinary item of $2,239,045, net of
    income taxes of $1,493,312 (or $.12 per share), because of the
    discontinuance of SFAS No. 71.
(2) Share data is based on the weighted average number of shares outstanding
    after giving retroactive effect to a 2-for-1 stock dividend effective May 3,
    1996, a 3-for-2 stock dividend effective August 1, 1997, the
    Recapitalization effective January 28, 1999 and the 2-for-1 stock dividend
    effective April 5, 2000. Dividends declared have been restated to give
    retroactive effect to these events.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion of our financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and related notes incorporated by reference in this report and the
selected financial data included elsewhere in this report.

OVERVIEW

     We are a growing provider of telecommunications services to residential and
business customers located primarily in North Carolina. We offer an integrated
package of telecommunications services
                                        20
<PAGE>   23

consisting of local and long distance telephone services, Internet and data
services, and digital wireless products and services.

     We have worked to expand our ILEC business in recent years by adding
additional telecommunications services to our integrated service packages,
emphasizing customer service and taking advantage of the strong demographic
growth in our service area. Another key component to our business strategy is to
grow our CLEC, Internet and data services, and digital wireless businesses. We
significantly expanded our Internet and data services in May 1998 through our
acquisition of Vnet and further expanded in September 1999 and in February 2000
through our acquisitions of Catawba Valley Internet Partnership and Internet of
Concord. In December 2000, we acquired WebServe, a Charlotte, NC based web
design and hosting company. WebServe will provide additional capabilities in
programming and web design that should complement our existing products and
services.

     We devoted substantial effort in the past three years to developing
business plans, enhancing our management team and board of directors, and
designing and developing our business support and operating systems. Development
of these areas has required significant investment of capital and start-up
expenses. We believe that through these investments, we are positioning
ourselves to achieve our strategic objectives.

     Our primary focus is to maximize our ILEC business in our current markets
by cross-selling integrated products and packages and growing our customer base
through our CLEC, Internet and data services, and digital wireless businesses.
We will also consider strategic acquisitions and investments as opportunities
arise.

     During 2000 we managed our internal financial reporting along certain
business segments. We have identified those five that are reportable segments
under generally accepted accounting principles. Selected data by business
segment, excluding intersegment revenue and expense, was as follows for the
years ended December 31, 2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                              -----------------------------
                                                                2000       1999      1998
                                                              --------   --------   -------
                                                                     (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
OPERATING REVENUES:
  ILEC......................................................  $ 82,353   $ 76,653   $70,647
  CLEC......................................................     4,447      2,613       493
  Long distance services....................................    13,832     14,291    13,391
  Internet and data services................................     6,899      5,717     3,369
  Digital wireless services.................................     7,674      5,193     3,151
  Other.....................................................       450      1,125       674
                                                              --------   --------   -------
     Consolidated operating revenues........................  $115,655   $105,592   $91,725
                                                              ========   ========   =======
OPERATING EBITDA (1):
  ILEC......................................................  $ 40,144   $ 34,722   $32,188
  CLEC......................................................    (9,600)    (2,257)   (1,570)
  Long distance services....................................     5,936      5,672     4,289
  Internet and data services................................      (326)       397       462
  Digital wireless services.................................    (1,767)    (1,674)   (1,045)
  Other.....................................................      (170)       633       (30)
                                                              --------   --------   -------
     Consolidated operating EBITDA..........................  $ 34,217   $ 37,493   $34,294
                                                              ========   ========   =======
</TABLE>

---------------

(1) Operating EBITDA represents operating earnings before interest, income
    taxes, depreciation and amortization and is commonly used in the
    telecommunications industry to analyze companies on the basis of operating
    performance, leverage and liquidity. It is not intended to represent cash
    flows for the period and should not be considered as an alternative to cash
    flows from operating, investing or financing activities as determined in
    accordance with generally accepted accounting principles and may not be
    comparable with other similarly titled measures of other companies.

                                        21
<PAGE>   24

RESULTS OF OPERATIONS

  Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

     Operating revenues increased $10.0 million or 9.5% for the year ended
December 31, 2000 when compared to 1999.

     Excluding intersegment revenues, ILEC revenue was $82.4 million, a $5.7
million or 7.4% increase over 1999, primarily resulting from increased access
revenue. The two primary factors behind increased access revenue are an increase
in minutes and an increase in local revenue based on access line growth of 5%
from December 31, 1999 to December 31, 2000. Custom call features revenue
increased 15% due to increased telemarketing and sales efforts. Higher equipment
sales also contributed to the increase.

     CLEC operating revenues were $4.4 million, representing a $1.8 million or
70.2% increase over last year. The increase is due to the additional CLEC access
lines placed in service during the past twelve months as we have continued our
expansion into the Charlotte and Greensboro, North Carolina markets. At December
31, 2000 we had over 11,800 CLEC lines in service, an increase of more than
8,000 from December 31, 1999.

     Long distance services (LD) revenue was $13.8 million, which is comparable
to revenue during 1999. Despite the increase in the number of pre-subscribed
access lines and a corresponding increase in minutes, revenue has remained flat
due to the introduction of new, more competitive long distance price plans in
the fourth quarter of 1999. These plans have resulted in a decline in the
average revenue per minute. We expect long distance revenue to remain steady.

     Internet and data services (ISP) revenue contributed $6.9 million for the
year ended December 31, 2000, an increase of $1.2 million or 20.7% over 1999.
This increase was driven by an increase in customers across all service
offerings within the segment, particularly DSL customers. Additionally, 1,845
customers were added in February 2000 through the acquisition of Internet of
Concord.

     Digital wireless services (DCS) contributed $7.7 million to revenue, a $2.5
million or 47.8% increase over the year ended December 31, 1999 due to an
increased number of customers. During 2000, our wireless customers increased by
5,600 to more than 16,300. Much of this growth has come as a result of the
strong residential and business development within our service area.

     Operating expenses, exclusive of depreciation and amortization, increased
$13.3 million or 19.6% for the year ended December 31, 2000 when compared to
1999.

     Excluding intersegment expenses, ILEC expenses were $42.2 million,
consistent with amounts for the year ended December 31, 1999.

     CLEC operating expenses were $14.0 million compared with $4.9 million
during 1999. CLEC operating expenses have risen significantly in 2000 due to the
CLEC expansion program described above. These expenses are expected to be funded
primarily through cash flows from operations, existing cash, cash equivalents
and short-term investments, sales of investment securities, and available lines
of credit.

     Long distance services operating expenses were $7.9 million, a $.7 million
or 8.4% decrease over the year ended December 31, 1999. This decrease was mainly
due to a decline in carrier transport and termination expense due to lower rates
on negotiated contracts.

     Internet and data services operating expenses were $7.2 million, a $1.9
million or 35.8% increase over the same period last year. This increase was
mainly due to the increase in ISP customers and additional personnel added
during 2000.

     Digital wireless services operating expenses were $9.4 million, a $2.6
million or 37.5% increase over 1999. This increase was mainly due to the costs
associated with the increase in wireless subscribers.

     Depreciation expense increased $3.6 million or 23.7% to $18.7 million for
the year ended December 31, 2000 when compared to 1999. This increase reflects
an increase in the depreciable assets.

                                        22
<PAGE>   25

     Other income (expenses) increased $36.1 million when compared to the year
ended December 31, 1999. This increase results from the following:

     - A $39.2 million pre-tax gain from the sale of the Registrant's 1.96%
       interest in the BellSouth DCS Partnership,

     - $11.4 million pretax income from sales of ITC-DeltaCom and Illuminet
       stock in 2000 compared with $15.8 million pretax income from sales of
       ITC-DeltaCom in 1999,

     - Income from the Palmetto MobileNet cellular partnership of $5.8 million
       for the year ended December 31, 2000 compared with $4.8 million in 1999,
       and

     - Higher other expenses, primarily due to a $0.8 increase in interest
       expense during 2000.

  Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

     Operating revenues increased $13.9 million or 15.1% to $105.6 million for
the year ended December 31, 1999 compared to 1998.

     Excluding intersegment revenues, ILEC revenue was $76.7 million, a $6.0
million or 8.5% increase over 1998. This growth arose primarily from increased
demand for local service and increased custom call feature revenue as a result
of telemarketing and sales efforts. Approximately 7,800 new access lines were
connected to the network in 1999, bringing the total number of local access
lines in our ILEC's three-county service area to 116,935. Higher equipment sales
also contributed to this increase.

     CLEC revenue contributed $2.6 million, a $2.1 million increase over 1998,
driven by the addition of 1,900 access lines, bringing the total CLEC lines in
service to nearly 3,600. The CLEC operation added nearly 1,000 access lines at
Concord Mills Mall for 100% of the retailers in the second half of the year. The
revenue in this area and in new CLEC markets is expected to continue to grow.

     Long distance services revenue, derived from providing long distance
communications between designated areas, was $14.3 million compared to $13.4
million in 1998, an increase of $0.9 million or 6.7%. This increase is a result
of increased sales and marketing efforts and increased calling volume.

     Internet and data services revenue was $5.7 million, a $2.3 million or
69.7% increase over 1998. This increase was driven by the acquisition of Vnet,
an Internet service provider, in the second quarter of 1998, coupled with an
increase in the number of dial-up, web hosting and dedicated high speed
customers. In 1999, customers grew in number from nearly 13,300 to nearly
17,000. Approximately 900 customers were added through the acquisition of
Catawba Valley Internet Partnership in September 1999. In addition, 1,845
customers were added in February 2000 through the acquisition of Internet of
Concord.

     Digital wireless services revenue was $5.2 million, a $2.0 million or 64.8%
increase over 1998. This growth is related to the increased number of
subscribers. Over 4,200 net customers were added during 1999, bringing the total
number of subscribers to 10,700, a 64.9% increase over 1998.

     Operating expenses increased $13.0 million or 18.4% to $83.2 million for
the year ended December 31, 1999 compared to 1998.

     Excluding intersegment expenses, ILEC operating expenses were $41.9
million, a $3.5 million or 9.0% increase over 1998 driven by an increase in
personnel, higher contracted services expenses related to the telephone plant
growth and increased reciprocal compensation charges. Depreciation and
amortization increased to $12.9 million, a $1.3 million or 11.4% increase over
1998 related to the increase in depreciable assets.

     CLEC and long distance services operating expenses were $13.5 million, a
$2.3 million or 20.8% increase over 1998. This increase was driven by additional
marketing and service expenses related to line growth and higher access expense
as a result of higher toll revenue. Depreciation and amortization increased to
$1.1 million, a $0.4 million or 67.2% increase over 1998 due to the addition of
plant to serve

                                        23
<PAGE>   26

the CLEC lines at Concord Mills Mall and additional plant in service primarily
for the anticipated increase of our CLEC operations.

     Internet and data services operating expenses were $5.3 million, a $2.4
million or 83.0% increase over 1998 due to higher network expenses, the addition
of sales and technical personnel along with the full year of expenses for Vnet.
Depreciation and amortization increased to $0.9 million, a $0.4 million or 67.4%
increase over 1998 due to the full year of goodwill amortization expense related
to the acquisition of Vnet.

     Digital wireless services operating expenses were $6.9 million, a $2.7
million or 63.6% increase over 1998. This increase was driven by the opening of
a new retail store and an increased number of customers.

     Other income (expenses) increased to $16.4 million, a $15.5 million
increase over 1998. This increase reflects:

     - $0.7 million related to lower losses associated with the BellSouth DCS
       partnership ($0.5 million) and the investment in US Telecom Holdings
       ($0.5 million), partially offset by lower earnings from Palmetto
       MobileNet ($0.3 million); and

     - An increase in interest, dividend and gain on sale of investments due to
       the pre-tax gains for the sale of ITC-DeltaCom stock of $17.8 million in
       1999, versus $1.9 million in 1998.

The increase was partially offset by higher other expenses due to higher
interest expense in 1999.

     Net income was $23.1 million in 1999, a $9.7 million or 72.4% increase over
1998.

LIQUIDITY AND CAPITAL RESOURCES

     We had net cash provided by operating activities for the year ended
December 31, 2000 of $4.7 million. Our primary use of cash during this period
was for additions to our telephone plant of $54.1 million, purchases of
investment securities of $8.2 million, acquisitions of $6.8 million, purchases
of investments in affiliates of $6.7 million, and payment of dividends of $4.9
million.

     Working capital was $7.7 million on December 31, 2000, compared to $8.1
million at December 31, 1999. Current assets increased by $8.0 million in the
year ended December 31, 2000 primarily due to increases in accounts receivable,
cash and materials. Current liabilities increased $8.4 million in the year ended
December 31, 2000 due to an increase in accounts payable and $5 million of
short-term borrowings.

     We have significant cash requirements due to growth in our service area,
planned improvements to our existing plant and equipment, and our geographic
expansion. Capital expenditures for the year ended December 31, 2000 and
December 31, 1999 were $54.1 million and $27.6 million, respectively, for
network improvements, including upgrades to the switching platform, CLEC
expansion, and improvements in the outside plant including poles, aerial cable
and buried cable. Our capital expenditures in 2001 are expected to be
approximately $84.5 million, as follows:

     - $20.0 million for partitioning of the BellSouth DCS network

     - $14.5 million for construction of the new CTC corporate center

     - $24.0 million for ILEC network facilities, outside plant, network
       switching, and other telecommunications assets,

     - $4.3 million for CLEC network expansion,

     - $13.0 million for new "Greenfield" projects,

     - $3.4 million for management information systems hardware and software
       upgrades and additions,

     - $2.7 million for DCS wireless cell sites,

     - $2.0 million for internet and high speed data services equipment, and

     - $0.6 million for long distance services equipment.

                                        24
<PAGE>   27

     Other anticipated uses of cash in 2001 include additional investments in
affiliates. We have elected to exercise our right to partition certain
territories in the DCS Partnership, the resulting net cost is expected to be
between $20.0 million and $24.0 million and is planned for the Spring of 2001.
We expect to fund these costs through additional borrowings under our credit
facility.

     We have an unsecured revolving credit facility with a syndicate of banks
for $60.0 million, of which $34 million was outstanding on December 31, 2000 The
interest rate on the credit facility is variable based on LIBOR plus a spread
based on our ratio of debt to EBITDA. The LIBOR interest rate on December 31,
2000 was approximately 6.8% and the applicable spread was 0.5%. The credit
facility provides for quarterly payments of interest until maturity on December
31, 2003. We entered into an interest rate swap transaction in March 1999 to fix
$10.0 million of the outstanding principal at a rate of 5.9% plus a spread,
currently 0.5%. In addition, we have two $5.0 million revolving credit
facilities with Rural Telephone Finance Cooperative (RTFC) and First Charter
National Bank at interest rates not to exceed a specified prime rate plus 1.5%
and minus 1.5%, respectively. As of December 31, 2000, we had $5 million
outstanding under the First Charter facility and no amounts outstanding under
the RTFC facility.

     We intend to enter into a $150 million credit facility comprised of a $50
million senior unsecured 14-year term loan and a $100 million 5-year revolving
credit facility. We plan on closing on this agreement early in the second
quarter of 2001.

     We believe our existing sources of liquidity, cash provided by operations,
new or existing credit facilities and the sale of investment securities will
satisfy our anticipated working capital and capital expenditure requirements for
the foreseeable future.

ACCOUNTING CONSIDERATIONS

     In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 requires that all
derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in current
operations or other comprehensive income, depending upon whether a derivative is
designated as part of a hedge transaction and, if it is, the type of hedge
transaction. The effective date for SFAS No. 133 is for fiscal years beginning
after June 15, 2000, though earlier adoption is encouraged and retroactive
application is prohibited. The Company adopted the standard effective January 1,
2001. The Company anticipates that, due to limited use of derivative
instruments, the adoption of SFAS No. 133 will not have a material impact on the
consolidated financial statements.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 summarizes certain of the staff's views in applying
generally accepted accounting principles to revenue recognition and deferred
costs in financial statements. SAB 101 was effective beginning in the fourth
quarter of 2000 and did not materially impact the Company's financial position
or results of operations.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This report contains certain "forward-looking statements," as defined in
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that are based on the beliefs of our management, as well
as assumptions made by, and information currently available to, our management.
We have based these forward-looking statements on our current expectations and
projections about future events and trends affecting the financial condition of
our business. These forward-looking statements are subject to risks,
uncertainties and assumptions about us, including, among other things:

     - changes in industry conditions created by the Telecommunications Act and
       related state and federal legislation and regulations,

     - recovery of the substantial costs which will result from the
       implementation of our new businesses,
                                        25
<PAGE>   28

     - retention of our existing customer base and our ability to attract new
       customers,

     - rapid changes in technology, and

     - actions of our competitors.

     These forward-looking statements are principally contained in the following
sections of this report:

     - Item 1. Business; and

     - Item 7. Management's Discussion and Analysis of Financial Condition and
       Results of Operations.

     In addition, in those and other portions of this report, the words and
phrases such as "expects," "estimates," "intends," "plans," "believes,"
"projection," "will continue" and "is anticipated" are intended to identify
forward-looking statements.

     These forward-looking statements may differ materially from actual results
because they involve estimates, assumptions and uncertainties. In making these
forward-looking statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
All forward-looking statements should be viewed with caution.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We have an unsecured revolving credit facility with a syndicate of banks
for $60.0 million, of which $34.0 million was outstanding on December 31, 2000.
The interest rate on the credit facility is variable based on LIBOR plus a
spread based on our ratio of debt to EBITDA. The interest rate was approximately
7.3% with the spread on December 31, 2000. We entered into an interest rate swap
transaction to establish a fixed rate of interest on $10.0 million of the
outstanding principal at December 31, 1998. The interest rate swap will protect
us, to the extent of $10.0 million of outstanding principal amount, against an
upward movement in interest rates, but subjects us to above market interest
costs if interest rates decline. We believe that reasonably foreseeable
movements in interest rates will not have a material adverse effect on our
financial condition or operations.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Our consolidated financial statements, the financial statement schedules
required to be filed with this report and the report of independent public
accountants are set forth on pages 17 through 37 of our 2000 Annual Report to
Shareholders. The selected quarterly financial data required by this Item is
included in Note 16 of our consolidated financial statements. The foregoing are
included herein as Exhibit 13.1 and are hereby incorporated by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     The information called for by Item 10 with respect to directors and Section
16 matters is set forth in the Proxy Statement for our 2001 Annual Meeting of
Shareholders under the captions "Election of Directors," and "Section 16(a)
Beneficial Ownership Reporting Compliance," respectively, and is hereby
incorporated by reference. The information called for by Item 10 with respect to
executive officers is set forth in Part I, "Business -- Executive Officers of
the Company" of this report.

                                        26
<PAGE>   29

ITEM 11.  EXECUTIVE COMPENSATION

     The information called for by Item 11 is set forth in the Proxy Statement
for our 2001 Annual Meeting of Shareholders under the captions "Election of
Directors -- Compensation of Directors," "Executive Compensation," "Compensation
Committee Interlocks and Insider Participation," "Report of the Compensation
Committee on Executive Compensation," and "Performance Graph," respectively, and
is hereby incorporated by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information called for by Item 12 is set forth in the Proxy Statement
for our 2001 Annual Meeting of Shareholders under the captions "Principal
Shareholders" and "Management Ownership of Common Stock," respectively, and is
hereby incorporated by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information called for by Item 13 is set forth in the Proxy Statement
for our 2001 Annual Meeting of Shareholders under the caption "Certain
Relationships and Related Transactions" and is hereby incorporated by reference.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Documents filed as part of this report

          (1) Financial Statements: The following financial statements, together
     with the report thereon of independent auditors, are included in this
     report by incorporation of pages 17 through 37 of our 2000 Annual Report to
     Shareholders (included herein as Exhibit 13.1) as set forth in Item 8:

        - Consolidated balance sheets as of December 31, 2000 and 1999;

        - Consolidated statements of income for the years ended December 31,
          2000, 1999 and 1998;

        - Consolidated statements of cash flows for the years ended December 31,
          2000, 1999 and 1998;

        - Consolidated statements of stockholders' equity for the years ended
          December 31, 2000, 1999 and 1998;

        - Consolidated statements of comprehensive income for the years ended
          December 31, 2000, 1999 and 1998; and

        - Notes to consolidated financial statements for the years ended
          December 31, 2000, 1999 and 1998 Report of Independent Public
          Accountants;

          (2) Consolidated Financial Statement Schedules: Financial statement
     schedules are omitted because the required information for Schedule II is
     included. All other financial statement schedules are not applicable.

          (3) Financial Statements of Palmetto MobileNet, L.P. (To be filed as
     an amendment to this Report on Form 10-K.)

          (4) The exhibits filed as part of this Report and exhibits
     incorporated herein by reference to other documents are listed in the Index
     to Exhibits to this Report.

     (b) Reports on Form 8-K

          On October 27, 2000, the Company filed a Current Report on Form 8-K
     announcing financial results for the three-month period and nine-month
     period ended September 30, 2000.

                                        27
<PAGE>   30

     (c) Exhibits

          See (a)(4), above.

     (d) Financial statement schedules

          See (a)(2), above.

                                        28
<PAGE>   31

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, we have duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                          CT COMMUNICATIONS, INC.

                                          By:    /s/ MICHAEL R. COLTRANE
                                            ------------------------------------
                                              Michael R. Coltrane
                                              President and Chief
                                              Executive Officer

                                          Date: March 26, 2001

                                          By:      /s/ BARRY R. RUBENS
                                            ------------------------------------
                                           Barry R. Rubens
                                           Senior Vice President, Treasurer and
                                           Chief Financial Officer

                                          Date: March 26, 2001

                                          By:       /s/ AMY M. JUSTIS
                                            ------------------------------------
                                           Amy M. Justis
                                           Vice President of Finance and
                                           Chief Accounting Officer

                                          Date: March 26, 2001

                                          By:    /s/ CHRISTOPHER R. MAY
                                            ------------------------------------
                                           Christopher R. May
                                           Controller

                                          Date: March 26, 2001

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Company
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <S>                              <C>

               /s/ L.D. COLTRANE, III                  Chairman of the Board and        March 26, 2001
-----------------------------------------------------  Director
                 L.D. Coltrane, III

               /s/ MICHAEL R. COLTRANE                 President, Chief Executive       March 26, 2001
-----------------------------------------------------  Officer and Director (Principal
                 Michael R. Coltrane                   Executive Officer)

               /s/ JOHN R. BOGER, JR.                  Director                         March 26, 2001
-----------------------------------------------------
                 John R. Boger, Jr.
</TABLE>

                                        29
<PAGE>   32

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----

<C>                                                    <S>                              <C>

            /s/ O. CHARLIE CHEWNING, JR.               Director                         March 26, 2001
-----------------------------------------------------
              O. Charlie Chewning, Jr.

                /s/ WILLIAM A. COLEY                   Director                         March 26, 2001
-----------------------------------------------------
                  William A. Coley

               /s/ SAMUEL E. LEFTWICH                  Director                         March 26, 2001
-----------------------------------------------------
                 Samuel E. Leftwich

               /s/ JERRY H. MCCLELLAN                  Director                         March 26, 2001
-----------------------------------------------------
                 Jerry H. McClellan

                  /s/ TOM E. SMITH                     Director                         March 26, 2001
-----------------------------------------------------
                    Tom E. Smith

               /s/ PHIL W. WIDENHOUSE                  Director                         March 26, 2001
-----------------------------------------------------
                 Phil W. Widenhouse
</TABLE>

                                        30
<PAGE>   33

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.                            DESCRIPTION
-----------                            -----------
<C>            <S>
    3.1        Articles of Incorporation of the Company, as amended.
               (Incorporated by reference to Exhibit 3.1 of the Company's
               Registration Statement on Form 8-A filed on January 28,
               1999.)
    3.2        Bylaws of the Company, as amended. (Incorporated by
               reference to Exhibit 3.2 to the Company's Annual Report on
               Form 10-K dated March 26, 1999.)
    4.2        Amended and Restated Rights Agreement, dated as of January
               28, 1999 and effective as of August 27, 1998, between the
               Company and First Union National Bank, including the Rights
               Certificate attached as an exhibit thereto. (Incorporated by
               reference to Exhibit 4.2 of the Company's Registration
               Statement on Form 8-A filed on January 28, 1999).
    4.3        Specimen of Common Stock Certificate. (Incorporated by
               reference to Exhibit 4.1 of the Company's Registration
               Statement on Form 8-A filed on January 28, 1999.)
    4.4        Credit Agreement, dated as of December 31, 1998, by and
               among the Company, the Subsidiary Borrowers referred to
               therein, the Lenders referred to therein and First Union
               National Bank, as administrative agent. (Incorporated by
               reference to Exhibit 4.4 of the Company's Annual Report on
               Form 10-K dated March 26, 1999.)
    4.5        The Company has certain long-term debt, but has not filed
               the instruments evidencing such debt as part of Exhibit 4
               because such instruments do not authorize the issuance of
               debt exceeding 10% of the total consolidated assets of the
               Company. The Company agrees to furnish a copy of such
               instruments to the Commission upon request.
   10.1        BellSouth Carolinas PCS Limited Partnership Agreement dated
               December 8, 1994. (Incorporated by reference to Exhibit
               10(h) to the Company's Amendment No. 1 to Annual Report Form
               10-K/A dated July 14, 1995.)
   10.2        Limited Liability Company Agreement of Wireless One of North
               Carolina, L.L.C. dated October 10, 1995 by and among CT
               Wireless Cable, Inc., Wireless One, Inc. and O. Gene
               Gabbard. (Incorporated by reference to Exhibit 10.4 to the
               Company's Annual Report on Form 10-K dated March 31, 1997.)
   10.3        1989 Executive Stock Option Plan dated April 26, 1989.
               (Incorporated by reference to Exhibit 10(d) to the Company's
               Annual Report Form 10-K dated March 29, 1994.)*
   10.4        Comprehensive Stock Option Plan dated April 27, 1995.
               (Incorporated by reference to Exhibit 99.1 to the Company's
               Registration Statement on Form S-8 (No. 33-59645) dated May
               26, 1995.)*
   10.5        Employee Stock Purchase Plan dated April 27, 1995.
               (Incorporated by reference to Exhibit 99.1 to the Company's
               Registration Statement on Form S-8 (No. 33-59643) dated May
               26, 1995.)*
   10.6        Restricted Stock Award Program dated April 27, 1995.
               (Incorporated by reference to Exhibit 99.1 to the Company's
               Registration Statement on Form S-8 (No. 33-59641) dated May
               26, 1995.)*
   10.7        Omnibus Stock Compensation Plan dated April 24, 1997.
               (Incorporated by reference to Exhibit 10.10 to the Company's
               Annual Report on Form 10-K dated April 9, 1998.)*
   10.8        1997 Employee Stock Purchase Plan dated April 24, 1997.
               (Incorporated by reference to Exhibit 10.11 to the Company's
               Annual Report on Form 10-K dated April 9, 1998.)*
</TABLE>
<PAGE>   34

<TABLE>
<CAPTION>
EXHIBIT NO.                            DESCRIPTION
-----------                            -----------
<C>            <S>
   10.9        Change in Control Agreement, dated October 1, 1997, between
               the Company and Michael R. Coltrane. (Incorporated by
               reference to Exhibit 10.12 to the Company's Annual Report on
               Form 10-K dated April 9, 1998.)*
   10.10       Change in Control Agreement, dated October 1, 1997, between
               the Company and Barry R. Rubens. (Incorporated by reference
               to Exhibit 10.13 to the Company's Annual Report on Form 10-K
               dated April 9, 1998.)*
   10.11       Change in Control Agreement, dated October 1, 1997, between
               the Company and Nicholas L. Kottyan. (Incorporated by
               reference to Exhibit 10.14 to the Company's Annual Report on
               Form 10-K dated April 9, 1998.)*
   10.12       Change in Control Agreement, dated October 1, 1997, between
               the Company and Thomas A. Norman. (Incorporated by reference
               to Exhibit 10.15 to the Company's Annual Report on Form 10-K
               dated April 9, 1998.)*
   10.13       Change in Control Agreement, dated October 1, 1997, between
               the Company and Catherine A. Duda. (Incorporated by
               reference to Exhibit 10.16 to the Company's Annual Report on
               Form 10-K dated April 9, 1998.)*
   10.14       Change in Control Agreement, dated as of June 22, 1998,
               between the Company and Richard L. Garner, Jr. (Incorporated
               by reference to Exhibit 10.14 to the Company's Annual Report
               on Form 10-K dated March 26, 1999.)*
   10.15       Change in Control Agreement, dated as of December 12, 1998,
               between the Company and Michael R. Nash. (Incorporated by
               reference to Exhibit 10.14 to the Company's Annual Report on
               Form 10-K dated March 26, 1999.)*
   10.16       Change in Control Agreement, dated as of December 30, 1998,
               between the Company and Charlotte S. Walsh. (Incorporated by
               reference to Exhibit 10.14 to the Company's Annual Report on
               Form 10-K dated March 26, 1999.)*
   10.17       Form of Supplemental Executive Retirement Plan, dated June
               27, 1997. (Incorporated by reference to Exhibit 10.17 to the
               Company's Annual Report on Form 10-K dated April 9, 1998.)*
   10.18       Contribution Agreement by and among Palmetto MobileNet,
               L.P., PMN, Inc., the Company and Ellerbe Telephone Co.,
               dated as of January 1, 1998. (Incorporated by reference to
               Exhibit 10.18 to the Company's Annual Report on Form 10-K
               dated April 9, 1998).
   10.19       Separation Agreement and Release, dated as of January 18,
               1999, between the Company and Nicholas L. Kottyan.
               (Incorporated by reference to Exhibit 10.14 to the Company's
               Annual Report on Form 10-K dated March 26, 1999.)*
   10.20       Employment Agreement, dated September 10, 1998, among the
               Company, CT Global Telecommunications, Inc. and Thomas A.
               Norman. (Incorporated by reference to Exhibit 10.14 to the
               Company's Annual Report on Form 10-K dated March 26, 1999.)*
   10.21       Change in Control Agreement, dated September 27, 1999,
               between the Company and Amy M. Justis. (Incorporated by
               reference to Exhibit 10.21 to the Company's Annual Report on
               Form 10-K dated March 27, 2000.)*
   10.22       Change in Control Agreement, dated as of July 1, 1999,
               between the Company and John A. Goocher. (Incorporated by
               reference to Exhibit 10.22 to the Company's Annual Report on
               Form 10-K dated March 27, 2000.)*
   10.23       Employment Agreement, dated as of April 18, 2000, between
               the Company and Thomas A. Norman.*
   10.24       Severance Agreement and Release, dated as of December 24,
               2000, between the Company and Catherine A. Duda.*
</TABLE>
<PAGE>   35

<TABLE>
<CAPTION>
EXHIBIT NO.                            DESCRIPTION
-----------                            -----------
<C>            <S>
   10.25       Change in Control Agreement, dated as of April 7, 2000,
               between the Company and George H. Sidman.*
   10.26       Amendment to the CT Communications, Inc. Omnibus Stock
               Compensation Plan, originally effective as of April 24,
               1997, dated as of February 22, 2001.*
   10.27       Amendment to the CT Communications, Inc. 1995 Comprehensive
               Stock Option Plan dated as of February 22, 2001.*
   13.1        CT Communications, Inc. 2000 Annual Report to Shareholders:
               Consolidated Financial Statements on pages 17 to 37. (With
               the exception of such portions, the 2000 Annual Report to
               Shareholders is not deemed to be filed or incorporated by
               reference as a part of this Report.)
   21          Subsidiaries of the Company.
   23          Consent of KPMG LLP.
</TABLE>

---------------

* Indicates management contract or compensatory plan required to be filed as an
Exhibit.