<PAGE>   1

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


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

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                       OR

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


            FOR THE TRANSITION PERIOD FROM           TO          .
                                           ---------    ---------

                           COMMISSION FILE NO. 0-19494


                              PAGING NETWORK, INC.
             (Exact name of the Registrant as specified in charter)

                DELAWARE                                   04-2740516
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                    Identification Number)

                               14911 QUORUM DRIVE
                               DALLAS, TEXAS 75240
          (Address of principal executive offices, including zip code)

                                 (972) 801-8000
              (Registrant's telephone number, including area code)


     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                                    No  X
                   -----                                 -----

      Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock, as of the latest practicable date.

               Title                     Shares Outstanding as of May 25, 2000
    -----------------------------        -------------------------------------
    Common Stock, $ .01 par value                     104,242,567


The Company's Common Stock is publicly traded on the Nasdaq SmallCap Market
under the symbol "PAGEE".



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

<PAGE>   2

                         PART I - FINANCIAL INFORMATION




ITEM 1.  FINANCIAL STATEMENTS.


                          Index to Financial Statements

<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----

<S>                                                                                              <C>
Consolidated Balance Sheets as of
     December 31, 1999 and March 31, 2000 (Unaudited)............................................  3

Consolidated Statements of Operations
     for the Three Months Ended March 31, 1999 and 2000 (Unaudited)..............................  4

Consolidated Statements of Cash Flows
     for the Three Months Ended March 31, 1999 and 2000 (Unaudited)..............................  5

Notes to Consolidated Financial Statements.......................................................  6
</TABLE>



                                       2
<PAGE>   3


                           CONSOLIDATED BALANCE SHEETS
                    (in thousands, except share information)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,        MARCH 31,
                                                                                             1999              2000
                                                                                         ------------      ------------
<S>                                                                                      <C>               <C>
ASSETS

Current assets:
     Cash and cash equivalents .....................................................     $     32,144      $     43,029
     Accounts receivable, less allowance
          for doubtful accounts ....................................................           84,476            99,365
     Inventories ...................................................................            8,687             6,577
     Prepaid expenses and other assets .............................................            5,623            13,450
                                                                                         ------------      ------------
          Total current assets .....................................................          130,930           162,421

Property, equipment, and leasehold improvements, at cost ...........................        1,451,761         1,419,705
     Less accumulated depreciation .................................................         (684,648)         (706,572)
                                                                                         ------------      ------------
          Net property, equipment, and leasehold improvements ......................          767,113           713,133

Other non-current assets, at cost ..................................................          609,014           609,683
     Less accumulated amortization .................................................          (84,497)          (89,841)
                                                                                         ------------      ------------
          Net other non-current assets .............................................          524,517           519,842
                                                                                         ------------      ------------
                                                                                         $  1,422,560      $  1,395,396
                                                                                         ============      ============
LIABILITIES AND SHAREOWNERS' DEFICIT

Current liabilities:
     Long-term debt in default .....................................................     $  1,945,000      $  1,945,000
     Accounts payable ..............................................................           80,889            73,232
     Accrued expenses ..............................................................           50,146            43,482
     Accrued interest ..............................................................           42,532            72,322
     Customer deposits .............................................................           15,927            14,953
     Deferred revenue ..............................................................           19,778            25,102
                                                                                         ------------      ------------
          Total current liabilities ................................................        2,154,272         2,174,091
                                                                                         ------------      ------------

Long-term obligations, non-current portion .........................................           58,127            59,753

Commitments and contingencies ......................................................               --                --

Shareowners' deficit:
 Common Stock - $.01 par, authorized 250,000,000 shares; 103,960,240 and
    104,232,567 shares issued and outstanding as of December 31, 1999 and
    March 31, 2000, respectively ...................................................            1,040             1,042
 Paid-in capital ...................................................................          134,161           134,719
 Accumulated other comprehensive income ............................................              745               804
 Accumulated deficit ...............................................................         (925,785)         (975,013)
                                                                                         ------------      ------------
          Total shareowners' deficit ...............................................         (789,839)         (838,448)
                                                                                         ------------      ------------
                                                                                         $  1,422,560      $  1,395,396
                                                                                         ============      ============
</TABLE>

                             See accompanying notes



                                       3
<PAGE>   4

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (in thousands, except per share information)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                                MARCH 31,
                                                       --------------------------
                                                          1999            2000
                                                       ----------      ----------

<S>                                                    <C>             <C>
Services, rent and maintenance revenues ..........     $  241,868      $  211,273
Product sales ....................................         21,692          24,364
                                                       ----------      ----------
     Total revenues ..............................        263,560         235,637
Cost of products sold ............................        (16,177)        (13,193)
                                                       ----------      ----------
                                                          247,383         222,444
Operating expenses:
     Services, rent and maintenance ..............         66,890          62,699
     Selling .....................................         24,030          20,101
     General and administrative ..................         88,290          79,770
     Depreciation and amortization ...............         66,880          62,837
     Provision for asset impairment ..............         17,798              --
                                                       ----------      ----------
          Total operating expenses ...............        263,888         225,407
                                                       ----------      ----------

Operating loss ...................................        (16,505)         (2,963)

Other income (expense):
     Interest expense ............................        (36,031)        (46,355)
     Interest income .............................            590             114
     Other non-operating income (expense) ........            188             (24)
                                                       ----------      ----------
          Total other expense ....................        (35,253)        (46,265)
                                                       ----------      ----------

Loss before cumulative effect of a change in
     accounting principle ........................        (51,758)        (49,228)
Cumulative effect of a change in accounting
     principle ...................................        (37,446)             --
                                                       ----------      ----------

Net loss .........................................     $  (89,204)     $  (49,228)
                                                       ==========      ==========

Net loss per share (basic and diluted):
Loss before cumulative effect of a change in
     principle accounting ........................     $    (0.50)     $    (0.47)
Cumulative effect of a change in accounting
     principle ...................................          (0.36)             --
                                                       ----------      ----------

Net loss per share ...............................     $    (0.86)     $    (0.47)
                                                       ==========      ==========
</TABLE>



                             See accompanying notes



                                       4
<PAGE>   5

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                                         MARCH 31,
                                                                                --------------------------
                                                                                   1999            2000
                                                                                ----------      ----------

<S>                                                                             <C>             <C>
Operating activities:
     Net loss .............................................................     $  (89,204)     $  (49,228)
          Adjustments to reconcile net loss to net cash provided
           by operating activities:
                 Provision for asset impairment ...........................         17,798              --
                 Cumulative effect of a change in accounting principle ....         37,446              --
                 Depreciation .............................................         63,116          58,609
                 Amortization .............................................          3,764           4,228
                 Provision for doubtful accounts ..........................          6,006           5,490
                 Amortization of debt issuance costs ......................          1,117           1,152
                 Other ....................................................           (188)             24

     Changes in operating assets and liabilities:
                 Accounts receivable ......................................          5,744         (20,379)
                 Inventories ..............................................         (6,258)          2,110
                 Prepaid expenses and other assets ........................          1,471          (7,827)
                 Accounts payable .........................................         35,376          (7,657)
                 Accrued expenses and accrued interest ....................        (15,661)         23,102
                 Accrued restructuring costs ..............................           (140)             --
                 Customer deposits and deferred revenue ...................            378           4,350
                                                                                ----------      ----------
Net cash provided by operating activities .................................         60,765          13,974
                                                                                ----------      ----------

Investing activities:
   Capital expenditures ...................................................        (98,410)         (4,778)
   Payments for spectrum licenses .........................................           (575)             --
   Restricted cash invested in money market instruments ...................             --            (617)
   Other, net .............................................................           (646)            603
                                                                                ----------      ----------
Net cash used in investing activities .....................................        (99,631)         (4,792)
                                                                                ----------      ----------

Financing activities:
   Borrowings of long-term obligations ....................................         92,146           1,843
   Repayments of long-term obligations ....................................        (39,979)           (700)
   Proceeds from exercise of stock options ................................          1,201             560
                                                                                ----------      ----------
Net cash provided by financing activities .................................         53,368           1,703
                                                                                ----------      ----------

Net increase in cash and cash equivalents .................................         14,502          10,885
Cash and cash equivalents at beginning of period ..........................          3,077          32,144
                                                                                ----------      ----------
Cash and cash equivalents at end of period ................................     $   17,579      $   43,029
                                                                                ==========      ==========
</TABLE>



                             See accompanying notes



                                       5
<PAGE>   6

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                                   (Unaudited)

1.   THE COMPANY AND MERGER AGREEMENT

     Paging Network, Inc. (the Company) is a provider of wireless communications
services throughout the United States and the U.S. Virgin Islands, Puerto Rico,
and Canada. The Company provides service in all 50 states and the District of
Columbia, including service in the 100 most populated markets in the United
States. The Company also owns a minority interest in a wireless communications
company in Brazil.

     On November 8, 1999, the Company announced that it had signed a definitive
agreement (the Merger Agreement) to merge (the Merger) with Arch Communications
Group, Inc. (Arch). Under the terms of the Merger Agreement, each share of the
Company's common stock will be exchanged for 0.1247 share of Arch common stock.
Under the terms of the Merger Agreement, the Company's 8.875% senior
subordinated notes due 2006, its 10% senior subordinated notes due 2008, and its
10.125% senior subordinated notes due 2007 (collectively, the Notes), along with
all accrued interest thereon, will be exchanged in a registered exchange offer
under which the holders of each $1,000 of outstanding principal of Notes will
receive, upon consummation of the Merger, approximately 64 shares of common
stock of Arch.

     As part of the Merger, the Company intends to distribute up to 80.5% of its
interest in Vast Solutions, Inc. (Vast), a wholly-owned subsidiary of the
Company, to holders of the Notes and the Company's common stock. Holders of the
Notes will receive up to a 68.9% interest in Vast, while holders of the
Company's common stock will receive up to an 11.6% interest. The remaining
interest will be held by the combined company following the Merger.

     The Merger Agreement requires 97.5% acceptance by the holders of the Notes
and affirmative votes of a majority of the Company's and Arch's stockholders to
complete the Merger. Consent of the lenders under the Company's revolving credit
facility (the Credit Agreement) is also required. The Merger Agreement also
provides for the Company to file a "pre-packaged" Chapter 11 reorganization plan
if the level of acceptances from the holders of the Notes is below 97.5%, but
greater than 66 2/3% in amount and 50% in number required under the Bankruptcy
Code for the noteholder class to accept the "pre-packaged" Chapter 11
reorganization plan. If the Merger Agreement is terminated after one party
pursues an alternative offer, a plan of reorganization of the Company other than
the one contemplated in the Merger Agreement is filed by the Company and/or
confirmed by a bankruptcy court, or under other specified circumstances, either
the Company or Arch may be required to pay a termination fee of $40 million.

     Consummation of the Merger is subject to customary regulatory review,
certain third-party consents, including the Company's lenders, and the approvals
noted above. The Company has received approval from the Department of Justice
and the Federal Communications Commission to proceed with the Merger, and
anticipates completing the Merger during the third quarter of 2000.


2.   LIQUIDITY AND GOING CONCERN MATTERS

     The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company incurred losses of
$157 million, $162 million, and $299 million during the years ended December 31,
1997, 1998, and 1999, respectively, and $49 million during the three months
ended March 31, 2000. The Company's deteriorating financial results and
liquidity have caused it to be in default of the covenants of all of its
domestic debt agreements. On February 2, 2000, the Company failed to make the
semi-annual interest payments on its 8.875% senior subordinated notes due 2006
(8.875% Notes) and its 10.125% senior subordinated notes due 2007 (10.125%
Notes). As of March 2, 2000, the non-payment of interest constituted a default
under the indentures of the 8.875% Notes and the 10.125% Notes. On April 17,
2000, the Company failed to make the semi-annual interest payment on its 10%
senior subordinated notes due 2008 (10% Notes). As a result of these defaults,
the holders of the Notes could demand at any time that the Company immediately
pay $1.2 billion of outstanding Notes in full. Should this



                                       6
<PAGE>   7

happen, the Company would be forced to immediately file for protection under
Chapter 11 of the United States Bankruptcy Code (Chapter 11).

     The Company is also in default of several of the financial and other
covenants of the Credit Agreement. As a result of these defaults, the lenders
under the Credit Agreement could demand at any time that the Company immediately
pay the $745 million outstanding under the Credit Agreement in full. Should this
happen, the Company would immediately file for protection under Chapter 11.

     The Company is prohibited from additional borrowings and has classified all
of its outstanding indebtedness under the Credit Agreement and the Notes as a
current liability as of December 31, 1999 and March 31, 2000, respectively. As
of May 30, 2000, the Company has approximately $68 million in cash. The Company
believes that this cash, plus the cash expected to be generated from operations,
is sufficient to meet its obligations, except for the cash interest payments due
under the Notes, into the third quarter of 2000. However, if the Company's
financial results continue to deteriorate, it may not have sufficient cash to
meet such obligations through the third quarter of 2000. As discussed below, the
Company is considering alternatives to ensure that it has sufficient liquidity
through the completion of the Merger. However, there can be no assurance that
the Company's efforts to ensure that it has adequate liquidity will be timely or
successful or that the Merger will be completed. As a result, the Company may
have to reduce the level of its operations and/or file for protection under
Chapter 11 to complete the Merger and/or restructure its obligations. The
Company is negotiating a debtor-in-possession loan facility with its lenders to
be made available in the event it commences a Chapter 11 case. Filing for
bankruptcy would have a material impact on the Company's results of operations
and financial position. In addition, if the Merger is not completed, the Company
will likely incur significant charges for asset impairments and restructuring
its obligations. The accompanying financial statements do not include any
adjustments relating to the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
might be necessary should the Company file for protection under Chapter 11
and/or be unable to continue as a going concern.

     The Company's deteriorating financial results and lack of additional
liquidity indicate that the Company may not be able to continue as a going
concern for a reasonable period of time. The Company's ability to continue as a
going concern is dependent upon several factors, including, but not limited to,
the continued non-demand for immediate payment of outstanding indebtedness by
the holders of the Notes and the lenders under the Credit Agreement and the
Company's ability to (i) generate sufficient cash flows to meet its obligations,
other than the semi-annual interest payments due under the Notes, on a timely
basis, (ii) obtain additional or restructured financing, including potential
debtor-in-possession borrowings if the Company is required to file for
protection under Chapter 11, (iii) continue to obtain uninterrupted supplies and
services from its vendors, and (iv) reduce capital expenditures and operating
expenses. The Company is proceeding with these initiatives as well as also
proceeding with its plan to complete the Merger described above.

3.   UNAUDITED INTERIM FINANCIAL STATEMENTS

     The interim consolidated financial information contained herein is
unaudited but, in the opinion of management, includes all adjustments, which are
of a normal recurring nature, except for the cumulative effect of a change in
accounting principle discussed in Note 4 and the provision for asset impairment
discussed in Note 5, necessary for a fair presentation of the financial
position, results of operations, and cash flows for the periods presented. These
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
these financial statements do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. The balance sheet as of December 31, 1999, has
been derived from the audited financial statements as of that date. Results of
operations for the periods presented herein are not necessarily indicative of
results of operations for the entire year. These financial statements and
related notes should be read in conjunction with the financial statements and
notes included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.



                                       7
<PAGE>   8

4.   ACCOUNTING CHANGES

     The Company adopted the provisions of Statement of Position 98-5 "Reporting
on the Costs of Start-Up Activities" (SOP 98-5), effective January 1, 1999. SOP
98-5 requires the expensing of all start-up costs as incurred, as well as
writing off the remaining unamortized balance of capitalized start-up costs at
the date of adoption of SOP 98-5. The impact of the Company's adoption of SOP
98-5 was a charge of $37 million representing the cumulative effect of a change
in accounting principle to write-off all unamortized start-up costs as of
January 1, 1999.

     Effective April 1, 1999, the Company changed the depreciable lives for its
subscriber devices and certain network equipment. The Company changed the
depreciable lives of its subscriber devices from three years to two years and
the depreciable life of certain of its network equipment from seven years to ten
years. The changes resulted from a review by the Company of the historical usage
periods of its subscriber devices and its network equipment and the Company's
expectations regarding future usage periods for subscriber devices considering
current and projected technological advances. The Company has determined that
the appropriate useful life of its subscriber devices is two years as a result
of technological advances, customer desire for new pager technology, and the
Company's decreasing ability to redeploy older pager models. As a result of
these changes, the net loss decreased by $5 million, or $0.05 per share (basic
and diluted), during the three months ended March 31, 2000.

5.   PROVISION FOR ASSET IMPAIRMENT

     During the first quarter of 1999, the Company made the decision to narrow
its focus to its North American operations and, as a result, made the decision
to sell or otherwise dispose of its operations in Spain. During the third
quarter of 1999, all operations of the Company's majority-owned Spanish
subsidiaries were ceased. The Company's interest in its Spanish subsidiaries was
sold in the first quarter of 2000 for minimal proceeds. As a result of the
Company's decision to sell or otherwise dispose of its Spanish subsidiaries, the
Company recorded a provision of $18 million during the year ended December 31,
1999, for the impairment of the assets of the Company's majority-owned
subsidiaries, the effect of which was to write-off the Company's net investment
in its Spanish subsidiaries. The amount of the provision was based on the
Company's estimate of the value of its net investment in the Spanish
subsidiaries, which did not materially differ from the proceeds received upon
the sale of the subsidiaries in the first quarter of 2000. No cash costs have
been incurred or are expected as a result of the provision for the impairment of
the assets of the Company's Spanish subsidiaries, and no additional charges are
expected to be required.

6.   INCOME TAXES

     For the three months ended March 31, 1999 and 2000, the Company had no
provision or benefit for income taxes because of the Company's inability to
benefit from its net operating losses.

7.   COMMON STOCK AND NET LOSS PER SHARE

     Net loss per share amounts are computed based on the weighted average
number of common shares outstanding. The number of shares used to compute per
share amounts for the three months ended March 31, 1999 and 2000, were 104
million. The average number of options to purchase shares of the Company's
Common Stock during the three months ended March 31, 1999 was 9 million, at
exercise prices ranging from $2.73 per share to $25.50 per share. The average
number of options to purchase shares of the Company's Common Stock during the
three months ended March 31, 2000, was 10 million, at exercise prices ranging
from $0.81 per share to $17.13 per share. These stock options were not included
in the computation of diluted earnings per share because the effect of assuming
their exercise would have been antidilutive.

     On May 17, 2000, in anticipation of the Company's merger with Arch, the
Board of Directors of the Company approved the suspension of all stock option
grants as of June 15, 2000.

     The Company has 275 million authorized shares, of which 250 million are
Common Stock and 25 million are preferred stock. As of March 31, 2000, there
were no preferred shares issued or outstanding.



                                       8
<PAGE>   9

8.   COMPREHENSIVE LOSS

     Comprehensive loss for the three months ended March 31, 1999 and 2000, is
as follows (in thousands):

<TABLE>
<CAPTION>
                                                                   THREE MONTHS
                                                                  ENDED MARCH 31,
                                                            --------------------------
                                                               1999            2000
                                                            ----------      ----------

<S>                                                         <C>             <C>
          Net loss ....................................     $  (89,204)     $  (49,228)
          Foreign currency translation adjustments ....           (841)             59
                                                            ----------      ----------
           Total comprehensive loss ...................     $  (90,045)     $  (49,169)
                                                            ==========      ==========
</TABLE>

9.   STATEMENT OF CASH FLOWS INFORMATION

     Cash and cash equivalents include highly liquid debt instruments with an
original maturity of three months or less. As of March 31, 2000, cash
equivalents also include investments in money market instruments, which are
carried at fair market value. Cash payments made for interest during the three
months ended March 31, 1999 and 2000, were approximately $39 million and $15
million, respectively, net of interest capitalized during the three months ended
March 31, 1999 and 2000 of $6 million and $1 million, respectively. There were
no significant federal or state income taxes paid or refunded for the three
months ended March 31, 1999 and 2000.

10.  SEGMENT INFORMATION

     The Company has two reportable segments, traditional paging operations and
advanced messaging operations. The Company's basis for the segments relates to
the types of products and services each segment provides. The traditional paging
segment includes the traditional display and alphanumeric services, which are
basic one-way services, and 1 1/2-way paging services. The advanced messaging
segment consists of the Company's new 2-way wireless messaging services,
VoiceNow service, and the operations of Vast, which include wireless integration
products and wireless software development and sales.



                                       9
<PAGE>   10

     The following table presents certain information related to the Company's
business segments for the three months ended March 31, 1999 and 2000.

<TABLE>
<CAPTION>
                                                THREE MONTHS
                                               ENDED MARCH 31,
                                      ---------------------------------
                                          1999                 2000
                                      ------------         ------------
<S>                                   <C>                  <C>
 Total Revenues:
       Traditional Paging(1) ....     $    260,666         $    228,485
       Advanced Messaging .......            2,894                7,152
                                      ------------         ------------
                                      $    263,560         $    235,637
                                      ============         ============
Operating loss:
       Traditional Paging(1) ....     $     (7,721)(2)     $     13,101
       Advanced Messaging .......           (8,784)             (16,064)
                                      ------------         ------------
                                      $    (16,505)        $     (2,963)
                                      ============         ============
Adjusted EBITDA (3):
       Traditional Paging(1) ....     $     76,351         $     67,348
       Advanced Messaging .......           (8,178)              (7,474)
                                      ------------         ------------
                                      $     68,173         $     59,874
                                      ============         ============
</TABLE>



     (1)  The international operations of the Company currently consist entirely
          of traditional paging services and accordingly are included in the
          Company's traditional paging business segment.

     (2)  Operating loss for the traditional paging business segment for the
          first quarter of 1999 includes a provision for asset impairment of $18
          million. See Note 5.

     (3)  Adjusted EBITDA, as determined by the Company, does not reflect other
          non-operating income (expense), provision for asset impairment, and
          cumulative effect of a change in accounting principle.


     Adjusted EBITDA is not defined in generally accepted accounting principles
and should not be considered in isolation or as a substitute for a measure of
performance in accordance with generally accepted accounting principles.



                                       10
<PAGE>   11

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

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     The statements contained in this filing which are not historical facts,
including but not limited to future capital expenditures, performance and market
acceptance of new products and services, impact of Year 2000 issues on the
operations of Paging Network, Inc. (the Company), pending distribution of equity
interests in Vast (the Vast distribution), the Company's financial condition and
ability to continue as a going concern are forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Among the
factors that could cause actual future results to differ materially are
competitive pricing pressures, the introduction of products and services by
competitors of the Company, the performance of the Company's vendors and
independent contractors, third-party Year 2000 remediation plans, the
introduction of competing technologies, the performance of the Company's
advanced messaging network, acceptance of the Company's products and services in
the marketplace, higher than normal employee turnover, impact of the suspension
of the restructuring of the Company's domestic operations (the Restructuring),
the financial condition of the Company and the uncertainty of additional
financing.

     Certain statements in this filing relating to the consummation of a merger
of the Company with Arch Communications Group, Inc. (Arch), including statements
regarding the rates at which the Company's common stock and senior subordinated
notes will be exchanged or converted into shares of the common stock of Arch,
the percentage distribution of the Company's interest in a wholly-owned
subsidiary to holders of the Company's common stock and senior subordinated
notes, and other statements regarding the manner and timing of the merger, are
forward-looking in nature and are subject to risks and uncertainties that could
cause the actual results to differ materially from those set forth in such
forward-looking statements. Among the factors that could cause actual future
results to differ materially are the failure to receive the necessary approvals
of stockholders, bondholders and lenders of the Company and Arch, the filing of
an involuntary bankruptcy proceeding by creditors of the Company or a voluntary
bankruptcy proceeding by the Company, the emergence of a competing offer to
acquire either the Company or Arch, the material breach of the merger agreement
by the Company or Arch, or the failure to satisfy any of the conditions to the
closing of the merger.

INTRODUCTION

     The Company is a provider of wireless communications services throughout
the United States and in the U.S. Virgin Islands, Puerto Rico, and Canada. The
Company provides service in all 50 states and the District of Columbia,
including service in the 100 most populated markets in the United States. The
Company also owns a minority interest in a wireless communications company in
Brazil. During 1999 and early 2000, several significant events have occurred:

o    On November 8, 1999, the Company announced a merger with Arch. Under the
     merger, the Company will become a wholly-owned subsidiary of Arch. Also as
     part of the merger, up to 80.5% of the Company's advanced wireless data and
     wireless solutions business will be distributed to the Company's
     noteholders and stockholders. See discussion under "Merger Agreement."

o    The Company's deteriorating financial results and defaults under its debt
     agreements have resulted in significant liquidity constraints. The report
     of the Company's independent auditors for the year ended December 31, 1999
     expresses substantial doubt about its ability to continue as a going
     concern. See discussion under "Liquidity and Capital Resources."

o    In February and April 2000, the Company failed to make the semi-annual
     interest payments due under its $1.2 billion of senior subordinated public
     notes. The Company is also not in compliance with several financial
     covenants of its domestic revolving credit facility (the Credit Agreement).
     See discussion under "Liquidity and Capital Resources."



                                       11
<PAGE>   12

o    Units in service with subscribers decreased from approximately 9.0 million
     units at December 31, 1999, to approximately 8.4 million units at March
     31, 2000. Units in service are expected to continue to decline throughout
     2000.

o    In June 1999, the Company consolidated its initiative to develop advanced
     services including wireless data and wireless solutions into its
     wholly-owned subsidiary, Vast. Vast is a development stage company and,
     since its inception, has been engaged primarily in product research and
     development and developing markets for its products and services. In the
     first quarter of 2000, Vast had only $1 million of total revenues and
     incurred an operating loss of approximately $6 million as a result of these
     startup activities.

o    On April 20, 2000, the Company was notified by Nasdaq of its intention to
     delist the Company's securities from Nasdaq SmallCap market. The Company
     has requested a hearing before the Nasdaq Listing Qualifications Panel and
     delisting has been stayed pending the outcome of the hearing. The hearing
     occurred on June 1, 2000. The outcome of the hearing is unknown at this
     time.

 MERGER AGREEMENT

     On November 8, 1999, the Company announced that it had signed a definitive
agreement (the Merger Agreement) to merge (the Merger) with Arch. Under the
terms of the Merger Agreement, each share of the Company's common stock will be
exchanged for 0.1247 share of Arch common stock. Under the terms of the Merger
Agreement, the Company's 8.875% senior subordinated notes due 2006, its 10%
senior subordinated notes due 2008, and its 10.125% senior subordinated notes
due 2007 (collectively, the Notes), along with all accrued interest thereon,
will be exchanged in a registered exchange offer under which the holders of each
$1,000 of outstanding principal of Notes will receive, upon consummation of the
Merger, approximately 64 shares of common stock of Arch.

     As part of the Merger, the Company intends to distribute up to 80.5% of its
interest in Vast, a wholly-owned subsidiary of the Company, to holders of the
Notes and the Company's common stock. Holders of the Notes will receive up to a
68.9% interest in Vast, while holders of the Company's common stock will receive
up to an 11.6% interest. The remaining interest will be held by the combined
company following the Merger.

     The Merger Agreement requires 97.5% acceptance by the holders of the Notes
and affirmative votes of a majority of the Company's and Arch's stockholders to
complete the Merger. Consent of the lenders under the Company's Credit Agreement
is also required. The Merger Agreement also provides for the Company to file a
"pre-packaged" Chapter 11 reorganization plan if the level of acceptances from
the holders of the Notes is below 97.5%, but greater than 66 2/3% in amount and
a majority in number required under the Bankruptcy Code for the noteholder class
to accept the "pre-packaged" Chapter 11 reorganization plan.

     Consummation of the Merger is subject to customary regulatory review,
certain third-party consents, including the Company's lenders, and the approvals
noted above. The Company has received approval from the Department of Justice
and the Federal Communications Commission to proceed with the Merger, and
anticipates completing the Merger during the third quarter of 2000.

LIQUIDITY AND CAPITAL RESOURCES

General

     The Company's deteriorating financial results and liquidity have caused it
to be in default of the covenants of all of its domestic debt agreements. On
February 2, 2000, the Company failed to make the semi-annual interest payment on
its 8.875% senior subordinated notes due 2006 (8.875% Notes), and its 10.125%
senior subordinated notes due 2007 (10.125% Notes). As of March 2, 2000, the
non-payment of interest constituted a default under the indentures of the 8.875%
Notes and the 10.125% Notes. As of April 17, 2000, the Company failed to make
the semi-annual interest payment on its 10% senior subordinated notes due 2008
(10% Notes) and does not expect to make additional cash interest payments on any
of its Notes. As a result of this default, the Company's bondholders could
demand at any time that the Company immediately pay $1.2 billion of its bonds in
full. Should this happen, the



                                       12
<PAGE>   13

Company would immediately file for protection under Chapter 11 of the United
States Bankruptcy Code (Chapter 11).

      The Company is also in default of several of the financial and other
covenants of its Credit Agreement. As a result of these defaults, the lenders
under the Credit Agreement could demand at any time that the Company immediately
pay the $745 million outstanding under the Credit Agreement in full. Should this
happen, the Company would immediately file for protection under Chapter 11.

     The Company is prohibited from additional borrowings and has classified all
of its outstanding indebtedness under the Credit Agreement and the Notes as a
current liability as of December 31, 1999 and March 31, 2000, respectively. As
of May 30, 2000, the Company had approximately $68 million in cash. The Company
believes that this cash, plus the cash expected to be generated from operations,
is sufficient to meet its obligations, except for the cash interest payments due
under the notes, into the third quarter of 2000. However, if the Company's
financial results continue to deteriorate, the Company may not have enough cash
to meet such obligations through the third quarter of 2000. The Company is
considering alternatives to ensure that it has sufficient liquidity through the
completion of the Merger. However, there can be no assurance that the Company's
efforts to obtain additional liquidity will be timely or successful or that the
Merger will be completed. As a result, the Company may have to reduce the level
of its operations and/or file for protection under Chapter 11 to complete the
Merger and/or restructure its obligations. The Company is negotiating a
debtor-in-possession loan facility with its lenders to be made available in the
event it commences a Chapter 11 case. Filing for bankruptcy would have a
material impact on the Company's results of operations and financial position.

       The Company's deteriorating financial condition and lack of additional
liquidity indicate that the Company may not be able to continue as a going
concern for a reasonable period of time. The Company's ability to continue as a
going concern is dependent upon several factors, including, but not limited to,
the continued non-demand for immediate payment of outstanding indebtedness by
the holders of the Notes and the lenders under the Credit Agreement and its
ability to (i) generate sufficient cash flows to meet its obligations, other
than the cash interest payments due under the Notes, on a timely basis, (ii)
obtain additional or restructured financing, including potential
debtor-in-possession borrowings if the Company is required to file for
protection under Chapter 11, (iii) continue to obtain uninterrupted supplies and
services from its vendors, and (iv) reduce capital expenditures and operating
expenses. The Company is proceeding with these initiatives as well as also
proceeding with its plan to complete the Merger described above.

Vast Solutions

     Since the inception of Vast, the Company has funded substantially all of
its operations, which are in the development stage. However, as a result of the
above described defaults, the Company is prohibited from providing any
additional funding to Vast. Of the Company's cash on hand at May 30, 2000,
approximately $5 million was held by Vast. Vast believes such cash is sufficient
to meet its obligations into the third quarter of 2000. However, without
additional financing, Vast may not have sufficient liquidity to meet its
obligations through the third quarter of 2000. Vast is currently involved in
discussions with third parties regarding potential private equity investments,
which, if consummated, would be expected to close simultaneously with the Merger
and related Vast distribution. However, there can be no assurance that such
efforts will prove successful or that Vast will have adequate liquidity to meet
its obligations through the date of the Vast distribution. Furthermore, the
financial position and debt defaults of the Company make it difficult for Vast
to obtain separate debt or equity financing prior to the completion of the
Merger and Vast distribution. As a result, Vast may be required to reduce or
cease its current level of development stage operations. Such events would have
a material impact on the Company.



                                       13
<PAGE>   14

Cash Provided by Operating Activities

      Net cash provided by operating activities was $14 million for the three
months ended March 31, 2000, compared to $61 million for the three months ended
March 31, 1999. The decrease of $47 million from 1999 to 2000 resulted primarily
from the continuing decline in revenues associated with the decline in units in
service, a decrease in accounts payable, and an increase in accounts receivable.
The decrease in accounts payable during the first quarter of 2000 was primarily
due to lower levels of capital expenditures and reduced purchases of paging
devices. The increase in accounts receivable during the first quarter of 2000
was the result of reduced cash collections during the first quarter caused by
issues associated with the Company's new billing and customer service platforms,
employee turnover, and the Company's proposed merger with Arch, which has
required a significant portion of the Company's resources. The Company increased
its collections efforts during the latter part of the first quarter of 2000 and
expects to realize the benefits of such efforts in the second quarter of 2000.

Cash Provided by Financing Activities

      Net cash provided by financing activities was $53 million and $2 million,
respectively, for the three months ended March 31, 1999 and 2000. The primary
source of financing for the first quarter of 1999 was net borrowings under the
Company's Credit Agreement. As of March 31, 2000, the Company had $745 million
of borrowings under its Credit Agreement. As of April 11, 2000, the Company
agreed to reduce its maximum borrowings under the Credit Agreement to
approximately $745 million. The Company does not anticipate being able to make
additional borrowings under the Credit Agreement in the future. Net cash
provided by financing activities has been used for capital expenditures, working
capital, and other general corporate purposes, which included expansion of its
existing business.

Cash Used in Investing Activities

      The Company's operations and expansion into new markets and product lines
have required substantial capital investment. Furthermore, the Company has been
building an advanced messaging network, which will enable it to offer new
enhanced messaging services and has converted certain back office functions from
decentralized field offices into centralized processing facilities. The Company
substantially completed building its advanced messaging network in early 2000.
The Company continued to convert certain back office functions from its
decentralized field offices into the centralized processing facilities through
January 2000, at which time the Company suspended further conversions. Cash used
in investing activities was $100 million and $5 million, respectively, for the
three months ended March 31, 1999 and 2000. Capital expenditures, excluding
payments for spectrum licenses, were $98 million and $5 million, respectively,
for the three months ended March 31, 1999 and 2000, and consisted primarily of
expenditures for the Company's traditional paging operations, its advanced
messaging operations, and its Restructuring.

      Capital expenditures related to the Company's traditional paging
operations, excluding capital expenditures related to the Restructuring, were
$33 million for the three months ended March 31, 1999. The decrease in
traditional paging capital expenditures have been primarily due to a reduction
in the Company's network-related expenditures pertaining to geographic coverage
and capacity expansion.

      Capital expenditures related to advanced messaging operations were $57
million and $2 million, respectively, for the three months ended March 31, 1999
and 2000. The Company launched its 2-way messaging services on its advanced
messaging network on February 1, 2000. The Company expects to spend an
additional $15 million in capital expenditures to complete the buildout of sites
started in the fourth quarter of 1999 and expand capacity in certain cities
throughout the nation during the first half of 2000. This will substantially
complete the Company's investment in its advanced messaging network.

      Capital expenditures related to establishing the Company's centralized
processing facilities, including new system implementations, were $8 million and
$3 million, respectively, for the three months ended March 31, 1999 and 2000. In
January 2000, the Company suspended further capital expenditures for its
centralized processing facilities, pending the decision as to which operating
platforms will be used after the Merger by the combined company. During May
2000, a decision was made to use Arch's existing billing and customer service
systems upon the completion of the Merger. The decisions regarding other systems
to be utilized by the combined company are still pending.

      The amount of capital expenditures may fluctuate from quarter to quarter
and on an annual basis due to several factors, including the variability of
units in service with subscribers. With the substantial completion of the
buildout



                                       14
<PAGE>   15

of its advanced messaging network and the suspension of the Restructuring beyond
January 2000, the Company expects its capital expenditures in 2000 to decrease
to approximately $100 million. The Company expects to fund these capital
expenditures through cash on hand, additional cash generated from operations
prior to its contemplated merger with Arch, and potential debtor-in-possession
borrowings if the Company is required to file for protection under Chapter 11.

Credit Agreements

      The Company is currently prohibited from making additional borrowings
under the Credit Agreement, and does not anticipate being able to make
additional borrowings under the Credit Agreement in the future. As of March 31,
2000, there were $745 million of outstanding borrowings under the Credit
Agreement. The Company continues to be in non-compliance with several of its
financial covenants under the Credit Agreement and has agreed with the lending
group not to seek a waiver of its covenant defaults for the foreseeable future.

      The two credit agreements of the Company's Canadian subsidiaries provide
for total borrowings of approximately $75 million. As a result of the above
described defaults, the Company is precluded from providing any additional
funding on behalf of its Canadian subsidiaries. The ability of the Company's
Canadian subsidiaries to continue as a going concern is dependent on meeting the
terms of their credit agreements, either by providing the additional cash
collateral or by establishing alternative arrangements satisfactory to the
lenders. The Company and its Canadian subsidiaries have taken and plan to take
certain actions that management believes will mitigate any adverse conditions
and events resulting from the likely failure of the Company to provide the
required cash collateral. However, there is no certainty that these actions or
other strategies will be sufficient to allow the Company's Canadian subsidiaries
to meet the terms of their credit agreements.

      As of March 31, 2000, approximately $58 million of borrowings were
outstanding under the Canadian credit facilities. Additional borrowings are
available to the Company's Canadian subsidiaries under these facilities, so long
as the borrowings are either collateralized or the financial covenants in the
credit agreements are met.

RESTRUCTURING

      In February 1998, the Company's Board of Directors approved the Company's
Restructuring. The Company's Restructuring plan called for the elimination of
redundant administrative operations by consolidating key support functions
located in offices throughout the country into centralized processing
facilities. In addition, the Restructuring plan called for the conversion to new
billing and customer service software platforms. The Restructuring plan
specified local and regional office closures, the disposition of certain
furniture, fixtures, and equipment and the termination of approximately 1,950
employees by job function and location. While progress in establishing the
centralized processing facilities was made, the Company's efforts to convert its
offices to its new billing and customer service software platforms fell behind
the original schedule of being completed during the second quarter of 1999.
Billing software and system implementation problems surfaced during the first
office conversions, and as a result, the Company had to postpone the conversion
of many of its other offices. These postponements resulted in delays in office
closures which deferred the payments of amounts accrued for lease obligations
and terminations and severance and related benefits. Additional implementation
problems surfaced during 1999 and caused further delays. In November 1999, and
in conjunction with the announcement of the Company's planned merger with Arch,
the Company decided to suspend further conversions after January 2000 pending
the decisions as to which operating platforms will be used by the combined
company. During May 2000, a decision was made to use Arch's existing billing and
customer service systems upon completion of the Merger. The decisions regarding
other systems to be utilized by the combined company are still pending.



                                       15
<PAGE>   16

      The Company has converted to its new billing and customer service software
platforms all of its customer units placed in service by its resellers and
approximately 50% of its direct customer units. As a result, the Company will
realize a portion of the anticipated cost savings resulting from its
Restructuring initiative and will eliminate some of the duplicative costs that
have adversely affected its results of operations. However, due to the
suspension of future conversions, combined with the impact of the contemplated
merger on its operations, the Company is unable to determine the amount of
future cost savings resulting from the centralized processing facilities
initiative.

RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and notes. EBITDA is a commonly
used measure of financial performance in the wireless messaging industry and is
one of the financial measures used to calculate whether the Company is in
compliance with the financial covenants under its debt agreements. EBITDA is
defined as earnings before interest, income taxes, depreciation, and
amortization. Adjusted EBITDA is defined as earnings before interest, income
taxes, depreciation, amortization, other non-operating income (expense),
provision for asset impairment, and cumulative effect of a change in accounting
principle. Adjusted EBITDA should not be considered an alternative to operating
income or cash flows from operating activities as determined in accordance with
generally accepted accounting principles. One of the Company's financial
objectives is to increase its Adjusted EBITDA, since Adjusted EBITDA is a
significant source of funds for servicing indebtedness and for investment in
continued growth, including purchase of paging units and paging system equipment
and the construction and expansion of paging systems. Adjusted EBITDA, as
determined by the Company, may not be comparable to similarly titled data of
other wireless messaging companies. Amounts described as Adjusted EBITDA are not
necessarily available for discretionary use as a result of restrictions imposed
by the terms of existing or future indebtedness, including the repayment of such
indebtedness or the payment of associated interest, limitations imposed by law
upon the payment of dividends or distributions or capital expenditure
requirements.

Services, Rent and Maintenance Revenues

     Revenues from services, rent and maintenance, which the Company considers
its primary business, decreased 12.6% to $211 million for the three months ended
March 31, 2000, compared to $242 million for the three months ended March 31,
1999. The average revenue per unit (ARPU) for the Company's traditional paging
domestic operations decreased to $8.00 for the three months ended March 31,
2000, compared to $8.04 for the corresponding period of 1999. The decrease in
revenues from services, rent and maintenance was primarily due to the 15.2%
reduction in number of units in service from March 31, 1999 to March 31, 2000.

     The number of units in service with subscribers at March 31, 2000 was
8,424,000, compared to 8,991,000 and 9,930,000 units in service with subscribers
at December 31, 1999 and March 31, 1999, respectively. This reduction was mainly
due to customers cancellations as a result of certain price increases,
intensifying price competition in the market for wireless communications
services, disruptions in customer service caused by conversions to new
centralized processing facilities systems and infrastructure, and the degree to
which cellular, personal communications services, and other mobile telephone
services are being subscribed to in lieu of one-way messaging services such as
those offered by the Company. Many of the factors that reduced the Company's
units in service in the first quarter of 2000 have continued to exist in the
second quarter of 2000. As a result, the Company estimates it will have a
reduction in net subscribers in the second quarter of 2000.

Product Sales

     Product sales increased 12.3% to $24 million for the three months ended
March 31, 2000, compared to $22 million for the same period in 1999.



                                       16
<PAGE>   17

Services, Rent and Maintenance Expenses

     Services, rent and maintenance expenses decreased 6.3% to $63 million for
the three months ended March 31, 2000, compared to $67 million for the three
months ended March 31, 1999. The decrease in services, rent and maintenance
expenses was primarily attributable to a decrease in pager parts, repairs and
scrap expense of approximately $4 million, mainly due to increased use of
in-house repair facilities, a more selective approach in the decision to repair
units, and increased sales of "as is" units.

Selling Expenses

     Selling expenses decreased 16.4% to $20 million for the first quarter of
2000, compared to $24 million for the same period in 1999. The decrease in
selling expenses for the first quarter of 2000 was primarily due to a decrease
in salaries and payroll costs of approximately $3 million, mainly due to lower
amount of sales commissions incurred in conjunction with the decreased revenue
levels. Marketing research, development costs, and advertising expenses
associated with the Company's traditional paging and advanced messaging
operations are expected to continue to be scaled back in future periods.

General and Administrative Expenses

     General and administrative expenses decreased 9.7% to $80 million for the
first quarter of 2000, compared to $88 million for the first quarter of 1999.
The decrease in general and administrative expenses was primarily due to:

     o    decreased salaries and payroll costs of approximately $4 million,
          mainly due to the Company's decreased employee headcount related to
          the higher than normal employee turnover associated with the Company's
          Restructuring and Merger.

     o    decreased contract labor and outside consulting expense of
          approximately $4 million, primarily related to decreased levels of
          contract labor and outside consulting incurred during the first three
          months of 2000 as the Company suspended its Restructuring in January
          2000. During the first quarter of 1999 the Company incurred higher
          contract labor and outside consulting expense primarily related to the
          transition to the centralized processing facilities and costs for
          temporary workforce personnel associated with the Company's higher
          than normal employee turnover during the first quarter of 1999.

Depreciation and Amortization Expense

     Depreciation and amortization expense decreased 6.0% to $63 million for the
three months ended March 31, 2000, compared to $67 million for the three months
ended March 31, 1999. Effective April 1, 1999, the Company changed the
depreciable lives of its subscriber devices and certain of its network
equipment. The Company changed the depreciable lives of its subscriber devices
from three years to two years and the depreciable life of certain of its network
equipment from seven years to ten years. The changes resulted from the Company's
review of the historical usage periods of its subscriber devices and its network
equipment and the Company's expectation regarding future usage periods for
subscriber devices considering current and projected technological advances. The
Company determined that the appropriate useful life of its subscriber devices is
two years as a result of technological advances, customer desire for new pager
technology, and the Company's decreasing ability to redeploy older pager models.
The Company determined that the appropriate useful life of its network equipment
is ten years since this equipment is operational for a longer time period given
current technology. As a result of these changes, depreciation expense decreased
by approximately $5 million during the three months ended March 31, 2000. The
Company commenced depreciation and amortization on the assets related to its
centralized processing facilities during the third quarter of 1999. This
increased depreciation and amortization expense during the first quarter of 2000
by approximately $2 million. The Company has commenced depreciation and
amortization on the assets related to its advanced messaging operations during
the first quarter of 2000, which increased depreciation and amortization expense
by $4 during the first quarter of 2000, and is expected to increase depreciation
and amortization expense during 2000 by approximately $24 million.



                                       17
<PAGE>   18

Provision for Asset Impairment

     The Company recorded a provision of $18 million during the quarter ended
March 31, 1999, for the impairment of the assets of the Company's majority-owned
Spanish subsidiaries. See Note 5 to the Company's consolidated financial
statements.

Interest Expense

     Interest expense, net of amounts capitalized, was $46 million for the first
quarter of 2000, compared to $36 million for the first quarter of 1999. Interest
expense increased in the first three months of 2000 primarily due to a decrease
in capitalized interest during the first quarter of 2000 and a higher level of
indebtedness outstanding during the first quarter of 2000. The amount of
interest capitalized decreased by $5 million resulting in the completion of the
build-out of the Company's advanced wireless network during the first quarter of
2000. The average level of indebtedness outstanding during the first three
months of 2000 was $2.0 billion, compared to $1.8 billion outstanding during the
corresponding period of 1999.

Change in Accounting Principle

     The Company adopted the provisions of SOP 98-5 effective January 1, 1999
and recorded a charge of $37 million as a cumulative effect of a change in
accounting principle to write-off all unamortized start-up costs as of January
1, 1999. See Note 4 to the Company's consolidated financial statements.

Adjusted EBITDA

     As a result of the factors outlined above, Adjusted EBITDA decreased 12.2%
to $60 million for the first quarter of 2000, compared to $68 million for the
corresponding period of 1999. Adjusted EBITDA and Adjusted EBITDA as a
percentage of total revenues less costs of products sold for the first three
months of 2000 were negatively impacted by the Company's declining revenues
(negative $28 million and negative 11.9%, respectively) and its advanced
messaging operations (negative $7 million and negative 3.4%, respectively).
Adjusted EBITDA and Adjusted EBITDA as a percentage of total revenues less costs
of products sold for the first three months of 1999 were negatively impacted by
the Company's advanced messaging operations (negative $8 million and negative
3.3%, respectively).

YEAR 2000 COMPLIANCE

     The Company implemented a task force, and developed a comprehensive plan to
address Year 2000 issues. The Company completed all of the phases for its
critical business processes and, to date, has not experienced any material Year
2000-related errors. The Company believes that all mission critical vendors have
successfully readied their systems for the Year 2000 and, to date, has not
experienced any Year 2000-related errors in its systems.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

     There have been no material changes from the information provided in Item
7A of the Company's Annual Report on Form 10-K for the year ended December 31,
1999.



                                       18
<PAGE>   19

                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

     The Company is involved in various lawsuits arising in the normal course of
business. In management's opinion, the ultimate outcome of these lawsuits will
not have a material adverse effect on the Company's business, financial
position, or results of operations.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     The Company's deteriorating financial results and liquidity have caused it
to be in default of the covenants of all of its domestic debt agreements. On
February 2, 2000, the Company failed to make the semi-annual interest payments
on its 8.875% senior subordinated notes due 2006 (8.875% Notes) and its 10.125%
senior subordinated notes due 2007 (10.125% Notes). As of March 2, 2000, the
non-payment of interest constituted a default under the indentures of the 8.875%
Notes and the 10.125% Notes. On April 17, 2000, the Company failed to make the
semi-annual interest payment on its 10% senior subordinated notes due 2008 (10%
Notes). As a result of these defaults, the holders of the Notes could demand at
any time that the Company immediately pay $1.2 billion of outstanding Notes in
full. Should this happen, the Company would be forced to immediately file for
protection under Chapter 11 of the United States Bankruptcy Code (Chapter 11).

     The Company is also in default of several of the financial and other
covenants of the domestic revolving credit facility (the Credit Agreement). As a
result of these defaults, the lenders under the Credit Agreement could demand at
any time that the Company immediately pay the $745 million outstanding under the
Credit Agreement in full. Should this happen, the Company would immediately file
for protection under Chapter 11.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits.

     The exhibits listed on the accompanying index to exhibits are filed as part
of this quarterly report.

(b)  Reports on Form 8-K.

     On January 20, 2000, the Company filed a Current Report on Form 8-K dated
January 7, 2000, disclosing that the Company had entered into an amendment to
the merger agreement with Arch Communications Group, Inc.

     On January 28, 2000, the Company filed a Current Report on Form 8-K dated
January 27, 2000, disclosing that the Company would not make the cash interest
payments due February 1, 2000 on its 8.875% and 10.125% senior subordinated
notes.

     On February 25, 2000, the Company filed a Current Report on Form 8-K dated
February 24, 2000, disclosing that it had been notified by Nasdaq that effective
February 25, 2000, Nasdaq would be moving the trading of the Company's common
stock from the Nasdaq National Market System to the Nasdaq SmallCap Market.



                                       19
<PAGE>   20

                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) 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.



                                             PAGING NETWORK, INC.




Date: May 31, 2000                         By: /s/ John P. Frazee, Jr.
                                               ---------------------------------
                                                   John P. Frazee, Jr.
                                                   Chairman of the Board of
                                                   Directors and Chief
                                                   Executive Officer
                                                   (Principal Executive Officer)



Date: May 31, 2000                         By: /s/ Julian B. Castelli
                                               ---------------------------------
                                                   Julian B. Castelli
                                                   Senior Vice President and
                                                   Chief Financial Officer
                                                   (Principal Financial Officer
                                                   and Principal Accounting
                                                   Officer)





                                       20
<PAGE>   21

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
-------                            -----------

<S>            <C>
     2.1       Agreement and Plan of Merger, dated as of November 7, 1999, by
               and among the Registrant, Arch Communications Group, Inc., and
               St. Louis Acquisition Corp. (11)

     2.2       Amendment to Agreement and Plan of Merger, dated as of January 7,
               2000, by and among the Registrant, Arch Communications Group,
               Inc., and St. Louis Acquisition Corp. (12)

     2.3       Amendment No. 2 to Agreement and Plan of Merger, dated as of
               May 10, 2000, by and among the Registrant, Arch Communications Group,
               Inc., and St. Louis Acquisition Corp. (14)

     3.1       Restated Certificate of Incorporation of the Registrant, as
               amended (1)

     3.3       By-laws of the Registrant, as amended (8)

     4.1       Articles Sixth, Seventh, Eighth, Twelfth, and Thirteenth of the
               Restated Certificate of Incorporation of the Registrant, as
               amended (1)

     4.2       Articles II, III, and VII and Section I of Article VIII of the
               Registrant's By-laws, as amended (8)

     4.3       Form of Indenture (2)

     4.4       Shareholder Rights Agreement (3)

     4.5       First Amendment to the Shareholder Rights Agreement (8)

     4.6       Second Amendment to the Shareholder Rights Agreement (10)

    10.1       1982 Incentive Stock Option Plan, as amended and restated (1)

    10.2       Form of Stock Option Agreement executed by recipients of options
               granted under the 1982 Incentive Stock Option Plan (1)

    10.3       Form of Management Agreement executed by recipients of options
               granted under the 1982 Incentive Stock Option Plan (1)

    10.4       Form of Vesting Agreement executed by recipients of options
               granted under the 1982 Incentive Stock Option Plan (1)

    10.5       Form of Indemnification Agreement executed by recipients of
               options granted under the 1991 Stock Option Plan (1)

    10.6       Form of First Amendment to Vesting Agreement executed by
               recipients of options granted under the 1982 Incentive Stock
               Option Plan (1)

    10.7       Form of First Amendment to Management Agreement executed by
               recipients of options granted under the 1982 Incentive Stock
               Option Plan (1)

    10.8       Second Amended and Restated Credit Agreement dated as of June 5,
               1996, among the Registrant, NationsBank of Texas, N.A., Toronto
               Dominion (Texas), Inc., The First National Bank of Boston, Chase
               Securities Inc., and certain other lenders (4)

    10.9       1997 Restricted Stock Plan, as approved by shareowners on May 22,
               1997 (5)
</TABLE>



<PAGE>   22

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                              DESCRIPTION
-------                             -----------

<S>            <C>
    10.10      Employment Agreement dated as of August 4, 1997 among the
               Registrant and John P. Frazee, Jr. (6)

    10.11      1992 Director Compensation Plan, as amended and restated on
               April 22, 1998 (7)

    10.12      Amended and Restated 1991 Stock Option Plan, as approved by
               shareowners on May 21, 1998 (7)

    10.13      Forms of Stock Option Agreement executed by recipients of options
               granted under the 1991 Stock Option Plan (8)

    10.14      Employee Stock Purchase Plan, as amended on December 16, 1998 (8)

    10.15      Severance Pay Plan dated as of January 20, 1999 (8)

    10.16      Amendment No. 2 to Severance Pay Plan dated as of May 3, 2000 (15)

    10.17      Amendment to Severance Pay Plan dated as of December 9, 1999 (13)

    10.18      Form of Stock Option Agreement executed by recipients of options
               granted under the 1992 Director Compensation Plan (8)

    10.19      Amended and Restated Loan Agreement dated August 5, 1999 among
               Paging Network of Canada Inc., The Toronto-Dominion Bank,
               Canadian Imperial Bank of Commerce, National Bank of Canada, and
               such other financial institutions as become banks (9)

    10.20      Amended and Restated Loan Agreement dated August 5, 1999 among
               Madison Telecommunications Holdings, Inc., The Toronto-Dominion
               Bank, Canadian Imperial Bank of Commerce, National Bank of
               Canada, and such other financial institutions as become banks (9)
</TABLE>


<PAGE>   23

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                              DESCRIPTION
-------                             -----------

<S>            <C>
    12.1       Ratio of Earnings to Fixed Charges for the three months ended
               March 31, 1999 and 2000 (15)

    27.1       Financial Data Schedule (15)
</TABLE>

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

               (1)  Previously filed as an exhibit to Registration Statement No.
                    33-42253 on Form S-1 and incorporated herein by reference.

               (2)  Previously filed as an exhibit to Registration Statement No.
                    33-46803 on Form S-1 and incorporated herein by reference.

               (3)  Previously filed as an exhibit to the Registrant's Report on
                    Form 8-K on September 15, 1994.

               (4)  Previously filed as an exhibit to the Registrant's Quarterly
                    Report on Form 10-Q for the quarterly period ended June 30,
                    1996.

               (5)  Previously filed as an exhibit to the Registrant's Quarterly
                    Report on Form 10-Q for the quarterly period ended June 30,
                    1997.

               (6)  Previously filed as an exhibit to the Registrant's Quarterly
                    Report on Form 10-Q for the quarterly period ended
                    September 30, 1997.

               (7)  Previously filed as an exhibit to the Registrant's Quarterly
                    Report on Form 10-Q for the quarterly period ended June 30,
                    1998.

               (8)  Previously filed as an exhibit to the Registrant's Annual
                    Report on Form 10-K for the fiscal year ended December 31,
                    1998.

               (9)  Previously filed as an exhibit to the Registrant's Quarterly
                    Report on Form 10-Q for the quarterly period ended June 30,
                    1999.

               (10) Previously filed as an exhibit to the Registrant's Quarterly
                    Report on Form 10-Q for the quarterly period ended
                    September 30, 1999.

               (11) Previously filed as an exhibit to the Registrant's Report on
                    Form 8-K on November 17, 1999.

               (12) Previously filed as an exhibit to the Registrant's Report on
                    Form 8-K on January 20, 2000.

               (13) Previously filed as an exhibit to the Registrant's Annual
                    Report on Form 10-K for the fiscal year ended December 31,
                    1999.

               (14) Previously filed as an exhibit to Registration Statement No.
                    333-94403 on Amendment No. 1 to Form S-4 on May 12, 2000.

               (15) Filed herewith.