<PAGE>

================================================================================


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

                                    FORM 10-Q

(MARK ONE)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

                                       OR

[ ]     TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO
        ________________

                        COMMISSION FILE NUMBER 000-23102


                                 POWERTEL, INC.
                                 --------------
             (Exact name of registrant as specified in its charter)


                 DELAWARE                               58-1944750
                 --------                               ----------
     (State or other jurisdiction of           (IRS Employer Identification No.)
     incorporation or organization)

       12920 - SE 38TH STREET S.E.
          BELLEVUE, WASHINGTON                               98006
          --------------------                               -----
(Address of principal executive offices)                   (Zip Code)

                                 (425) 378-4000
                                 --------------
              (Registrant's telephone number, including area code)


   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report.)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

             Title                     Shares Outstanding as of November 1, 2001
             -----                     -----------------------------------------
Common Stock, $0.000001 par value                       56,120,666

================================================================================

<PAGE>

                                 POWERTEL, INC.
                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               Page
                                                                                               ----
<S>                                                                                            <C>

PART I - FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS
  Consolidated Balance Sheets...............................................................    2
  Consolidated Statements of Operations.....................................................    3
  Consolidated Statements of Cash Flows.....................................................    4
  Notes to Consolidated Financial Statements................................................    5
  ITEM 2.  MANAGEMENT DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................................    9
  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
           ABOUT MARKET RISK................................................................   14
PART II - OTHER INFORMATION
  ITEM 1.  LEGAL PROCEEDINGS................................................................   15
  ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS........................................   15
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES..................................................   15
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............................   15
  ITEM 5.  OTHER INFORMATION................................................................   15
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.................................................   15
</TABLE>



                                       1
<PAGE>

                                 POWERTEL, INC.
                           CONSOLIDATED BALANCE SHEETS
           (dollars in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                                      September 30,    |    December 31,
                                                                                          2001         |        2000
                                                                                      -------------    |    ------------
                                                                                       (unaudited)     |
<S>                                                                                   <C>              |    <C>
                                    ASSETS                                                             |
Current assets:                                                                                        |
   Cash and cash equivalents .................................................        $    20,236      |    $   168,563
   Accounts receivable, net of allowance for doubtful accounts                                         |
      of $10,905 and $5,368; respectively ....................................             66,883      |         63,175
   Inventory .................................................................             25,038      |         35,362
   FCC license deposits and other current assets .............................             38,788      |         26,188
                                                                                      -----------      |    -----------
        Total current assets .................................................            150,945      |        293,288
Property and equipment, net of accumulated depreciation of                                             |
   $67,676 and $253,321, respectively ........................................            754,139      |        627,286
Goodwill, net of accumulated amortization of $81,361 .........................          4,820,270      |             --
Licensing costs and other intangible assets, net of accumulated                                        |
   amortization of $34,744 and $47,817, respectively .........................          1,779,777      |        431,300
Other assets and investments .................................................             14,605      |          7,136
                                                                                      -----------      |    -----------
                                                                                      $ 7,519,736      |    $ 1,359,010
                                                                                      ===========      |    ===========
                                                                                                       |
              LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                                           |
                                                                                                       |
Current liabilities:                                                                                   |
   Accounts payable ..........................................................        $    26,050      |    $    45,476
   Accrued liabilities .......................................................             95,663      |         37,943
   Deferred revenue ..........................................................             18,712      |         22,887
   Construction accounts payable .............................................                281      |         30,151
   Current portion of long-term debt .........................................            196,421      |         33,023
                                                                                      -----------      |    -----------
        Total current liabilities ............................................            337,127      |        169,480
                                                                                                       |
Deferred tax liability .......................................................            220,766      |             --
Long-term debt ...............................................................            328,288      |      1,298,337
Other long-term liabilities ..................................................             43,561      |             --
Long-term notes payable to affiliates.........................................          1,100,000      |             --
                                                                                      -----------      |    -----------
                                                                                        1,692,615      |      1,298,337
Minority interest in equity of consolidated subsidiary .......................             56,268      |             --
                                                                                                       |
Cumulative convertible, redeemable preferred stock ...........................                 --      |        152,219
                                                                                                       |
Commitments and contingencies                                                                          |
                                                                                                       |
Shareholders' equity (deficit):                                                                        |
   Preferred stock ...........................................................                 --      |              3
   Common stock: $.000001 and $.01 par value, respectively and paid in                                 |
      capital; 100,000,000 shares authorized, 56,120,666 and 31,525,638                                |
      shares issued and outstanding, respectively ............................          5,588,212      |        525,415
   Deferred compensation .....................................................             (4,929)     |           (703)
   Accumulated deficit .......................................................           (149,557)     |       (785,161)
   Treasury stock, at cost, 56,438 shares at December 31, 2000 ...............                 --      |           (580)
                                                                                      -----------      |      ---------
        Total shareholders' equity (deficit) .................................          5,433,726      |       (261,026)
                                                                                      -----------      |      ---------
                                                                                      $ 7,519,736      |    $ 1,359,010
                                                                                      ===========      |    ===========
</TABLE>



          See accompanying notes to consolidated financial statements.



                                       2
<PAGE>

                                 POWERTEL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (dollars in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                    Nine month periods
                                                                                       ---------------------------------------------
                                                                                       June 1, 2001  |   January 1,    Nine months
                                                                                         through     | 2001 through       ended
                                                     Three months ended September 30,  September 30, |    May 31,      September 30,
                                                          2001       |     2000            2001      |     2001            2000
                                                     -------------   | --------------  -----------   | -----------     -----------
<S>                                                  <C>             | <C>             <C>           | <C>             <C>
Revenues:                                                            |                               |
   Subscriber revenues ..............................  $  91,244     |   $  61,864      $ 120,064    |  $ 133,143       $ 174,129
   Prepaid revenues .................................     46,924     |      35,964         61,892    |     83,747         104,458
   Roamer revenues ..................................      2,548     |       4,058          5,417    |      8,861           9,287
   Equipment sales ..................................     12,299     |       4,975         16,007    |     19,847          17,941
   Affiliate and other revenues .....................      1,911     |       2,830          2,637    |      4,655           5,523
                                                       ---------     |   ---------      ---------    |  ---------       ---------
            Total revenues ..........................    154,926     |     109,691        206,017    |    250,253         311,338
                                                       ---------     |   ---------      ---------    |  ---------       ---------
                                                                     |                               |
Operating expenses:                                                  |                               |
   Cost of service ..................................     38,447     |      32,076         49,894    |     58,164          73,906
   Cost of equipment sales ..........................     29,111     |      28,707         44,971    |     68,845          79,175
   General and administrative .......................     34,673     |      17,120         48,658    |     59,960          64,998
   Sales and marketing ..............................     40,370     |      27,630         53,702    |     64,377          79,471
   Depreciation and amortization ....................    122,126     |      26,214        169,542    |     62,265          74,981
   Stock-based compensation .........................        462     |         150            617    |        189             594
                                                       ---------     |   ---------      ---------    |  ---------       ---------
            Total operating expenses ................    265,189     |     131,897        367,384    |    313,800         373,125
                                                       ---------     |   ---------      ---------    |  ---------       ---------
Operating loss ......................................   (110,263)    |     (22,206)      (161,367)   |    (63,547)        (61,787)
                                                       ---------     |   ---------      ---------    |  ---------       ---------
                                                                     |                               |
Other income (expense):                                              |                               |
   Interest and financing expense ...................    (27,524)    |     (35,045)       (37,549)   |    (63,576)       (102,955)
   Interest income and other, net ...................     13,376     |       5,022         10,755    |    (26,216)         17,292
                                                       ---------     |   ---------      ---------    |  ---------       ---------
            Total other income (expense) ............    (14,148)    |     (30,023)       (26,794)   |    (89,792)        (85,663)
                                                       ---------     |   ---------      ---------    |  ---------       ---------
Net loss before income taxes ........................   (124,411)    |     (52,229)      (188,161)   |   (153,339)       (147,450)
Income tax benefit ..................................     25,358     |          --         38,604    |         --              --
                                                       ---------     |   ---------      ---------    |  ---------       ---------
                                                                     |                               |
Net loss ............................................    (99,053)    |     (52,229)      (149,557)   |   (153,339)       (147,450)
                                                                     |                               |
Dividends on cumulative redeemable preferred stock ..         --     |      (2,437)            --    |         --          (7,312)
                                                       ---------     |   ---------      ---------    |  ---------       ---------
   Net loss attributable to common shareholders......  $ (99,053)    |   $ (54,666)     $(149,557)   |  $(153,339)      $(154,762)
                                                       =========     |   =========      =========    |  =========       =========
</TABLE>


          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>

                                 POWERTEL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   June 1, 2001    |   January 1, 2001    Nine months
                                                                     through       |       through           ended,
                                                                   September 30,   |       May 31,        September 30,
                                                                        2001       |        2001              2000
                                                                   -------------   |   ---------------    -------------
<S>                                                                <C>             |   <C>                <C>
Operating activities:                                                              |
   Net loss ....................................................    $  (149,557)   |     $(153,339)        $(147,450)
   Adjustments to reconcile net loss to net cash used in                           |
      operating activities:                                                        |
         Depreciation and amortization .........................        169,542    |        62,265            74,981
         Income tax benefit ....................................        (38,604)   |            --                --
         Amortization of debt discount and premium, net.........         (1,610)   |        17,231                --
         Bond accretion ........................................             --    |            --            57,313
         Stock-based compensation ..............................            617    |           189               594
         Allowance for bad debts ...............................         (4,261)   |          (402)               --
         Other, net ............................................        (10,265)   |        (2,256)           (4,781)
         Changes in operating assets and liabilities, net of                       |
            effects of purchase accounting:                                        |
                Accounts receivable ............................         (4,765)   |         5,652           (14,946)
                Inventory ......................................         12,408    |        (2,084)             (441)
                Other current assets ...........................         (9,877)   |        (2,723)           (4,920)
                Accounts payable and accrued liabilities........          2,632    |        34,154             3,083
                                                                    -----------    |     ---------         ---------
      Net cash used in operating activities ....................        (33,740)   |       (41,313)          (36,567)
                                                                    -----------    |     ---------         ---------
                                                                                   |
Investing activities:                                                              |
   Purchases of property and equipment .........................        (84,376)   |      (111,291)          (99,820)
   Acquisitions of wireless properties, net of cash acquired....         (1,559)   |      (297,790)               --
   Sales of short-term investments, net ........................             --    |            --            16,223
   Investments in and advances to affiliates ...................         (7,334)   |            --           (27,295)
   Other .......................................................             --    |            --               541
                                                                    -----------    |     ---------         ---------
      Net cash used in investing activities ....................        (93,269)   |      (409,081)         (110,351)
                                                                    -----------    |     ---------         ---------
                                                                                   |
Financing activities:                                                              |
   Net proceeds from exercise of stock options and warrants.....             --    |       130,149            19,506
   Long-term debt borrowings ...................................             --    |       140,000                --
   Long-term debt repayments ...................................     (1,014,420)   |       (14,538)           (9,670)
   Long-term borrowings from affiliates, net ...................      1,075,000    |       101,000                --
   Other .......................................................             --    |        11,885              (125)
                                                                    -----------    |     ---------         ---------
      Net cash provided by financing activities ................         60,580    |       368,496             9,711
                                                                    -----------    |     ---------         ---------
                                                                                   |
Change in cash and cash equivalents ............................        (66,429)   |       (81,898)         (137,207)
Cash and cash equivalents, beginning of period .................         86,665    |       168,563           371,396
                                                                    -----------    |     ---------         ---------
Cash and cash equivalents, end of period .......................    $    20,236    |     $  86,665         $ 234,189
                                                                    ===========    |     =========         =========
</TABLE>


          See accompanying notes to consolidated financial statements.



                                       4
<PAGE>

                                 POWERTEL, INC.

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1.  Organization


   Powertel, Inc. ("Powertel" or "we") was incorporated in Delaware in April
1991 under the name Intercel, Inc. In June 1997, we changed our name to
Powertel, Inc. We currently provide personal communication services ("PCS") in
the southeastern United States using the Global System for Mobile
Communications, or GSM, technology. Prior to April 30, 1999, we also provided
cellular telephone services in contiguous portions of eastern Alabama and
western Georgia under the name "Intercel."


   On May 31, 2001, Deutsche Telekom AG, ("Deutsche Telekom") acquired 100% of
the common shares of Powertel. The merger qualified as a tax-free
reorganization. Powertel shareholders received 2.6353 shares of Deutsche Telekom
for each Powertel common share. Deutsche Telekom transferred all of its Powertel
shares to T-Mobile International AG ("T-Mobile"). T-Mobile is a wholly owned
subsidiary of Deutsche Telekom and is the holding company for Deutsche Telekom's
GSM wireless operations primarily in Europe and the United States. Upon
consummation of the merger and the transfer by Deutsche Telekom of all of its
Powertel common shares to T-Mobile (hereafter referred to as "the T-Mobile
merger"), Powertel common shares were deregistered and delisted from NASDAQ and
are no longer publicly traded.

   On January 31, 2001, Eliska Wireless Ventures I, Inc. ("Eliska Ventures"), a
joint venture between Powertel, Sonera Holding B.V. and Eliska Wireless
Investors I, L.P. purchased substantially all of the assets of DiGiPH PCS, Inc.
and certain of its affiliates for approximately $364.2 million in total
consideration, including the assumption of $63.2 million in debt owed to the
Federal Communications Commission and other debt of $3.2 million. The
acquisition was accounted for under the purchase method of accounting. Powertel
owns a 49.9% minority interest in the joint venture. The operating results of
Eliska Ventures have been included in Powertel's consolidated results of
operations from the date of the acquisition because the majority interests do
not have significant capital at risk.

2.  Summary of Significant Accounting Policies

    Consolidation and Financial Statement Presentation

   The unaudited consolidated financial statements of Powertel and its
consolidated subsidiaries include the accounts of all majority and
minority-owned subsidiaries that are controlled by Powertel. Intercompany
accounts and transactions have been eliminated in consolidation. The unaudited
consolidated financial statements of Powertel for the three and nine months
ended September 30, 2001 and 2000 reflect all adjustments that are, in the
opinion of management, necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods. Such
adjustments include those of a normal, recurring nature and those related to the
T-Mobile merger as described below. The operating results for the interim
periods presented herein are not necessarily indicative of results of operations
for the entire year. Reference should be made to the consolidated financial
statements included in our Annual Report on Form 10-K for the year ended
December 31, 2000.

   The T-Mobile merger was accounted for as a purchase business combination and
resulted in an adjustment of the basis of our assets, liabilities and
shareholder's equity to reflect fair value on the closing date of the merger. As
a result of this new basis, our consolidated balance sheets, results of
operations and cash flows for periods subsequent to May 31, 2001, the closing
date of the merger, are not comparable to periods prior to the merger. The
consolidated financial statements of Powertel for the nine months ended
September 30, 2001 are presented as two distinct periods, the five months prior
to the merger, and the period from June 1, 2001 to September 30, 2001,
subsequent to the merger.



                                       5
<PAGE>

                                 POWERTEL, INC.

        CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (unaudited)

   Loss per Common Share

   Powertel no longer presents loss per share information as Powertel's
common shares are not publicly traded.

   Recently Issued Accounting Standards

   In June 2001, the Financial Accounting Standards Board ("FASB") approved
Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets." SFAS No. 142 requires companies to cease amortizing
goodwill and other intangible assets with indefinite lives that existed at June
30, 2001. The amortization of existing goodwill will cease on December 31, 2001.
Any goodwill and other intangible assets with indefinite lives resulting from
acquisitions completed after June 30, 2001 will not be amortized. SFAS No. 142
also establishes a new method of testing goodwill for impairment on an annual
basis or on an interim basis if an event occurs or circumstances change that
would reduce the fair value of a reporting unit below its carrying value. The
test for goodwill impairment under the new standard will begin in the first
quarter of 2002, and could have an adverse non-cash effect on our future results
of operations if an impairment occurs.

   In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". The statement provides accounting and reporting standards for
recognizing obligations related to asset retirement costs associated with the
retirement of tangible long-lived assets. Under this statement, legal
obligations associated with the retirement of long-lived assets are to be
recognized at their fair value in the period in which they are incurred if a
reasonable estimate of fair value can be made. The fair value of the asset
retirement costs is capitalized as part of the carrying amount of the long-lived
asset and subsequently expensed using a systematic and rational method over the
assets' useful life. Any subsequent changes to the fair value of the liability
will be expensed. We will be required to adopt this statement no later than
January 1, 2003. We are currently assessing the impact of this statement on our
results of operations, financial position and cash flows.

   In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", which is effective for fiscal
years beginning after December 15, 2001. This statement supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" and replaces the provisions of APB Opinion
No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal
of Segments of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions", for the disposal of segments of a business. SFAS 144
retains the fundamental provisions of SFAS No. 121 for the recognition and
measurement of the impairment of long-lived assets to be held and used and the
measurement of long-lived assets to be disposed of by sale. Impairment on
goodwill is not included in the scope of SFAS No. 144 and will be treated in
accordance with the accounting standards established in SFAS No. 142, "Goodwill
and Other Intangible Assets." Under SFAS No. 144, long-lived assets are to be
measured at the lower of carrying amount or fair value less cost to sell. We
will be required to adopt this statement no later than January 1, 2002. We are
currently assessing the impact of this statement on our results of operations,
financial position and cash flows.

   Reclassifications

   Certain of the comparative figures in the prior period financial statements
have been reclassified to conform to the current period presentation.



                                       6
<PAGE>

                                 POWERTEL, INC.

        CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (unaudited)

3. Business Combinations and Other Transactions

    T-Mobile Merger

   As a result of the T-Mobile merger, we adjusted the basis of our assets,
liabilities and shareholder's equity to reflect the purchase allocations
recorded by T-Mobile (see Note 2). These non-cash adjustments, which have not
been finalized and may be subject to change, resulted in the following balance
sheet allocations as of May 31, 2001, the acquisition date (dollars in
thousands):

<TABLE>
<S>                                                                    <C>
                                    ASSETS
          Other current assets........................................  $    (29,812)
          Licenses and other intangibles (excluding goodwill).........     1,231,558
          Goodwill....................................................     4,821,211
          Other long-term assets......................................        50,819
                                                                        ------------
                                                                        $  6,073,776
                                                                        ============

                     LIABILITIES AND SHAREHOLDER'S EQUITY
          Other current liabilities...................................  $     40,955
          Long-term debt..............................................        72,791
          Deferred tax liability......................................       259,370
          Common stock and additional paid-in capital.................     4,792,231
          Deferred compensation.......................................        (5,546)
          Deficit.....................................................       913,975
                                                                        ------------
                                                                        $  6,073,776
                                                                        ============
</TABLE>

   Effective June 1, 2001, we changed the amortization period for licenses from
40 to 20 years.

   Unaudited Pro Forma Operating Results

   The following are the unaudited pro forma operating results, assuming that
Powertel's business combinations occurred on January 1 of each of the respective
years (dollars in thousands):

<TABLE>
<CAPTION>
                                                     For the nine months ended
                                                           September 30,
                                                     -------------------------
                                                        2001          2000
                                                     ----------     ----------
<S>                                                  <C>            <C>
          Total revenues ......................      $ 456,000      $ 322,000
          Net loss ............................      $(383,000)     $(348,000)
</TABLE>



                                       7
<PAGE>
                                 POWERTEL, INC.

        CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (unaudited)

4. Long-term Debt

   The carrying values of our long-term debt were adjusted to fair value at May
31, 2001 (see Note 2) resulting in a premium of $72.8 million. This premium will
be amortized to interest expense over the remaining term of the related debt.

<TABLE>
<CAPTION>
                                                                       September 30,       December 31,
         (DOLLARS IN THOUSANDS)                                            2001               2000
                                                                       -------------       ------------
                                                                        (unaudited)
         <S>                                                           <C>                 <C>
         Senior Notes:
            12% Senior Discount Notes, due February 2006 .......        $        --        $   349,539
            12% Senior Discount Notes, due May 2006 ............                 --            346,415
            11.125% Senior Notes, due June 2007 ................            299,955            300,000
         Long-term portion Eliska facility .....................            196,421            252,130
         Other .................................................                 --             83,276
                                                                        -----------        -----------
                                                                            496,376          1,331,360
         Long-term unamortized premium .........................             23,334                 --
         Current portion unamortized premium ...................              4,999                 --
         Current portion long-term notes .......................           (196,421)           (33,023)
                                                                        -----------        -----------
                                                                        $   328,288        $ 1,298,337
                                                                        ===========        ===========

         Long-term notes payable to affiliates .................        $ 1,100,000        $        --
                                                                        ===========        ===========
</TABLE>

   On July 2, 2001, we repaid all of our 12% Senior Discount Notes at a
redemption price of 106% per note, together with accrued and unpaid interest to
June 30, 2001, the redemption date. On June 29, 2001, we repaid all outstanding
borrowings under our credit facility and cancelled the related lending
agreement.

   At September 30, 2001, we owed $1.1 billion in notes payable to Deutsche
Telekom. The notes relating to these borrowings, which are due in 2010, bear
interest at 4.85% through December 15, 2001 and thereafter will bear interest at
the six-month LIBOR rate plus 0.95%.

   At September 30, 2001, Eliska Ventures had $140 million outstanding under a
bank credit facility. The credit facility contains affirmative and negative
covenants, including financial covenants, and provides for various events of
default.  Eliska Ventures was in compliance with all but one covenant related to
total revenues. Eliska Ventures will obtain a waiver or otherwise cure this
event of non-compliance by November 29, 2001. If Eliska Ventures has not
obtained a waiver or otherwise cured this event of non-compliance by November
29, 2001, the bank group would have the right to call the facility. Accordingly,
the Eliska facility has been classified as current as of September 30, 2001.

                                       8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Litigation Reform Act of 1995.

   Information contained or incorporated by reference herein that is not based
on historical fact, including without limitation, statements containing the
words "believes," "may," "will," "estimate," "continue," "anticipates,"
"intends," "expects" and words of similar import, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, events or
developments to be materially different from any future results, events or
developments expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions, both nationally and in the regions in which Powertel operates;
technology changes; competition; changes in business strategy or development
plans; the high leverage of Powertel; the ability to attract and retain
qualified personnel; existing governmental regulations and changes in, or the
failure to comply with, governmental regulations; liability and other claims
asserted against Powertel; and other factors referenced in Powertel's filings
with the Securities and Exchange Commission. GIVEN THESE UNCERTAINTIES, READERS
ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS.
Powertel disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future results, events or developments.

   The following is a discussion and analysis of the consolidated financial
condition and results of operations of Powertel and should be read in
conjunction with our consolidated financial statements and notes thereto and
other financial information included herein and in our Form 10-K for the year
ended December 31, 2000. Due to the stage of development of our PCS operations
and the significance of our recent merger with T-Mobile and other transactions,
our operating results for prior periods may not be indicative of future
performance.

   Unless the context requires otherwise, "Powertel", "we", "our" and "us"
include us and our predecessors and subsidiaries.

Overview

   We provide PCS service in the southeastern United States through the
ownership and operation of PCS licenses and through our ownership in joint
ventures that own and operate similar licenses. The following chronology
highlights the key events in the periods covered by these financial statements.

-  In the first quarter of 2001, we invested $125 million for a minority
   non-controlling interest in Eliska Ventures. On January 31, 2001, Eliska
   Ventures purchased substantially all of the assets of DiGiPH PCS, a PCS
   provider that used GSM technology to serve six BTAs on the gulf coast of
   Alabama, Florida and Mississippi. On February 1, 2001, we began offering our
   PCS services through our relationship with Eliska Ventures in the DiGiPH PCS
   markets, which are contiguous to our existing footprint.

-  On May 31, 2001, Deutsche Telekom acquired 100% of the common shares of
   Powertel. The merger qualified as a tax-free reorganization. Powertel
   shareholders received 2.6353 shares of Deutsche Telekom stock for each
   Powertel common share. Deutsche Telekom transferred all of its Powertel
   shares to T-Mobile. T-Mobile is a wholly owned subsidiary of Deutsche Telekom
   and is the holding company for Deutsche Telekom's GSM wireless operations
   primarily in Europe and the United States. Upon consummation of the merger
   and the transfer by Deutsche Telekom of all of its Powertel common shares to
   T-Mobile (hereafter referred to as the "T-Mobile merger"), Powertel common
   shares were deregistered and delisted from NASDAQ and are no longer publicly
   traded.

   Upon completion of the T-Mobile merger, members of the management of
VoiceStream Wireless Corporation ("VoiceStream") replaced the management of
Powertel. Powertel's markets were relaunched under the VoiceStream brand in the
third quarter of 2001. We will market, provide and bill our services under the
VoiceStream brand and will not compete with VoiceStream in the markets we serve.
Our wireless network will also be fully integrated with VoiceStream's network
such that, from a customer's perspective, our services will be indistinguishable
from VoiceStream's.



                                       9
<PAGE>
   The T-Mobile merger was accounted for as a purchase business combination and
resulted in the adjustment of the basis of our assets, liabilities and
shareholder's equity to reflect fair value on the closing date of the merger. As
a result of this new basis, our consolidated balance sheets, results of
operations and cash flows for periods subsequent to May 31, 2001, the closing
date of the merger, are not comparable to periods prior to the merger. The
consolidated financial statements of Powertel for the nine months ended
September 30, 2001 are presented as two distinct periods, the five months prior
to the merger, and the period from June 1, 2001 to September 30, 2001,
subsequent to the merger. The following discussion and analysis refers to the
results and activities for the three and nine months ended September 30, 2001.
Where necessary, we have provided explanations to improve comparability between
the pre-merger and post-merger activity.

Operating Markets

   Our licenses encompass a territory of approximately 246,000 contiguous
square miles with a population of approximately 25 million people. We hold
licenses to serve the MTAs of Atlanta, Georgia, Jacksonville, Florida, Memphis,
Tennessee, Jackson, Mississippi and Birmingham, Alabama, as well as 13 BTAs in
Kentucky and Tennessee. As a result of the Eliska Ventures purchase of DiGiPH,
our relationship with Eliska Ventures allows us to offer our services in six
BTAs on the gulf coast of Alabama, Florida and Mississippi. We have one of the
largest contiguous PCS license footprints in the southeastern United States.

   We introduced our PCS services in October 1996 in Jacksonville, Florida and
Montgomery, Alabama, and, to date, have launched our PCS services in a total of
34 markets in the Southeast. In most of these markets, we were the first to
offer PCS services commercially.

Results of Operations for the Three and Nine Months Ended September 30, 2001 and
2000

Revenues

   In 2000 and in the first quarter of 2001 our revenues were weighted towards
our prepaid service. Beginning in the second quarter of 2001, in connection with
the T-Mobile merger, we began to transition our marketing emphasis towards our
post pay service, similar to VoiceStream's strategy. In the third quarter of
2001 we began marketing our services under the VoiceStream brand and the "Get
More" marketing strategy, including new pricing strategies and an advertising
campaign featuring Jamie Lee Curtis. We believe the success of our "Get More"
strategy will continue to positively affect our subscriber growth.

   Post pay service revenues increased $29.4 million, or 47.5%, for the three
months ended September 30, 2001 and $79.1 million, or 45.4%, for the nine months
ended September 30, 2001, as compared to the same periods in 2000. The increases
are primarily the result of our continued post pay subscriber growth. Our post
pay subscribers grew to 576,800 at September 30, 2001, from 393,000 at September
30, 2000. There were 22,200 and 131,200 net post pay subscribers added during
the three and nine months ended September 30, 2001, respectively, as compared to
10,000 and 52,000 for the same periods in 2000. The increase in the rate of post
pay subscriber growth is attributable primarily to our new rate plans and
advertising campaigns.

   Prepaid service revenues increased $11.0 million, or 30.5%, for the three
months ended September 30, 2001, and $41.2 million, or 39.4%, for the nine
months ended September 30, 2001, as compared to the same periods of 2000. Our
prepaid customers grew to 593,600 at September 30, 2001, from 410,000 at
September 30, 2000. Net prepaid customers decreased 33,400 for the three months
ended September 30, 2001, and 33,600 net prepaid customers were added during the
nine months ended September 30, 2001, as compared to an increase of 67,000 and
205,000 for the same periods in 2000. The decline in the rate of prepaid
subscriber growth is attributable to our new marketing strategy which emphasizes
post pay subscriber growth through post pay promotions and rate plans as
discussed above.




                                       10
<PAGE>
   Total service revenue per average subscriber ("ARPU") decreased to $39.89 and
$42.71 for the three and nine months ended September 30, 2001, respectively, as
compared to $44.42 and $47.42 for the same periods in 2000. The decrease in 2001
as compared to the same periods in 2000 is a result of the conversion to the
VoiceStream prepaid business model subsequent to the T-Mobile merger.

   Roamer revenues (including roaming long distance) decreased $1.5 million, or
37.2%, for the three months ended September 30, 2001, as compared to the same
period in 2000, due to the conversion to the VoiceStream rate plans and billing
systems subsequent to the T-Mobile merger. Roamer revenues increased $5.0
million, or 53.7%, for the nine months ended September 30, 2001, as compared to
the same periods in 2000. The increase in the nine month period is primarily due
to subscriber growth and our expanded coverage area in 2001 as compared to 2000.

   Equipment revenues increased 147.2% for the three months ended September 30,
2001 as compared to the same period in 2000. The increase is primarily due to
higher revenue per handset as a result of increased pricing as compared to the
prior period, as well as the growth in the number of handsets sold. Equipment
revenues increased 99.8% for the nine months ended September 30, 2001 as
compared to the same period in 2000 primarily due to volume increases which are
correlated to the growth in our customer base. We anticipate continued equipment
sales growth in 2001 in conjunction with our increasing customer base and as
next generation products are introduced.

Operating Expenses

   Cost of service expense represents network operating expenses incurred in
operational markets including the cost of interconnection with LEC facilities,
direct cell site costs (property taxes, insurance, site lease and utilities),
roaming validation (provided by a third-party clearinghouse) and long distance
toll costs. Cost of service expenses increased $6.4 million, or 19.9%, for the
three months ended September 30, 2001, and $34.2 million, or 46.2%, for the nine
months ended September 30, 2001, as compared to the same periods in 2000. The
increase is due primarily to the costs of providing service to our growing
customer base.

   Cost of equipment sales increased for both the three and nine months ended
September 30, 2001 as compared to the same periods in 2000, primarily due to the
increase in the number of handsets sold. The volume increase is related to the
growth in our customer base. Although subscribers generally are responsible for
purchasing their own handsets, we sell handsets below cost as we compete for new
subscribers. We expect handset subsidies to remain common industry practice for
the foreseeable future.

   General and administrative costs per average customer per month was $9.83
and $11.45 for the three and nine months ended September 30, 2001, respectively,
as compared to $7.46 and $10.71 for the same periods in 2000. The increase is
primarily attributable to bonuses paid related to the T-Mobile Merger. While
general and administrative expenses are expected to increase due to continuing
growth in subscribers, we expect the cost per customer to trend downward as
greater economies of scale are realized.

   Selling and marketing costs increased $12.7 million, or 46.1%, for the three
months ended September 30, 2001 and $38.6 million, or 48.6% for the nine months
ended September 30, 2001, as compared to the same periods in 2000. Substantially
all of this increase is attributable to increases in advertising to support our
promotional campaigns and sales compensation costs resulting from the increase
in post pay subscribers.



                                       11
<PAGE>
   Depreciation and amortization expense increased $95.9 million, or 365.9%, for
the three months ended September 30, 2001 and $156.8 million, or 209.2%, for the
nine months ended September 30, 2001, as compared to the same periods in 2000.
The increase is due to the amortization of the step up in licenses and
intangible assets related to the T-Mobile merger.

Adjusted EBITDA

   Adjusted EBITDA represents operating income before interest, taxes,
depreciation, amortization and non-cash stock-based compensation. We believe
Adjusted EBITDA provides meaningful additional information on our operating
results and on our ability to service our long-term debt and other fixed
obligations, and to fund our continued growth. Adjusted EBITDA is considered by
many financial analysts to be a meaningful indicator of an entity's ability to
meet its future financial obligations, and growth in Adjusted EBITDA is
considered to be an indicator of future profitability, especially in a
capital-intensive industry such as wireless telecommunications. Adjusted EBITDA
should not be construed as an alternative to operating income (loss) as
determined in accordance with United States generally accepted accounting
principles ("GAAP"), as an alternate to cash flows from operating activities (as
determined in accordance with GAAP), or as a measure of liquidity. Because
Adjusted EBITDA is not calculated in the same manner by all companies, our
presentation may not be comparable to other similarly titled measures reported
by other companies.

   Adjusted EBITDA increased to $12.3 million for the three months ended
September 30, 2001 as compared to $4.2 million in the same period in 2000 due
primarily to customer growth in the third quarter of 2001, offset by a
corresponding increase in general and administrative expenses. Included in
general and administrative expenses are $11.3 million in bonus expenses related
to the T-Mobile merger. Adjusted EBITDA decreased to $7.7 million for the nine
months ended September 30, 2001 as compared to adjusted EBITDA of $13.8 million
for the same period in 2000. This decrease was primarily due to bonus expenses
related to the T-Mobile merger of $15.7 million that are included in our results
for the nine months ended September 30, 2001.

Other Income (Expense)

   Interest and financing expense, net of capitalized interest, decreased $7.5
million, or 21.5%, for the three months ended September 30, 2001, and $1.8
million, or 1.8%, for the nine months ended September 30, 2001, as compared to
the same periods in 2000. The decrease is primarily the result of our having
paid off a portion of our outstanding debt facilities, replacing them with
notes payable to Deutsche Telekom with significantly lower interest rates.

   Other expenses included in interest income and other expenses increased $8.4
million and $32.8 million for the three and nine months ended September 30,
2001, respectively, as compared to the same periods in 2000. The increase in the
expenses for the nine month period is the result of approximately $34 million in
costs related to the T-Mobile merger.

Net Loss

   Our net loss was $99.1 million and $302.9 million for the three and nine
months ended September 30, 2001, respectively. Losses are primarily due to the
significant costs, including interest expense, required to expand and maintain
our PCS network, the subsidization of handsets to our customers and the
depreciation of PCS equipment. A significant component of the loss is also
attributable to the amortization of licenses and intangibles related to the
T-Mobile merger.



                                       12
<PAGE>

Liquidity and Capital Resources

   Investments and Capital Expenditures

   Capital expenditures totaled $59.2 million and $195.7 million for the three
and nine months ended September 30, 2001, respectively, primarily for the
continuing build out of our wireless network. We expect to incur significant
additional capital expenditures through 2001 for capacity expansion of operating
markets. Actual capital expenditures could vary considerably depending on
opportunities that arise over the course of the year and on funding
availability. We expect that future funding of our on-going cash requirements
will be provided by Deutsche Telekom or its affiliates.

   In the first quarter of 2001 we invested $125 million for a minority
non-controlling interest in Eliska Ventures.

   Financing Activities

   In connection with the DiGiPH acquisition, Eliska Ventures borrowed $140
million under a $200 million credit facility to fund a portion of the purchase
price. The remainder of the credit facility is to be used by Eliska Ventures for
working capital and other purposes. We are not a borrower under, or a guarantor
of, this credit facility, and we are not otherwise obligated to repay any
amounts borrowed or owed under this credit facility.

   At September 30, 2001, Eliska Ventures had $140 million outstanding under a
bank credit facility. The credit facility contains affirmative and negative
covenants, including financial covenants, and provides for various events of
default.  Eliska Ventures was in compliance with all but one covenant related to
total revenues. Eliska Ventures will obtain a waiver or otherwise cure this
event of non-compliance by November 29, 2001. If Eliska Ventures has not
obtained a waiver or otherwise cured this event of non-compliance by November
29, 2001, the bank group would have the right to call the facility. Accordingly,
the Eliska facility has been classified as current as of September 30, 2001.

   On June 29, 2001, we repaid all outstanding borrowings under our credit
facility and cancelled the related lending agreement. On July 2, 2001, we repaid
all of our 12% Senior Discount Notes, together with accrued and unpaid interest,
at a redemption price of 106% per note. These repayments were funded by $1.1
billion in borrowings from Deutsche Telekom. The notes related to these
borrowings, which are due in 2010, bear interest at 4.85% through December 15,
2001 and thereafter will bear interest at the six-month LIBOR plus 0.95%.

   Cash Flow Information

   Cash used in operating activities was $75.1 million for the nine months
ended September 30, 2001. Adjustments to the net loss of $302.9 million to
reconcile net cash used in operating activities include $231.8 million in
non-cash depreciation and amortization expenses related to network
infrastructure, FCC licenses and goodwill. The T-Mobile merger resulted in an
increase of approximately $6.1 billion in the carrying value of our assets, most
of which is related to licenses and goodwill. We recorded a $38.6 million
non-cash income tax benefit based on our operating loss for the period. Other
adjustments included changes in operating assets and liabilities including
increases in accounts payable and accrued liabilities of $36.8 million,
primarily due to the timing of interest payments on long-term debt and other
merger related costs. Net cash used in operating activities was $36.6 million
for the nine months ended September 30, 2000.

   Cash used in investing activities was $502.4 million for the nine months
ended September 30, 2001 as compared to $110.4 million for the same period in
2000. Investing activities for the nine months ended September 30, 2001
consisted primarily of cash payments of $297.8 million for the DiGiPH
acquisition by Eliska and capital expenditures of $195.7 million.

   Cash provided from financing activities was $429.1 million for the nine
months ended September 30, 2001 as compared to $9.7 million for the same period
in 2000. Financing activities for the nine months ended September 30, 2001
consisted primarily of $130.1 million in proceeds from the issuance of stock
through the exercise of stock options and warrants, $140.0 million related to
additional long-term debt borrowings. We retired approximately $1.0 billion in
outstanding debt using funds provided by Deutsche Telekom.

   We expect continued use of cash in operating activities due to operating
losses and increased working capital requirements together with continuing
investments in network infrastructure to grow and support our customer base. The
cost of completing the build-out in any particular market, the magnitude of
operating losses, debt service requirements and the funding requirements for


                                       13
<PAGE>
license or business acquisitions could vary significantly from current
estimates. We plan to use cash on hand and borrowings from Deutsche Telekom or
its affiliates to fund these activities and expenditures. If such financing is
not fully available we may be required to curtail our growth or our service
operations.

Recently Issued Accounting Standards

   In June 2001, the FASB approved SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 requires companies to cease amortizing goodwill and other
intangible assets with indefinite lives that existed at June 30, 2001. The
amortization of existing goodwill will cease on December 31, 2001. Any goodwill
and other intangible assets with indefinite lives resulting from acquisitions
completed after June 30, 2001 will not be amortized. SFAS No. 142 also
establishes a new method of testing goodwill for impairment on an annual basis
or on an interim basis if an event occurs or circumstances change that would
reduce the fair value of a reporting unit below its carrying value. The test for
goodwill impairment under the new standard will begin in the first quarter of
2002, and could have an adverse non-cash effect on our future results of
operations if an impairment occurs.

   In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". The statement provides accounting and reporting standards for
recognizing obligations related to asset retirement costs associated with the
retirement of tangible long-lived assets. Under this statement, legal
obligations associated with the retirement of long-lived assets are to be
recognized at their fair value in the period in which they are incurred if a
reasonable estimate of fair value can be made. The fair value of the asset
retirement costs is capitalized as part of the carrying amount of the long-lived
asset and expensed using a systematic and rational method over the assets'
useful life. Any subsequent changes to the fair value of the liability will be
expensed. We will be required to adopt this statement no later than January 1,
2003. We are currently assessing the impact of this statement on our results of
operations, financial position and cash flows.

   In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", which is effective for fiscal
years beginning after December 15, 2001. This statement supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" and replaces the provisions of APB Opinion
No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal
of Segments of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions", for the disposal of segments of a business. SFAS 144
retains the fundamental provisions of SFAS No. 121 for the recognition and
measurement of the impairment of long-lived assets to be held and used and the
measurement of long-lived assets to be disposed of by sale. Impairment on
goodwill is not included in the scope of SFAS No. 144 and will be treated in
accordance with the accounting standards established in SFAS No. 142, "Goodwill
and Other Intangible Assets." Under SFAS No. 144, long-lived assets are to be
measured at the lower of carrying amount or fair value less cost to sell. We
will be required to adopt this statement no later than January 1, 2002. We are
currently assessing the impact of this statement on our results of operations,
financial position and cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Sensitive Financial Instrument Risk Management

   During the nine months ended September 30, 2001, there were no material
events that have occurred that would require a change to the qualitative or
quantitative disclosures about market risks presented in the Annual Report on
Form 10-K for the year ended December 31, 2000.



                                       14
<PAGE>

                          PART II -- OTHER INFORMATION

Item 1. Legal Proceedings

   Except as referenced in our Form 10-K for the year ended December 31, 2000,
there are no material, pending legal proceedings to which we or any of our
subsidiaries or affiliates is a party or of which any of their property is
subject which, if adversely decided, would have a material adverse affect on
their financial position, results of operations or cash flows.

Item 2. Changes in Securities and Use of Proceeds

   (a) None.

   (b) None.

   (c) None.

Item 3. Defaults Upon Senior Securities

    None.

Item 4. Submission of Matters to a Vote of Security Holders

    None.

Item 5. Other Information

    None.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

    None.

(b) Reports on Form 8-K

   Powertel filed a Current Report on Form 8-K dated August 31, 2001, in which
Powertel reported under Item 4 that on August 29, 2001, Powertel engaged
PricewaterhouseCoopers LLP as its new independent accountant, replacing Arthur
Andersen LLP.

   Powertel filed a Current Report on Form 8-K dated June 27, 2001, in which
Powertel reported under Item 5 that on June 27, 2001, Powertel commenced an
offer to purchase for cash all of its outstanding 11-1/8% Senior Notes due 2007.
Powertel also reported that on June 29, 2001, Powertel repaid all outstanding
amounts due and owing under its senior credit facility in the aggregate amount
of $248 million and that on July 2, 2001, Powertel completed the previously
announced redemption of its two series of 12% Senior Discount Notes due 2006.


                                       15
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                 POWERTEL, INC.

By /s/ BRIAN W. KIRKPATRICK                 By /s/ ALLYN P. HEBNER
   ------------------------------              ---------------------------------
Brian W. Kirkpatrick                        Allyn P. Hebner
Executive Vice President,                   Vice President and Controller
Chief Financial Officer                     (Principal Accounting Officer)
(Principal Financial Officer)

Dated: November 14, 2001



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