UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549

FORM 10-Q

(Mark One)

|        |                                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period endedMarch 31, 2005 |

OR

|        |                                                                                                                                                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | TRANSITION REPORT PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition periodfrom              to             |

COMMISSION FILE NUMBER: 0-32357

ALAMOSA HOLDINGS, INC.(Exact name of registrant asspecified in its charter)

|                                                              |  |                                     |  |  |  |  |
|--------------------------------------------------------------|--|-------------------------------------|--|--|--|--|
| DELAWARE                                                     |  | 75-2890997                          |
| (State or other jurisdictionofincorporation or organization) |  | (I.R.S. EmployerIdentification No.) |
|                                                              |

5225 SOUTH LOOP 289,SUITE 120 LUBBOCK, TEXAS 79424 (Address of principalexecutive offices, including zip code)

(806)722-1100 (Registrant's telephone number, including areacode)

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filingrequirements for the past 90 days.

YES      NO  

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES      NO  

As ofMay 5, 2005, 159,134,320 shares of common stock, $0.01 par value pershare, were issued and outstanding.

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ALAMOSAHOLDINGS, INC. TABLE OFCONTENTS

|                                      |  |                                                                                                   |        |        |        |        |  |  |  |  |
|--------------------------------------|--|---------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--|--|--|--|
|                                 |  |                                                                                              |        | PAGE   |
| **PARTI—FINANCIALINFORMATION** |  |                                                                                              |   |   |
| Item1.                               |  | FinancialStatements                                                                               |        |   |   |   |
|                                 |  | ConsolidatedBalance Sheets at March 31, 2005 and December 31, 2004(unaudited)                     |        |   | 3      |   |
|                                 |  | ConsolidatedStatements of Operations for the three months ended March 31, 2005and 2004(unaudited) |        |   | 4      |   |
|                                 |  | ConsolidatedStatements of Cash Flows for the three months ended March 31, 2005and 2004(unaudited) |        |   | 5      |   |
|                                 |  | Notesto the Consolidated FinancialStatements                                                      |        |   | 6      |   |
| Item2.                               |  | Management'sDiscussion and Analysis of Financial Condition and Results ofOperations               |        |   | 25     |   |
| Item3.                               |  | Quantitative and Qualitative Disclosures About MarketRisk                                         |        |   | 34     |   |
| Item4.                               |  | Controls andProcedures                                                                            |        |   | 35     |   |
| **PARTII—OTHERINFORMATION**    |
| Item1.                               |  | LegalProceedings                                                                                  |        |   | 36     |   |
| Item2.                               |  | Unregistered Sales of Equity Securities and Use ofProceeds                                        |        |   | 36     |   |
| Item3.                               |  | Defaults Upon SeniorSecurities                                                                    |        |   | 36     |   |
| Item4.                               |  | Submission of Matters to a Vote of SecurityHolders                                                |        |   | 36     |   |
| Item5.                               |  | OtherInformation                                                                                  |        |   | 36     |   |
| Item6.                               |  | Exhibits                                                                                          |        |   | 36     |   |
| **SIGNATURES**                       |  |                                                                                              | 37     |   |
|                                      |

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PART I – FINANCIALINFORMATION ITEM 1. FINANCIAL STATEMENTS

ALAMOSAHOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)(dollars in thousands, except shareinformation)

|                                                                                                                                   |  |               |           |                  |  |        |           |         |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------|--|---------------|-----------|------------------|--|--------|-----------|---------|--|--|
|                                                                                                                              |  | March31, 2005 |           | December 31,2004 |
| ASSETS                                                                                                                            |  |          |      |             |  |   |      |    |
| Currentassets:                                                                                                                    |  |          |      |             |  |   |      |    |
| Cash andcashequivalents                                                                                                           |  | $             | 42,566    |             |  | $      | 129,917   |    |
| Shortterminvestments                                                                                                              |  |          | 95,318    |             |  |   | 50,418    |    |
| Customeraccounts receivable,net                                                                                                   |  |          | 68,275    |             |  |   | 44,687    |    |
| Receivable fromSprint                                                                                                             |  |          | 42,749    |             |  |   | 24,809    |    |
| Interestreceivable                                                                                                                |  |          | 196       |             |  |   | 216       |    |
| Inventory                                                                                                                         |  |          | 16,594    |             |  |   | 9,136     |    |
| Prepaidexpenses and otherassets                                                                                                   |  |          | 20,334    |             |  |   | 13,170    |    |
| Deferredcustomer acquisitioncosts                                                                                                 |  |          | 6,040     |             |  |   | 6,337     |    |
| Deferred taxasset                                                                                                                 |  |          | 4,230     |             |  |   | 4,230     |    |
| Totalcurrentassets                                                                                                                |  |          | 296,302   |             |  |   | 282,920   |    |
| Property andequipment, net                                                                                                        |  |          | 526,647   |             |  |   | 441,808   |    |
| Debtissuance costs,net                                                                                                            |  |          | 8,858     |             |  |   | 9,086     |    |
| Early redemptionoption on preferredstock                                                                                          |  |          | 22,019    |             |  |   | 21,387    |    |
| Goodwill                                                                                                                          |  |          | 253,161   |             |  |   | —   |    |
| Intangibleassets, net                                                                                                             |  |          | 818,443   |             |  |   | 416,716   |    |
| Othernoncurrentassets                                                                                                             |  |          | 5,638     |             |  |   | 4,188     |    |
| Totalassets                                                                                                                       |  | $             | 1,931,068 |             |  | $      | 1,176,105 |    |
| LIABILITIES,MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK ANDSTOCKHOLDERS'EQUITY                                             |  |          |      |             |  |   |      |    |
| Currentliabilities:                                                                                                               |  |          |      |             |  |   |      |    |
| Accountspayable                                                                                                                   |  | $             | 29,227    |             |  | $      | 24,692    |    |
| Accruedexpenses                                                                                                                   |  |          | 59,589    |             |  |   | 43,916    |    |
| Payable toSprint                                                                                                                  |  |          | 59,569    |             |  |   | 35,852    |    |
| Interestpayable                                                                                                                   |  |          | 14,590    |             |  |   | 21,076    |    |
| Deferredrevenue                                                                                                                   |  |          | 27,927    |             |  |   | 22,549    |    |
| Currentinstallments of capitalleases                                                                                              |  |          | 113       |             |  |   | 110       |    |
| Totalcurrentliabilities                                                                                                           |  |          | 191,015   |             |  |   | 148,195   |    |
| Longterm liabilities:                                                                                                             |  |          |      |             |  |   |      |    |
| Capital leaseobligations                                                                                                          |  |          | 720       |             |  |   | 749       |    |
| Other noncurrentliabilities                                                                                                       |  |          | 8,874     |             |  |   | 5,835     |    |
| Deferred taxliability                                                                                                             |  |          | 38,204    |             |  |   | 16,362    |    |
| Seniornotes                                                                                                                       |  |          | 1,093,662 |             |  |   | 739,141   |    |
| Totallong termliabilities                                                                                                         |  |          | 1,141,460 |             |  |   | 762,087   |    |
| Totalliabilities                                                                                                                  |  |          | 1,332,475 |             |  |   | 910,282   |    |
| Commitmentsand contingencies (see Note15)                                                                                         |  |          | —   |             |  |   | —   |    |
| Mandatorilyredeemable convertible preferredstock:                                                                                 |  |          |      |             |  |   |      |    |
| Series B preferred stock,$.01 par value; 750,000 shares authorized; 448,180 and 478,987shares issued and outstanding,respectively |  |          | 150,783   |             |  |   | 161,148   |    |
| SeriesC preferred stock, $.01 par value; 500,000 shares authorized; no sharesissued                                               |  |          | —   |             |  |   | —   |    |
| Totalmandatorily redeemable convertible preferredstock                                                                            |  |          | 150,783   |             |  |   | 161,148   |    |
| Stockholders'equity:                                                                                                              |  |          |      |             |  |   |      |    |
| Preferred stock, $.01 parvalue; 8,750,000 shares authorized; no sharesissued                                                      |  |          | —   |             |  |   | —   |    |
| Common stock,$.01 par value; 290,000,000 shares authorized; 144,892,392 and114,895,245 shares issued and outstanding,respectively |  |          | 1,449     |             |  |   | 1,149     |    |
| Additionalpaid-incapital                                                                                                          |  |          | 1,205,735 |             |  |   | 860,425   |    |
| Accumulateddeficit                                                                                                                |  |          | (757,076  | )           |  |   | (756,834  | )  |
| Unearnedcompensation                                                                                                              |  |          | (2,298    | )           |  |   | (65       | )  |
| Totalstockholders'equity                                                                                                          |  |          | 447,810   |             |  |   | 104,675   |    |
| Totalliabilities and stockholders'equity                                                                                          |  | $             | 1,931,068 |             |  | $      | 1,176,105 |    |
|                                                                                                                                   |

Theaccompanying notes are an integral part of the consolidated financialstatements.

3

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ALAMOSA HOLDINGS, INC.CONSOLIDATEDSTATEMENTS OF OPERATIONS (UNAUDITED)(dollars inthousands, except per shareamounts)

|                                                                                                                                                            |  |                                   |             |         |  |        |            |         |  |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-----------------------------------|-------------|---------|--|--------|------------|---------|--|--|
|                                                                                                                                                       |  | Forthe three months endedMarch31, |
|                                                                                                                                                       |  | 2005                              |             | 2004    |
| Revenues:                                                                                                                                                  |  |
| Subscriberrevenues                                                                                                                                         |  | $                                 | 189,980     |    |  | $      | 124,746    |    |
| Roamingand wholesalerevenues                                                                                                                               |  |                              | 68,177      |    |  |   | 43,153     |    |
| Servicerevenues                                                                                                                                            |  |                              | 258,157     |    |  |   | 167,899    |    |
| Productsales                                                                                                                                               |  |                              | 9,615       |    |  |   | 8,791      |    |
| Totalrevenue                                                                                                                                               |  |                              | 267,772     |    |  |   | 176,690    |    |
| Costsand expenses:                                                                                                                                         |  |
| Cost of service and operations(excluding depreciation shown separately below and non-cashcompensation of $75 and $2 for 2005 and 2004, respectively)       |  |                              | 122,275     |    |  |   | 86,216     |    |
| Cost of products sold(excluding depreciation shown separatelybelow)                                                                                        |  |                              | 28,579      |    |  |   | 19,783     |    |
| Selling andmarketing (excluding depreciation shown separately below and non-cashcompensation of $45 and $2 for 2005 and 2004, respectively)                |  |                              | 45,277      |    |  |   | 30,993     |    |
| General and administrativeexpenses (excluding depreciation shown separately below and non-cashcompensation of $651 and $22 for 2005 and 2004,respectively) |  |                              | 9,180       |    |  |   | 5,717      |    |
| Mergerrelatedexpenses                                                                                                                                      |  |                              | 1,280       |    |  |   | —    |    |
| Depreciationandamortization                                                                                                                                |  |                              | 40,654      |    |  |   | 27,384     |    |
| (Gain)loss on disposal of property andequipment                                                                                                            |  |                              | (24         | )  |  |   | 306        |    |
| Non-cashcompensation                                                                                                                                       |  |                              | 771         |    |  |   | 26         |    |
| Totalcosts andexpenses                                                                                                                                     |  |                              | 247,992     |    |  |   | 170,425    |    |
| Incomefromoperations                                                                                                                                       |  |                              | 19,780      |    |  |   | 6,265      |    |
| Losson debtextinguishment                                                                                                                                  |  |                              | —     |    |  |   | (13,101    | )  |
| Gainon derivativeinstruments                                                                                                                               |  |                              | 849         |    |  |   | 12,672     |    |
| Interest andother income                                                                                                                                   |  |                              | 1,100       |    |  |   | 168        |    |
| Interestexpense                                                                                                                                            |  |                              | (22,354     | )  |  |   | (18,235    | )  |
| Lossbefore incometaxes                                                                                                                                     |  |                              | (625        | )  |  |   | (12,231    | )  |
| Income tax(expense)benefit                                                                                                                                 |  |                              | 383         |    |  |   | (317       | )  |
| Netloss                                                                                                                                                    |  |                              | (242        | )  |  |   | (12,548    | )  |
| Preferred stockdividend                                                                                                                                    |  |                              | (2,149      | )  |  |   | (3,220     | )  |
| Preferredstock conversionpremium                                                                                                                           |  |                              | (729        | )  |  |   | —    |    |
| Netloss attributable to commonstockholders                                                                                                                 |  | $                                 | (3,120      | )  |  | $      | (15,768    | )  |
| Netloss per common share, basic anddiluted                                                                                                                 |  | $                                 | (0.02       | )  |  | $      | (0.17      | )  |
| Weightedaverage common shares outstanding, basic anddiluted                                                                                                |  |                              | 128,944,685 |    |  |   | 95,490,768 |    |
|                                                                                                                                                            |

Theaccompanying notes are an integral part of the consolidated financialstatements.

4

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ALAMOSA HOLDINGS, INC. CONSOLIDATEDSTATEMENTS OF CASH FLOWS (UNAUDITED)(dollars inthousands)

|                                                                              |  |                                    |          |         |  |        |          |         |  |  |
|------------------------------------------------------------------------------|--|------------------------------------|----------|---------|--|--------|----------|---------|--|--|
|                                                                         |  | Forthe three months ended March31, |
|                                                                         |  | 2005                               |          | 2004    |
| Cashflows from operatingactivities:                                          |  |                               |     |    |  |   |     |    |
| Netloss                                                                      |  | $                                  | (242     | )  |  | $      | (12,548  | )  |
| Adjustments toreconcile net loss to net cash provided byoperatingactivities: |  |                               |     |    |  |   |     |    |
| Non-cashcompensation                                                         |  |                               | 771      |    |  |   | 26       |    |
| Non-cashinterest expense on derivativeinstruments                            |  |                               | —  |    |  |   | 6        |    |
| Non-cashaccretion of asset retirementobligations                             |  |                               | 70       |    |  |   | 45       |    |
| Non-cash gain onderivativeinstruments                                        |  |                               | (849     | )  |  |   | (12,672  | )  |
| Provisionfor baddebts                                                        |  |                               | 1,719    |    |  |   | 1,935    |    |
| Depreciation andamortization of property andequipment                        |  |                               | 22,381   |    |  |   | 17,980   |    |
| Amortizationof intangibleassets                                              |  |                               | 18,273   |    |  |   | 9,404    |    |
| Amortization offinancing costs included in interestexpense                   |  |                               | 228      |    |  |   | 265      |    |
| Amortization of debtpremium                                                  |  |                               | (441     | )  |  |   | —  |    |
| Loss on debtextinguishment                                                   |  |                               | —  |    |  |   | 13,101   |    |
| Interestaccreted on discountnotes                                            |  |                               | 6,571    |    |  |   | 6,001    |    |
| (Gain) loss ondisposal of property andequipment                              |  |                               | (24      | )  |  |   | 306      |    |
| Merger relatedexpenses                                                       |  |                               | 1,280    |    |  |   | —  |    |
| (Increase)decreasein:                                                        |  |
| Receivables                                                                  |  |                               | (2,446   | )  |  |   | (6,380   | )  |
| Inventory                                                                    |  |                               | (3,126   | )  |  |   | 1,936    |    |
| Prepaidexpenses and otherassets                                              |  |                               | (2,792   | )  |  |   | (631     | )  |
| Increase(decrease) in:                                                       |  |
| Accounts payable and accruedexpenses                                         |  |                               | (32,059  | )  |  |   | 1,423    |    |
| Netcash provided by operatingactivities                                      |  |                               | 9,314    |    |  |   | 20,197   |    |
| Cashflows from investing activities:                                         |  |
| Proceeds from saleof assets                                                  |  |                               | 131      |    |  |   | 343      |    |
| Purchases ofproperty andequipment                                            |  |                               | (26,371  | )  |  |   | (24,218  | )  |
| Net cashpaid in businesscombination                                          |  |                               | (69,756  | )  |  |   | —  |    |
| Mergerrelatedexpenses                                                        |  |                               | (436     | )  |  |   | —  |    |
| Change inrestricted cash                                                     |  |                               | —  |    |  |   | 1        |    |
| Change inshort terminvestments                                               |  |                               | (277     | )  |  |   | —  |    |
| Netcash used in investingactivities                                          |  |                               | (96,709  | )  |  |   | (23,874  | )  |
| Cashflows from financing activities:                                         |  |
| Proceeds fromissuance of seniornotes                                         |  |                               | —  |    |  |   | 250,000  |    |
| Repayments ofborrowings under senior secureddebt                             |  |                               | —  |    |  |   | (200,000 | )  |
| Mergerrelated expenses                                                       |  |                               | (844     | )  |  |   | —  |    |
| Debtissuancecosts                                                            |  |                               | —  |    |  |   | (8,059   | )  |
| Preferredstockdividends                                                      |  |                               | (2,245   | )  |  |   | (2,866   | )  |
| Stockoptions exercised                                                       |  |                               | 2,890    |    |  |   | 235      |    |
| Sharesissued to employee stock purchaseplan                                  |  |                               | 267      |    |  |   | 492      |    |
| Proceeds fromrestricted stocksales                                           |  |                               | 2        |    |  |   | —  |    |
| Payments on capitalleases                                                    |  |                               | (26      | )  |  |   | (139     | )  |
| Netcash provided by financingactivities                                      |  |                               | 44       |    |  |   | 39,663   |    |
| Netincrease (decrease) in cash and cashequivalents                           |  |                               | (87,351  | )  |  |   | 35,986   |    |
| Cash andcash equivalents at beginning ofperiod                               |  |                               | 129,917  |    |  |   | 99,644   |    |
| Cashand cash equivalents at end ofperiod                                     |  | $                                  | 42,566   |    |  | $      | 135,630  |    |
| Supplementaldisclosure of non-cash financing and investingactivities:        |  |
| Stock issued in businesscombination                                          |  | $                                  | 330,848  |    |  | $      | —  |    |
| Warrants assumed in businesscombination                                      |  |                               | 2,568    |    |  |   | —  |    |
| Fair valueof assets acquired in businesscombination                          |  |                               | 881,511  |    |  |   | —  |    |
| Fairvalue of liabilities assumed in businesscombination                      |  |                               | (442,335 | )  |  |   | —  |    |
| Conversionof preferredstock                                                  |  |                               | 10,365   |    |  |   | 19       |    |
| Non-cash fixed assetadditions                                                |  |                               | 127      |    |  |   | —  |    |
| Assetretirement obligationscapitalized                                       |  |                               | 213      |    |  |   | 29       |    |
| Change inaccounts payable for purchases of property andequipment             |  |                               | 3,658    |    |  |   | (12,110  | )  |
|                                                                              |

Theaccompanying notes are an integral part of the consolidated financialstatements.

5

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

1.    BASIS PRESENTATION OFUNAUDITED INTERIM FINANCIAL INFORMATION

The unauditedconsolidated balance sheets at March 31, 2005 and December 31, 2004,the unaudited consolidated statements of operations for the threemonths ended March 31, 2005 and 2004, the unaudited consolidatedstatements of cash flows for the three months ended March 31, 2005 and2004 and related footnotes have been prepared in accordance withaccounting principles generally accepted in the United States ofAmerica for interim financial information and Article 10 of RegulationS-X. Accordingly, they do not include all of the information andfootnotes required annually by accounting principles generally acceptedin the United States of America. The financial information presentedshould be read in conjunction with the audited consolidated financialstatements as of and for the year ended December 31, 2004. In theopinion of management, the interim data includes all adjustments(consisting of only normally recurring adjustments) necessary for afair statement of the results for the interim periods. Operatingresults for the three months ended March 31, 2005 are not necessarilyindicative of results that may be expected for the year ending December31, 2005.

Basic and diluted net loss per share of common stockis computed by dividing net loss attributable to common stockholdersfor each period by the weighted-average outstanding number of commonshares. No conversion of common stock equivalents has been assumed inthe calculations since the effect would be antidilutive. As a result,the number of weighted-average outstanding common shares as well as theamount of net loss per share are the same for basic and diluted netloss per share calculations for all periods presented. Common stockequivalents excluded from diluted net loss per share calculationsconsisted of options to purchase 9,173,859 and 9,870,735 shares ofcommon stock at March 31, 2005 and 2004, respectively. Also excludedfrom diluted net loss per share calculations for all periods presentedis the impact of the Series B mandatorily redeemable convertiblepreferred stock outstanding during the period as the inclusion of theimpact of the conversion of this preferred stock would be antidilutive.The number of shares of Series B mandatorily redeemable convertiblepreferred stock outstanding was 448,180 and 679,435 at March 31, 2005and 2004, respectively.

In addition, 400,000 shares ofrestricted stock that were collectively awarded in October and Decemberof 2002 have been excluded from the weighted-average outstanding numberof common shares for the three months ended March 31, 2004 and 200,000shares of this restricted stock have been excluded from theweighted-average outstanding number of common shares for the threemonths ended March 31, 2005. These shares are included in theweighted-average outstanding number of common shares for basic netincome (loss) per share calculations as the restrictions lapse. Anadditional 200,000 shares of restricted stock were awarded to officersand 54,000 shares of restricted stock were awarded to directors inJanuary 2005. These shares vest in 2006 and are excluded from theweighted-average outstanding number of common shares for the threemonths ended March 31, 2005. For purposes of determining the dilutedweighted-average outstanding number of common shares, the shares ofrestricted stock for which the restrictions have not lapsed are notincluded in the three months ended March 31, 2005 and 2004, as theeffect would be antidilutive.

Certain reclassifications havebeen made to prior period balances to conform to current periodpresentation.

2.    ORGANIZATION AND BUSINESS OPERATIONS

Alamosa Holdings, Inc. ("AlamosaHoldings") is a PCS Affiliate of Sprint with the exclusiveright to provide wireless personal communications services under theSprint brand name in a territory encompassing approximately 23.2million residents. Alamosa Holdings was formed in July 2000. AlamosaHoldings is a holding company and through its subsidiaries provideswireless personal 

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

communications services, commonly referred toas PCS, in the Southwestern, Southeastern, Northwestern and MidwesternUnited States. Alamosa (Delaware), Inc. ("Alamosa(Delaware)"), a subsidiary of Alamosa Holdings, was formedin October 1999 under the name "Alamosa PCS Holdings,Inc." to operate as a holding company in anticipation ofits initial public offering. On February 3, 2000, Alamosa (Delaware)completed its initial public offering. Immediately prior to the initialpublic offering, shares of Alamosa (Delaware) were exchanged forAlamosa PCS LLC's ("Alamosa LLC")membership interests, and Alamosa LLC became wholly-owned by Alamosa(Delaware).

On December 14, 2000, Alamosa (Delaware) formed anew holding company pursuant to Section 251(g) of the Delaware GeneralCorporation Law. In that transaction, each share of Alamosa (Delaware)was converted into one share of the new holding company, and the formerpublic company, which was renamed "Alamosa (Delaware),Inc." became a wholly-owned subsidiary of the new holdingcompany, which was renamed "Alamosa PCS Holdings,Inc."

On February 14, 2001, Alamosa Holdings becamethe new public holding company of Alamosa PCS Holdings, Inc.("Alamosa PCS Holdings") and its subsidiariespursuant to a reorganization transaction in which a wholly-ownedsubsidiary of Alamosa Holdings was merged with and into Alamosa PCSHoldings. As a result of this reorganization, Alamosa PCS Holdingsbecame a wholly-owned subsidiary of Alamosa Holdings, and each share ofAlamosa PCS Holdings common stock was converted into one share ofAlamosa Holdings common stock.

On February 15, 2005, AlamosaHoldings completed the acquisition of AirGate PCS, Inc.("AirGate"), as discussed in Note 4. Theacquisition was treated as a purchase and the results of operations ofAirGate are included in the Company's consolidated results ofoperations from the date of acquisition. Alamosa Holdings and itssubsidiaries are collectively referred to in these consolidatedfinancial statements as the "Company,""we," "us" or"our."

Alamosa Holdings' commonstock is quoted on Nasdaq under the symbol"APCS."

3.    LIQUIDITY AND CAPITALRESOURCES

Since inception, the Company has financed itsoperations through capital contributions from owners, through debtfinancing and through proceeds generated from public offerings ofcommon stock. The proceeds from these transactions have been used tofund the build-out of the Company's portion of the PCS network ofSprint, subscriber acquisition costs and working capital.

Whilethe Company has incurred net losses since inception and incurrednegative cash flows from operating activities in the past, the Companygenerated approximately $130 million and $9 million of cash flows fromoperating activities for the year ended December 31, 2004 and the threemonths ended March 31, 2005, respectively.

As of March 31, 2005,the Company had $43 million in cash and cash equivalents as well as $95million in short-term investments which the Company believes will besufficient to fund expected capital expenditures and to cover itsworking capital and debt service requirements (including dividends onpreferred stock) for at least the next 12 months.

TheCompany's future liquidity will be dependent on a number offactors influencing its projections of operating cash flows, includingthose related to subscriber growth, average revenue per user, averagemonthly churn and cost per gross addition. Should actual results differsignificantly from these assumptions, the Company's liquidityposition could be adversely affected and it could be in a position thatwould require it to raise additional capital which may or may not beavailable on terms acceptable to the Company, if at all, and could havea material adverse effect on the Company's ability to achieve itsintended business objectives.

7

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

4.    MERGERS AND ACQUISITIONS

The Company completed the acquisition of AirGate on February 15,2005. AirGate was a PCS affiliate of Sprint with 7.4 million licensedpopulation ("POPs") in the SoutheasternUnited States. This acquisition increased the Company's coveredPOPs by approximately 6.4 million and included the acquisition ofapproximately 415,000 subscribers. The transaction increased the sizeand scale of the Company's operations and provided synergies inthe form of the elimination of certain fixed costs in AirGate'shistorical activity. The transaction was accounted for under thepurchase method of accounting and the results of the acquired companyare included in these consolidated financial statements from the dateof acquisition.

The merger consideration consisted of 26.1million shares of Alamosa Holdings' common stock valued at $12.66per share, representing the average closing price of Alamosa Holdingscommon stock from February 10, 2005 to February 15, 2005. andapproximately $100.0 million in cash plus direct transaction costs ofapproximately $6.1 million. The Company also assumed the debt ofAirGate in the transaction, which had a fair value of approximately$348.4 million as of February 15, 2005.

The Company is in theprocess of obtaining an independent valuation of AirGate to allocatethe purchase price. The preliminary result of the allocation is asfollows:

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |
|                                               |  |   |   |   |
| Consideration:                                     |  |   |   |   |
| Commonstock issued                                 |  | $ | 330,848 |   |
| Common stock warrantsassumed                       |  |   | 383 |   |
| Cash consideration to AirGatestockholders          |  |   | 100,000 |   |
| Totalconsideration                                 |  |   | 431,231 |   |
| Directtransactions costs                           |  |   | 6,143 |   |
| Long-term debtassumed                              |  |   | 348,391 |   |
| Other liabilities assumed(including deferredtaxes) |  |   | 96,129 |   |
| Totalpurchaseprice                                 |  |   | 881,894 |   |
| Allocatedto:                                       |  |   |   |   |
| Currentassets                                      |  |   | 130,682 |   |
| Property andequipment                              |  |   | 77,085 |   |
| Other tangible non-currentassets                   |  |   | 966 |   |
| Intangible assets (other thangoodwill)             |  |   | 420,000 |   |
| Goodwill                                           |  | $ | 253,161 |   |
|                                                    |

Theinformation presented above is preliminary and is based on theCompany's estimates of fair value. These estimates may changeupon the completion of the independent valuation of AirGate.

Theunaudited pro forma condensed consolidated statements of operations forthe three months ended March 31, 2005 and 2004 set forth below presentthe results of operations as if the acquisition had occurred at thebeginning of each period and are not necessarily indicative of futureresults or actual results that would have been achieved had theseacquisitions occurred as of the beginning of theperiod.

8

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |  |  |  |  |  |  |  |
|                                                        |  | For the three monthsendedMarch31, |
|                                                        |  | 2005 |  | 2004 |
| Totalrevenues                                               |  | $ | 316,635 |   |  | $ | 254,726 |   |
| Lossbefore income taxbenefit                                |  | $ | (11,503 | )  |  | $ | (35,773 | )  |
| Incometax (expense)benefit                                  |  |   | 7,049 |   |  |   | (927 | )  |
| Netloss                                                     |  |   | (4,454 | )  |  |   | (36,700 | )  |
| Preferredstockdividends                                     |  |   | (2,149 | )  |  |   | (3,220 | )  |
| Preferredstock conversionpremium                            |  |   | (729 | )  |  |   | — |   |
| Netloss attributable to commonstockholders                  |  | $ | (7,332 | )  |  | $ | (39,920 | )  |
| Basicand diluted net loss pershare                          |  | $ | (0.05 | )  |  | $ | (0.33 | )  |
| Weightedaverage common shares outstanding, basic anddiluted |  |   | 142,011,295 |   |  |   | 121,623,988 |   |
|                                                             |

5.    STOCK-BASEDCOMPENSATION

The Company has elected to follow AccountingPrinciples Board ("APB") Opinion No. 25,"Accounting for Stock Issued to Employees"and related interpretations in accounting for its employee stockoptions. No stock-based employee compensation cost related to optiongrants is reflected in the consolidated statements of operations forthe three months ended March 31, 2005 or 2004, as all options grantedby the Company had an exercise price equal to or greater than themarket value of the underlying common stock on the date of grant.Non-cash compensation expense reflected in the consolidated statementsof operations for the three month periods ended March 31, 2005 and 2004is related to the vesting of shares of restricted stock awarded toofficers and directors and unrestricted shares of stock awarded todirectors and is not related to the granting of stock options. Thefollowing table illustrates the effect on net loss and net loss pershare if the Company had applied the fair value recognition provisionsof Statement of Financial Accounting Standards("SFAS") No. 123, "Accountingfor Stock-Based Compensation," to stock-based employeecompensation:

9

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

|                                                                                                                              |
|------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                              |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                         |  | For the three monthsendedMarch31, |
|                                                                                                                         |  | 2005 |  | 2004 |
|                                                                                                                         |  |   |   |   |  |   |   |   |
| Netloss – asreported                                                                                                   |  | $ | (242 | )  |  | $ | (12,548 | )  |
| Add:stock-based employee compensation included in reported net loss, net ofrelated tax                                       |  |   | 771 |   |  |   | 26 |   |
| Deduct:stock-based employee compensation expense determined under fair valuemethod for all awards, net of related taxeffects |  |   | (1,780 | )  |  |   | (1,184 | )  |
| Netloss – proforma                                                                                                     |  |   | (1,251 | )  |  |   | (13,706 | )  |
| Preferredstockdividend                                                                                                       |  |   | (2,149 | )  |  |   | (3,220 | )  |
| Preferredstock conversionpremium                                                                                             |  |   | (729 | )  |  |   | — |   |
| Netloss attributable to common stockholders – proforma                                                                 |  | $ | (4,129 | )  |  | $ | (16,926 | )  |
| Netloss per share – as reportedBasic anddiluted                                                                        |  | $ | (0.02 | )  |  | $ | (0.17 | )  |
| Netloss per share – pro formaBasic anddiluted                                                                          |  | $ | (0.03 | )  |  | $ | (0.18 | )  |
|                                                                                                                              |

6.    ACCOUNTSRECEIVABLE

Customer accounts receivable —Customer accounts receivable represent amounts owed to the Companyby subscribers for PCS service. Customer accounts receivable do notbear interest.

The amounts presented in the consolidated balancesheets are net of an allowance for uncollectible accounts of $8,823 and$5,728 at March 31, 2005 and December 31, 2004, respectively. Estimatesare used in determining the allowance for uncollectible accounts andare based on the Company's historical collection experience,current trends, credit policy, a percentage of accounts receivable byaging category and expectations of future bad debts based on currentcollection activities. The receivable is recorded net due to a right ofoffset with respect to the receivable from/payable to Sprint withrespect to travel and the fact that the activity has historically beensettled on a net basis by Sprint. In determining the allowance, theCompany considers historical write-offs of its receivables as well ashistorical changes in its credit policies. The Company also takes intoconsideration current trends in the credit quality of its customerbase.

Receivable from Sprint — Receivable fromSprint in the accompanying consolidated balance sheets consists of thefollowing:

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |
|                        |  | March 31,2005 |  | December 31,2004 |
| Net roamingreceivable       |  | $ | 33,996 |   |  | $ | 20,948 |   |
| Accruedservice revenue      |  |   | 4,467 |   |  |   | 2,910 |   |
| Otheramounts due fromSprint |  |   | 4,986 |   |  |   | 951 |   |
|                        |  | $ | 43,449 |   |  | $ | 24,809 |   |
|                             |

10

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

Net roaming receivable includes net travelrevenue due from Sprint relative to PCS subscribers based outside ofthe Company's licensed territory who utilize the Company'sportion of the PCS network of Sprint. The net roaming receivable is netof amounts owed to Sprint relative to the Company's subscriberswho utilize the PCS network of Sprint outside of the Company'slicensed territory. In addition, net roaming receivable also includesamounts due from Sprint, which have been collected from other PCSproviders and wholesale customers for their customers' usage ofthe Company's portion of the PCS network of Sprint.

Accrued service revenue represents the Company's estimate ofairtime usage and other charges that have been earned but not billed atthe end of the period.

Other amounts due from Sprint at March31, 2005 primarily consist of proceeds from the sale of previouslycharged off customer accounts, universal service fund recoveries andinterconnect revenue receivable. Other amounts due from Sprint atDecember 31, 2004 primarily consist of universal service fundrecoveries and interconnect revenue receivable.

7.    PROPERTY AND EQUIPMENT

Property and equipment arestated net of accumulated depreciation and amortization of $268.8million and $246.4 million at March 31, 2005 and December 31, 2004,respectively.

8.    ASSET RETIREMENT OBLIGATIONS

Forthe Company's leased telecommunications facilities, primarilyconsisting of cell sites and switch site operating leases and operatingleases for retail and office space, the Company has adopted SFAS No.143, "Accounting for Asset RetirementObligations," as of January 1, 2003. The obligationsassociated with the Company's operating leases primarily relateto the restoration of the leased sites to specified conditionsdescribed in the respective lease agreements. For purposes ofdetermining the amounts recorded as asset retirement obligationsassociated with the respective leases, the Company has estimated thecosts by type of lease to be incurred upon the termination of the leasefor restoration costs, as adjusted for expected inflation. These costshave been discounted back to the origination of the lease using anappropriate discount rate to determine the amount of obligation to berecorded upon the inception of the lease. The liability is accreted upto the expected settlement amount over the life of the lease using theeffective interest method. A corresponding asset is recorded at theinception of the lease in the same amount as the asset retirementobligation. This asset is depreciated using the same method and life ofsimilar network assets or leasehold improvements.

11

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

The following table illustrates theactivity with respect to asset retirement obligations for the threemonths ended March 31, 2005 and2004:

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |  |  |  |
|                                                       |  | For the three monthsendedMarch31, |
|                                                       |  | 2005 |  | 2004 |
| BalanceJanuary 1                                           |  | $ | 2,212 |   |  | $ | 1,813 |   |
| Obligationassumed in connection with acquisition ofAirGate |  |   | 575 |   |  |   | — |   |
| Initialobligation recorded during theperiod                |  |   | 213 |   |  |   | 29 |   |
| Obligations settledduring theperiod                        |  |   | — |   |  |   | — |   |
| Accretion ofobligation during theperiod                    |  |   | 70 |   |  |   | 45 |   |
| Impact of revision inestimates                             |  |   | — |   |  |   | — |   |
| BalanceMarch31                                             |  | $ | 3,070 |   |  | $ | 1,887 |   |
|                                                            |

9.    GOODWILLAND INTANGIBLE ASSETS

In connection with the acquisition ofother PCS affiliates of Sprint, the Company allocated portions of therespective purchase prices to identifiable intangible assets consistingof (i) the value of the Sprint agreements in place at the acquiredcompanies and (ii) the value of the subscriber base in place at theacquired companies. In addition to the identifiable intangibles,goodwill has been recorded in the amount by which the purchase priceexceeded the fair value of the net assets acquired, includingidentified intangibles.

The value assigned to the Sprintagreements is being amortized using the straight-line method over theremaining original terms of the agreements that were in place at thetime of acquisition. The value assigned to the subscriber basesacquired is amortized using the straight-line method over the estimatedlife of the acquired subscribers.

In September 2004, the Companypurchased the rights to additional territory from Sprint in connectionwith an amendment of one of its management agreements. The purchaseprice of $467 consisted of $14 allocated to purchased equipment and$453 allocated to the value of the Sprint agreement associated with theterritory acquired. The intangible asset related to the Sprintagreement will be amortized over the remaining original term of theSprint agreement at the time of purchase.

In connection with theacquisition of AirGate in 2005 as discussed in Note 4, the Companyallocated $210,000 to the value of the subscriber base in place atAirGate at the time of acquisition and allocated $210,000 to the valueof the Sprint agreements in place at AirGate at the time ofacquisition. The final values will be based on an independentappraisal. The subscriber base intangible will be amortized over theestimated life of the subscribers acquired, or approximately 3 years,and the intangible associated with the Sprint agreements in place willbe amortized over the remaining original term of the Sprint agreementsassumed in the acquisition, or approximately 13 years.

TheCompany accounts for goodwill and intangible assets in accordance withthe provisions of SFAS No. 142, "Goodwill and OtherIntangible Assets." The provisions of SFAS No. 142 (i)prohibit the amortization of goodwill and indefinite-lived intangibleassets, (ii) require that goodwill and indefinite-lived intangibleassets be tested annually for impairment (and in interim periods ifcertain events occur indicating that the carrying value may beimpaired), and (iii) require that reporting units be identified for thepurpose of assessing potential future impairments of goodwill.

SFAS No. 142 requires that goodwill and indefinite-lived intangibleassets be tested annually for impairment using a two-step process. Inconnection with the annual assessment in 2002, the Company

12

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

recorded an impairment charge of $291,635,which represented the entire balance of recorded goodwill at that time.As a result of the acquisition of AirGate discussed in Note 4, theCompany recorded goodwill during the three months ended March 31, 2005of $253,161. In accordance with the provisions of SFAS No. 142, thisgoodwill will be tested annually for impairment.

Goodwill andintangible assets consistof:

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |
|                                  |  | March 31, 2005 |  | December31,2004 |
| Goodwill                              |  | $ | 253,161 |   |  | $ | — |   |
| Intangibleassets:                     |  |   |   |   |  |   |   |   |
| Sprintaffiliation and otheragreements |  | $ | 742,653 |   |  | $ | 532,653 |   |
| Accumulatedamortization               |  |   | (125,460 | )  |  |   | (115,937 | )  |
| Subtotal                              |  |   | 617,193 |   |  |   | 416,716 |   |
| Subscriberbaseacquired                |  |   | 239,500 |   |  |   | 29,500 |   |
| Accumulatedamortization               |  |   | (38,250 | )  |  |   | (29,500 | )  |
| Subtotal                              |  |   | 201,250 |   |  |   | — |   |
| Intangibleassets,net                  |  | $ | 818,443 |   |  | $ | 416,716 |   |
|                                       |

Amortizationexpense related to intangible assets was $18,273 and $9,404 for thethree months ended March 31, 2005 and 2004, respectively.

Aggregate amortization expense relative to intangible assets for theperiods shown will be asfollows:

|                        |
|------------------------|
|                        |  |  |  |  |  |  |
| Year ended December31, |  |   |
| 2005                   |  | $ | 105,212 |   |
| 2006                   |  |   | 115,918 |   |
| 2007                   |  |   | 115,918 |   |
| 2008                   |  |   | 54,668 |   |
| 2009                   |  |   | 45,918 |   |
| Thereafter             |  |   | 399,082 |   |
|                   |  | $ | 836,716 |   |
|                        |

13

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

10.    LONG-TERM DEBT

Long-termdebt consists of thefollowing:

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |
|                                           |  | March 31, 2005 |  | December31, 2004 |
| 12 7/8% SeniorDiscount Notes, net ofdiscount   |  | $ | 6,389 |   |  | $ | 6,293 |   |
| 12%Senior Discount Notes, net ofdiscount       |  |   | 224,503 |   |  |   | 218,028 |   |
| 121⁄2%SeniorNotes                         |  |   | 11,600 |   |  |   | 11,600 |   |
| 13 5/8%Senior Notes                            |  |   | 2,325 |   |  |   | 2,325 |   |
| 11%SeniorNotes                                 |  |   | 250,895 |   |  |   | 250,895 |   |
| 81⁄2%SeniorNotes                          |  |   | 250,000 |   |  |   | 250,000 |   |
| 9 3/8%SeniorNotes                              |  |   | 168,344 |   |  |   | — |   |
| Floating RateNotes                             |  |   | 179,606 |   |  |   | — |   |
| **TotalDebt**                                  |  |   | 1,093,662 |   |  |   | 739,141 |   |
| Lesscurrentmaturities                          |  |   | — |   |  |   | — |   |
| **Longterm debt, excluding currentmaturities** |  | $ | 1,093,662 |   |  | $ | 739,141 |   |
|                                                |

SENIORNOTES

12 7/8% Senior DiscountNotes — The 12 7/8% Senior DiscountNotes were issued in February 2000, mature February 15, 2010, carry acoupon rate of 12 7/8% and provide for interestdeferral through February 15, 2005. The 12 7/8%Senior Discount Notes accreted to their $6,389 face amount on February15, 2005. The 12 7/8% Senior Discount Notes wereredeemed in April 2005 at a premium of $411.

12%Senior Discount Notes — The 12% Senior Discount Noteswere issued in November 2003, mature July 31, 2009, carry a coupon rateof 12% and provide for interest deferral through July 31, 2005.The 12% Senior Discount Notes will accrete to their $233 millionface amount by July 31, 2005, after which interest will be paid in cashsemiannually.

121⁄2% Senior Notes— The 121⁄2% Senior Notes wereissued in January 2001, mature February 1, 2011 and carry a coupon rateof 121⁄2%, payable semiannually on February 1and August 1.

Approximately $59.0 million of the proceeds of the121⁄2% Senior Notes Offering were used byAlamosa (Delaware) to establish a security account (with cash or U.S.government securities) to secure on a pro rata basis the paymentobligations under the 121⁄2% Senior Notes andthe 12 7/8% Senior Discount Notes. As ofDecember 31, 2004, all of the escrowed proceeds had been used inconnection with payment of cash interest.

13 5/8% Senior Notes — The13 5/8% Senior Notes were issued in August 2001,mature August 15, 2011 and carry a coupon rate of13 5/8%, payable semiannually on February 15 andAugust 15. Approximately $39.1 million of the proceeds of the13 5/8% Senior Notes were used by Alamosa(Delaware) to establish a security account to secure on a pro ratabasis the payment obligations under all of the Company'sunsecured borrowings. As of December 31, 2004, all of the escrowedproceeds had been used in connection with payment of cash interest.

11% Senior Notes — The 11% Senior Noteswere issued in November 2003, mature July 31, 2010 and carry a couponrate of 11%, payable semiannually on January 31 and July 31.

81⁄2% Senior Notes — The81⁄2% Senior Notes were issued in January 2004,mature January 31, 2012 and carry a coupon rate of81⁄2%, payable semiannually on January 31 andJuly 31. The proceeds of these notes were used to permanently repay theCompany's senior secured credit facility in January 2004 and forgeneral corporate purposes.

14

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

9 3/8% SeniorNotes — The 9 3/8% Senior Notes wereassumed in connection with the acquisition of AirGate in February 2005,as discussed in Note 4. These notes were originally issued in February2004, have a face value of $159,035, mature September 1, 2009 and carrya coupon rate of 9 3/8%, payable semiannually onJanuary 1 and July 1. The 9 3/8% Senior Notesare secured by a second priority lien on the assets of AirGate.

Floating Rate Notes — The Floating Rate Notes wereassumed in connection with the acquisition of AirGate in February 2005,as discussed in Note 4. These notes were originally issued in October2004, have a face value of $175,000, mature October 15, 2011 and bearinterest at LIBOR plus 3.75%, payable quarterly on January 15,April 15, July 15 and October 15. The Floating Rate Notes are securedby a first priority lien on the assets of AirGate.

11.    MANDATORILY REDEEMABLE CONVERTIBLE PARTICIPATING PREFERREDSTOCK

In connection with a debt exchange completed in November2003, the Company issued 679,495 shares of Series B Preferred Stock tonoteholders who tendered their notes in the exchange. Holders of theSeries B Preferred Stock are entitled to receive cumulative dividendsat an annual rate of 71⁄2% of the $250 pershare liquidation preference. Dividends are payable quarterly inarrears on the last calendar day of each January, April, July andOctober. Until July 31, 2008, the Company has the option to paydividends in (1) cash, (2) shares of Alamosa Holdings Series CPreferred Stock, (3) shares of Alamosa Holdings common stock or (4) acombination thereof. After July 31, 2008, all dividends are payable incash only. Holders of the Series B Preferred Stock are entitled toparticipate in any dividends declared on Alamosa Holdings common stockbased on the number of common shares the Series B Preferred Stock couldbe converted into immediately prior to the declaration of the commonstock dividend. The Series C Preferred Stock has essentially the sameterms as the Series B Preferred Stock with the exception of theconversion rate, as discussed below.

Each share of Series BPreferred Stock and Series C Preferred Stock is convertible at theholder's option and at any time into shares of Alamosa HoldingsCommon Stock. The Series B Preferred Stock is convertible at $3.40 pershare and the Series C Preferred Stock is convertible at $4.25 pershare.

Beginning on the third anniversary of the date oforiginal issuance of the Series B or Series C Preferred Stock, theCompany has the option to redeem outstanding preferred shares for cash.The initial redemption price is 125 percent of the $250 per shareliquidation preference, reduced by 5 percent annually thereafter until2011, after which time the redemption price remains at 100 percent. Alloutstanding Series B and Series C Preferred Stock must be redeemed bythe Company on July 31, 2013.

In accordance with the provisionsof SFAS No. 149, "Amendment of Statement 133 on DerivativeInstruments and Hedging Activities," this option to redeemoutstanding preferred shares for cash represents a derivativeinstrument that must be bifurcated and accounted for separately, as theearly redemption could potentially double a holder's return onthe preferred shares. As a result, an asset was recorded in connectionwith this early redemption option in November 2003 in the amount of$18.8 million, which represented the fair value of the option upon theissuance of the preferred shares as determined by an independentvaluation professional. This derivative is adjusted to fair value atthe end of each reporting period with any change in fair value beingreflected in earnings for the period. As of March 31, 2005 and December31, 2004, the fair value of this option was $22.0 million and $21.4million, respectively.

The Series B Preferred Stock was recordedat fair value as of the date of issuance, or approximately $325 pershare, less a portion of the costs incurred in connection with the debt

15

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

exchange of approximately $4.4 million plusthe value assigned to the early redemption option discussed previously.The costs allocated to the Series B Preferred Stock were determinedbased on the relative fair value of the Series B Preferred Stock to thetotal fair value of consideration given to the tendering noteholders.In determining the $325 per share fair value of Series B PreferredStock, the Company engaged the services of an independent valuationprofessional who used customary methodologies common in the valuationof such instruments to arrive at the fair value.

In May 2004,the Company completed a private exchange transaction with a holder ofthe 13 5/8% Senior Notes. Pursuant to thetransaction, the holder delivered to the Company an aggregate of $150principal amount of the 13 5/8% Senior Notes inexchange for a newly issued $97 in principal amount of the 11%Senior Notes and 150 shares of Series B Preferred Stock.

Duringthe three months ended March 31, 2005 and 2004, holders of 30,807 and60 shares, respectively, of Series B Preferred Stock exercised theirconversion option or exchanged shares of Series B Preferred Stock withthe Company and were granted 2,323,754 and 4,411 shares, respectively,of Alamosa Holdings common stock. In connection with the exchangeduring the three months ended March 31, 2005, the Company paid aconversion premium to holders in the form of approximately 58,533shares of common stock valued at $729.

During the three monthsended March 31, 2005 and 2004, the Company paid $2,245 and $2,866,respectively, in cash dividends on the Series B Preferred Stock.

Subsequent to March 31, 2005, the Company completed private exchangetransactions with holders of 184,860 shares of Series B PreferredStock. Holders of the Series B Preferred Stock in these transactionsreceived approximately 13.9 million shares of Alamosa Holdings commonstock, which included conversion premiums in the form of approximately324,000 shares valued at approximately $4.0 million.

12.    INCOME TAXES

The Company's effective incometax rate is based on annual income (loss), statutory tax rates, taxplanning opportunities, expected future taxable income, and expectedreversals of taxable temporary differences. The annual rate is thenapplied to the Company's quarterly operating results. The Companyestablishes a valuation allowance for deferred tax assets when it ismore likely than not that the deferred tax assets will not be realized.Due to the Company's limited operating history and lack ofpositive taxable earnings, a valuation allowance was established during2003 as deferred tax assets were expected to exceed deferred taxliabilities. The establishment of this valuation allowance in the threemonths ended March 31, 2004 resulted in an effective tax rate of 16percent. The effective tax rate for the three months ended March 31,2005 is 61 percent. The difference between the statutory rate of 35percent and the projected rate is primarily due to non-deductibleinterest on high yield debt obligations.

13.    DERIVATIVEFINANCIAL INSTRUMENTS

The Company follows the provisions ofSFAS No. 133, "Accounting for Derivatives and HedgingActivities" in its accounting for derivative financialinstruments and hedging activities. The statement requires the Companyto record all derivatives on the balance sheet at fair value.Derivatives that are not hedges must be adjusted to fair value throughearnings.

In connection with the acquisition of AirGate onFebruary 15, 2005, as discussed in Note 4, the Company assumed certaincommon stock purchase warrants that existed at AirGate at the time ofacquisition. The terms of the warrants were impacted by the exchangeratio of Alamosa Holdings common stock exchanged for AirGate commonstock in the acquisition. As of March 31, 2005, three sets of commonstock purchase warrants were outstanding.

16

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

AirGate Warrants — TheAirGate Warrants were originally issued by AirGate in connection withan offering of AirGate notes in 1999. As of March 31, 2005, 8,620AirGate Warrants were outstanding. Each warrant entitles the holder toreceive 0.9482 shares of Alamosa Holdings common stock and $3.64 incash at an exercise price of $0.02 per share and expire on October 1,2009. Due to the fact that these warrants require settlement withregistered shares of Alamosa Holdings common stock, these warrants arereflected as a liability in the consolidated balance sheet at fairmarket value. Changes in fair market value are reflected in earningsfor the period. The fair value of the AirGate Warrants at March 31,2005 is approximately $127.

iPCS Note Warrants —The iPCS Note Warrants were originally issued by iPCS, Inc.("iPCS") in 2000 and assumed by AirGate uponAirGate's acquisition of iPCS in 2001. As of March 31, 2005,300,000 iPCS Note Warrants were outstanding. Each warrant entitles theholder to receive 0.6996 shares of Alamosa Holdings common stock at anexercise price of $74.34 per share and expire on July 15, 2011. Due tothe fact that these warrants require settlement with registered sharesof Alamosa Holdings common stock, these warrants are reflected as aliability in the consolidated balance sheet at fair market value.Changes in fair market value are reflected in earnings for the period.The fair value of the iPCS Note Warrants at March 31, 2005 isapproximately $1,841.

iPCS Sprint Warrant — TheiPCS Sprint Warrant was originally issued by iPCS in 2000 and assumedby AirGate upon AirGate's acquisition of iPCS in 2001. As ofMarch 31, 2005, the iPCS Sprint Warrant to purchase 81,050 shares ofAlamosa Holdings common stock at an exercise price of $66.52 per sharewas outstanding. This warrant expires on July 15, 2007 and is notreflected as a liability in the consolidated balance sheet.

14.    SPRINT AGREEMENTS

In accordance with theCompany's affiliation agreements with Sprint, Sprint provides theCompany various services including billing, customer care, collectionsand inventory logistics. In addition, Sprint bills the Company forvarious pass-through items such as commissions and rebates to nationalretail merchants, handset subsidies on handsets activated in theCompany's territory but not sold by the Company and long distancecharges.

In 2003, the Company executed amendments to itsaffiliation agreements with Sprint. The amendments, among other things,established fixed per subscriber costs for services that the Companypurchases from Sprint through December 31, 2006 in the form of two newfees. The amendments created a new combined service bureau fee, whichconsolidates numerous fees that were previously settled separately, forback office services such as billing and customer care. The combinedservice bureau fee was initially set at $7.70 per average subscriberper month through December 31, 2006 and will be recorded in costs ofservices and operations in the consolidated statement of operations.The amendments also created a new per-activation fee, whichconsolidates numerous fees that were previously settled separately, formarketing services, such as subscriber activation and handsetlogistics. The per-activation fee was initially calculated as apercentage of certain of Sprint PCS' selling and marketingexpenses and was to be applied to the actual number of gross subscriberactivations the Company experiences on a monthly basis through December31, 2006. The per-activation fee will be recorded in selling andmarketing expenses in the consolidated statement of operations. InMarch 2004, the Company exercised its rights under a most favorednations clause in the Sprint agreements to implement the terms of anagreement entered into between Sprint and another PCS Affiliate ofSprint. As a result, the Company entered into new amendments thatincreased the per-activation fee and decreased the price to the Companyon purchases of handsets and accessories. Additionally, the March 2004amendments increased the reciprocal roaming rate for data services from$0.0014 per Kb to $0.0020 per Kb and extended the fixed reciprocalrates for voice and data roaming through December 31, 2006. In June2004, the Company further amended its agreements with Sprint to (1)

17

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

reduce the combined service bureau fee from$7.70 to $7.00 per average subscriber per month and (2) change theper-activation fee from a percentage of certain of Sprint PCS'selling and marketing expenses to a fixed rate of $23.00 peractivation.

In addition to the new fees, the amendments changedthe methodology used for settling cash received from subscribers.Historically, actual weekly cash receipts were passed through to theCompany by Sprint based on a calculation of an estimate of the portionof that cash related to the Company's activity. Under the newmethodology, the Company receives its portion of billed revenue (net ofan 8% affiliation fee) less actual written off accounts in themonth subsequent to billing regardless of when Sprint collects the cashfrom the subscriber. The provisions of the amendments became effectiveon December 1, 2003 and the Company has the right to evaluatesubsequent amendments to the affiliation agreements of other similarlysituated PCS Affiliates of Sprint and adopt the provisions of thoseamendments if the Company elects to do so. AirGate amended itsagreements with Sprint in August 2004 and the provisions of thoseamendments are consistent with those of Alamosa Holdings' amendedSprint agreements.

Expenses reflected in the consolidatedstatements of operations related to the Sprint affiliation agreementsare:

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |
|                               |  | For the three monthsendedMarch31, |
|                               |  | 2005 |  | 2004 |
| Costof service and otheroperations |  | $ | 91,659 |   |  | $ | 62,638 |   |
| Cost ofproducts sold               |  |   | 28,579 |   |  |   | 19,783 |   |
| Sellingandmarketing                |  |   | 19,095 |   |  |   | 10,394 |   |
| Total                              |  | $ | 139,333 |   |  | $ | 92,815 |   |
|                                    |

Inconnection with the billing services provided to the Company by Sprint,the Company relies on Sprint to provide information as to monthlybilling activity relative to all subscriber revenues. In addition,Sprint provides the information utilized for the settlement of allroaming revenue.

The Company relies upon Sprint as a serviceprovider to provide accurate information for the settlement of revenueand expense items. The Company makes estimates used in connection withthe preparation of financial statements based on the financial andstatistical information provided by Sprint. The Company assesses theaccuracy of this information through analytic review and reliance onthe service auditor report on Sprint's internal control processesprepared by Sprint's external service auditor.

On December15, 2004, Sprint Corporation and Nextel Communications, Inc. announcedthat their boards of directors unanimously approved a definitiveagreement for a merger of equals. Nextel Communications currentlyoperates a wireless mobility communications network in certainterritories in which the Company also provides digital wirelessmobility communications network services under the Sprint or affiliatedbrands.

The Company and Sprint have had only very preliminarycommunications regarding the potential impact on the Company of thepending Sprint-Nextel transaction. The Company believes that, based oncurrently available information, and assuming that no changes areeffected with respect to Sprint's agreements with the Company,Sprint could be in violation of the exclusivity provisions of certainof the Company's agreements with Sprint upon completion of theSprint-Nextel transaction and Sprint could be in violation of theexclusivity provisions of the other agreements with Sprint at somepoint following completion of the Sprint-Nextel transaction.

Sprint's agreements with the Company provide for specificremedies in the event of a material violation by Sprint of suchagreements if not cured within an applicable time period. Neither wenor 

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

any of our executives have made anydefinitive determination as to the impact on the value to us or ourbusiness of any of such remedies or whether any such remedy would bemore or less favorable to us or our shareholders than our existingarrangements with Sprint or any possible renegotiated arrangement withSprint.

The Company is committed to working with Sprint to reachmutually agreeable arrangements with respect to these matters. However,there can be no assurances that the Company and Sprint will be able toreach mutually acceptable arrangements or as to the terms of any sucharrangements or the likely impact on the Company of any sucharrangement.

15.    COMMITMENTS AND CONTINGENCIES

Employment agreements — The Company is a party toemployment agreements, effective October 1, 2002, and amended as ofJanuary 1, 2005, with its Chief Executive Officer("CEO") and Chief Financial Officer("CFO"). The CEO's agreement willexpire on December 31, 2007 and entitles the CEO to receive an annualbase salary of $425 in 2005, subject to increase from time to time. Theagreement also provides that so long as he serves on theCompany's board of directors, he will serve as Chairman of theBoard. The CFO's agreement will expire on December 31, 2006 andentitles him to receive an annual base salary of $400 in 2005, subjectto increase from time to time. The CEO and CFO are eligible to receivean annual performance-based bonus with an initial target of $340 and$280, respectively. The executives are entitled to participate in anylong-term incentive plans the Company establishes, including AlamosaHoldings' Amended and Restated 1999 Long Term Incentive Plan("LTIP").

The agreements provide forannual option grants, contingent upon continued employment. TheCEO's agreement provides for the grant of options to purchase80,000 shares, 64,000 shares and 51,200 shares in 2005, 2006 and 2007,respectively. The CFO's agreement provides for the grant ofoptions to purchase 50,000 shares and 40,000 shares in 2005 and 2006,respectively. Additionally, the agreements provide for grants ofrestricted stock subject to the terms of the LTIP and that vest uponcontinued employment and in amounts determined based upon attainment ofperformance goals as set forth in certain restricted stock agreements.The target shares for restricted stock grants for the CEO are 60,000 in2005, 48,000 in 2006, and 38,400 in 2007. The target shares forrestricted stock grants for the CFO are 50,000 in 2005 and 40,000 in2006. The actual award shares for restricted stock could range fromzero to 200% of the target amount.

The agreements entitlethe executives to $5,000 in term life insurance coverage, reimbursementfor reasonable business expenses, a car allowance, reimbursement forapproved club dues, reimbursement for an annual physical exam up to $5,and financial planning services up to $10 per annum. The executives mayparticipate in any incentive, retirement, life, medical, disability andother benefit plans available to the Company's other executiveswith comparable responsibilities, subject to the terms of thoseprograms.

Upon termination of employment by the Company withoutcause or by the executive for good reason, within thirty days after thedate of termination, the Company will provide the terminated executivea lump-sum severance payment equal to the sum of: (i) one year'sbase salary; (ii) the higher of (x) the executive's target bonusor (y) the average annual bonus the executive earned over the twopreceding years (the "Bonus"); and (iii) apro-rated bonus for the year of termination. If such termination occurswithin twelve months following a change in control, the terminatedexecutive is instead entitled to three times his base salary and Bonus,plus a pro-rata bonus for the year of termination. In either case, theterminated executive will also receive continuing welfare and fringebenefits for one year following termination of his employment (twoyears if such termination occurs within twelve months following achange in control) and all restricted stock and options granted to theexecutive under the agreement will become vested and exercisable.

19

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

The Company entered into employmentagreements on October 1, 2002, as amended as of January 1, 2005 withits Chief Integration Officer ("CIO"), ChiefTechnology Officer ("CTO"), and Senior VicePresident of Corporate Finance ("SVP"). TheCompany entered into an employment agreement on December 1, 2002, asamended as of January 1, 2005 with its Chief Operating Officer("COO"). The CIO's agreement willexpire on December 31, 2005. The agreements with the CTO, SVP and COOwill expire on December 31, 2006.

These agreements provide forannual grants of options to purchase 186,000 shares of Company commonstock during 2005 and 2006 and additionally provide for totalrestricted stock grants among these executives in the target amount of150,000 shares during 2005 and 2006. The actual award shares forrestricted stock could range from zero to 200% of the targetamount. Additionally, the agreements entitle the executives to bereimbursed for reasonable business expenses, car allowances, andreimbursement for annual physical exams in amounts as set forth intheir agreements as well as other allowed perquisites. They mayparticipate in any incentive, retirement, life, medical, disability andother benefit plans available to the Company's other executiveswith comparable responsibilities, subject to the terms of thoseprograms.

Upon termination of employment by the Company withoutcause or by the executive for good reason, within thirty days after thedate of termination, the Company will provide the terminated executivea lump-sum severance payment equal to the sum of: (i) one year'sbase salary; (ii) the executive's Bonus; and (iii) a pro-ratedbonus for the year of termination. If such termination occurs withintwelve months following a change in control, the terminated executiveis instead entitled to receive two times base salary and Bonus, plus apro-rata bonus for the year of termination. In either case, theterminated executive will also receive continuing welfare and fringebenefits for one year (two years if such termination occurs withintwelve months following a change in control) and all restricted stockand options granted to the executive under the agreement will becomevested and exercisable.

The agreements contain non-compete andnon-solicitation provisions effective for (i) two years followingtermination of employment by the Company without cause or by theexecutive for good reason within one year following a change in controlor (ii) one year following termination of employment in any othercircumstances.

The restricted stock grants associated with theJanuary 2005 employment agreement amendments are considered variableawards as the number of the shares that will ultimately be earned bythe employee is not known until December 31 of each year during theterm of the agreement (the measurement dates). In accordance with FAS123 related compensation expense associated with the annual grants ismeasured based on the fair market value of the award at the measurementdate and is recognized over the vesting period.

The restrictedstock granted in January 2005 under the terms of these employmentagreement amendments vest 65% on March 1, 2006 and 35% onSeptember 1, 2006. Until the measurement date has been reachedcompensation expense is adjusted for changes in the fair market value.The market value of the restricted stock grants was $2,468 on the dateof grant and was recorded as unearned compensation, a component ofshareholders' equity. At March 31, 2005, the unearnedcompensation was adjusted to $2,332 based on a decrease in the fairmarket value of the award as of March 31, 2005. The non-cashcompensation expense recognized during the three months ended March 31,2005 was $583 resulting in a balance of $1,749 in unearned compensationrelated to these awards as of March 31, 2005.

Litigation— The Company has been named as a defendant in a number ofpurported securities class actions in the United States District Courtfor the Southern District of New York, arising out of its initialpublic offering (the "IPO"). Variousunderwriters of the IPO also are named as defendants 

20

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

in the actions. The action against theCompany is one of more than 300 related class actions which have beenconsolidated and are pending in the same court. The complainants seekto recover damages and allege, among other things, that theregistration statement and prospectus filed with the SEC for purposesof the IPO were false and misleading because they failed to disclosethat the underwriters allegedly (i) solicited and received commissionsfrom certain investors in exchange for allocating to them shares ofcommon stock in connection with the IPO, and (ii) entered intoagreements with their customers to allocate such stock to thosecustomers in exchange for the customers agreeing to purchase additionalCompany shares in the aftermarket at pre-determined prices. On February19, 2003, the Court granted motions by the Company and 115 otherissuers to dismiss the claims under Rule 10b-5 of the Exchange Actwhich had been asserted against them. The Court denied the motions bythe Company and virtually all of the other issuers to dismiss theclaims asserted against them under Section 11 of the Securities Act.The Company maintains insurance coverage which may mitigate itsexposure to loss in the event that this claim is not resolved in theCompany's favor.

The issuers in the IPO cases, includingthe Company, have reached an agreement in principle with the plaintiffsto settle the claims asserted by the plaintiffs against them. Under theterms of the proposed settlement, the insurance carriers for theissuers will pay the plaintiffs the difference between $1 billion andall amounts which the plaintiffs recover from the underwriterdefendants by way of settlement or judgment. Accordingly, no payment onbehalf of the issuers under the proposed settlement will be made by theissuers themselves. The claims against the issuers will be dismissed,and the issuers and their officers and directors will receive releasesfrom the plaintiffs. Under the terms of the proposed settlement, theissuers will also assign to plaintiffs certain claims which they mayhave against the underwriters arising out of the issuers' IPOs,and the issuers will also agree not to assert certain other claimswhich they may have against the underwriters, without plaintiffs'consent. The proposed settlement is subject to agreement among theparties on final settlement documents and the approval of the court.The court has issued a decision and order which preliminarily approvesthe settlement as to the issuers. The next step in the process isnotice to the class of the proposed settlement and the scheduling of ahearing before the court to determine the fairness of the settlement.Neither of these events has occurred as of this date.

InNovember 2003, December 2003 and January 2004, multiple lawsuits werefiled against the Company and David E. Sharbutt, its Chairman and ChiefExecutive Officer as well as Kendall W. Cowan, its Chief Financialofficer. Steven Richardson, the Company's Chief OperatingOfficer, was also a named defendant in one of the lawsuits. Each claimis a purported class action filed on behalf of a putative class ofpersons who and/or entities that purchased Alamosa Holdings'securities between January 9, 2001 and June 13, 2002, inclusive, andseeks recovery of compensatory damages, fees and costs. Each lawsuitwas filed in the United States District Court for the Northern Districtof Texas, in either the Lubbock Division or the Dallas Division. OnFebruary 27, 2004, the lawsuits were consolidated into one actionpending in the United States District Court for the Northern Districtof Texas, Lubbock Division. On March 4, 2004, the Court appointed theMassachusetts State Guaranteed Annuity Fund to serve as lead plaintiffand approved its selection of lead counsel for the consolidatedaction.

On May 18, 2004, the lead plaintiff filed a consolidatedcomplaint. The consolidated complaint named three of the originaldefendants (the Company, David Sharbutt and Kendall Cowan), dropped oneof the original defendants (Steven Richardson) and named two newdefendants who are outside directors (Michael Roberts and StevenRoberts). The putative class period remained the same. The consolidatedcomplaint alleged violations of Sections 10(b) and 20(a) of theExchange Act, Rule 10b-5 promulgated thereunder, and Sections 11 and 15of the Securities Act. The consolidated complaint sought recovery ofcompensatory damages, fees, costs, recission or rescissory damages inconnection with the Sections 11 and 15 claims, and injunctive reliefand/or disgorgement in connection with 

21

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

defendants' alleged insider tradingproceeds. At the end of the putative class period on June 13, 2002, theCompany announced that its projection of net subscriber additions forthe second quarter of 2002 would be less than previously projected. Theconsolidated complaint alleged, among other things, that the Companymade false and misleading statements about subscriber additions duringthe putative class period. The consolidated complaint also alleged thatthe Company's financial statements were false and misleadingbecause the Company improperly recognized revenue and failed to recordadequate allowances for uncollectible receivables.

On March 28,2005, the Court granted the defendants' motion to dismiss andentered a judgment dismissing this action. On April 22, 2005, theplaintiffs filed a notice of appeal from the dismissal order andjudgment to the Fifth Circuit Court of Appeals.

On July 8 and15, 2004, two shareholder derivative suits, each asserting identicalallegations, were filed in State District Court in Dallas County, Texason behalf of the Company against certain of its officers and directors:David E. Sharbutt, the Company's Chairman and Chief ExecutiveOfficer, Kendall W. Cowan, the Company's Chief Financial Officer,as well as other current and former members of the Company'sboard of directors, including Scotty Hart, Michael V. Roberts, Ray M.Clapp, Jr., Schuyler B. Marshall, Thomas F. Riley, Jr. Steven C.Roberts, Jimmy R. White, Thomas B. Hyde and Tom M. Phelps. The suitsalso name the Company as a nominal defendant. On August 27, 2004, thelawsuits were consolidated into one action pending in State DistrictCourt in Dallas County, Texas. On November 24, 2004, the plaintiffsfiled a consolidated derivative petition. Based on allegationssubstantially similar to the federal shareholder action, the suitsassert claims for defendants' alleged violations of state law,including breaches of fiduciary duty, abuse of control, grossmismanagement, waste of corporate assets and unjust enrichment thatallegedly occurred between January 2001 and June 2002. The suits seekrecovery of damages, fees, costs, equitable and/or injunctive remedies,and disgorgement of all profits, benefits and other compensation. Thedefendants filed a motion to stay this action pending the outcome ofthe federal shareholder action. In the alternative, the defendantsfiled special exceptions to the consolidated derivative petitionrequesting dismissal of the action. The plaintiffs served writtendiscovery requests on defendants and in response, defendants filed amotion for protective order and to stay discovery.

On April 27,2005, the plaintiffs filed a notice of non-suit without prejudice todismiss the defendants and all claims asserted in this action withoutprejudice.

By letter dated January 10, 2005, the Companyreceived notice of request for arbitration by PVT Networks, Inc.pursuant to the Outsource Service Provider Agreement by and between PVTNetworks, Inc. and the Company. The underlying dispute concerns arequest by PVT to be reimbursed for certain costs and fees under theOutsource Service Provider Agreement. In a mediation held on March 29,2005, the dispute was resolved via settlement whereby the Companyagreed to pay to PVT $150 in exchange for certain changes to the termsof the Outsource Service Provider Agreement.

In May 2002,putative class action complaints were filed in the United StatesDistrict Court for the Northern District of Georgia against AirGatePCS, Inc., Thomas M. Dougherty, Barbara L. Blackford, Alan B.Catherall, Credit Suisse First Boston, Lehman Brothers, UBS WarburgLLC, William Blair & Company, Thomas Wiesel Partners LLC and TDSecurities. The complaints alleged that the prospectus used inconnection with the secondary offering of AirGate stock by certainformer stockholders of iPCS, a former subsidiary of AirGate, onDecember 18, 2001 contained materially false and misleading statementsand omitted material information necessary to make the statements inthe prospectus not false and misleading. After initially denyingmotions for appointment of lead plaintiffs and lead plaintiffs'counsel, the Court granted a modified renewed motion for appointment oflead plaintiffs and lead plaintiffs' counsel on August 17, 2004.Pursuant to a consent scheduling order, lead plaintiffs filed aconsolidated amended class action complaint on October 15, 2004, namingthe same defendants (the "ConsolidatedComplaint"). 

22

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

The ConsolidatedComplaint  asserts claims under Sections 11, 12(a)(2) and 15 ofthe Securities Act of 1933 based on a number of purported false ormisleading statements in the prospectus. Plaintiffs' claims arepremised on allegations, among others, that (1) AirGate'sbusiness plan was not "fully funded,"contrary to what was asserted in the prospectus; (2) disclosures in theprospectus regarding the churn rate experienced by AirGate were untrueand/or misleading; (3) AirGate did not have strong future revenue andprofit growth prospects based on its rapid customer growth, contrary towhat was allegedly asserted in the prospectus; (4) AirGate'sallowance for doubtful accounts was understated in its fiscal 2001financial statements, and hence AirGate understated its net losses for2001 and the prospectus incorrectly stated that AirGate'sfinancial statements complied with generally accepted accountingprinciples; (5) iPCS's network build-out was not nearly complete,contrary to what was allegedly asserted in the prospectus; and (6) theiPCS merger did not significantly enhance shareholder value, contraryto alleged assertions in the prospectus.

OnDecember 30, 2004, defendants filed motions to dismiss the ConsolidatedComplaint, which are presently pending before the Court. TheCompany believes that AirGate and the other defendants have meritoriousdefenses to the claims asserted in the Consolidated Complaint andintends to defend the action vigorously. However, the ultimate outcomeof the litigation is not currently predictable, there can be noassurance that the litigation will be resolved in our favor, and anadverse outcome could adversely affect our financial condition. Wemaintain insurance coverage which could mitigate our exposure to lossin the event of an adverse outcome.

 On February23, 2003, iPCS and its two subsidiaries, iPCS Wireless, Inc. and iPCSEquipment, Inc. (the "Debtors") filedvoluntary petitions for relief under Chapter  11 of theBankruptcy Code. During the bankruptcy cases, iPCS filed a motion andobtained an order authorizing it to assume a management agreementbetween iPCS, AirGate PCS and AirGate Services Co., as amended. AirGatePCS subsequently filed an administrative expense priority claim foramounts that it contends were owed by the Debtors under the assumedmanagement agreement. The claim was for amounts that AirGate PCS mightbe liable to certain third party vendors for goods and servicesprovided by such vendors to or for the benefit of the Debtors. In theirdisclosure statement, the Debtors indicated that they might seek todefend against the claim by arguing, among other things, that AirGatePCS has failed to disgorge an alleged preferential transfer in theamount of $3,079 and that the Company, its affiliates, officers, anddirectors may be subject to claims of the Debtors for mismanagement,breach of fiduciary duties, officer and director liability, and similarclaims. The parties engaged in settlement discussions in an effort toresolve all of the disputes between them and on or about April 8, 2005,AirGate PCS and the Debtors entered into a settlement agreementresolving the claims between them. Under the settlement, the Companywill receive 8,200 shares of the common stock issued by the Debtorsunder their confirmed plan of reorganization.

The Company isinvolved in various claims and legal actions arising in the ordinarycourse of business. The ultimate disposition of these matters is notexpected to have a material adverse impact on the Company'sfinancial position, results of operations or liquidity.

16.    EFFECTS OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board("FASB") issued SFAS No. 123(R),"Share-Based Payment," which is a revision ofSFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123(R)requires all share-based payments to employees, including grants ofemployee stock options, to be valued at fair value on the date ofgrant, and to be expensed over the applicable vesting period. Pro formadisclosures of the income statement effects of share-based payments isno longer an alternative. SFAS No. 123(R) is effective for allstock-based awards granted on or after July 1, 2005. In addition,companies must also recognize compensation expense related to anyawards that are not fully vested as of July 1, 2005. Compensationexpense for the unvested awards 

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ALAMOSAHOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in thousands, except asnoted)

will be measured based on the fair value ofthe awards previously calculated in developing the pro formadisclosures in accordance with the provisions of SFAS No. 123. On April14, 2005, the SEC announced the adoption of a new rule that amends thecompliance dates for SFAS No. 123(R). The new rule allows registrantsto implement SFAS No. 123(R) at the beginning of their next fiscal yearthat begins after June 15, 2005. As a result, the Company will berequired to adopt the provisions of SFAS No. 123(R) on January 1, 2006.The Company is currently assessing the impact of adopting SFAS No.123(R) to its consolidated results of operations.

On March 31,2005, the FASB issued Interpretation No.("FIN") 47, "Accounting forConditional Asset Retirement Obligations" which is aninterpretation of SFAS No. 143, "Accounting for AssetRetirement Obligations." FIN 47 clarifies that therecognition and measurement provisions of SFAS No. 143 apply to assetretirement obligations in which the timing and/or method of settlementmay be conditional on a future event, including obligations toremediate asbestos at the end of a building's useful life andobligations to dispose of chemically-treated telephone poles at the endof their useful lives. FIN 47 is effective for fiscal years endingafter December 15, 2005. The Company is currently assessing the impactof adopting FIN 47 to its consolidated results ofoperations.

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ITEM2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION                     AND RESULTS OF OPERATIONS

Forward-Looking Statements

This quarterly report on Form10-Q includes "forward-looking statements"within the meaning of Section 27A of the Securities Act of 1933, asamended (the "Securities Act"), and Section21E of the Securities Exchange Act of 1934, as amended (the"Exchange Act"), which can be identified bythe use of forward-looking terminology such as"may," "might,""could," "would,""believe,""expect," "intend,""plan," "seek,""anticipate,""estimate,""project" or"continue" or the negative thereof or othervariations thereon or comparable terminology. All statements other thanstatements of historical fact included in this quarterly report on Form10-Q regarding our financial position and liquidity may be deemed to beforward-looking statements. These forward-looking statementsinclude:

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | forecasts of populationgrowth in our territory; |

|              |                                                                                                                    |
|--------------|--------------------------------------------------------------------------------------------------------------------|
| •  | statementsregarding our anticipated revenues, expense levels, liquidity, capitalresources and operating losses;and |

|              |                                                                                   |
|--------------|-----------------------------------------------------------------------------------|
| •  | statements regarding expectationsor projections about markets in our territories. |

Although webelieve that the expectations reflected in such forward-lookingstatements are reasonable, we can give no assurance that suchexpectations will prove to have been correct. Important factors withrespect to any such forward-looking statements, including certain risksand uncertainties that could cause actual results to differ materiallyfrom our expectations, are further disclosed in our annual report onForm 10-K for the year ended December 31, 2004 under the sections"Item 1. Business" and "Item 7.Management's Discussion and Analysis of Financial Condition andResults of Operations." Important factors that could causeactual results to differ materially from those in the forward-lookingstatements include, but are not limitedto:

|              |                                               |
|--------------|-----------------------------------------------|
| •  | our dependence on our affiliationwith Sprint; |

|              |                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the ability of Sprintto alter the terms of our affiliation agreements with it, includingfees paid or charged to us and other programrequirements; |

|              |                                   |
|--------------|-----------------------------------|
| •  | our anticipation offuture losses; |

|              |                                                                                              |
|--------------|----------------------------------------------------------------------------------------------|
| •  | our dependence onback office services, such as billing and customer care, provided bySprint; |

|              |                                                         |
|--------------|---------------------------------------------------------|
| •  | inaccuracies in financialinformation provided bySprint; |

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | potential fluctuations in ouroperating results; |

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| •  | our ability topredict future customer growth, as well as other key operatingmetrics; |

|              |                                   |
|--------------|-----------------------------------|
| •  | changes or advances intechnology; |

|              |                                                               |
|--------------|---------------------------------------------------------------|
| •  | the ability to leveragethird generation products andservices; |

|              |                                                            |
|--------------|------------------------------------------------------------|
| •  | competition in the industryand markets in which weoperate; |

|              |                           |
|--------------|---------------------------|
| •  | subscriber creditquality; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | our ability to attract andretain skilled personnel; |

|              |                                                                                            |
|--------------|--------------------------------------------------------------------------------------------|
| •  | ourpotential need for additional capital or the need for refinancingexisting indebtedness; |

|              |                                                                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | our potentialinability to expand our services and related products in the event ofsubstantial increases in demand for these services and relatedproducts; |

|              |                                                                         |
|--------------|-------------------------------------------------------------------------|
| •  | our inability to predictthe outcomes of potentially materiallitigation; |

|              |                                                                   |
|--------------|-------------------------------------------------------------------|
| •  | the potential impact ofwireless local number portability, orWLNP; |

|              |                                  |
|--------------|----------------------------------|
| •  | changes in governmentregulation; |

|              |                     |
|--------------|---------------------|
| •  | futureacquisitions; |

25

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|              |                                             |
|--------------|---------------------------------------------|
| •  | generaleconomic and business conditions;and |

|              |                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | effects of mergers andconsolidations within the telecommunications industry and unexpectedannouncements or developments from others in the telecommunicationsindustry. |

All subsequent written and oral forward-lookingstatements attributable to us or persons acting on our behalf areexpressly qualified in their entirety by the cautionary statements setforth above.

Definitions of Operating Metrics

Wediscuss the following operating metrics relating to our business inthis section:

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| •  | ARPU, or averagemonthly revenue per user, is a measure used to determine the monthlysubscriber revenue earned for subscribers based in our territory. Thismeasure is calculated by dividing subscriber revenues in ourconsolidated statement of operations by our average daily subscribersduring the period divided by the number of months in theperiod. |

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| •  | Average monthly churn is usedto measure the rate at which subscribers based in our territorydeactivate service on a voluntary or involuntary basis. We calculateaverage monthly churn based on the number of subscribers deactivatedduring the period (net of transfers out of our service area and thosewho deactivated within 30 days of activation) as a percentage of ouraverage daily subscriber base during the period divided by the numberof months during the period. |

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| •  | LicensedPOPs represent the number of residents (usually expressed in millions)in our territory in which we have an exclusive right to providewireless mobility communications services under the Sprint brand name.The number of residents located in our territory does not represent thenumber of wireless subscribers that we serve or expect to serve in ourterritory. |

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| •  | Covered POPs represent thenumber of residents (usually expressed in millions) covered by ourportion of the PCS network of Sprint in our territory. The number ofresidents covered by our network does not represent the number ofwireless subscribers that we serve or expect to serve in ourterritory. |

General

As a PCS Affiliate of Sprint, wehave the exclusive right to provide wireless mobility communicationsservices under the Sprint brand name in our licensed territory. We ownand are responsible for building, operating and managing the portion ofthe PCS network of Sprint located in our territory. We offer nationalplans designed by Sprint as well as local plans tailored to our marketdemographics. Our portion of the PCS network of Sprint is designed tooffer a seamless connection with the 100% digital PCS nationwidewireless network of Sprint. We market Sprint PCS products and servicesthrough a number of distribution outlets located in our territory,including our own retail stores, major national distributors and localthird party distributors. At March 31, 2005, we had total licensed POPsof over 23.2 million, covered POPs of approximately 19.4 million andtotal subscribers of approximately 1.4 million.

We recognizerevenues from our subscribers for the provision of wirelesstelecommunications services, proceeds from the sales of handsets andaccessories through channels controlled by us and fees from Sprint andother wireless service providers and resellers when their customersroam onto our portion of the PCS network of Sprint. Sprint retains8% of all service revenue collected from our subscribers (notincluding products sales and roaming charges billed to our subscribers)and all fees collected from other wireless service providers andresellers when their customers use our portion of the PCS network ofSprint. We report the amount retained by Sprint as an operatingexpense. In addition, Sprint bills our subscribers for taxes, handsetinsurance, equipment and Universal Service Fund charges and othersurcharges which we do not record. Sprint collects these amounts fromthe subscribers and remits them to the appropriate tax authority.

As part of our affiliation agreements with Sprint, we havecontracted with Sprint to provide back office services such as customeractivation, handset logistics, billing, customer care and networkmonitoring services. We initially elected to delegate the performanceof these services to Sprint to take 

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advantage of their economies of scale, toaccelerate our build-out and market launches and to lower our initialcapital requirements. We continue to contract with Sprint for theseservices today and are obligated to continue using Sprint to providethese services through December 31, 2006. The cost for these servicesis primarily on a per-subscriber or per-transaction basis and isrecorded as an operating expense.

Critical AccountingPolicies

The fundamental objective of financial reporting is toprovide useful information that allows a reader to comprehend thebusiness activities of an entity. To aid in that understanding, we haveidentified our "critical accountingpolicies." These policies have the potential to have amore significant impact on our consolidated financial statements,either because of the significance of the financial statement item towhich they relate or because they require judgment and estimation dueto the uncertainty involved in measuring, at a specific point in time,events which are continuous in nature.

Accounting forBusiness Combinations – The acquisition of AirGate onFebruary 15, 2005 has been accounted for as a business combination inaccordance with the provisions of SFAS No. 141, "BusinessCombinations." Significant assumptions used in connectionwith allocating the purchase price to identifiable tangible andintangible assets and liabilities as well as unidentifiable goodwillinclude (i) the value of Alamosa Holdings common stock issued in thetransaction, (ii) the value of identifiable intangible assets includingvalue assigned to acquired subscribers and value assigned to the Sprintagreements assumed, (iii) the value of property and equipment acquired,(iv) the value of long term debt assumed and (iv) deferred income taxassets and liabilities attributable to the assets and liabilitiesacquired. The operations of the acquired company are included in theconsolidated results of operations of Alamosa Holdings, from the dateof acquisition.

Allowance for doubtful accounts –Estimates are used in determining our allowance for doubtfulaccounts and are based on our historical collection experience, currenttrends, credit policy, a percentage of our accounts receivable by agingcategory and expectations of future bad debts based on currentcollection activities. In determining the allowance, we considerhistorical write-offs of our receivables as well as historical changesin our credit policies. We also look at current trends in the creditquality of our customer base.

Revenue recognition –We record equipment revenue for the sale of handsets andaccessories to customers in our retail stores and to local resellers inour territories. We do not record equipment revenue on handsets andaccessories purchased by our customers from national resellers ordirectly from Sprint. Our customers pay an activation fee when theyinitiate service. We allocate amounts charged to customers at the pointof sale between the sale of handsets and other equipment and the saleof wireless telecommunications services in those transactions takingplace in distribution channels that we directly control. Activationfees charged in transactions outside of our directly controlleddistribution channels continue to be deferred and amortized over theaverage life of the subscriber base.

We recognize revenue fromour customers as they use the service. Additionally, we provide areduction of recorded revenue for billing adjustments and billingcorrections.

The cost of handsets sold generally exceeds theretail sales price, as it is common in our industry to subsidize theprice of handsets for competitive reasons. For handsets sold throughchannels controlled by Sprint that are activated by a subscriber in ourterritory, we reimburse Sprint for the amount of subsidy incurred bythem in connection with the sale of these handsets. This reimbursementpaid to Sprint is reflected in our selling and marketing expenses inthe consolidated statements of operations.

Accounting forgoodwill and intangible assets – We have recorded certainintangible assets in connection with acquisitions, including bothidentifiable intangibles and goodwill. Identifiable intangibles consistof the Sprint agreements and the respective subscriber bases in placeat the acquired companies at the time of acquisition. The intangibleassets related to the Sprint agreements are being amortized on astraight line basis over the remaining original term of the underlyingSprint agreements. The subscriber base intangible asset is amortized ona straight line basis over the estimated life of the acquiredsubscribers.

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Goodwill was recorded in connection withthe acquisition of AirGate in the first quarter of 2005. We account forgoodwill in accordance with the provisions of SFAS No. 142,"Goodwill and Other Intangible Assets." Inaccordance with SFAS No. 142, goodwill is tested annually forimpairment.

Long-lived asset recovery –Long-lived assets, consisting primarily of property, equipment andintangibles, comprised approximately 83 percent of our total assets atMarch 31, 2005. Changes in technology or in our intended use of theseassets may cause the estimated period of use or the value of theseassets to change. In addition, changes in general industry conditionscould cause the value of certain of these assets to change. We monitorthe appropriateness of the estimated useful lives of these assets.Whenever events or changes in circumstances indicate that the carryingamounts of these assets may not be recoverable, we review therespective assets for impairment. In performing this review, assets aregrouped according to identifiable cash flow streams and theundiscounted cash flow over the life of the asset group is compared tothe carrying value of the asset group. We have determined that we haveone asset grouping related to cash flows generated by our subscriberbase, which includes all of our assets. The life of this asset groupfor purposes of these impairment tests is assumed to be ten years.Estimates and assumptions used in both estimating the useful life andevaluating potential impairment issues require a significant amount ofjudgment.

Operating leases – Operating leases andrelated leasehold improvement costs are accounted for based on theprovisions of SFAS No. 13, "Accounting forLeases." We have a significant number of leases primarilyassociated with towers and other locations on which we install ournetwork equipment. These leases are considered operating leases and themonthly rentals are expensed as incurred while any capital expendituresassociated with preparing the site for our use are capitalized anddepreciated. These capital expenditures are depreciated over theshorter of the lease term or the economic life of the respectiveassets. Additionally, certain of these operating leases contain rentescalation provisions over the term of the respective leases. For thoseleases with escalation provisions, the periodic rental expense isrecorded on a straight line basis over the lease term.

Income taxes – We account for income taxes inaccordance with SFAS No. 109, "Accounting for IncomeTaxes." Under this method, we utilize an asset andliability approach to accounting for income taxes, wherein deferredtaxes are provided for book and tax basis differences for assets andliabilities. In the event differences exist between the book and taxbasis of our assets and liabilities that result in deferred assets, anevaluation of the probability of being able to realize the futurebenefits indicated by such assets is made. A valuation allowance isprovided for the portion of deferred tax assets for which there issufficient uncertainty regarding our ability to recognize the benefitsof those assets in future years.

On a quarterly basis, weevaluate the need for and adequacy of the valuation allowance basedupon the expected realizability of our deferred tax assets and adjustthe amount of such allowance, if necessary. The factors used to assessthe likelihood of realization are the latest forecast of future taxableincome, available tax planning strategies and the future reversal ofexisting taxable temporary differences.

Reliance on thetimeliness and accuracy of data received from Sprint – Weplace significant reliance on Sprint as a service provider in terms ofthe timeliness and accuracy of financial and statistical data relatedto customers based in our service territory that we receive on aperiodic basis from Sprint. We make significant estimates in terms ofrevenue, cost of service, selling and marketing costs and the adequacyof our allowance for uncollectible accounts based on this data wereceive from Sprint. We obtain assurance as to the accuracy of thisdata through analytic review and reliance on the service auditor reporton Sprint's internal control processes prepared by Sprint'sexternal service auditor. Inaccurate or incomplete data from Sprintcould have a material adverse effect on our results of operations andcash flow.

Consolidated Results of Operations (dollars inthousands)

For the three month period ended March 31, 2005compared to the three month period ended March  31, 2004

On February 15, 2005, we completed the acquisition AirGate PCS, Inc.This acquisition added a total of approximately 415,000 subscribers atthe time of acquisition. The acquisition was accounted for under thepurchase method of accounting such that the results of operations forthe acquired entity are included 

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in our consolidated operating results onlyfrom the date of acquisition. Accordingly, this impacts the comparisonof our results of operations for the three month period ended March 31,2005.

Subscriber growth and key performance indicators– We had total subscribers of approximately 1,395,000 atMarch 31, 2005 compared to approximately 773,000 at March 31, 2004.This growth of approximately 622,000 subscribers, or 80 percent yearover year, includes 415,000 subscribers acquired in connection with theacquisition of AirGate. Excluding acquired subscribers, subscribergrowth was approximately 207,000 subscribers, or 27 percent from March31, 2004 to March 31, 2005, and compares to 18 percent growth fromMarch 31, 2003 to March 31, 2004. The increase in growth is primarilyattributable to an increase in our distribution channels, primarily inour own Sprint retail stores and branded dealers in our territory aswell as overall growth in the wireless telecommunications industry.

Average monthly churn for the first quarter of 2005 wasapproximately 2.3 percent compared to approximately 2.4 percent for thefirst quarter of 2004. Increases in churn negatively impact ouroperations, as we incur significant up front costs in acquiringcustomers.

Service Revenues – Service revenuesconsist of revenues from our subscribers and roaming and wholesalerevenue earned when subscribers from other carriers or resellers of PCSservice use our portion of the PCS network of Sprint.

Subscriberrevenue consists of payments received from our subscribers for monthlyservice under their service plans. Subscriber revenue also includesamortization of deferred activation fees and charges for the use ofvarious features including PCS Vision, the wireless web and voiceactivated dialing. Subscriber revenues were $189,980 for the quarterended March 31, 2005 compared to $124,746 for the quarter ended March31, 2004. This increase of 52 percent was primarily due to the increasein our subscriber base discussed above. Base ARPU (which does notinclude roaming revenue) remained relatively consistent in the firstquarter of 2005 at $55, compared to $56 in the first quarter of2004.

Roaming and wholesale revenue is comprised of revenue fromSprint and other PCS subscribers based outside of our territory whoroam onto our portion of the PCS network of Sprint as well as revenuefrom resellers of PCS service whose subscribers use our portion of thePCS network of Sprint.

Roaming revenue was $55,291 for thequarter ended March 31, 2005, compared to $40,639 for the quarter endedMarch 31, 2004. This increase of 36 percent was due to a 50 percentincrease in inbound roaming minutes to 742 million for the quarterended March 31, 2005, compared to 496 million for the quarter endedMarch 31, 2004, driven primarily by additional minutes in the AirGateterritories from February 15, 2005 through March 31, 2005. Thepercentage increase in revenue was less than the percentage increase inminutes due to declining rates from carriers other than Sprint. We havea reciprocal roaming rate arrangement with Sprint pursuant to whichper-minute charges for inbound and outbound roaming related to Sprintsubscribers are identical. This rate is fixed at 5.8 cents per minuteuntil December 31, 2006. We are currently a net receiver of roamingwith Sprint, meaning that the minute volume from other Sprintsubscribers roaming onto our network is greater than the minute volumefrom our subscribers roaming onto other portions of the PCS network ofSprint. The ratio of inbound to outbound Sprint roaming minutes was1.17 to 1 for the three months ended March 31, 2005. We haveexperienced an increase in the volume of inbound roaming traffic fromPCS providers other than Sprint. This traffic is settled at ratesseparately negotiated by Sprint on our behalf with the other PCSproviders and these rates have declined in some cases during 2005compared to 2004.

Wholesale revenue was $12,886 for the quarterended March 31, 2005, compared to $2,514 for the quarter ended March31, 2004. This increase of 413 percent was due to the addition ofrevenue related to subscribers of another PCS carrier with whom Sprintentered into an agreement to allow those subscribers to use the PCSnetwork of Sprint on a wholesale basis subsequent to the quarter endedMarch 31, 2004. As a result, all minutes of use for those subscribersin their home areas as well as when roaming are on the PCS network ofSprint.

Product sales and cost of products sold –We record revenue from the sale of handsets and accessories, netof an allowance for returns, as product sales. Product sales revenueand cost of products sold are recorded for all products that are soldthrough our retail stores as well as those sold to our local indirectagents. The cost of handsets sold generally exceeds the retail salesprice as we subsidize the price of 

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handsets for competitive reasons.Sprint's handset return policy allows customers to return theirhandsets for a full refund within 14 days of purchase. When handsetsare returned to us, we may be able to reissue the handsets to customersat little additional cost to us. However, when handsets are returned toSprint for refurbishing, we may receive a credit from Sprint, which isless than the amount we originally paid for the handset.

Productsales revenue for the first quarter of 2005 was $9,615, compared to$8,791 for the first quarter of 2004. Cost of products sold for thefirst quarter of 2005 was $28,579, compared to $19,783 for the firstquarter of 2004. As such, the subsidy on handsets sold through ourretail and local indirect channels was $18,964 in the first quarter of2005 and $10,992 in the first quarter of 2004. The increase insubsidies of $7,972 in 2005 is primarily due to an increase in thenumber of activations through our retail and local indirect channels ofapproximately 21,000 subscribers and an increase in subsidiesassociated with handset upgrades of approximately $2,065.

Cost of service and operations (excluding non-cash compensation)– Cost of service and operations includes the costs ofoperating our portion of the PCS network of Sprint. These costs includeitems such as tower operating leases and maintenance as well asbackhaul costs, which are costs associated with transporting wirelesscalls across our portion of the PCS network of Sprint to anothercarrier's network. In addition, cost of service and operationsincludes outbound roaming costs, long distance charges, the fees we payto Sprint for our 8 percent affiliation fee, back office services suchas billing and customer care, as well as our provision for estimateduncollectible accounts. Expenses of $122,275 in the first quarter of2005 were approximately 42 percent higher than the $86,216 incurred inthe first quarter of 2004. The increase in expenses in the firstquarter of 2005 was due to the increased volume of traffic carried onour network due both to the increase in our subscribers, includingthose acquired from AirGate, as well as wholesale and resale customers.Total minutes of use on our network were 3.5 billion minutes in thefirst quarter of 2005 compared to 2.0 billion minutes in the firstquarter of 2004 for an increase in traffic of 75 percent includingminutes of use on the network of AirGate from the date of acquisition.The increase in costs was lower relative to the increase in traffic dueto the leverage we experience in spreading our fixed network operatingcosts over a larger volume of activity.

Selling andmarketing expenses (excluding non-cash compensation) –Selling and marketing expenses include advertising, promotion,sales commissions and expenses related to our distribution channels,including our retail store expenses. In addition, we reimburse Sprintfor the subsidy on handsets sold through national retail stores due tothe fact that these retailers purchase their handsets from Sprint. Thissubsidy is recorded as a selling and marketing expense. Total sellingand marketing expenses of $45,277 in the first quarter of 2005 were 46percent higher than the $30,993 incurred in the first quarter of 2004.The increase experienced during the three months ended March 31, 2005is attributable to an increase in variable costs resulting fromincreases in gross activations of approximately 27 percent in the firstquarter of 2005, as compared to the first quarter of 2004, as well asan increase in subsidies on handsets sold through national retailstores to existing subscribers of approximately $1,554.

General and administrative expenses (excluding non-cashcompensation) – General and administrative expenses includecorporate costs and expenses such as administration and finance.General and administrative expenses of $9,180 in the first quarter of2005 were 61 percent higher than the $5,717 incurred in the firstquarter of 2004. The increase in the first quarter of 2005 has been theresult of increased professional fees associated with regulatorycompliance as well as increased personnel and other costs associatedwith the addition of the AirGate markets.

Merger relatedexpenses – Merger related expenses in the first quarter of2005 of $1,280 includes $844 related to a fee associated with financingthat was not used and $436 related to incremental travel costsassociated with the acquisition of AirGate that are not considered partof the cost of the transaction in the purchase price allocation.

Depreciation and amortization – Depreciation andamortization includes depreciation of our property and equipment aswell as amortization of intangibles. Depreciation is calculated on thestraight-line method over the estimated useful lives of the underlyingassets and totaled $22,381 in the first quarter of 2005, which was 25percent higher than the $17,929 recorded in the first quarter of 2004.The increase in 2005 is due to the increase in depreciable costs as aresult of our capital expenditures in the last nine 

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months of 2004 and the first three months of2005, as well as depreciation on the property and equipment acquiredfrom AirGate in the first quarter of 2005.

Amortization expenserelates to identifiable intangible assets we have recorded related tothe agreements with Sprint and the customer base acquired in connectionwith purchase transactions. Amortization expense of $18,273 in thefirst quarter of 2005 was 94 percent higher than the $9,404 in thefirst quarter of 2004. The increase is primarily due to approximately$10,707 in amortization recorded in the first quarter of 2005 relatedto the identifiable intangible assets recorded in connection with theacquisition of AirGate on February 15, 2005.

(Gain) loss ondisposal of property and equipment – We recorded a gain ondisposal of property and equipment in the first quarter of 2005 of $24,compared to a loss of $306, in the first quarter of 2004. Impairmentsrecorded in 2004 primarily relate to the abandonment of certain networkequipment that had become technologically obsolete.

Non-cashcompensation – Non-cash compensation expense of $771 in thefirst quarter of 2005 was significantly higher than the $26 in thefirst quarter of 2004. The expense relates to vesting of restrictedstock that had been awarded to certain of our officers and directors.The increase in 2005 is due to the issuance of an additional 200,000shares of restricted stock to our officers in the first quarter of2005.

Income from operations – Our operatingincome for the first quarter of 2005 was $19,780, compared to $6,265for the first quarter of 2004, representing an improvement of $13,515.The improvement in operating income is primarily attributable to theleverage we have achieved in spreading our fixed costs over a largerbase of subscribers.

Loss on debt extinguishment –The loss on debt extinguishment of $13,101 recorded in the firstquarter of 2004 relates to the repayment and termination of our seniorsecured credit facility in January 2004. The loss is comprised of$12,565 in net deferred loan fees related to the terminated creditfacility plus the recognition of $536 in other comprehensive lossrelated to derivative instruments used for hedging interest rate riskon outstanding borrowings under the credit facility.

Gain onderivative instrument – The Series B Mandatorily RedeemableConvertible Preferred Stock that was issued in November 2003 containsan early call option which allows us to repurchase the preferred stockat a premium beginning in the fourth year after the shares were issued.Based on the provisions of SFAS No. 149, "Amendment ofStatement 133 on Derivative Instruments and HedgingActivities," the derivative instrument related to thisearly call option has been separated from the value of the preferredstock and recorded separately in our consolidated balance sheet.Changes in the fair value of this option are reflected in earnings eachperiod. The gain on this derivative in the first quarter of 2005 of$632 represents the net increase in the fair value of this option aftertaking into account the conversion of 30,807 shares of preferred stockduring the first quarter of 2005. The gain of $12,672 in the firstquarter of 2004 represents the net increase in the fair value of thisoption during the first quarter of 2004. Conversions in the firstquarter of 2004 consisted of only 60 shares of preferred stock.

The gain on derivative instrument for the first quarter of 2005 alsoincludes $217 associated with the decrease in the fair value ofwarrants assumed in connection with the acquisition of AirGate from thedate of acquisition through March 31, 2005. These warrants are recordedas a liability in the consolidated financial statements and changes infair value are reflected in earnings during the period.

Interest and other income – Interest and other incomerepresents amounts earned on the investment of excess cash, includingrestricted cash. Income of $1,100 in the first quarter of 2005 wassignificantly higher than the $168 earned in the first quarter of 2004.The increase in interest and other income earned in the first quarteris primarily due to the fact that during the second quarter of 2004,the Board of Directors approved a change in the Company'sinvestment policy to extend the allowable weighted average maturity ofinvestments from the 90 days allowed previously to 270 days. As aresult, excess cash has been invested in higher yieldinginstruments.

Interest expense – Interest expensefor the first quarter of 2005 and 2004 included non-cash interest of$6,358 and $6,273, respectively, related to the accretion of seniordiscount notes, the amortization of debt issuance costs and premium onthe debt assumed in connection with the acquisition of AirGate. The

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increase in total interest expense to $22,354in the first quarter of 2005 from $18,235 in the first quarter of 2004is due primarily to the addition of debt assumed in connection with theacquisition of AirGate in the first quarter of 2005.

IncomeTaxes

We account for income taxes in accordance with SFAS No.109 "Accounting for Income Taxes." As ofDecember 31, 2000, the net deferred tax asset consisted primarily oftemporary differences related to the treatment of organizational costs,unearned compensation, interest expense and net operating loss carryforwards. The net deferred tax asset was fully offset by a valuationallowance as of December 31, 2000 because there was sufficientuncertainty as to whether we would recognize the benefit of thosedeferred taxes in future periods. In connection with the acquisitionscompleted in the first quarter of 2001, we recorded significantdeferred tax liabilities due to differences in the book and tax basisof the net assets acquired, particularly intangible assets.

Thereversal of the timing differences which gave rise to these deferredtax liabilities allowed us to realize the benefit of timing differenceswhich gave rise to the deferred tax asset. As a result, we released thevaluation allowance during the second quarter of 2001. Prior to 2001,all deferred tax benefit had been fully offset by an increase in thevaluation allowance such that there was no financial statement impactwith respect to income taxes. With the reduction of the valuationallowance in 2001, we began to reflect a deferred tax benefit in ourconsolidated statement of operations. During 2003, we reinstated avaluation allowance to reflect the deferred tax assets at the amountsexpected to be realized. The valuation allowance was further increasedin 2004 to reflect the deferred tax assets at the amounts expected tobe realized. On a quarterly basis, we evaluate the need for andadequacy of the valuation allowance based on the expected realizabilityof our deferred tax assets and adjust the amount of such allowance, ifnecessary. The factors used to assess the likelihood of realization arethe latest forecast of future taxable income, available tax planningstrategies and the future reversal of existing taxable temporarydifferences.

Cash Flows

Operating activities– Operating cash flows decreased $10,883 in the firstquarter of 2005 compared to the first quarter of 2004. This decrease isprimarily due to working capital changes of negative $36,771, offset byan improvement in net loss of $12,306 and an increase in non-cashexpenses of $12,302.

Investing activities – Ourinvesting cash flows were negative $96,709 in the first quarter of2005, compared to negative $23,874 in the first quarter of 2004. Theincrease in negative cash flows of $72,835 is primarily due to $69,756in net cash paid in connection with the acquisition of AirGate in thefirst quarter of 2005.

Financing activities – Ourfinancing cash flows decreased in the first quarter of 2005 to $44 from$39,663 in the first quarter of 2004. In the first quarter of 2004, wereceived net proceeds from an offering of senior notes of approximately$242 million which were used to permanently repay $200 million inborrowings outstanding under our senior secured credit facility.

Liquidity and Capital Resources

Since inception, we havefinanced our operations through capital contributions from our owners,debt financing and proceeds generated from public offerings of ourcommon stock. The proceeds from these transactions have been used tofund the build-out of our portion of the PCS network of Sprint,subscriber acquisition costs and working capital.

While we haveincurred net losses since inception and incurred negative cash flowsfrom operating activities in the past, we generated approximately $130million and $9 million of cash flows from operating activities for theyear ended December 31, 2004 and the three months ended March 31, 2005,respectively.

As of March 31, 2005, we had $43 million of cashon hand as well as $95 million in short-term investments, which webelieve will be sufficient to fund expected capital expenditures and tocover our working capital and debt service requirements (includingdividends on preferred stock) for at least the next 12 months.

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Our future liquidity will be dependent ona number of factors influencing our projections of operating cashflows, including those related to subscriber growth, ARPU, averagemonthly churn and cost per gross addition. Should actual results differsignificantly from these assumptions, our liquidity position could beadversely affected and we could be in a position that would require usto raise additional capital, which may or may not be available on termsacceptable to us, if at all, and could have a material adverse effecton our ability to achieve our intended business objectives.

Future Trends That May Affect Operating Results, Liquidity andCapital Resources

During 2002 and 2003, we experienced overalldeclining net subscriber growth compared to previous periods. Thistrend was attributable to increased competition and slowing aggregatesubscriber growth in the wireless telecommunications industry. Althoughwe have experienced improvement in subscriber growth in 2004 and thefirst quarter of 2005, we are continuing to incur net losses as wecontinue to add subscribers, which requires a significant up-frontinvestment to acquire those subscribers. If net subscriber growth doesnot continue to improve, it will lengthen the amount of time it willtake for us to reach a sufficient number of subscribers to achieveprofitability.

We may experience a higher average monthly churnrate than we are currently anticipating. Our average monthly churn forthe first quarter of 2005 was 2.3 percent, compared to 2.3 percent forthe year ended December 31, 2004 and 2.7 percent for the year endedDecember 31, 2003. Although churn has declined over the past two years,we expect that in the near term churn could increase as a result of theimplementation of the FCC's WLNP mandate in all of our marketsduring 2004. Through the first quarter of 2005, we have not experienceda material impact to churn related to WLNP with respect to the marketsin which we operate. If average monthly churn increases over thelong-term, we would lose the cash flows attributable to those customersand have greater than projected losses.

We may incur significanthandset subsidy costs for existing customers who upgrade to a newhandset. As our customer base matures and technological advances in ourservices take place, more existing customers will begin to upgrade tonew handsets to take advantage of these services. We have limitedhistorical experience regarding the rate at which existing customersupgrade their handsets and if more customers upgrade than we arecurrently anticipating, it could have a material adverse impact on ourearnings and cash flows.

We may not realize the anticipatedbenefits of our acquisition of AirGate, which took place in February2005. If we are unable to effectively operate the territories acquiredin connection with the acquisition of AirGate, our expected synergiesand results of operations of AirGate may not be realized, which couldhave a material adverse impact on our earnings and cash flows.

We may not be able to access the credit or equity markets foradditional capital if the liquidity discussed above is not sufficientfor the cash needs of our business. We continually evaluate options foradditional sources of capital to supplement our liquidity position andmaintain maximum financial flexibility. If the need for additionalcapital arises due to our actual results differing significantly fromour business plan or for any other reason, we may be unable to raiseadditional capital.

Recently Issued AccountingPronouncements

In December 2004, the Financial AccountingStandards Board ("FASB") issued SFAS No.123(R), "Share-Based Payment," which is arevision of SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No.123(R) requires all share-based payments to employees, including grantsof employee stock options, to be valued at fair value on the date ofgrant, and to be expensed over the applicable vesting period. Pro formadisclosures of the income statement effects of share-based payments isno longer an alternative. SFAS No. 123(R) is effective for allstock-based awards granted on or after July 1, 2005. In addition,companies must also recognize compensation expense related to anyawards that are not fully vested as of July 1, 2005. Compensationexpense for the unvested awards will be measured based on the fairvalue of the awards previously calculated in developing the pro formadisclosures in accordance with the provisions of SFAS No. 123. On April14, 2005, the SEC announced the adoption of a new rule that amends thecompliance dates for SFAS No. 123(R). The new rule allows registrantsto implement SFAS 

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No. 123(R) at the beginning of their nextfiscal year that begins after June 15, 2005. As a result, we will berequired to adopt the provisions of SFAS No. 123(R) on January 1, 2006.We are currently assessing the impact of adopting SFAS No. 123(R) toour consolidated results of operations.

On March 31, 2005, theFASB issued Interpretation No. ("FIN") 47,"Accounting for Conditional Asset RetirementObligations" which is an interpretation of SFAS No. 143,"Accounting for Asset RetirementObligations." FIN 47 clarifies that the recognition andmeasurement provisions of SFAS No. 143 apply to asset retirementobligations in which the timing and/or method of settlement may beconditional on a future event, including obligations to remediateasbestos at the end of a building's useful life and obligationsto dispose of chemically-treated telephone poles at the end of theiruseful lives. FIN 47 is effective for fiscal years ending afterDecember 15, 2005. We are currently assessing the impact of adoptingFIN 47 to its consolidated results of operations.

ITEM3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not engage in commodity futures trading activities and do notenter into derivative financial instrument transactions for trading orother speculative purposes. We also do not engage in transactions inforeign currencies that could expose us to market risk.

General hedging policies – We have entered intointerest rate swap and collar agreements to manage our exposure tointerest rate changes in the past. We seek to minimize counterpartycredit risk through stringent credit approval and review processes, theselection of only the most creditworthy counterparties, continualreview and monitoring of all counterparties, and through legal reviewof contracts. We also control exposure to market risk by regularlymonitoring changes in interest rate positions under normal and stressconditions to ensure that they do not exceed established limits. Ourderivative transactions are used for hedging purposes only and complywith Board-approved policies. Senior management receives frequentstatus updates of all outstanding derivative positions. As of March 31,2005, we had no hedging instruments outstanding.

Interestrate risk management – Our interest rate risk managementprogram focuses on minimizing exposure to interest rate movements bysetting an optimal mixture of floating and fixed-rate debt. We utilizeinterest rate swaps and collars to adjust our risk profile relative toany floating rate debt. We have $175,000 in floating rate debtoutstanding at March 31, 2005 as a result of our acquisition of AirGatein the first quarter of 2005.

The following table presents theestimated future outstanding long-term debt at the end of each year andfuture required annual principal payments for each year then endedassociated with the senior discount notes, senior notes and capitalleases based on our projected level of long-termindebtedness:

34

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|                                  |  |                         |         |         |  |        |         |         |  |        |         |            |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------|--|-------------------------|---------|---------|--|--------|---------|---------|--|--------|---------|------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                             |  | YearsEnding December31, |
|                             |  | 2005                    |         | 2006    |  | 2007   |         | 2008    |  | 2009   |         | Thereafter |
|                             |  | (Dollars InMillions)    |
| Fixed RateInstruments            |  |                    |    |    |  |   |    |    |  |   |    |       |  |   |    |    |  |   |    |    |  |   |    |    |
| 12 7/8%senior discount notes (1) |  | $                       | 6       |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | — |    |
| Fixed interestrate               |  |                    | 12.875  | %  |  |   | N/A     |    |  |   | N/A     |       |  |   | N/A     |    |  |   | N/A     |    |  |   | N/A     |    |
| Principalpayments                |  | $                       | 6       |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | — |    |
| 12% senior discount notes (2)    |  | $                       | 233     |    |  | $      | 233     |    |  | $      | 233     |       |  | $      | 233     |    |  | $      | — |    |  | $      | — |    |
| Fixed interestrate               |  |                    | 12.000  | %  |  |   | 12.000  | %  |  |   | 12.000  | %     |  |   | 12.000  | %  |  |   | 12.000  | %  |  |   | N/A     |    |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | 233     |    |  | $      | — |    |
| 121⁄2% seniornotes          |  | $                       | 12      |    |  | $      | 12      |    |  | $      | 12      |       |  | $      | 12      |    |  | $      | 12      |    |  | $      | — |    |
| Fixed interestrate               |  |                    | 12.500  | %  |  |   | 12.500  | %  |  |   | 12.500  | %     |  |   | 12.500  | %  |  |   | 12.500  | %  |  |   | 12.500  | %  |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | 12      |    |
| 13 5/8%seniornotes               |  | $                       | 2       |    |  | $      | 2       |    |  | $      | 2       |       |  | $      | 2       |    |  | $      | 2       |    |  | $      | — |    |
| Fixedinterestrate                |  |                    | 13.625  | %  |  |   | 13.625  | %  |  |   | 13.625  | %     |  |   | 13.625  | %  |  |   | 13.625  | %  |  |   | 13.625  | %  |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | 2       |    |
| 11% seniornotes                  |  | $                       | 251     |    |  | $      | 251     |    |  | $      | 251     |       |  | $      | 251     |    |  | $      | 251     |    |  | $      | — |    |
| Fixed interestrate               |  |                    | 11.000  | %  |  |   | 11.000  | %  |  |   | 11.000  | %     |  |   | 11.000  | %  |  |   | 11.000  | %  |  |   | 11.000  | %  |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | 251     |    |
| 81⁄2%seniornotes            |  | $                       | 250     |    |  | $      | 250     |    |  | $      | 250     |       |  | $      | 250     |    |  | $      | 250     |    |  | $      | — |    |
| Fixed interestrate               |  |                    | 8.500   | %  |  |   | 8.500   | %  |  |   | 8.500   | %     |  |   | 8.500   | %  |  |   | 8.500   | %  |  |   | 8.500   | %  |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | 250     |    |
| 9 3/8%senior notes(3)            |  | $                       | 159     |    |  | $      | 159     |    |  | $      | 159     |       |  | $      | 159     |    |  | $      | — |    |  | $      | — |    |
| Fixed interestrate               |  |                    | 9.375   | %  |  |   | 9.375   | %  |  |   | 9.375   | %     |  |   | 9.375   | %  |  |   | 9.375   | %  |  |   | N/A     |    |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | 159     |    |  | $      | — |    |
| Variable RateInstruments         |  |                    |    |    |  |   |    |    |  |   |    |       |  |   |    |    |  |   |    |    |  |   |    |    |
| Floatingrate notes (3)           |  | $                       | 175     |    |  | $      | 175     |    |  | $      | 175     |       |  | $      | 175     |    |  | $      | 175     |    |  | $      | — |    |
| Average Interest Rate(4)         |  |                    | 6.410   | %  |  |   | 6.410   | %  |  |   | 6.410   | %     |  |   | 6.410   | %  |  |   | 6.410   | %  |  |   | 6.410   | %  |
| Principalpayments                |  | $                       | — |    |  | $      | — |    |  | $      | — |       |  | $      | — |    |  | $      | — |    |  | $      | 175     |    |
| Capitalleases                    |  |
| Total minimum lease payments(5)  |  | $                       | 1.064   |    |  | $      | .888    |    |  | $      | 0.744   |       |  | $      | 0.600   |    |  | $      | 0.445   |    |  | $      | — |    |
| Average InterestRate             |  |                    | 11.000  | %  |  |   | 11.000  | %  |  |   | 11.000  | %     |  |   | 11.000  | %  |  |   | 11.000  | %  |  |   | 11.000  | %  |
| Annualleasepayments              |  | $                       | 0.196   |    |  | $      | 0.176   |    |  | $      | 0.144   |       |  | $      | 0.145   |    |  | $      | 0.154   |    |  | $      | 0.445   |    |
|                                  |

|     |                                                            |
|-----|------------------------------------------------------------|
| (1) | The12 7/8% senior discount notes were called inApril 2005. |

|           |                                                                                                                                                     |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Interest willaccrete on the 12% senior discount notes through July 31, 2005,at which time the notes will begin to require cash payments ofinterest. |

|           |                                                                                                                                           |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------|
| (3)  | The9 3/8% senior notes and the floating rate noteswere assumed in connection with the acquisition of AirGate in the firstquarter of 2005. |

|           |                                                                                                                                        |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------|
| (4)  | The Floatingrate notes bear interest at LIBOR plus 3.75%. The rate reflectedin the table is the effective rate as of December 31,2004. |

|           |                                                                                                                                          |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------|
| (5)  | These amounts represent theestimated minimum annual payments due under our estimated capital leaseobligations for the periods presented. |

Our primary marketrisk exposure relates to:

|              |                                                                  |
|--------------|------------------------------------------------------------------|
| •  | theinterest rate risk on long-term and short-term borrowings;and |

|              |                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------|
| •  | our ability to refinance oursenior discount notes and senior notes at maturity at market rates. |

ITEM 4.    CONTROLS AND PROCEDURES

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | Evaluation of Disclosure Controlsand Procedures. The Company's management with the participationof the Company's Chief Executive Officer and Chief FinancialOfficer has evaluated the effectiveness of our disclosure controls andprocedures (as such term is defined in Rules 13a-15(e) or 15d-15(e)under the Exchange Act of 1934, as amended (the "ExchangeAct")), as of the end of the period covered by thisquarterly report. Based on such evaluation, such officers haveconcluded that, as of the end of the period covered by this quarterlyreport, the Company's disclosure controls and procedures areeffective. |

|           |                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | Changes in InternalControl Over Financial Reporting. There have not been any changes inour internal controls over financial reporting (as such term is definedin Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during thefiscal quarter to which this report relates that have materiallyaffected, or are reasonably likely to materially affect, our internalcontrols over financial reporting. |

35

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We place reliance on Sprint to adequatelydesign its internal controls with respect to the processes establishedto provide financial information and other information to us and theother PCS Affiliates of Sprint. To address this issue, Sprint engagesits independent auditors to perform a periodic evaluation of thesecontrols and to provide a "Report on Controls Placed inOperation and Tests of Operating Effectiveness forAffiliates" under guidance provided in Statement ofAuditing Standards No. 70. This report is provided to ussemi-annually.

PART II – OTHER INFORMATION

ITEM1.    LEGAL PROCEEDINGS.

See Part I, Item 1, Note 15 underthe caption "Commitments and Contingencies –Litigation" for a description of legal proceedings.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OFPROCEEDS.

On March 16, 2005, we completed a private exchangetransaction pursuant to which a holder of Series B Preferred Stockdelivered to us 30,807 shares of Series B Preferred Stock in exchangefor 2,323,754 newly issued shares of Alamosa Holdings common stock. Thecommon stock issued in this transaction was issued in reliance onSection 3(a)(9) of the Securities Act.

ITEM 3.    DEFAULTSUPON SENIOR SECURITIES.

None.

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

At a special meetingof stockholders held on February 15, 2005, the stockholders voted on aproposal to approve the issuance of shares of common stock, par value$0.01 per share, of Alamosa Holdings, Inc. pursuant to the Agreementand Plan of Merger, dated as of December 7, 2004, by and among AlamosaHoldings, Inc., A-Co. Merger Sub, Inc. and AirGate PCS, Inc. Theresults of that vote are asfollows:

|                                |  |         |         |         |  |        |         |        |  |        |        |        |  |        |        |        |  |  |
|--------------------------------|--|---------|---------|---------|--|--------|---------|--------|--|--------|--------|--------|--|--------|--------|--------|--|--|
| **Commonstockshareholders**    |  |
| For                            |  | Against |         | Abstain |  |
| 79,992,408                     |  |    | 271,314 |    |  |   | 246,644 |   |  |
|                           |  |    |    |    |  |   |    |   |  |   |   |   |  |   |   |   |
| **Preferredstockshareholders** |  |
| For                            |  | Against |         | Abstain |  |
| 82,352                         |  |    | — |    |  |   | — |   |  |
|                                |

ITEM5.    OTHER INFORMATION.

None.

ITEM6.    EXHIBITS.

See the Exhibit Index following the signaturepage hereto for a list of the exhibits filed pursuant to Item 601 ofRegulation S-K.

36

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SIGNATURES

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

|  | ALAMOSA HOLDINGS, INC. (Registrant) |
|--|-------------------------------------|

|  | /s/ David E.Sharbutt                                   DavidE. Sharbutt Chairman of the Board of Directors and ChiefExecutive Officer (Principal Executive Officer) |
|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | /s/ Kendall W.Cowan                                   KendallW. Cowan Chief Financial Officer (Principal Financial andAccounting Officer) |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

37

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EXHIBITINDEX

|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  |  |
|---------------|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| EXHIBITNUMBER |  | EXHIBITTITLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.1           |  | Amended and Restated Certificateof Incorporation of Alamosa Holdings, Inc., filed as Exhibit 1.1 to theRegistration Statement on Form 8-A, dated February 14, 2001 of AlamosaHoldings, Inc. (SEC File No. 000-32357), which exhibit is incorporatedherein by reference.                                                                                                                                                                                                                              |
| 3.2           |  | Amended andRestated Bylaws of Alamosa Holdings, Inc., filed as Exhibit 1.2 to theRegistration Statement on Form 8-A, dated February 14, 2001 of AlamosaHoldings, Inc. (SEC File No. 000-32357), which exhibit is incorporatedherein by reference.                                                                                                                                                                                                                                                    |
| 3.3           |  | Certificate of theDesignations, Powers, Preferences and Rights of Series B ConvertiblePreferred Stock, filed as Exhibit 3.1 to Form 10-Q of Alamosa Holdings,Inc. (SEC File No. 001-16793) for the quarterly period ended September30, 2003, which exhibit is incorporated herein byreference.                                                                                                                                                                                                       |
| 3.4           |  | Certificate of theDesignations, Powers, Preferences and Rights of Series C ConvertiblePreferred Stock, filed as Exhibit 3.2 to Form 10-Q of Alamosa Holdings,Inc. (SEC File No. 001-16793) for the quarterly period ended September30, 2003, which exhibit is incorporated herein byreference.                                                                                                                                                                                                       |
| 4.1           |  | First Supplemental Indenturefor 9 3/8% Senior Subordinated Secured Notes due 2009, dated asof January 25, 2005, by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.2 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 001-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference.            |
| 4.2           |  | Second Supplemental Indenturefor 9 3/8% Senior Subordinated Secured Notes due 2009, dated asof February 15, 2005 by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.3 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 001-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference.           |
| 4.3           |  | First Supplemental Indenturefor First Priority Senior Secured Floating Rate Notes due 2011, datedas of January 25, 2005, by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.5 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 001-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference.   |
| 4.4           |  | Second Supplemental Indenturefor First Priority Senior Secured Floating Rate Notes due 2011, datedas of February 15, 2005, by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.6 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 001-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference. |
| 10.1+         |  | EmploymentAgreement, dated as of January 1, 2005, by and between AlamosaHoldings, Inc. and David E. Sharbutt, filed as Exhibit 10.1 to thecurrent report on Form 8-K of Alamosa Holdings, Inc. (SEC File No.001-16793), dated December 30, 2004, which exhibit is incorporatedherein by reference.                                                                                                                                                                                                   |
|               |

38

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|               |  |                                                                                                                                                                                                                                                                                                 |  |  |  |  |
|---------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| EXHIBITNUMBER |  | EXHIBITTITLE                                                                                                                                                                                                                                                                                    |
| 10.2+         |  | EmploymentAgreement, dated as of January 1, 2005, by and between AlamosaHoldings, Inc. and Kendall Cowan, filed as Exhibit 10.2 to the currentreport on Form 8-K of Alamosa Holdings, Inc. (SEC File No. 001-16793),dated December 30, 2004, which exhibit is incorporated herein byreference.  |
| 10.3+         |  | Form ofExecutive Stock Option Agreement under Alamosa's Amended andRestated 1999 Long Term Incentive Plan, filed as Exhibit 10.3 to thecurrent report on Form 8-K of Alamosa Holdings, Inc. (SEC File No.001-16793), dated December 30, 2004, which exhibit is incorporatedherein by reference. |
| 10.4+         |  | Formof Restricted Stock Agreement under Alamosa's Amended andRestated 1999 Long Term Incentive Plan, filed as Exhibit 10.4 to thecurrent report on Form 8-K of Alamosa Holdings, Inc. (SEC File No.001-16793), dated December 30, 2004, which exhibit is incorporatedherein byreference.        |
| 10.5+         |  | EmploymentAgreement, dated as of January 1, 2005, by and between Alamosa andMargaret Z. Couch, filed as Exhibit 10.1 to the current report on Form8-K of Alamosa Holdings, Inc. (SEC File No. 001-16793), dated January6, 2005, which exhibit is incorporated herein byreference.               |
| 10.6+         |  | EmploymentAgreement, dated as of January 1, 2005, by and between Alamosa andAnthony Sabatino, filed as Exhibit 10.2 to the current report on Form8-K of Alamosa Holdings, Inc. (SEC File No. 001-16793), dated January6, 2005, which exhibit is incorporated herein byreference.                |
| 10.7+         |  | EmploymentAgreement, dated as of January 1, 2005, by and between Alamosa and LoydI. Rinehart, filed as Exhibit 10.3 to the current report on Form 8-K ofAlamosa Holdings, Inc. (SEC File No. 001-16793), dated January 6, 2005,which exhibit is incorporated herein byreference.                |
| 10.8+         |  | EmploymentAgreement, dated as of January 1, 2005, by and between Alamosa andSteven Richardson, filed as Exhibit 10.4 to the current report on Form8-K of Alamosa Holdings, Inc. (SEC File No. 001-16793), dated January6, 2005, which exhibit is incorporated herein byreference.               |
| 31.1 *        |  | Certification of CEOPursuant to Section 302 of the Sarbanes-Oxley Act of2002.                                                                                                                                                                                                                   |
| 31.2 *        |  | Certification of CFO Pursuantto Section 302 of the Sarbanes-Oxley Act of2002.                                                                                                                                                                                                                   |
| 32.1 *        |  | Certification of CEO Pursuantto 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002.                                                                                                                                                                    |
| 32.2*         |  | Certification of CFO Pursuant to 18 U.S.C. Section 1350, asadopted Pursuant to Section 906 of the Sarbanes-Oxley Act of2002.                                                                                                                                                                    |
|               |

|  |
|--|
|  |  |
|  |

|   |                                                       |
|---|-------------------------------------------------------|
| + | Exhibit isa management contract or compensatory plan. |

|   |                           |
|---|---------------------------|
| * | Exhibit is filedherewith. |

39

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