##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007

or



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

For the transition period from  to
.

Commission File Number: 000-51798



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NTELOS Holdings Corp.

(Exact name of registrant as specified in its charter)



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|                                                              |  |                                     
|------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                      |  | 36-4573125                          
|(State or other jurisdictionof incorporation or organization) |  | (I.R.S. Employer Identification No.)

401 Spring Lane, Suite 300, PO Box 1990, Waynesboro, Virginia 22980

(Address of principal executive offices) (Zip Code)

(540) 946-3500

(Registrants telephone number, including area
code)



---

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

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ̈Yes    x  No

There were 42,019,476 shares of
the registrants common stock outstanding as of the close of business on July 31, 2007.



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##### Table of Contents

NTELOS HOLDINGS CORP.

QUARTERLY REPORT ON FORM 10-Q

JUNE 30, 2007

INDEX



|                               |  |                                                                                                           |  |      
|------------------------------ |  | --------------------------------------------------------------------------------------------------------- |  | -----
|PART I  FINANCIAL INFORMATION |  |                                                                                                          
|                               |  |                                                                                                          
|Item 1.                        |  | Financial Statements                                                                                      |  |      
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006                           |  | 1-2  
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2007 and 2006 |  | 3    
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006           |  | 4    
|                               |  |                                                                                                          
|                               |  | Notes to Condensed Consolidated Financial Statements                                                      |  | 5-14 
|                               |  |                                                                                                          
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                     |  | 15-28
|                               |  |                                                                                                          
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                |  | 28-29
|                               |  |                                                                                                          
|Item 4.                        |  | Controls and Procedures                                                                                   |  | 29-30
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                          
|                               |  |                                                                                                          
|Item 1.                        |  | Legal Proceedings                                                                                         |  | 30   
|                               |  |                                                                                                          
|Item 1A.                       |  | Risk Factors                                                                                              |  | 30   
|                               |  |                                                                                                          
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                       |  | 30   
|                               |  |                                                                                                          
|Item 5.                        |  | Other Information                                                                                         |  | 31   
|                               |  |                                                                                                          
|Item 6.                        |  | Exhibits                                                                                                  |  | 31   
|                               | 
|Signatures                     |  | 32                                                                                                       
|                               | 
|Certifications                 |  |                                                                                                          



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##### Table of Contents

Part I  FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

Condensed Consolidated Balance Sheets

NTELOS Holdings Corp.

(Unaudited)



|                                                                              |  |               |         |                   |   |        
|----------------------------------------------------------------------------- |  | ------------- | ------- | ----------------- | - | -------
|(In thousands)                                                                |  | June 30, 2007 |         | December 31, 2006
|Assets                                                                        |  |               |         |                   |   |        
|                                                                              |  |              
|Current Assets                                                                |  |               |         |                   |   |        
|Cash and cash equivalents                                                     |  | $             | 57,536  |                   | $ | 44,180 
|Accounts receivable, net of allowance of $11,036 ($11,412 in 2006)            |  |               | 41,534  |                   |   | 38,396 
|Inventories and supplies                                                      |  |               | 7,238   |                   |   | 5,471  
|Other receivables and deposits                                                |  |               | 3,870   |                   |   | 3,777  
|Prepaid expenses and other                                                    |  |               | 8,105   |                   |   | 6,562  
|                                                                              |  |               |         |                   |   |        
|                                                                              |  |               | 118,283 |                   |   | 98,386 
|                                                                              |  |               |         |                   |   |        
|Securities and Investments                                                    |  |               |         |                   |   |        
|Interest rate swap                                                            |  |               | 2,491   |                   |   | 3,874  
|Securities and investments                                                    |  |               | 395     |                   |   | 294    
|                                                                              |  |               |         |                   |   |        
|                                                                              |  |               | 2,886   |                   |   | 4,168  
|                                                                              |  |               |         |                   |   |        
|Property, Plant and Equipment                                                 |  |               |         |                   |   |        
|Land and buildings                                                            |  |               | 37,089  |                   |   | 36,736 
|Network plant and equipment                                                   |  |               | 423,934 |                   |   | 402,393
|Furniture, fixtures and other equipment                                       |  |               | 40,540  |                   |   | 38,312 
|                                                                              |  |               |         |                   |   |        
|Total in service                                                              |  |               | 501,563 |                   |   | 477,441
|Under construction                                                            |  |               | 24,938  |                   |   | 12,370 
|                                                                              |  |               |         |                   |   |        
|                                                                              |  |               | 526,501 |                   |   | 489,811
|Less accumulated depreciation                                                 |  |               | 145,012 |                   |   | 113,039
|                                                                              |  |               |         |                   |   |        
|                                                                              |  |               | 381,489 |                   |   | 376,772
|                                                                              |  |               |         |                   |   |        
|Other Assets                                                                  |  |               |         |                   |   |        
|Goodwill                                                                      |  |               | 144,074 |                   |   | 151,976
|Franchise rights                                                              |  |               | 32,000  |                   |   | 32,000 
|Other intangibles, less accumulated amortization of $30,773 ($23,671 in 2006) |  |               | 92,277  |                   |   | 99,379 
|Radio spectrum licenses in service                                            |  |               | 114,102 |                   |   | 114,102
|Radio spectrum licenses not in service                                        |  |               | 18,282  |                   |   | 18,250 
|Other radio spectrum licenses                                                 |  |               | 1,344   |                   |   | 1,344  
|Deferred charges                                                              |  |               | 4,842   |                   |   | 4,470  
|                                                                              |  |               |         |                   |   |        
|                                                                              |  |               | 406,921 |                   |   | 421,521
|                                                                              |  |               |         |                   |   |        
|                                                                              |  | $             | 909,579 |                   | $ | 900,847
|                                                                              |  |               |         |                   |   |        

See accompanying Notes to Condensed Consolidated Financial Statements.



1



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##### Table of Contents

Condensed Consolidated Balance Sheets

NTELOS Holdings Corp.

(Unaudited)



|                                                                                                                 |  |               |         |                   |   |         |  
|---------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ----------------- | - | ------- | -
|(In thousands, except par value per share amounts)                                                               |  | June 30, 2007 |         | December 31, 2006 |  
|Liabilities and Stockholders Equity                                                                             |  |               |         |                   |   |         |  
|                                                                                                                 |  |              
|Current Liabilities                                                                                              |  |               |         |                   |   |         |  
|Current portion of long-term debt                                                                                |  | $             | 6,818   |                   | $ | 13,152  |  
|Accounts payable                                                                                                 |  |               | 26,995  |                   |   | 25,209  |  
|Dividends payable                                                                                                |  |               | 6,303   |                   |   |        |  
|Advance billings and customer deposits                                                                           |  |               | 17,799  |                   |   | 16,709  |  
|Accrued payroll                                                                                                  |  |               | 6,719   |                   |   | 10,021  |  
|Accrued interest                                                                                                 |  |               | 149     |                   |   | 305     |  
|Deferred revenue                                                                                                 |  |               | 521     |                   |   | 683     |  
|Income tax payable                                                                                               |  |               | 943     |                   |   |        |  
|Accrued operating taxes                                                                                          |  |               | 4,199   |                   |   | 3,584   |  
|Other accrued liabilities                                                                                        |  |               | 2,911   |                   |   | 3,749   |  
|                                                                                                                 |  |               |         |                   |   |         |  
|                                                                                                                 |  |               | 73,357  |                   |   | 73,412  |  
|                                                                                                                 |  |               |         |                   |   |         |  
|Long-term Liabilities                                                                                            |  |               |         |                   |   |         |  
|Long-term debt                                                                                                   |  |               | 610,350 |                   |   | 613,371 |  
|Other long-term liabilities:                                                                                     |  |               |         |                   |   |         |  
|Retirement benefits                                                                                              |  |               | 28,858  |                   |   | 33,062  |  
|Deferred income taxes                                                                                            |  |               | 4,472   |                   |   | 7,799   |  
|Long-term deferred liabilities                                                                                   |  |               | 18,283  |                   |   | 17,986  |  
|Income tax payable                                                                                               |  |               | 3,187   |                   |   | 2,576   |  
|Class A common stock deposit                                                                                     |  |               | 219     |                   |   | 419     |  
|                                                                                                                 |  |               |         |                   |   |         |  
|                                                                                                                 |  |               | 665,369 |                   |   | 675,213 |  
|                                                                                                                 |  |               |         |                   |   |         |  
|Minority Interests                                                                                               |  |               | 453     |                   |   | 457     |  
|                                                                                                                 |  |               |         |                   |   |         |  
|Commitments and Contingencies                                                                                    |  |               |         |                   |   |         |  
|                                                                                                                 |  |              
|Stockholders Equity                                                                                             |  |               |         |                   |   |         |  
|Preferred Stock, par value $.01 per share, authorized 100 shares, none issued                                    |  |               |        |                   |   |        |  
|Common stock, par value $.01 per share, authorized 55,000 shares; 42,018 issued and outstanding (41,965 in 2006) |  |               | 160,054 |                   |   | 157,376 |  
|Retained earnings (accumulated deficit)                                                                          |  |               | 9,870   |                   |   | (6,087  | )
|Accumulated other comprehensive income                                                                           |  |               | 476     |                   |   | 476     |  
|                                                                                                                 |  |               |         |                   |   |         |  
|                                                                                                                 |  |               | 170,400 |                   |   | 151,765 |  
|                                                                                                                 |  |               |         |                   |   |         |  
|                                                                                                                 |  | $             | 909,579 |                   | $ | 900,847 |  
|                                                                                                                 |  |               |         |                   |   |         |  

See accompanying Notes to Condensed Consolidated Financial Statements.



2



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##### Table of Contents

Condensed Consolidated Statements of Operations

NTELOS Holdings Corp.

(Unaudited)



|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ------------------------------ | - | ------- | ---------------------------- |  | - | ---------------------------- | - |  | - | ------- | -
|(In thousands except per share amounts)                                                                                                                                                                                                |  | Three MonthsEndedJune 30, 2007 |         |   | Three MonthsEndedJune 30, 2006 |   |         | Six MonthsEndedJune 30, 2007 |  |   | Six MonthsEndedJune 30, 2006 |  
|Operating Revenues                                                                                                                                                                                                                     |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Wireless communications                                                                                                                                                                                                                |  | $                              | 93,493  |   |                                | $ | 79,588  |                              |  | $ | 185,085                      |   |  | $ | 157,163 |  
|Wireline communications                                                                                                                                                                                                                |  |                                | 30,306  |   |                                |   | 28,924  |                              |  |   | 60,091                       |   |  |   | 57,428  |  
|Other communication services                                                                                                                                                                                                           |  |                                | 171     |   |                                |   | 227     |                              |  |   | 369                          |   |  |   | 415     |  
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|                                                                                                                                                                                                                                       |  |                                | 123,970 |   |                                |   | 108,739 |                              |  |   | 245,545                      |   |  |   | 215,006 |  
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Operating Expenses                                                                                                                                                                                                                     |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Cost of wireless sales (exclusive of items shown separately below)                                                                                                                                                                     |  |                                | 18,609  |   |                                |   | 16,964  |                              |  |   | 37,718                       |   |  |   | 32,763  |  
|Maintenance and support (inclusive of non-cash compensation expense of $103 and $196 for the three and six months ended June 30, 2007,
respectively and $83 and $923 for the three and six months ended June 30, 2006, respectively)   |  |                                | 21,312  |   |                                |   | 18,813  |                              |  |   | 41,550                       |   |  |   | 38,110  |  
|Customer operations (inclusive of non-cash compensation expense of $162 and $302 for the three and six months ended June 30, 2007,
respectively and $123 and $1,194 for the three and six months ended June 30, 2006, respectively)    |  |                                | 26,242  |   |                                |   | 24,533  |                              |  |   | 51,860                       |   |  |   | 48,904  |  
|Corporate operations (inclusive of non-cash compensation expense of $831 and $1,617 for the three and six months ended June 30, 2007,
respectively and $718 and $9,263 for the three and six months ended June 30, 2006, respectively) |  |                                | 7,865   |   |                                |   | 6,604   |                              |  |   | 16,008                       |   |  |   | 21,464  |  
|Depreciation and amortization                                                                                                                                                                                                          |  |                                | 20,579  |   |                                |   | 21,345  |                              |  |   | 40,678                       |   |  |   | 41,992  |  
|Accretion of asset retirement obligations                                                                                                                                                                                              |  |                                | 217     |   |                                |   | 230     |                              |  |   | 392                          |   |  |   | 427     |  
|Termination of advisory agreements                                                                                                                                                                                                     |  |                                |        |   |                                |   |        |                              |  |   |                             |   |  |   | 12,941  |  
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|                                                                                                                                                                                                                                       |  |                                | 94,824  |   |                                |   | 88,489  |                              |  |   | 188,206                      |   |  |   | 196,601 |  
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Operating Income                                                                                                                                                                                                                       |  |                                | 29,146  |   |                                |   | 20,250  |                              |  |   | 57,339                       |   |  |   | 18,405  |  
|                                                                                                                                                                                                                                       |  |                                |         |  
|Other Income (Expenses)                                                                                                                                                                                                                |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Interest expense                                                                                                                                                                                                                       |  |                                | (10,671 | ) |                                |   | (21,149 | )                            |  |   | (21,701                      | ) |  |   | (37,895 | )
|(Loss) gain on interest rate swap                                                                                                                                                                                                      |  |                                | (455    | ) |                                |   | 1,005   |                              |  |   | (1,383                       | ) |  |   | 2,943   |  
|Other income                                                                                                                                                                                                                           |  |                                | 759     |   |                                |   | 774     |                              |  |   | 1,501                        |   |  |   | 3,718   |  
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|                                                                                                                                                                                                                                       |  |                                | (10,367 | ) |                                |   | (19,370 | )                            |  |   | (21,583                      | ) |  |   | (31,234 | )
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|                                                                                                                                                                                                                                       |  |                                | 18,779  |   |                                |   | 880     |                              |  |   | 35,756                       |   |  |   | (12,829 | )
|Income Tax Expense                                                                                                                                                                                                                     |  |                                | 7,958   |   |                                |   | 627     |                              |  |   | 15,180                       |   |  |   | 4,237   |  
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|                                                                                                                                                                                                                                       |  |                                | 10,821  |   |                                |   | 253     |                              |  |   | 20,576                       |   |  |   | (17,066 | )
|Minority Interests in Losses (Earnings) of Subsidiaries                                                                                                                                                                                |  |                                |        |   |                                |   | (15     | )                            |  |   | 4                            |   |  |   | (18     | )
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Net Income (Loss)                                                                                                                                                                                                                      |  |                                | 10,821  |   |                                |   | 238     |                              |  |   | 20,580                       |   |  |   | (17,084 | )
|Dividend Distribution Preference on Class B Shares                                                                                                                                                                                     |  |                                |        |   |                                |   | (30,000 | )                            |  |   |                             |   |  |   | (30,000 | )
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Income (Loss) Applicable to Common Shares                                                                                                                                                                                              |  | $                              | 10,821  |   |                                | $ | (29,762 | )                            |  | $ | 20,580                       |   |  | $ | (47,084 | )
|                                                                                                                                                                                                                                       |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Basic and Diluted Earnings (Loss) per Common Share:                                                                                                                                                                                    |  |                                |         |   |                                |   |         |                              |  |   |                              |   |  |   |         |  
|Income (Loss) per share  basic                                                                                                                                                                                                        |  | $                              | 0.26    |   |                                | $ | (0.72   | )                            |  | $ | 0.50                         |   |  | $ | (1.26   | )
|Income (Loss) per share  diluted                                                                                                                                                                                                      |  | $                              | 0.26    |   |                                | $ | (0.72   | )                            |  | $ | 0.49                         |   |  | $ | (1.26   | )
|Average shares outstanding  basic                                                                                                                                                                                                     |  |                                | 41,464  |   |                                |   | 41,081  |                              |  |   | 41,325                       |   |  |   | 37,297  |  
|Average shares outstanding  diluted                                                                                                                                                                                                   |  |                                | 42,171  |   |                                |   | 41,081  |                              |  |   | 41,998                       |   |  |   | 37,297  |  
|Cash dividends declared per share  common stock                                                                                                                                                                                       |  | $                              |        |   |                                | $ |        |                              |  | $ | 0.15                         |   |  | $ |        |  

See accompanying Notes to Condensed Consolidated Financial Statements.



3



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##### Table of Contents

Condensed Consolidated Statements of Cash Flows

NTELOS Holdings Corp.

(Unaudited)



|                                                                                         |  |                              |         |   |                              |   |          |  
|---------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---------------------------- | - | -------- | -
|(In thousands)                                                                           |  | Six MonthsEndedJune 30, 2007 |         |   | Six MonthsEndedJune 30, 2006 |  
|Cash flows from operating activities                                                     |  |                              |         |   |                              |   |          |  
|Net income (loss)                                                                        |  | $                            | 20,580  |   |                              | $ | (17,084  | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                              |         |   |                              |   |          |  
|Gain on sale of investment                                                               |  |                              |        |   |                              |   | (1,723   | )
|Depreciation                                                                             |  |                              | 33,576  |   |                              |   | 34,892   |  
|Amortization                                                                             |  |                              | 7,102   |   |                              |   | 7,100    |  
|Accretion of asset retirement obligations                                                |  |                              | 392     |   |                              |   | 427      |  
|Deferred income taxes                                                                    |  |                              | 6,985   |   |                              |   | 4,232    |  
|Loss (gain) on interest rate swap instrument                                             |  |                              | 1,383   |   |                              |   | (2,943   | )
|Interest paid-in-kind on the floating rate notes                                         |  |                              |        |   |                              |   | 677      |  
|Prepayment penalty from early debt repayment recorded in interest expense                |  |                              |        |   |                              |   | 2,250    |  
|Common stock and stock options non-cash compensation expense                             |  |                              | 2,115   |   |                              |   | 11,380   |  
|Retirement benefits and other                                                            |  |                              | 1,776   |   |                              |   | 2,002    |  
|Amortization and write-off of loan origination costs and debt discount                   |  |                              | 154     |   |                              |   | 6,679    |  
|Changes in assets and liabilities from operations:                                       |  |                              |         |   |                              |   |          |  
|(Increase) decrease in accounts receivable, net                                          |  |                              | (3,138  | ) |                              |   | 453      |  
|(Increase) decrease in inventories and supplies                                          |  |                              | (1,767  | ) |                              |   | 47       |  
|Increase in other current assets                                                         |  |                              | (1,636  | ) |                              |   | (830     | )
|Changes in income taxes                                                                  |  |                              | 1,007   |   |                              |   | (702     | )
|Increase (decrease) in accounts payable                                                  |  |                              | 1,786   |   |                              |   | (8,738   | )
|Decrease in other current liabilities                                                    |  |                              | (2,261  | ) |                              |   | (4,750   | )
|Retirement benefit contributions and distributions                                       |  |                              | (6,477  | ) |                              |   | (6,766   | )
|                                                                                         |  |                              |         |   |                              |   |          |  
|Net cash provided by operating activities                                                |  |                              | 61,577  |   |                              |   | 26,603   |  
|                                                                                         |  |                              |         |   |                              |   |          |  
|Cash flows from investing activities                                                     |  |                              |         |   |                              |   |          |  
|Purchases of property, plant and equipment                                               |  |                              | (38,259 | ) |                              |   | (43,248  | )
|Proceeds from sale of investments                                                        |  |                              |        |   |                              |   | 4,572    |  
|Other                                                                                    |  |                              | (19     | ) |                              |   |         |  
|                                                                                         |  |                              |         |   |                              |   |          |  
|Net cash used in investing activities                                                    |  |                              | (38,278 | ) |                              |   | (38,676  | )
|                                                                                         |  |                              |         |   |                              |   |          |  
|Cash flows from financing activities                                                     |  |                              |         |   |                              |   |          |  
|Proceeds from initial public offering of common stock, net                               |  |                              |        |   |                              |   | 170,535  |  
|Proceeds from issuance of long-term debt                                                 |  |                              |        |   |                              |   | 235,000  |  
|Repayment of high yield notes                                                            |  |                              |        |   |                              |   | (139,257 | )
|Loan repayment and prepayment penalty associated with early debt repayment               |  |                              |        |   |                              |   | (227,250 | )
|Repayments on senior secured term loans                                                  |  |                              | (9,321  | ) |                              |   | (2,588   | )
|Payment of dividend distribution preference to Class B stockholders                      |  |                              |        |   |                              |   | (30,000  | )
|Payments under other debt instruments                                                    |  |                              |        |   |                              |   | (12      | )
|Debt issuance costs                                                                      |  |                              | (951    | ) |                              |   | (761     | )
|Other                                                                                    |  |                              | 329     |   |                              |   | 2        |  
|                                                                                         |  |                              |         |   |                              |   |          |  
|Net cash (used in) provided by financing activities                                      |  |                              | (9,943  | ) |                              |   | 5,669    |  
|                                                                                         |  |                              |         |   |                              |   |          |  
|Increase (decrease) in cash and cash equivalents                                         |  |                              | 13,356  |   |                              |   | (6,404   | )
|Cash and cash equivalents:                                                               |  |                              |         |   |                              |   |          |  
|Beginning of period                                                                      |  |                              | 44,180  |   |                              |   | 28,134   |  
|                                                                                         |  |                              |         |   |                              |   |          |  
|End of period                                                                            |  | $                            | 57,536  |   |                              | $ | 21,730   |  
|                                                                                         |  |                              |         |   |                              |   |          |  

See accompanying Notes to Condensed Consolidated Financial Statements.



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##### Table of Contents

Notes to Condensed Consolidated Financial Statements

NTELOS Holdings Corp.

Note 1. Organization

NTELOS Holdings Corp. (hereafter referred to as
Holdings Corp. or the Company), through NTELOS Inc. and its subsidiaries, is an integrated communications provider that offers a broad range of products and services to businesses, telecommunications carriers and residential
customers in Virginia, West Virginia and surrounding states. The Companys primary services are wireless digital personal communications services (PCS), local and long distance telephone services, high capacity network services and
broadband Internet access (such as DSL and dedicated access). Holdings Corp. does not have any independent operations.

Holdings Corp. was formed in
January 2005 by Citigroup Venture Capital Equity Partners, L.P. and certain of its affiliates, collectively CVC, and Quadrangle Capital Partners LP and certain of its affiliates, collectively Quadrangle, for the purpose of
acquiring NTELOS Inc. On January 18, 2005, Holdings Corp. entered into an agreement with NTELOS Inc. and certain of its shareholders to acquire the common stock of NTELOS Inc., making an initial investment on February 24, 2005. On
May 2, 2005, the Company acquired all of NTELOS Inc.s remaining common shares, warrants and vested options by means of a merger at which time NTELOS Inc. became a wholly-owned subsidiary of Holdings Corp.

On April 4, 2007, in a secondary offering of our common stock, CVC and Quadrangle sold an aggregate of 12,650,000 shares, priced at $18.25 per share. This resulted
in CVCs and Quadrangles combined ownership declining from approximately 58% to approximately 27%. The Company did not receive any proceeds from the offering and the Companys total shares outstanding did not change as a result of
this offering. All direct costs of this offering, which were primarily legal, printing and accounting fees related to the preparation of the registration statement, which totaled $0.6 million, were charged to corporate operations expense.

During the first quarter of 2006, Holdings Corp. completed an initial public offering (the IPO) of 15,375,000 shares of its common stock at a
price of $12.00 per share. The Company received proceeds from the offering of approximately $172.5 million, net of $12.0 million of underwriting fees. The Company incurred other closing costs associated with this transaction totaling $2.7 million.
The Company used approximately $12.9 million of the net proceeds to terminate advisory agreements with CVC Management LLC and Quadrangle Advisors LLC, affiliates of CVC and Quadrangle, and $143.9 million to redeem its Floating Rate Senior Notes in
full (including unpaid accrued interest of $4.6 million) on April 15, 2006. The remaining proceeds, combined with available cash, were used to pay a $30 million dividend on the Companys Class B common stock on June 6, 2006. All Class
B common stock was subsequently converted to common stock by the end of 2006.

Note 2. Significant Accounting Policies

In the Companys opinion, the accompanying unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2007 and
2006 contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 2007, and the results of operations and cash flows for all periods presented on the respective
financial statements included herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying Condensed Consolidated Balance Sheet as of December 31,
2006 has been derived from the audited financial statements included in Part II, Item 8 of the Companys Annual Report on Form 10-K for the year ended December 31, 2006.

Accounting Estimates

The preparation of consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.



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##### Table of Contents

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, NTELOS Inc. and all of its wholly-owned subsidiaries and those limited liability corporations where NTELOS Inc., as managing member, exercises control. All
significant intercompany accounts and transactions have been eliminated.

Goodwill and Intangible Assets

Goodwill, franchise rights and radio spectrum licenses are considered indefinite-lived intangible assets. Indefinite-lived intangible assets are not subject to
amortization but are instead tested for impairment annually or more frequently if an event indicates that the asset might be impaired. The Company assesses the recoverability of indefinite-lived assets annually on October 1 and whenever adverse
events or changes in circumstances indicate that impairment may have occurred. At June 30, 2007, no impairment indicators existed that would trigger impairment testing prior to the scheduled annual testing date of October 1.

The following table presents the activity in goodwill for the six months ended June 30, 2007:



|                                                  |  |      |         |  
|------------------------------------------------- |  | ---- | ------- | -
|(In thousands)                                    |  | 2007 |        
|Goodwill, beginning of period                     |  | $    | 151,976 |  
|Pre-acquisition deferred tax adjustments (Note 9) |  |      | (7,902  | )
|                                                  |  |      |         |  
|Goodwill, end of period                           |  | $    | 144,074 |  
|                                                  |  |      |         |  

Intangibles with a finite life are classified as other intangibles on the condensed consolidated balance sheets.
At June 30, 2007 and December 31, 2006, other intangibles were comprised of the following:



|                       |  |                |  |             |         |                         |   |             |  |                         |         |  |   |       
|---------------------- |  | -------------- |  | ----------- | ------- | ----------------------- | - | ----------- |  | ----------------------- | ------- |  | - | ------
|                       |  |                |  | 2007        |         | 2006                   
|(Dollars in thousands) |  | Estimated Life |  | GrossAmount |         | AccumulatedAmortization |   | GrossAmount |  | AccumulatedAmortization
|Customer relationships |  | 3 to 15 yrs.   |  | $           | 113,400 |                         | $ | 29,376      |  | $                       | 113,400 |  | $ | 22,597
|Trademarks             |  | 15 yrs.        |  | $           | 9,650   |                         | $ | 1,397       |  | $                       | 9,650   |  | $ | 1,074 

The Company amortizes its definite-lived intangible assets using the straight-line method. Amortization expense
for each of the three month periods ended June 30, 2007 and 2006 was $3.6 million and amortization expense for each of the six month periods ended June 30, 2007 and 2006 was $7.1 million. Amortization expense for the remainder of 2007 and
the next five years is as follows:



|                  |  |                       |        |            |   |       |  |   |       
|----------------- |  | --------------------- | ------ | ---------- | - | ----- |  | - | ------
|(In thousands)    |  | CustomerRelationships |        | Trademarks |   | Total
|Remainder of 2007 |  | $                     | 6,780  |            | $ | 322   |  | $ | 7,102 
|2008              |  |                       | 12,847 |            |   | 645   |  |   | 13,492
|2009              |  |                       | 12,491 |            |   | 645   |  |   | 13,136
|2010              |  |                       | 12,491 |            |   | 645   |  |   | 13,136
|2011              |  |                       | 12,491 |            |   | 645   |  |   | 13,136
|2012              |  |                       | 8,977  |            |   | 645   |  |   | 9,622 



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##### Table of Contents

Pension Benefits and Other Postretirement Benefits

For the three and six months ended June 30, 2007 and 2006, the components of the Companys net periodic benefit cost for the Defined Benefit Pension Plan were as follows:



|                               |  |                                |      |   |                                |   |      |                              |  |   |                              |   |  |   |        |  
|------------------------------ |  | ------------------------------ | ---- | - | ------------------------------ | - | ---- | ---------------------------- |  | - | ---------------------------- | - |  | - | ------ | -
|(In thousands)                 |  | Three MonthsEndedJune 30, 2007 |      |   | Three MonthsEndedJune 30, 2006 |   |      | Six MonthsEndedJune 30, 2007 |  |   | Six MonthsEndedJune 30, 2006 |  
|Service cost                   |  | $                              | 699  |   |                                | $ | 721  |                              |  | $ | 1,398                        |   |  | $ | 1,441  |  
|Interest cost                  |  |                                | 685  |   |                                |   | 624  |                              |  |   | 1,369                        |   |  |   | 1,249  |  
|Expected return on plan assets |  |                                | (749 | ) |                                |   | (630 | )                            |  |   | (1,497                       | ) |  |   | (1,260 | )
|                               |  |                                |      |   |                                |   |      |                              |  |   |                              |   |  |   |        |  
|Net periodic benefit cost      |  | $                              | 635  |   |                                | $ | 715  |                              |  | $ | 1,270                        |   |  | $ | 1,430  |  
|                               |  |                                |      |   |                                |   |      |                              |  |   |                              |   |  |   |        |  

For the three and six months ended June 30, 2007 and 2006, the components of the Companys net periodic
benefit cost for the Other Postretirement Benefit Plan were as follows:



|                              |  |                                |     |                                |   |                              |  |                               |     |  |   |    
|----------------------------- |  | ------------------------------ | --- | ------------------------------ | - | ---------------------------- |  | ----------------------------- | --- |  | - | ---
|(In thousands)                |  | Three MonthsEndedJune 30, 2007 |     | Three MonthsEndedJune 30, 2006 |   | Six MonthsEndedJune 30, 2007 |  | Six MonthsEnded June 30, 2006
|Service cost                  |  | $                              | 35  |                                | $ | 41                           |  | $                             | 70  |  | $ | 82 
|Interest cost                 |  |                                | 157 |                                |   | 168                          |  |                               | 314 |  |   | 335
|Recognized net actuarial loss |  |                                |    |                                |   | 22                           |  |                               |    |  |   | 44 
|                              |  |                                |     |                                |   |                              |  |                               |     |  |   |    
|Net periodic benefit cost     |  | $                              | 192 |                                | $ | 231                          |  | $                             | 384 |  | $ | 461
|                              |  |                                |     |                                |   |                              |  |                               |     |  |   |    

The total expense recognized for the Companys nonqualified pension plans for the three months ended June 30,
2007 and 2006 is $0.3 million for both periods and $0.6 million and $0.5 million for the six months ended June 30, 2007 and 2006, respectively.

Note 3.
Disclosures About Segments of an Enterprise and Related Information

The Company manages its business segments with separate management focus and
infrastructures.

The Company has one customer that accounted for 22.2% and 21.7% of its revenues for the three and six months ended June 30, 2007,
respectively, and 20.0% and 19.7% of its revenues for the three and six months ended June 30, 2006, respectively. Revenue from this customer was derived from a wireless PCS wholesale contract and RLEC and Competitive wireline segments
network access.

Summarized financial information concerning the Companys reportable segments is shown in the following table. On the condensed
consolidated statement of operations, the wireless communications revenue caption is exclusively comprised of the wireless PCS segment and the wireline communications revenue caption is comprised of the rural telephone company, or RLEC, and the
Competitive wireline segments.



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##### Table of Contents

|                                                 |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|------------------------------------------------ |  | ----------- | ------- | ---- | - | ------------------- |  | ----- | ------- |  | ----- | ------- | - |  | - | -------
|(In thousands)                                   |  | WirelessPCS |         | RLEC |   | CompetitiveWireline |  | Other |         |  | Total
|For the three months ended June 30, 2007         |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|Operating revenues                               |  | $           | 93,493  |      | $ | 15,460              |  | $     | 14,846  |  | $     | 171     |   |  | $ | 123,970
|Operating income (loss)                          |  |             | 21,902  |      |   | 7,571               |  |       | 1,890   |  |       | (2,217  | ) |  |   | 29,146 
|Depreciation and amortization                    |  |             | 13,897  |      |   | 3,519               |  |       | 3,146   |  |       | 17      |   |  |   | 20,579 
|Accretion of asset retirement obligations        |  |             | 196     |      |   | 4                   |  |       | 15      |  |       | 2       |   |  |   | 217    
|Non-cash compensation charges                    |  |             |        |      |   |                    |  |       |        |  |       | 1,096   |   |  |   | 1,096  
|Secondary offering costs                         |  |             |        |      |   |                    |  |       |        |  |       | 66      |   |  |   | 66     
|                                                 |  |             |         |      |  
|As of and for the six months ended June 30, 2007 |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|Operating revenues                               |  | $           | 185,085 |      | $ | 30,839              |  | $     | 29,252  |  | $     | 369     |   |  | $ | 245,545
|Operating income (loss)                          |  |             | 43,046  |      |   | 15,376              |  |       | 3,712   |  |       | (4,795  | ) |  |   | 57,339 
|Depreciation and amortization                    |  |             | 27,457  |      |   | 7,022               |  |       | 6,151   |  |       | 48      |   |  |   | 40,678 
|Accretion of asset retirement obligations        |  |             | 353     |      |   | 8                   |  |       | 27      |  |       | 4       |   |  |   | 392    
|Non-cash compensation charges                    |  |             |        |      |   |                    |  |       |        |  |       | 2,115   |   |  |   | 2,115  
|Secondary offering costs                         |  |             |        |      |   |                    |  |       |        |  |       | 566     |   |  |   | 566    
|                                                 |  |             |         |      |  
|Goodwill                                         |  |             | 91,426  |      |   | 33,348              |  |       | 19,300  |  |       |        |   |  |   | 144,074
|                                                 |  |             |         |      |  
|Total segment assets                             |  |             | 512,979 |      |   | 193,930             |  |       | 104,875 |  |       | 1,127   |   |  |   | 812,911
|Corporate assets                                 |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   | 96,668 
|                                                 |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|Total assets                                     |  |             |         |      |   |                     |  |       |         |  |       |         |   |  | $ | 909,579
|                                                 |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|                                                 |  |             |         |      |  
|For the three months ended June 30, 2006         |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|Operating revenues                               |  | $           | 79,588  |      | $ | 14,843              |  | $     | 14,081  |  | $     | 227     |   |  | $ | 108,739
|Operating income (loss)                          |  |             | 12,581  |      |   | 7,662               |  |       | 2,095   |  |       | (2,088  | ) |  |   | 20,250 
|Depreciation and amortization                    |  |             | 14,919  |      |   | 3,596               |  |       | 2,789   |  |       | 41      |   |  |   | 21,345 
|Accretion of asset retirement obligations        |  |             | 212     |      |   | 4                   |  |       | 11      |  |       | 3       |   |  |   | 230    
|Non-cash compensation charges                    |  |             |        |      |   |                    |  |       |        |  |       | 924     |   |  |   | 924    
|                                                 |  |             |         |      |  
|For the six months ended June 30, 2006           |  |             |         |      |   |                     |  |       |         |  |       |         |   |  |   |        
|Operating revenues                               |  | $           | 157,163 |      | $ | 29,563              |  | $     | 27,865  |  | $     | 415     |   |  | $ | 215,006
|Operating income (loss)                          |  |             | 26,217  |      |   | 15,376              |  |       | 3,627   |  |       | (26,815 | ) |  |   | 18,405 
|Depreciation and amortization                    |  |             | 29,056  |      |   | 7,222               |  |       | 5,632   |  |       | 82      |   |  |   | 41,992 
|Accretion of asset retirement obligations        |  |             | 392     |      |   | 7                   |  |       | 22      |  |       | 6       |   |  |   | 427    
|Termination of advisory agreements               |  |             |        |      |   |                    |  |       |        |  |       | 12,941  |   |  |   | 12,941 
|Non-cash compensation charges                    |  |             |        |      |   |                    |  |       |        |  |       | 11,380  |   |  |   | 11,380 

The Other segment is comprised of the paging operation and the communications services operations.
Additionally, certain unallocated corporate related items that do not provide direct benefit to the operating segments are included in the Other segment. For the three and six months ended June 30, 2007, total unallocated corporate



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##### Table of Contents

operating expenses were $1.0 million and $2.0 million, respectively. Additionally, the Company recorded non-cash compensation of $1.1 million and $2.1
million for the three and six months ended June 30, 2007, respectively, and $0.1 million and $0.6 million of secondary offering costs for the three and six months ended June 30, 2007, respectively, which were not allocated. For the three
and six months ended June 30, 2006, total unallocated corporate operating expenses were $1.2 million and $2.0 million, respectively. Additionally, the Company recorded $0.5 million of advisory fees in the first quarter of 2006, a fee for the
termination of the advisory agreements of $12.9 million in the first quarter of 2006, and non-cash compensation of $0.9 million and $11.4 million for the three and six months ended June 30, 2006, respectively, none of which was allocated.
Depreciation related to corporate assets is allocated to the operating segments and was $1.0 million and $2.0 million for the three and six months ended June 30, 2007, respectively, and was $0.8 million and $1.5 million for the three and six
months ended June 30, 2006, respectively.

Note 4. Long-Term Debt

As of June 30, 2007 and December 31, 2006, the Companys outstanding long-term debt consisted of the following:



|                                        |  |              |         |                  |   |        
|--------------------------------------- |  | ------------ | ------- | ---------------- | - | -------
|(In thousands)                          |  | June 30,2007 |         | December 31,2006
|First lien term loan                    |  | $            | 615,917 |                  | $ | 625,237
|Capital lease obligations               |  |              | 1,251   |                  |   | 1,286  
|                                        |  |              |         |                  |   |        
|                                        |  |              | 617,168 |                  |   | 626,523
|                                        |  |             
|Less: current portion of long-term debt |  |              | 6,818   |                  |   | 13,152 
|                                        |  |              |         |                  |   |        
|Long-term debt                          |  | $            | 610,350 |                  | $ | 613,371
|                                        |  |              |         |                  |   |        

Long-term debt, excluding capital lease obligations

On June 1, 2006, NTELOS Inc. entered into a first lien Restated and Amended Credit Agreement (the Amended Credit Agreement or First Lien Term
Loan). Borrowings under the Amended Credit Agreement amounted to $630 million, consisting of (i) $235 million of new borrowings, the proceeds of which were used to retire the prior $225 million second lien credit facility (which carried
an interest rate of 5.0% above the Eurodollar rate), (ii) the refinancing of $395 million of prior first lien borrowings and (iii) the payment of other costs associated with the borrowing, including a $2.25 million prepayment penalty on
the second lien credit facility which was included in interest expense in the second quarter of 2006. The Amended Credit Agreement also includes a $35 million first lien revolving credit facility (the Revolving Credit Facility), none of
which has been drawn upon.

The First Lien Term Loan matures in August 2011, with quarterly payments of $1.6 million through September 30, 2010, and
the remainder due in four equal quarterly installments over the year prior to maturity. The Company made a mandatory excess cash flow payment of $6.2 million on March 30, 2007 which was included in current portion of long-term debt
on the December 31, 2006 consolidated balance sheet.

On March 9, 2007, NTELOS Inc. amended its First Lien Term Loan. The principal purpose of
the amendment was to establish a restricted payment basket, initially set at $30.0 million, which can be used to make certain restricted payments, as defined under the Credit Agreement, including the ability to pay dividends, repurchase stock
or advance funds to the Company. This restricted payment basket will be increased by $6.5 million per quarter commencing with the quarter ending March 31, 2007 and will be decreased by any actual restricted payments during the quarter. The
amount of the restricted payment basket was $43.0 million as of June 30, 2007, which was subsequently reduced by the $6.3 million dividend paid on July 12, 2007. In addition, on an annual basis, the restricted payment basket will be
increased by the amount, if any, by which 50% (or, if the leverage ratio, as defined, as of the most recently ended calendar year, was less than 3.25:1:00, 75%) of the excess cash flow, as defined, for the most recently ended fiscal year, exceeds
$26.0 million. Under the amendment, a mandatory debt repayment of 50% of the excess cash flow, as defined, for the most recently ended calendar year (beginning with the year ended December 31, 2007) must be made by March 31 of the
following year, if the leverage ratio is above 3.25:1.00. If the leverage ratio exceeds 4.25:1.00, the mandatory payment increases to 75% of excess cash flow. NTELOS Inc. incurred an amendment fee and closing costs of approximately $1.0 million in
connection with this amendment which are being amortized to interest expense over the remaining life of the Amended Credit Agreement.

Amortization of the
First Lien Term Loan debt issuance costs for the six months ended June 30, 2007 was $0.2 million.



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##### Table of Contents

The aggregate maturities of long-term debt outstanding at June 30, 2007 based on the contractual terms of the
instruments are $3.5 million for the remainder of 2007, $6.7 million in 2008, $6.5 million in 2009, $153.8 million in 2010 and $446.7 million thereafter.

The Companys blended average interest rate on its long-term debt as of June 30, 2007 is 6.9%.

Note 5. Supplementary Disclosures of
Cash Flow Information

The following information is presented as supplementary disclosures for the consolidated statements of cash flows for the periods
indicated below.



|                   |  |                               |        |                               |   |       
|------------------ |  | ----------------------------- | ------ | ----------------------------- | - | ------
|(In thousands)     |  | Six Months EndedJune 30, 2007 |        | Six Months EndedJune 30, 2006
|Cash payments for: |  |                               |        |                               |   |       
|Interest           |  | $                             | 21,950 |                               | $ | 28,934
|Income taxes       |  |                               | 7,331  |                               |   | 590   

Interest payments in the above table are net of $2.0 million and $1.0 million related to net interest received on
the interest rate swap agreements for the six months ended June 30, 2007 and 2006, respectively.

During the first quarter of 2006, the Company
submitted the stock redemption agreements related to its investment in Rural Telephone Bank stock and recognized a gain of $1.7 million based on the stated liquidation value of $4.5 million. Proceeds from the redemption were received in April 2006.

Note 6. Derivatives and Hedging Activities

NTELOS
Inc. is party to an interest rate swap agreement with maturities through February 2008 and a notional amount of $312.5 million in order to manage its exposure to interest rate movements by effectively converting a portion of its long-term debt from
variable to fixed rates. Fixed interest rate payments are at a per annum rate of 4.1066%. Variable rate payments are based on three month U.S. Dollar LIBOR. The weighted average LIBOR rate applicable to this agreement was 5.36% on June 30,
2007 and December 31, 2006. The Company did not designate this swap as a cash flow hedge for accounting purposes and therefore records the changes in market value of the swap agreement as gain or loss on interest rate swap instrument for the
applicable periods.

Note 7. Stockholders Equity

On March 20, 2007, the Companys board of directors declared a quarterly dividend on its common stock in the amount of $0.15 per share (totaling $6.3 million), which was paid on July 12, 2007 to stockholders of record on
June 21, 2007.

During the first quarter of 2006, the Company completed an IPO of 15.4 million shares of its common stock. In conjunction with
the IPO, each share of our Class L common stock and Class A common stock was converted into approximately 2.15 shares of Class B common stock, or 26.5 million shares of Class B common stock, and each option to purchase Class A common
stock was converted into approximately 2.15 options to purchase common stock. Additionally, on February 13, 2006, the $6.0 million outstanding Class L share distribution preference was converted into additional Class B shares. Including this
distribution preference, the conversion ratio for the Class L shares was 2.19.

The Class B common stock was issued with a $30 million ($1.13 per share)
distribution preference which was paid on June 6, 2006. The payment of the dividend represented the payment in full of the Class B distribution preference provided for in the Companys Restated Certificate of Incorporation. By
December 31, 2006, all of the Class B shares were converted into shares of common stock on a one-for-one basis and the Class B common stock instrument was retired. As a result, the Companys Restated Certificate of Incorporation has been
amended so as to effect a reduction in the authorized number of shares of the Company by the elimination of the Class B common stock.



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In connection with the IPO, 50% of the repurchase rights expired related to a majority of the Class A common stock
and substantially all of the options became 25% vested on that date. The repurchase rights continued related to the remaining 50% of the original Class A instruments that were converted to common stock, with half expiring on May 2, 2007.
Accordingly, approximately 389,000 shares vested, resulting in a $0.2 million reclassification from class A common stock deposit to common stock. The remaining repurchase rights expire in May 2008.

As a result of the acceleration in the expiration of the repurchase rights and option vesting, coupled with the continued increase in these instruments fair value up to
the IPO price, the Company recorded a $9.9 million non-cash compensation charge related to the former Class A shares and options on February 13, 2006. Non-cash compensation charges after the IPO related to these instruments were determined
on the IPO date and are being recognized over the remaining period for which the repurchase rights relate or the options vest. Total charges for non-cash compensation (including charges relating to options granted in 2005, 2006 and 2007, as
applicable) were $1.1 million and $2.1 million for the three and six months ended June 30, 2007 and $0.9 million and $11.4 million for the three and six months ended June 30, 2006. Future charges for non-cash compensation related to
instruments outstanding at June 30, 2007 for the remainder of 2007 and the years 2008 through 2011 are estimated to be $2.2 million, $1.9 million, $0.8 million, $0.5 million and $0.1 million, respectively.

The common shares for which the repurchase rights continue have the same conditions related to termination of an employee as did the converted Class A shares. Until
such time as the repurchase rights expire, the unvested portion of the common shares continues to be classified as a long-term liability. The Company and/or, if approved by the board of directors, the holders of the former Class B shares have the
right and option to repurchase within 90 days of the termination date (on a pro-rata basis) the unvested portion of the employees former Class B shares at adjusted cost price (as defined in the Companys Amended and Restated Shareholders
Agreement entered into in connection with the IPO).

The computations of basic and diluted earnings per share for the three and six months ended
June 30, 2007 and 2006 are as follows:



|                                                                                        |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  
|--------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ---------------- | - | ------- | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                                                                        |  | Three Months Ended |        |   | Six Months Ended |  
|(In thousands)                                                                          |  | June 30,2007       |        |   | June 30,2006     |   |         | June 30,2007 |  |   | June 30,2006 |  
|Numerator:                                                                              |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Income (loss) applicable to common shares for earnings-per-share computation            |  | $                  | 10,821 |   |                  | $ | (29,762 | )            |  | $ | 20,580       |   |  | $ | (47,084 | )
|                                                                                        |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Denominator:                                                                            |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Total shares outstanding                                                                |  |                    | 42,018 |   |                  |   | 41,873  |              |  |   | 42,018       |   |  |   | 41,873  |  
|Less: unvested shares                                                                   |  |                    | (399   | ) |                  |   | (789    | )            |  |   | (399         | ) |  |   | (789    | )
|Less: effect of calculating weighted average shares                                     |  |                    | (155   | ) |                  |   | (3      | )            |  |   | (294         | ) |  |   | (3,787  | )
|                                                                                        |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Denominator for basic earnings per common shareweighted average shares outstanding     |  |                    | 41,464 |   |                  |   | 41,081  |              |  |   | 41,325       |   |  |   | 37,297  |  
|Plus: unvested shares                                                                   |  |                    | 399    |   |                  |   |        |              |  |   | 399          |   |  |   |        |  
|Plus: common stock equivalents of stock options outstanding                             |  |                    | 308    |   |                  |   |        |              |  |   | 274          |   |  |   |        |  
|                                                                                        |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Denominator for diluted earnings per common share  weighted average shares outstanding |  |                    | 42,171 |   |                  |   | 41,081  |              |  |   | 41,998       |   |  |   | 37,297  |  
|                                                                                        |  |                    |        |   |                  |   |         |              |  |   |              |   |  |   |         |  

For the three and six months ended June 30, 2006, the denominator for diluted earnings per common share is
equal to the denominator for basic earnings per common share because the addition of unvested shares or other common stock equivalents would be anti-dilutive.



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Below is a summary of the activity and status of stockholders equity as of and for the six months ended
June 30, 2007:



|                                                                                                        |  |              |  |             |         |                                      |   |        |                                     |  |                          |     |  |   |         |  
|------------------------------------------------------------------------------------------------------- |  | ------------ |  | ----------- | ------- | ------------------------------------ | - | ------ | ----------------------------------- |  | ------------------------ | --- |  | - | ------- | -
|(In thousands)                                                                                          |  | CommonShares |  | CommonStock |         | RetainedEarnings(AccumulatedDeficit) |   |        | AccumulatedOtherComprehensiveIncome |  | TotalStockholdersEquity |    
|Balance, December 31, 2006                                                                              |  | 41,965       |  | $           | 157,376 |                                      | $ | (6,087 | )                                   |  | $                        | 476 |  | $ | 151,765 |  
|Adjustment for the adoption of FASB Interpretation No. 48                                               |  |              |  |             |         |                                      |   | 1,680  |                                     |  |                          |     |  |   | 1,680   |  
|Non-cash compensation                                                                                   |  |              |  |             | 2,115   |                                      |   |        |                                     |  |                          |     |  |   | 2,115   |  
|Expiration of former Class A common stock repurchase rights                                             |  |              |  |             | 200     |                                      |   |        |                                     |  |                          |     |  |   | 200     |  
|Excess tax deduction related to non-cash compensation recorded for non-qualified stock option exercises |  |              |  |             | 193     |                                      |   |        |                                     |  |                          |     |  |   | 193     |  
|Shares issued through the Employee Stock Purchase Plan and stock options exercised                      |  | 53           |  |             | 170     |                                      |   |        |                                     |  |                          |     |  |   | 170     |  
|Cash dividends declared ($0.15 per share)                                                               |  |              |  |             |         |                                      |   | (6,303 | )                                   |  |                          |     |  |   | (6,303  | )
|Net income                                                                                              |  |              |  |             |         |                                      |   | 20,580 |                                     |  |                          |     |  |   | 20,580  |  
|                                                                                                        |  |              |  |             |         |                                      |   |        |                                     |  |                          |     |  |   |         |  
|Balance, June 30, 2007                                                                                  |  | 42,018       |  | $           | 160,054 |                                      | $ | 9,870  |                                     |  | $                        | 476 |  | $ | 170,400 |  
|                                                                                                        |  |              |  |             |         |                                      |   |        |                                     |  |                          |     |  |   |         |  

For the six months ended June 30, 2007 and 2006, comprehensive income (loss) was comprised entirely of net
income (loss) of $20.6 million and ($17.1) million, respectively.

Note 8. Stock Plans

The Company has an Equity Incentive Plan administered by the Compensation Committee of the Companys board of directors, which permits the grant of long-term incentives to employees, including stock options,
stock appreciation rights, restricted stock awards, restricted stock units and incentive awards. The maximum number of shares of common stock available for awards under the Equity Incentive Plan is 4,050,000. The Company also has a non-employee
director equity plan (the Non-Employee Director Equity Plan). The total number of shares of common stock available for grant under the Non-Employee Director Equity Plan is 400,000. These two plans are together referred to as the
Equity Incentive Plans. Awards under these plans are issuable to employees or non-employee directors as applicable.

During the quarter ended
March 31, 2007, the Company issued 323,440 options under the Equity Incentive Plan, of which 209,440 were issued to officers, and 25,800 options under the Non-Employee Director Plan. There were no options granted during the quarter ended
June 30, 2007. Fifty percent of the options issued to officers vest on the second anniversary of the grant date, with 25% vesting on each of the third and fourth anniversary dates. All other employee options vest one-fourth annually beginning
one year after the grant date and the non-employee director options cliff vest one year after the grant date. No options expired during the period.

The
summary of the activity and status of the Equity Incentive Plans for the six months ended June 30, 2007 is as follows:



|                                                       |  |        |   |  |                              |            |                       |   |       |  
|------------------------------------------------------ |  | ------ | - |  | ---------------------------- | ---------- | --------------------- | - | ----- | -
|(In thousands, except per share amounts)               |  | Shares |   |  | WeightedAverageExercisePrice |            | ExtendedExercisePrice |  
|Options outstanding at January 1, 2007                 |  | 339    |   |  | $                            | 5.26       |                       | $ | 1,786 |  
|Granted during the period                              |  | 349    |   |  |                              | 18.12      |                       |   | 6,324 |  
|Exercised during the period                            |  | (49    | ) |  |                              | 2.25       |                       |   | (110  | )
|Forfeited during the period                            |  | (4     | ) |  |                              | 10.92      |                       |   | (44   | )
|                                                       |  |        |   |  |                              |            |                       |   |       |  
|Options outstanding at June 30, 2007                   |  | 635    |   |  | $                            | 12.53      |                       | $ | 7,956 |  
|                                                       |  |        |   |  |                              |            |                       |   |       |  
|Exercisable at June 30, 2007                           |  | 110    |   |  | $                            | 4.72       |                       | $ | 519   |  
|                                                       |  |        |   |  |                              |            |                       |   |       |  
|Weighted average remaining term of exercisable options |  |        |   |  |                              | 8.21 years |                       |   |       |  



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The weighted average fair value of options granted was $7.17 per share for the six months ended June 30, 2007 and
$7.30 per share for the six months ended June 30, 2006. The intrinsic values of the options that were exercised during the six months ended June 30, 2007 and 2006 were $1.2 million and $0.1 million, respectively.

Note 9. Income Taxes

Income taxes for the six month period ended
June 30, 2007 were $15.2 million, representing the statutory tax rate applied to pre-tax income and the effects of non-deductible, non-cash stock based compensation, and non-deductible cost incurred for the secondary offering. We expect our
recurring non-deductible expenses to relate primarily to certain non-cash stock based compensation. The annual amounts of these non-cash stock based compensation charges are projected to be $3.8 million in 2007 and $1.6 million in 2008. Income taxes
for the six months ended June 30, 2006 were $4.2 million, driven by non-deductible, non-cash stock based compensation and interest cost in excess of Internal Revenue Code defined yields.

Our unused Net Operating Losses (NOLs) are subject to an annual utilization limitation of $1.6 million (prior to adjustment for realization of built-in gains
that existed as of the 2005 merger). Based on this limitation and the adjustments required for certain built-in gains realized during the five year period immediately following our May 2, 2005 merger, we expect to use NOLs of approximately
$25.1 million in 2007, $19.0 million in 2008, $9.2 million in 2009 through 2012 and $1.6 million thereafter.

During March 2007, we resolved our
uncertainty related to the interaction of the adjustment for realized built-in gains and the general carryforward provisions for unused annual NOL limits. This uncertainty existed at the time of our merger and thus we did not record a deferred tax
asset of approximately $7.9 million for the benefit of approximately $20 million of our existing NOLs. This deferred tax benefit of approximately $7.9 million was reflected as a reduction to goodwill and the increased available NOL amounts have been
included in the annual projections discussed above.

The Company adopted the provisions of FIN No. 48, Accounting for Uncertainty in Income
Taxes-an interpretation of FASB Statement 109. As a result of the implementation of FIN No. 48, the Company recognized an increase to retained earnings of approximately $1.7 million on January 1, 2007. The balance of the unrecognized
tax benefits at adoption was $3.3 million, of which $3.1 million would affect earnings if recognized. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than our accrued
position. Accordingly, additional provisions could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved. We accrue interest and penalties related to unrecognized tax benefits in interest
expense and income tax expense, respectively, all of which have been immaterial to date. None of the unrecognized benefits are expected to be recognized during the next twelve months.

With limited exception, the Company is no longer subject to U.S. federal, state or local income tax audits by taxing authorities for the years through 2002.

Note 10. Commitments and Contingencies

The Company periodically
makes claims for recovery of access charges on certain minutes of use terminated by the Company on behalf of other carriers. The Company recognizes revenue in the period that it is reliably assured of the collection of these claims, generally when
the matter is settled.

The Company is periodically involved in disputes and legal and tax proceedings and filings arising from normal business activities.
While the outcome of such matters is currently not determinable, management does not expect that the ultimate costs to resolve such matters will have a material adverse effect on the Companys consolidated financial position, results of
operations or cash flows, and believes that adequate provision for any probable losses has been made in our consolidated financial statements.

In
connection with the planned EVDO network upgrade pursuant to the terms of the Amended and Restated Resale Agreement with Sprint Spectrum L.P. (Note 11) and based on the Companys plan to upgrade substantially all of its



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current service coverage areas outside its wholesale territory, the Company expects to enter into a three year vendor agreement to purchase network
equipment. The Company expects to spend approximately $88 million under this agreement, approximately $65 million of which represents the incremental capital expenditures associated with the EVDO upgrade.

The Company had other purchase commitments relating to capital expenditures totaling $9.5 million as of June 30, 2007. All of these commitments are expected to be
satisfied during 2007.

Note 11. Subsequent Events

On
July 31, 2007, the Company entered into an Amended and Restated Resale Agreement (Agreement) with Sprint Spectrum L.P., an indirect wholly owned subsidiary of Sprint Nextel Corporation (hereinafter collectively referred to as
Sprint Nextel), which became effective as of July 1, 2007. The Agreement supersedes and replaces the original 2004 Resale Agreement, whereby the term of the original 2004 Resale Agreement has been extended, the Company has committed
to network upgrades and pricing structures have been changed, including the addition of revenue minimum guarantees.

Under the terms of the Agreement, the
Company is committed to upgrading its wireless network to Evolution-Data Optimized Revision A (EVDO) in the territory covered by the Agreement. Relative to this upgrade, the Company is required to be 95% complete by January 31, 2010 and
98% complete by January 31, 2011. Failure by the Company to achieve these deadlines will constitute an event of default and may give Sprint Nextel the right to terminate the Agreement. The Company currently expects that the upgrade will be 98%
completed by mid-year 2009.

Beginning in July 2007, the Company is guaranteed a minimum monthly revenue of $8.0 million and, upon achieving 98% completion
of the network upgrade to EVDO, the monthly minimum increases to $9.0 million. The term of the Agreement was extended four years over the 2004 Resale Agreement, to July 31, 2015, subject to automatic three-year extensions unless certain notice
provisions are exercised. The Agreement prohibits Sprint Nextel from directly or indirectly commencing construction of, contracting for or launching its own wireless communications network in the Agreement territory until 18 months prior to end of
the Agreement. The Agreement specifies a series of usage rates for various types of services. The voice rate pricing under the Agreement is fixed through July 1, 2008, at rates comparable to the rates in the 2004 Resale Agreement, but provides
for greater volume discounts in the future to provide incentives for the migration of additional traffic onto the network. Generally, the data rate pricing is lower under the Agreement compared to the rates agreed to in the 2004 Resale Agreement in
recognition of the significant growth experience in data usage and anticipated growth from the introduction of higher speed data services as a result of the network upgrade and to also provide incentives for the migration of additional traffic onto
the network.

Pricing rate structures for services were revised with voice per minute rates or pricing tiers remaining fixed through July 1, 2008,
then resetting semi-annually based on Sprint Nextels voice revenue yield. Data rates for Sprint Nextel in-market home subscribers are on a per subscriber basis. The data rate for Sprint Nextel customers that are traveling through the territory
covered by the Agreement and use the network are on a per kilobyte basis, reset quarterly beginning July 1, 2009. The Strategic Network Alliance also permits our NTELOS-branded customers to access Sprint Nextels national wireless network
at reciprocal rates as the Sprint Nextel travel rates.

Based on the aforementioned planned EVDO network upgrade, the Company is planning on disposing of
the 3G-1xRTT equipment prior to its previously planned useful life or redeploying certain of the legacy equipment to fringe areas or contiguous markets where the Company owns spectrum but currently does not provide service. Additionally, the Company
estimates that it will perform an EVDO upgrade for the assets that we intend to redeploy prior to the end of their previously planned useful life. The total net book value of the related equipment subject to early retirement is approximately $80
million. The Company estimates recording approximately $16 million of accelerated depreciation during the remainder of 2007.

On July 26, 2007, the
Board of Directors declared a quarterly cash dividend on its common stock in the amount of $0.15 per share to be paid on October 11, 2007 to stockholders of record on September 20, 2007.



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------

Any statements contained in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words
anticipates, believes, expects, intends, plans, estimates, targets, projects, should, may, will and similar words and
expressions are intended to identify forward-looking statements. These forward-looking statements are contained throughout this report, for example in Risk Factors and Managements Discussion and Analysis of Financial
Condition and Results of Operations. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks,
uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. All forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this report. Because of these risks, uncertainties and assumptions, you should not place undue reliance on
these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future
events or otherwise. You should read the following discussion of our financial condition in conjunction with our consolidated financial statements and the related notes included elsewhere in this report. The following discussion contains
forward-looking statements that involve risks and uncertainties. For additional information regarding some of these risks and uncertainties that affect our business and the industry in which we operate, please see Risk Factors in Part I,
Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2006.

Overview

We are a leading provider of wireless and wireline communications services to consumers and businesses primarily in Virginia and West Virginia under the NTELOS brand
name. Our wireless operations are composed of an NTELOS-branded retail business and a wholesale business that we operate under an exclusive contract with Sprint Spectrum L.P, which we refer to as the Strategic Network Alliance. We believe our
regional focus and contiguous service area provide us with a differentiated competitive position relative to our primary wireless competitors, all of whom are national providers.

Our wireless revenues accounted for 75% of our total revenues for the three and six month periods ended June 30, 2007 and 91% of the total revenue growth over the comparative three and six month periods in 2006.
As of June 30, 2007, our wireless retail business had approximately 391,000 NTELOS-branded subscribers, representing a 7.6% penetration of our total covered population. Additionally, as a result of significant investments that we made to our
network in 2005, 2006 and the first six months of 2007 when we added 162 new wireless cell sites as well as product, system and program initiatives recently employed in all segments, we have realized revenue growth of 17.8% for the first six months
of 2007 as compared to the first six months of 2006, with wireless subscriber revenue growth of 15.2% and wireless wholesale revenue growth of 26.1%. We have also accomplished significant wireless customer growth (11.7% from June 30, 2006 to
June 30, 2007, with 23,998 net adds in the first six months of 2007) from increases in customer additions and reductions in customer churn.

Founded
in 1897, our wireline incumbent local exchange carrier business is conducted through two subsidiaries that qualify as rural telephone companies, or RLECs, under the Telecommunications Act. These two RLECs provide wireline communications services to
residential and business customers in the western Virginia communities of Waynesboro, Covington, Clifton Forge and portions of Botetourt and Augusta counties. We also own a 2,040-mile regional fiber optic network and participate in partnerships that
connect our networks with many of the largest markets in the mid-Atlantic region. We leverage our wireline network infrastructure to offer competitive voice and data communication services in Virginia and West Virginia outside our RLEC coverage
area. Within our Competitive segment, we market and sell local and long distance, voice and data services almost exclusively to business customers through our competitive local exchange carrier, or CLEC, and Internet Service Provider, or ISP,
operation. The Wireline Competitive segment strategic products (local phone services, broadband voice and data services, and high-capacity network access and transport services) experienced revenue growth of 10.9% from the second quarter of 2006 to
the second quarter of 2007 and 11.3% from the first six months of 2006 to the first six months of 2007.

On March 20, 2007, the Board of Directors
declared a quarterly cash dividend on its common stock in the amount of $0.15 per share, which amounted to $6.3 million and was paid on July 12, 2007 to stockholders of record on June 21, 2007.



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On April 4, 2007, in a secondary offering of our common stock, CVC and Quadrangle and certain of their affiliates
sold an aggregate of 12,650,000 shares priced at $18.25 per share. This resulted in their combined ownership declining from 58% to approximately 27%. The Company did not receive any proceeds from the offering and the Companys total shares
outstanding did not change as a result of this offering. All direct costs of this offering, which were primarily legal, printing and accounting fees with outside service firms related to the preparation of the registration statement were charged to
corporate operations expense, with $0.5 million charged in the first quarter of 2007 and $0.1 million charged in the second quarter of 2007.

On
July 26, 2007, the Board of Directors declared a quarterly cash dividend on its common stock in the amount of $0.15 per share to be paid on October 11, 2007 to stockholders of record on September 20, 2007.

Effects of Being a Public Company

Following the initial public
offering in 2006, we became subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, and the other rules and regulations of the Securities and Exchange Commission, or SEC. We also are subject to various
other regulatory requirements, including the Sarbanes-Oxley Act of 2002. In addition, we are subject to the rules of The NASDAQ Global Market.

We are
working with our independent legal, accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas
include corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal
control over financial reporting.

In addition, compliance with reporting and other requirements applicable to public companies creates additional costs
for us and will require the time and attention of management. We incurred approximately $1.5 million of incremental operating expenses in 2006, our first year of being a public company. The majority of these costs are associated with increased
Director and Officer insurance costs and external consulting fees incurred to prepare for Sarbanes-Oxley Act compliance. We are required to be in compliance with section 404 of the Sarbanes-Oxley Act by December 31, 2007. At this time, we
project that the total incremental operating expenses of being a public company will be approximately $1.8 million in 2007. The incremental costs are estimates, and actual incremental expenses could be materially different from these estimates.

Other Overview Discussion

To supplement our financial
statements presented under generally accepted accounting principles, or GAAP, throughout this document we reference average monthly revenues per handset/unit in service, or ARPU, a non-GAAP measure of operating performance for which our operating
managers are responsible and upon which we evaluate their performance.

ARPU is a telecommunications industry metric that measures service revenues per
period divided by the weighted average number of handsets in service during that period. ARPU as defined below may not be similar to ARPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not
as a substitute for, the information contained in our consolidated statements of operations. We closely monitor the effects of new rate plans and service offerings on ARPU in order to determine their effectiveness. We believe ARPU provides
management useful information concerning the appeal of our rate plans and service offerings and our performance in attracting and retaining high-value customers. The table below provides a reconciliation of subscriber revenues used to calculate ARPU
to wireless communications revenues shown in the consolidated statements of operations for the three and six months ended June 30, 2007 and 2006.



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##### Table of Contents

|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|--------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                                          |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|(Dollars in thousands, other than ARPU data)              |  | 2007                       |         |   | 2006                     |   |         | 2007 |  |   | 2006     |  
|Wireless communications revenues                          |  | $                          | 93,493  |   |                          | $ | 79,588  |      |  | $ | 185,085  |   |  | $ | 157,163  |  
|Less: equipment revenues from sales to new customers      |  |                            | (2,902  | ) |                          |   | (3,795  | )    |  |   | (7,648   | ) |  |   | (7,540   | )
|Less: equipment revenues from sales to existing customers |  |                            | (1,622  | ) |                          |   | (1,207  | )    |  |   | (3,613   | ) |  |   | (2,291   | )
|Less: wholesale revenues                                  |  |                            | (24,325 | ) |                          |   | (19,175 | )    |  |   | (47,251  | ) |  |   | (37,462  | )
|Plus: other revenues and adjustments                      |  |                            | 456     |   |                          |   | 279     |      |  |   | 937      |   |  |   | 643      |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|Wireless gross subscriber revenues                        |  | $                          | 65,100  |   |                          | $ | 55,690  |      |  | $ | 127,510  |   |  | $ | 110,513  |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|Average subscribers                                       |  |                            | 386,758 |   |                          |   | 345,794 |      |  |   | 380,880  |   |  |   | 342,926  |  
|Total ARPU                                                |  | $                          | 56.11   |   |                          | $ | 53.68   |      |  | $ | 55.80    |   |  | $ | 53.71    |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|                                                          |  |                            |         |  
|Wireless gross subscriber revenues                        |  | $                          | 65,100  |   |                          | $ | 55,690  |      |  | $ | 127,510  |   |  | $ | 110,513  |  
|Less: paid in advance and prepay subscriber revenues      |  |                            | (17,774 | ) |                          |   | (12,473 | )    |  |   | (34,882  | ) |  |   | (25,168  | )
|Less: adjustments                                         |  |                            | (183    | ) |                          |   | (230    | )    |  |   | (857     | ) |  |   | (726     | )
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|Wireless gross postpay subscriber revenues                |  | $                          | 47,143  |   |                          | $ | 42,987  |      |  | $ | 91,771   |   |  | $ | 84,619   |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|Average postpay subscribers                               |  |                            | 276,637 |   |                          |   | 259,133 |      |  |   | 273,460  |   |  |   | 257,861  |  
|Postpay ARPU                                              |  | $                          | 56.80   |   |                          | $ | 55.30   |      |  | $ | 55.93    |   |  | $ | 54.69    |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|                                                          |  |                            |         |  
|Wireless gross subscriber revenues                        |  | $                          | 65,100  |   |                          | $ | 55,690  |      |  | $ | 127,510  |   |  | $ | 110,513  |  
|Less: wireless voice and other features revenues          |  |                            | (60,177 | ) |                          |   | (52,956 | )    |  |   | (118,721 | ) |  |   | (105,130 | )
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|Wireless data revenues                                    |  | $                          | 4,923   |   |                          | $ | 2,734   |      |  | $ | 8,789    |   |  | $ | 5,383    |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  
|Average subscribers                                       |  |                            | 386,758 |   |                          |   | 345,794 |      |  |   | 380,880  |   |  |   | 342,926  |  
|Total data ARPU                                           |  | $                          | 4.24    |   |                          | $ | 2.64    |      |  | $ | 3.85     |   |  | $ | 2.62     |  
|                                                          |  |                            |         |   |                          |   |         |      |  |   |          |   |  |   |          |  

Operating Revenues

Our revenues are generated from the following categories:



| |  |  | wireless PCS, consisting of retail revenues from network access, data services, equipment revenues and feature services; and wholesale revenues from the Strategic
Network Alliance and roaming from other carriers;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | wireline communications, comprised of our RLEC segment revenues, including local service, network access, toll and directory advertising, and our Competitive
segment revenues, including revenues from our key strategic products (local services, broadband voice and data services, and high-capacity network access and transport services), long distance and dial-up Internet services; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | other communications services revenues, including primarily revenues from paging and revenue from leasing excess building space.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

Operating Expenses

Our operating expenses are incurred from the
following categories:



| |  |  | cost of wireless sales, including digital PCS handset equipment costs which, in keeping with industry practice, we sell to our customers at a price below our cost,
and usage-based access charges, including long distance, roaming charges, and other direct costs incurred in accessing other telecommunications providers networks in order to provide wireless services to our end-use customers;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintenance and support expenses, including costs related to specific property, plant and equipment, as well as indirect costs such as engineering and general
administration of property, plant and equipment; leased facility expenses for connection to other carriers, cell sites and switch locations;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | customer operations expenses, including marketing, product management, product advertising, selling, billing, publication of regional telephone directories,
customer care, directory services and bad debt expenses;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | corporate operations expenses, including taxes other than income, executive, accounting, legal, purchasing, information technology, human resources and other
general and administrative expenses, including non-cash compensation expense related to the original Class A common stock and option instruments held by certain members of corporate management and secondary offering costs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | depreciation and amortization, including depreciable long-lived property, plant and equipment and amortization of intangible assets where applicable;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | accretion of asset retirement obligations, or ARO; and
| | - |  | ------------------------------------------------------



| |  |  | termination of advisory agreements.
| | - |  | -----------------------------------

Other Income
(Expenses)

Our other income (expenses) are generated (incurred) from interest expense on debt instruments, including changes in fair value of our
interest rate swap instrument, other income, which includes interest income, and gain on sale of investment.

Income Taxes

Our income tax liability or benefit and effective tax rate increases or decreases based upon changes in a number of factors, including our pre-tax income or loss, net
operating losses and related carryforwards, valuation allowances, alternative minimum tax credit carryforwards, state minimum tax assessments, gain or loss on the sale of assets and investments, write-down of assets and investments, non-deductible
expenses and other tax deductible amounts.

Minority Interests in Losses (Earnings) of Subsidiaries

Our minority interest relates to a 53.7% RLEC segment investment in a partnership that owns certain signaling equipment and provides service to a number of small RLECs
and to Verisign. We also have a 97% majority interest in the Virginia PCS Alliance L.C., or the VA Alliance, that provides PCS services to a 1.9 million populated area in central and western Virginia. The VA Alliance has incurred significant
cumulative operating losses since it initiated PCS services in 1997. Given that the total of minority member contributions and cumulative operating results are negative during all periods reported, we recognize a minority interest credit adjustment
only to the extent of capital contributions from the 3% minority owners. No such contributions were made during the six months ended June 30, 2007 and 2006. Amounts related to the RLEC segment minority interest were not material for all periods
presented.

Results of Operations

Three and six
months ended June 30, 2007 compared to three and six months ended June 30, 2006

OVERVIEW

Operating revenues increased $15.2 million, or 14.0%, from the quarter ended June 30, 2006 to the quarter ended June 30, 2007 and $30.5 million, or 14.2%, from
the six months ended June 30, 2006 to the six months ended June 30, 2007. Wireless PCS accounted for 91.3% of the three month increase and 91.4% of the six month increase, with growth occurring from subscriber revenues, wholesale revenues
and equipment sales. Wireline contributed the remaining revenue increase primarily from increases in key strategic products in the Competitive segment and minute-driven increases in access revenues within the RLEC segment, partially offset by
declines in other revenues from the Competitive segment (dial-up Internet services, switched access and reciprocal compensation).

Operating income
increased $8.9 million over the comparative quarters and $38.9 million over the comparative six month periods. Operating margin, before non-cash compensation, advisory fees and termination of advisory agreements, increased from 19.5% for the quarter
ended June 30, 2006 to 24.4% for the quarter ended June 30, 2007 and increased from 20.1% for the six months ended June 30, 2006 to 24.2% for the six months ended June 30, 2007.

Net income increased $10.6 million from $0.2 million for the quarter ended June 30, 2006 to $10.8 million for the quarter ended June 30, 2007. Net income
increased $37.7 million from a net loss of $17.1 million for the six months ended June 30, 2006 to net income of $20.6 million for the six months ended June 30, 2007. Included in net loss for



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the six months ended June 30, 2006 was a charge of $12.9 million for the termination of advisory agreements and interest expense that was $16.2 million
higher during the first six months of 2006 than the first six months of 2007, which related to interest on the Floating Rate Notes (retired in April 2006), $8.7 million of non-recurring interest expense related to the early retirement of debt and
lower interest during 2007 as a result of the refinancing transaction in June 2006. In addition, non-cash compensation charges were $9.3 million higher during the first six months of 2006 than 2007 driven by expense recognition commensurate with the
IPO. Finally, the $10.9 million six month increase in income tax expense was primarily driven by the significant change in taxable income.

OPERATING
REVENUES

The following tables identify our operating revenues on a business segment basis for the three and six months ended June 30, 2007 and 2006:



|                       |  |                            |         |      |   |            |  |   |            |   |  |       |   
|---------------------- |  | -------------------------- | ------- | ---- | - | ---------- |  | - | ---------- | - |  | ----- | --
|                       |  | Three Months EndedJune 30, |         |      |   |            |  |  
|Operating Revenues     |  | 2007                       |         | 2006 |   | $ Variance |  |   | % Variance |  
|(Dollars in thousands) |  |                            |         |      |   |            |  |   |            |   |  |       |   
|Wireless PCS           |  | $                          | 93,493  |      | $ | 79,588     |  | $ | 13,905     |   |  | 17.5  | % 
|                       |  |                            |         |      |   |            |  |   |            |   |  |       |   
|Wireline               |  |                            |         |      |   |            |  |   |            |   |  |       |   
|RLEC                   |  |                            | 15,460  |      |   | 14,843     |  |   | 617        |   |  | 4.2   | % 
|Competitive wireline   |  |                            | 14,846  |      |   | 14,081     |  |   | 765        |   |  | 5.4   | % 
|                       |  |                            |         |      |   |            |  |   |            |   |  |       |   
|Total wireline         |  |                            | 30,306  |      |   | 28,924     |  |   | 1,382      |   |  | 4.8   | % 
|                       |  |                            |         |      |   |            |  |   |            |   |  |       |   
|Other                  |  |                            | 171     |      |   | 227        |  |   | (56        | ) |  | (24.7 | %)
|                       |  |                            |         |      |   |            |  |   |            |   |  |       |   
|Total                  |  | $                          | 123,970 |      | $ | 108,739    |  | $ | 15,231     |   |  | 14.0  | % 
|                       |  |                            |         |      |   |            |  |   |            |   |  |       |   



|                       |  |                          |         |      |   |            |  |   |            |   |  |       |   
|---------------------- |  | ------------------------ | ------- | ---- | - | ---------- |  | - | ---------- | - |  | ----- | --
|                       |  | Six Months EndedJune 30, |         |      |   |            |  |  
|Operating Revenues     |  | 2007                     |         | 2006 |   | $ Variance |  |   | % Variance |  
|(Dollars in thousands) |  |                          |         |      |   |            |  |   |            |   |  |       |   
|Wireless PCS           |  | $                        | 185,085 |      | $ | 157,163    |  | $ | 27,922     |   |  | 17.8  | % 
|                       |  |                          |         |      |   |            |  |   |            |   |  |       |   
|Wireline               |  |                          |         |      |   |            |  |   |            |   |  |       |   
|RLEC                   |  |                          | 30,839  |      |   | 29,563     |  |   | 1,276      |   |  | 4.3   | % 
|Competitive wireline   |  |                          | 29,252  |      |   | 27,865     |  |   | 1,387      |   |  | 5.0   | % 
|                       |  |                          |         |      |   |            |  |   |            |   |  |       |   
|Total wireline         |  |                          | 60,091  |      |   | 57,428     |  |   | 2,663      |   |  | 4.6   | % 
|                       |  |                          |         |      |   |            |  |   |            |   |  |       |   
|Other                  |  |                          | 369     |      |   | 415        |  |   | (46        | ) |  | (11.1 | %)
|                       |  |                          |         |      |   |            |  |   |            |   |  |       |   
|Total                  |  | $                        | 245,545 |      | $ | 215,006    |  | $ | 30,539     |   |  | 14.2  | % 
|                       |  |                          |         |      |   |            |  |   |            |   |  |       |   

WIRELESS COMMUNICATIONS REVENUESWireless communications revenues increased $13.9 million from the quarter
ended June 30, 2006 to the quarter ended June 30, 2007 due to an increase in our NTELOS-branded net subscriber revenue of $9.2 million, or 16.7%, and a $5.2 million, or 26.9%, increase in wholesale and roaming revenues, offset by a $0.5
million, or 9.6%, decrease in equipment sales revenues related to postpay plan promotional pricing (which could continue). The $27.9 million increase from the six months ended June 30, 2006 to the six months ended June 30, 2007 was due to
an increase in our NTELOS-branded net subscriber revenue of $16.7 million, or 15.2%, a $9.8 million, or 26.1%, increase in wholesale and roaming revenues, and a $1.4 million, or 14.5%, increase in equipment sales revenues.

In both the three and six month comparative periods, subscriber revenues reflected subscriber growth of 11.7%, or 41,027 subscribers, from 350,168 subscribers as of
June 30, 2006 to 391,195 subscribers as of June 30, 2007.

Results for the comparative second quarters also reflect an increase in ARPU of 4.5%,
from $53.68 to $56.11 for the quarters ended June 30, 2006 and 2007, respectively. This increase in ARPU is attributable to the continued growth in data services, data packages and higher-priced product offerings. Total data ARPU was $4.24 for
the second quarter of 2007, up from $2.64 for the second quarter of 2006. Also contributing to the revenue increase was an 11.0% decrease in total subscriber churn, from 3.0% for the second quarter of 2006 (31,054 subscribers) to 2.7% for the second
quarter of 2007 (30,885 subscribers), due to network and service quality improvements and an increased take-rate of the national and other lower churn plans and other program improvements in 2007. Offsetting these increases was a decrease in
equipment sales revenue of $0.5 million, or 9.6%, from the quarter ended June 30, 2006



19



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to the quarter ended June 30, 2007. This decrease is primarily attributable to handset post pay product promotions in the second quarter of 2007 which
helped drive a 5.1% increase quarter over quarter in Postpay gross additions, which contain handset subsidies greater than Prepay gross additions.

Similarly, ARPU and churn improvements, combined with higher gross additions, drove the revenue improvement over the six month comparative periods. ARPU increased 3.9%, from $53.71 to $55.80 for the six months ended June 30, 2006 and
2007, respectively. Total data ARPU was $3.85 for the first six months of 2007, up from $2.62 for the first six months of 2006. Gross subscriber additions were 11.4% higher for the first six months of 2007, at 86,516, compared to gross subscriber
additions of 77,628 for the first six months of 2006. This increase in gross additions combined with the introduction of more feature-rich handsets sold in the 2007 period as compared to the 2006 period led to an increase in equipment sales revenue
of $1.4 million, or 14.5%, from the six months ended June 30, 2006 to the six months ended June 30, 2007. Total subscriber churn decreased 11.6%, from 3.1% for the first six months of 2006 to 2.7% for the first six months of 2007.

The increase in wholesale revenues for both the three and six month comparative periods was driven by increased voice and data usage under the Strategic
Network Alliance. Wholesale revenues grew 26.9% for the quarter, from $19.2 million for the quarter ended June 30, 2006 to $24.3 million for the quarter ended June 30, 2007. Wholesale revenues grew 26.1% year to date, from $37.5 million
for the six months ended June 30, 2006 to $47.3 million for the six months ended June 30, 2007. Our wholesale revenues are derived primarily from the voice usage by Sprint Nextel customers who live in the Strategic Network Alliance service
area (home minutes of use), those customers of Sprint Nextel who use our network for voice services while traveling through the Strategic Network Alliance service area (travel minutes of use) and data usage by Sprint Nextel
customers who live in or travel through the Strategic Network Alliance service area. In addition to volume increases experienced on existing cell sites, we have added 65 cell sites within this wholesale service area over the last six quarters,
improving existing service and extending this coverage area.

Wholesale pricing reductions under the Strategic Network Alliance went into effect on
July 1, 2006 relating to travel minutes of use and data usage in accordance with the annual pricing reset provisions of this wholesale agreement. The impact of the July 2006 pricing reductions was more than offset by increased usage. On
July 31, 2007, we entered into a revised agreement with Sprint Nextel in which we committed to an EVDO technology upgrade, an extension to the terms of the contract through July 2015, a structure for future rates and revenue minimum provisions.
Under the agreement, our wholesale revenue effective July 1, 2007 will be the greater of $8 million per month ($9 million per month once 98% of our cell sites in this wholesale area are converted to EVDO) or the revenue derived based on the
application of the voice and data pricing structures within the revised agreement. Based on our historical experience relative to volume growth and pricing resets under the agreement, we expect that per unit pricing reductions will occur over the
life of the agreement related to voice and data usage. However, we expect continued growth in voice and data usage to result in continued growth in wholesale revenue for 2007 compared to 2006.

WIRELINE COMMUNICATIONS REVENUESWireline communications revenues increased $1.4 million over the comparative quarters and increased $2.7 million over the
comparative six month periods.



| |  | RLEC Revenues.RLEC revenues, which include local service, network access, toll service, directory advertising and calling feature revenues from our RLEC
customers, increased over both the three and six month comparative periods despite a 2.9% access line decrease, with lines totaling 44,697 as of June 30, 2007 compared to 46,013 as of June 30, 2006. The revenue increases over the
comparative three and six month periods were due primarily to increases in access revenues of $0.8 million, or 8.9%, over the comparative quarters and $1.6 million, or 9.6%, over the comparative six month periods driven by increases in carrier
access minutes of 22% from the second quarter of 2006 to the second quarter of 2007 and 21% for the first six months of 2006 to the first six months of 2007 due primarily to growth in usage by wireless carriers. Our interstate access rates are
subject to a biennial reset on July 1, 2007. We expect this will result in a net revenue reduction which we anticipate will be partially offset by continued minute growth.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The access line loss noted above is reflective primarily of residential wireless substitution, second line losses and PBX displacement of Centrex lines.
These line losses, to date, do not reflect the introduction of competitive voice service offerings, such as from cable companies or CLECs, in our markets. While still uncertain, we do anticipate competitive voice service competition from Comcast in
certain of our markets to commence in late 2007 or early 2008. We have estimated that our access line losses may be between 3% and 5% in 2007, assuming cable competition does occur which would impact RLEC revenues, principally from residential
consumers.



20



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| |  | Competitive Wireline Revenues.Revenues from our key strategic products (local services, broadband voice and data services, and high-capacity network access
and transport services) in the Competitive wireline segment grew $1.1 million, or 10.9%, over the comparative quarters, offset by declines in other Competitive revenues (dial-up Internet services, switched access and reciprocal compensation).
Revenues from broadband, integrated access and Metro Ethernet services increased $0.9 million, or 32.0%, from the second quarter of 2006 to the second quarter of 2007 due primarily to customer growth of 20.3% with the broadband products,
particularly in the products with higher bandwidth. Revenues from the remaining key strategic products collectively increased $0.2 million, or 2.3%, over the comparative quarters primarily from new circuit additions with carriers and increased
customers. Dial-up revenue declined $0.3 million from continued customer erosion, with 5,447 fewer customers, or 18.0%, from 30,242 at June 30, 2006 to 24,795 at June 30, 2007.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The revenue growth over the comparative six month periods is also attributable to growth in our key strategic products, totaling $2.3 million, or 11.3%,
offset by a net decline in other Competitive revenues. Revenue from broadband, integrated access and Metro Ethernet services increased $1.9 million, or 33.2%, from the first six months of 2006 to the first six months of 2007 due to continued growth
in demand for higher bandwidth. Revenues from the remaining key strategic products collectively increased $0.4 million, or 2.5%, over the comparative quarters primarily from new circuit additions with carriers and increased customers. Dial-up
revenue declined $0.6 million, with a customer decline of 18.0% over the comparative periods. In addition, switched access and reciprocal compensation revenues declined $0.3 million due to volume reductions.

OPERATING EXPENSES

The following tables identify our operating expenses on
a business segment basis, consistent with the tables presenting operating revenues above, for the three and six months ended June 30, 2007 and 2006:



|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | ---- | - | ---------- |  | - | --------- | - |  | ----- | --
|                                                                                                                                                        |  | Three Months EndedJune 30, |        |      |   |            |  |  
|Operating Expenses                                                                                                                                      |  | 2007                       |        | 2006 |   | $ Variance |  |   | %Variance |  
|(Dollars in thousands)                                                                                                                                  |  |                            |        |      |   |            |  |   |           |   |  |       |   
|Wireless PCS                                                                                                                                            |  | $                          | 57,498 |      | $ | 51,876     |  | $ | 5,622     |   |  | 10.8  | % 
|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   
|Wireline                                                                                                                                                |  |                            |        |      |   |            |  |   |           |   |  |       |   
|RLEC                                                                                                                                                    |  |                            | 4,366  |      |   | 3,581      |  |   | 785       |   |  | 21.9  | % 
|Competitive wireline                                                                                                                                    |  |                            | 9,795  |      |   | 9,186      |  |   | 609       |   |  | 6.6   | % 
|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   
|Total wireline                                                                                                                                          |  |                            | 14,161 |      |   | 12,767     |  |   | 1,394     |   |  | 10.9  | % 
|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   
|Other                                                                                                                                                   |  |                            | 1,207  |      |   | 1,347      |  |   | (140      | ) |  | (10.4 | )%
|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   
|Operating expenses, before depreciation and amortization, accretion of asset retirement obligations, secondary offering costs and non-cash
compensation |  |                            | 72,866 |      |   | 65,990     |  |   | 6,876     |   |  | 10.4  | % 
|                                                                                                                                                        |  |                            |        |     
|Depreciation and amortization                                                                                                                           |  |                            | 20,579 |      |   | 21,345     |  |   | (766      | ) |  | (3.6  | )%
|Accretion of asset retirement obligations                                                                                                               |  |                            | 217    |      |   | 230        |  |   | (13       | ) |  | (5.7  | )%
|                                                                                                                                                        |  |                            |        |     
|Secondary offering costs                                                                                                                                |  |                            | 66     |      |   |           |  |   | 66        |   |  | N/M   |   
|Non-cash compensation                                                                                                                                   |  |                            | 1,096  |      |   | 924        |  |   | 172       |   |  | 18.6  | % 
|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   
|Total operating expenses                                                                                                                                |  | $                          | 94,824 |      | $ | 88,489     |  | $ | 6,335     |   |  | 7.2   | % 
|                                                                                                                                                        |  |                            |        |      |   |            |  |   |           |   |  |       |   



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|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | ---- | - | ---------- |  | - | --------- | - |  | ----- | --
|                                                                                                                                                                                            |  | Six Months EndedJune 30, |         |      |   |            |  |  
|Operating Expenses                                                                                                                                                                          |  | 2007                     |         | 2006 |   | $ Variance |  |   | %Variance |  
|(Dollars in thousands)                                                                                                                                                                      |  |                          |         |      |   |            |  |   |           |   |  |       |   
|Wireless PCS                                                                                                                                                                                |  | $                        | 114,229 |      | $ | 101,498    |  | $ | 12,731    |   |  | 12.5  | % 
|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   
|Wireline                                                                                                                                                                                    |  |                          |         |      |   |            |  |   |           |   |  |       |   
|RLEC                                                                                                                                                                                        |  |                          | 8,433   |      |   | 6,958      |  |   | 1,475     |   |  | 21.2  | % 
|Competitive wireline                                                                                                                                                                        |  |                          | 19,362  |      |   | 18,584     |  |   | 778       |   |  | 4.2   | % 
|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   
|Total wireline                                                                                                                                                                              |  |                          | 27,795  |      |   | 25,542     |  |   | 2,253     |   |  | 8.8   | % 
|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   
|Other                                                                                                                                                                                       |  |                          | 2,431   |      |   | 2,821      |  |   | (390      | ) |  | (13.8 | )%
|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   
|Operating expenses, before depreciation and amortization, accretion of asset retirement obligations, secondary offering costs, termination of
advisory agreements and non-cash compensation |  |                          | 144,455 |      |   | 129,861    |  |   | 14,594    |   |  | 11.2  | % 
|                                                                                                                                                                                            |  |                          |         |     
|Depreciation and amortization                                                                                                                                                               |  |                          | 40,678  |      |   | 41,992     |  |   | (1,314    | ) |  | (3.1  | )%
|Accretion of asset retirement obligations                                                                                                                                                   |  |                          | 392     |      |   | 427        |  |   | (35       | ) |  | (8.2  | )%
|                                                                                                                                                                                            |  |                          |         |     
|Secondary offering costs                                                                                                                                                                    |  |                          | 566     |      |   |           |  |   | 566       |   |  | 100   | % 
|                                                                                                                                                                                            |  |                          |         |     
|Termination of advisory agreements                                                                                                                                                          |  |                          |        |      |   | 12,941     |  |   | (12,941   | ) |  | 100   | % 
|Non-cash compensation                                                                                                                                                                       |  |                          | 2,115   |      |   | 11,380     |  |   | (9,265    | ) |  | (81.4 | )%
|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   
|Total operating expenses                                                                                                                                                                    |  | $                        | 188,206 |      | $ | 196,601    |  | $ | (8,395    | ) |  | (4.3  | )%
|                                                                                                                                                                                            |  |                          |         |      |   |            |  |   |           |   |  |       |   

OPERATING EXPENSES  The following describes our operating expenses by segment and on a basis consistent with
our financial statement presentation.

The primary drivers of the three and six month increases in our operating expenses before depreciation and
amortization, accretion of asset retirement obligations, secondary offering costs, termination of advisory agreements and non-cash compensation are described in detail by segment as follows:



| |  |  | Wireless Communications  Of the increases in wireless communications operating expenses noted in the tables above, increased cost of sales
(COS), particularly roaming COS, accounted for $1.6 million and $5.0 million of the three and six month increases, respectively. Roaming COS increased $1.3 million over the comparative three month periods and $2.7 million over the
comparative six month periods related primarily to increased sales of national plans and other plans which contain more roaming minutes, partially offset by a decline in roaming rates and in-network roaming savings related to continued cell site
expansion. The percentage of subscribers with a national plan increased from 18.1% as of June 30, 2006 to 28.9% as of June 30, 2007. Data and other features COS increased $0.3 million over the comparative quarters and $0.5 million over the
comparative six month periods consistent with increased data usage. Also increasing over both periods was access and toll COS due to volume from fixed rate plans. These costs increased $0.3 million over the comparative quarters and $0.8 million over
the comparative six month periods. The remaining increase in COS over the comparative six month periods is primarily due to an increase in equipment COS of $0.9 million due to 8,888 more wireless gross customer additions over the comparative six
month periods combined with sales of feature-rich, more expensive handsets to new customers and upgrades by existing customers.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The remaining operating expense increases in wireless communications over the three and six month comparative periods were due to increased costs of improving and maintaining our network, combined with direct and indirect costs of
operations. Specifically, cell site and repairs and maintenance expenses



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increased related to additional capacity due to the increased subscriber base, with an 8.9% increase in the number of cell sites in service from
June 30, 2006 to June 30, 2007, and network improvement. Collectively, these expenses increased $1.0 million over the comparative quarters and $1.7 million over the comparative six month periods. Also increasing over both comparative
periods were direct costs, such as customer retention, employee and agent sales commissions and other selling expenses, associated with increased wireless PCS customer additions between the comparative periods and the related increase in the
customer base. These direct costs increased $0.4 million and $2.7 million over the comparative three and six month periods, respectively. Also increasing over both periods were compensation expenses, which increased $0.5 million over the three month
comparative periods and $1.2 million over the six month comparative periods.



| |  |  | Wireline Communications  The increases in wireline operating expenses over the three and six month comparative periods noted in the tables above are
primarily attributable to increased access expense, which increased $0.8 million over the comparative quarters and $1.3 million over the comparative six month periods and accounted for 54.6% of the total three month increase and 55.7% of the total
six month increase. This increase in access expense was due primarily to supporting the growth of the strategic Wireline Competitive services, particularly broadband voice and data services, and CLEC UNE-loop rate increases. As a percent of the
related revenues, access expense declined from 31.7% to 30.7% for the six months ended June 30, 2006 and 2007, respectively, from improved network utilization. Also contributing to the increases over the comparative periods was increased
compensation expenses.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other  As noted in the tables above, operating expenses from the corporate and other communication service businesses decreased $0.1 million over the
comparative quarters and $0.4 million over the comparative six month periods. The six month decrease was due primarily to a decrease of $0.5 million in advisory fees. These costs were eliminated after the first quarterly payment in 2006 as a result
of the termination of our advisory agreements in February 2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

COST OF WIRELESS SALESCost of wireless sales increased $1.6
million, or 9.7%, over the comparative quarters and $5.0 million, or 15.1%, over the comparative six month periods. As described in the Wireless Communications segment operating expense discussion above, these increases are primarily attributable to
increased roaming COS as well as increased equipment COS for the comparative six month periods. We expect continued growth in this line item as our customer base grows, sales of national plans increase and usage of data features increases.

MAINTENANCE AND SUPPORT EXPENSESMaintenance and support expenses increased $2.5 million, or 13.3%, over the comparative quarters and $3.4 million,
or 9.0%, over the comparative six month periods. One of the primary drivers of the increases in both the three and six month comparative periods is cell site costs for wireless, as discussed above. The increase in maintenance and support is also
attributable to wireline transport and access expense as discussed above. The remaining increase for both the three and six month comparative periods is primarily attributable to increased repairs and maintenance and compensation expenses. Primarily
offsetting the increase over the six month comparative periods was a decrease in non-cash compensation of $0.7 million related to the original Class A common stock and option instruments held by certain members of operations and engineering
management.

CUSTOMER OPERATIONS EXPENSESCustomer operations expenses increased $1.7 million, or 7.0%, from the second quarter of 2006 to the second
quarter of 2007 and increased $3.0 million, or 6.0%, from the first six months of 2006 to the first six months of 2007. These increases are primarily related to the direct costs associated with increased wireless PCS customer additions between the
comparative periods and the related increase in the customer base, as discussed above. The remaining increase for both the three and six month comparative periods is primarily attributable to increased compensation expenses. The increase over the
comparative six month periods was primarily offset by a decrease in non-cash compensation expense of $0.9 million related to the original Class A common stock and option instruments held by certain members of sales, marketing and customer care
executive management. Also offsetting the six month increase was a reduction in advertising and marketing expenses of $0.3 million.

CORPORATE OPERATIONS
EXPENSESCorporate operations expenses increased $1.3 million, or 19.1%, over the comparative quarters due primarily to increases in regulatory fees, compensation expenses and other corporate expenses.



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For the six month comparative periods, corporate operations expenses decreased $5.5 million, or 25.4%. This decrease
primarily relates to a decrease of $7.6 million of non-cash compensation charges and a decrease in advisory fee charges of $0.5 million. Offsetting these decreases was an increase of $0.6 million relating to legal, accounting and other costs related
to the secondary stock offering discussed in the overview section above and an increase in compensation expenses.

DEPRECIATION AND AMORTIZATION
EXPENSESDepreciation and amortization expenses decreased $0.8 million, or 3.6%, from the quarter ended June 30, 2006 to the quarter ended June 30, 2007 and $1.3 million, or 3.1%, over the six month comparative periods. For the three
and six month comparative periods, $0.4 million and $1.0 million, respectively, related to accelerated depreciation related to the 3G-1xRTT network upgrade which commenced in 2005 and was completed during the second quarter of 2006. The remaining
decreases of $0.4 million and $0.3 million over the three and six month periods, respectively, related to assets becoming fully depreciated, retired or whose life was extended (and future depreciation reduced) as they continued in service beyond the
original expected life.

As discussed in the overview to this section, we entered into a new contract with Sprint Nextel which included a requirement for a
technological upgrade of the network from 3G-1xRTT to EVDO technology by 2009 in the Sprint overlap territory. Additionally, management is planning an EVDO upgrade in our other coverage areas. This will involve a significant acceleration of
depreciation on the 3G-1xRTT assets planned for disposal as a result of this upgrade. Some of the equipment is planned for redeployment to fringe areas of the network. However, given the upgrade to EVDO, these assets are planned for retirement
earlier than originally anticipated. Based on this network upgrade plan, the company expects to record approximately $16 million of additional depreciation in the second half of 2007.

ACCRETION OF ASSET RETIREMENT OBLIGATIONSAccretion of asset retirement obligations is recorded in order to accrete the estimated asset retirement obligation over the life of the related asset up to its future
expected settlement cost. This charge remained flat over the comparative quarters at $0.2 million and was flat over the six month comparative periods at $0.4 million.

TERMINATION OF ADVISORY AGREEMENTSOn February 13, 2006, commensurate with its IPO, the Company terminated the advisory agreements, paying a $12.9 million termination fee on that date.

OTHER INCOME (EXPENSES)

Interest expense on debt instruments decreased
$10.5 million, or 49.5%, over the comparative quarters and $16.2 million, or 42.7%, over the comparative six month periods due primarily to the repayment of the Floating Rate Notes in April 2006. Prior to their repayment, interest on the Floating
Rate Notes was $0.7 million and $5.3 million for the three and six months ended June 30, 2007, respectively. In the second quarter of 2006, we incurred $5.1 million and $1.3 million of interest charges related to the write-off of the high yield
Floating Rate Notes deferred issuance costs and discount, respectively, when the Notes were repaid and a $2.3 million prepayment penalty recorded as an interest charge related to the second lien term loan repayment.

In addition to the factors causing the decrease in interest expense noted above, interest on our senior credit facilities decreased due to the reduced interest rates
associated with the debt refinancing in June 2006 where the $225 million second lien credit facility, which bore interest at 5.0% above the Eurodollar rate, was refinanced with a new first lien credit facility bearing interest at 2.25% above the
Eurodollar rate. The blended rate improvement realized from this refinancing is approximately 0.94%, or a $6.2 million annual savings at the current level of senior debt.

Our swap agreement is not designated as an interest rate hedge instrument for accounting purposes and therefore the changes in the fair value of the swap agreement are recorded as a charge or credit to (loss) gain on
interest rate swap. The fair value of the current interest rate swap agreement of $2.5 million at June 30, 2007 has been recorded as interest rate swap on the condensed consolidated balance sheets. The interest rate swap agreement
matures in February 2008.



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Other income primarily relates to interest income from cash and cash equivalents. Other income totaled $0.8 million for
the quarter ended June 30, 2007, equivalent to the prior year comparable quarter, and $1.5 million for the six months ended June 30, 2007, $2.2 million lower than the prior year comparable six month period due to lower cash balances after
our IPO proceeds were used to repay obligations in the second quarter of 2006. We also recorded a gain on sale of investment totaling $1.7 million during the six months ended June 30, 2006 related to the redemption of the RTB stock for which we
received the cash in April 2006.

INCOME TAXES

Income tax
expense for the six months ended June 30, 2007 was $15.2 million, which is a 42.5% effective tax rate, approximately 3.6% above the effective statutory rate due primarily to the effects of non-deductible, non-cash stock based compensation and
non-deductible secondary offering transaction costs. We expect our recurring non-deductible expenses to relate primarily to certain non-cash stock based compensation. The annual amounts of these charges are projected to be approximately $3.8 million
in 2007 and $1.6 million in 2008. Income taxes for the six months ended June 30, 2006 were $4.2 million, representing primarily the effects of non-deductible transaction costs, non-deductible/non-cash stock based compensation, interest cost in
excess of Internal Revenue Code defined yields and revenue based state minimum taxes.

Income tax expense for the three months ended June 30, 2007 was
$8.0 million, which is a 42.4% effective tax rate, approximately 3.5% above the effective statutory rate due primarily to the effects of non-deductible, non-cash stock based compensation and non-deductible secondary offering transaction costs.
Income taxes for the three months ended June 30, 2006 were $0.6 million, driven by non-deductible transaction costs, non-deductible/non-cash stock based compensation, interest cost in excess of Internal Revenue Code defined yields and revenue
based state minimum taxes.

Our unused Net Operating Losses (NOLs) are subject to an annual utilization limitation of $1.6 million (prior to
adjustment for realization of built-in gains that existed as of our recent merger). Based on this limitation and the adjustments required for certain built-in gains realized during the five year period immediately following our May 2, 2005
merger, we expect to use NOLs of approximately $25.1 million in 2007, $19.0 million in 2008, $9.2 million in 2009 through 2012 and $1.6 million thereafter.

Liquidity and Capital Resources

For the six months ended June 30, 2006 and 2007, we funded our working capital requirements and
capital expenditures from net cash provided from operating activities and long-term debt, as applicable. We believe our cash from operations will continue to grow in the future as we continue to execute on our business strategy and increase our
subscriber base, particularly in our wireless segment. In addition, the predictability of our cash flow is enhanced by our long-term Strategic Network Alliance with Sprint Nextel which was amended on July 31, 2007 and extended to July 31,
2015 (see overview section above).

As of June 30, 2007, we had $665.4 million in aggregate long term liabilities, consisting of $610.4 million in
outstanding long-term debt ($617.2 million including the current portion) and $55.0 million in other long-term liabilities. On June 1, 2006, NTELOS Inc. refinanced the second lien term loan by entering into the first lien Restated and Amended
Credit Agreement (the Amended Credit Agreement), consisting of $395 million of the prior First Lien Term Loan and $235 million of new borrowings. The new borrowings were used to repay the second lien term loan of $225 million and to pay
other costs associated with the borrowing, including a $2.3 million prepayment penalty on the second lien term loan. In connection with this refinancing, NTELOS Inc. also paid the Company a dividend of $16.0 million on June 6, 2006. The Amended
Credit Agreement also includes a revolving credit facility of $35 million (the Revolving Credit Facility), none of which has been used. The Revolving Credit Facility is available for our working capital requirements and other general
corporate purposes. Our blended interest rate on our long-term debt as of June 30, 2007 is 6.9%. In addition to the long-term debt from the Amended Credit Agreement, we also enter into capital leases on vehicles used in our operations with
lease terms of four to five years. At June 30, 2007, the net present value of these future minimum lease payments was $1.2 million. The aggregate maturities of our long-term debt based on the contractual terms of the instruments are $3.5
million for the remainder of 2007, $6.7 million in 2008, $6.5 million in 2009, $153.8 million in 2010 and $446.7 million in 2011.

As discussed in the
overview section above, we entered into a new contract with Sprint Nextel which included a requirement for a technological upgrade of the network from 3G-1xRTT to EVDO technology by 2009 in the Sprint overlap territory. Additionally, management is
planning an EVDO upgrade in our other coverage areas. The total incremental capital expenditures in 2007 through 2009 in connection with these upgrades are estimated to be



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approximately $65 million. This will involve a significant acceleration of depreciation on the 3G-1xRTT assets planned for disposal as a result of this
upgrade. Some of the equipment is planned for redeployment to fringe areas of the network or contiguous areas for which we own spectrum but do not currently have service coverage. However, given the upgrade to EVDO in the network, these redeployed
assets are planned for retirement earlier than originally anticipated. The net book value of the equipment subject to early retirement is approximately $80 million. Based on this revised network plan, the company expects to record approximately $16
million of additional depreciation in 2007.

On March 9, 2007, NTELOS Inc. amended its Amended Credit Agreement. The principal purpose of the
amendment was to establish a restricted payment basket, initially set at $30.0 million, which could be used to make certain restricted payments, as defined under the Credit Agreement, including the ability to pay dividends, repurchase stock
or advance funds to the Company, and included various other terms and provisions. The amount of the restricted payment basket was $43.0 million as of June 30, 2007, which was subsequently reduced by the $6.3 million dividend paid on
July 12, 2007.

Under the Amended Credit Agreement, NTELOS Inc. is also bound by certain financial covenants, specifically a maximum ratio of total
debt outstanding to EBITDA and a minimum interest coverage ratio. Noncompliance with any one or more of the debt covenants may have an adverse effect on our financial condition or liquidity in the event such noncompliance cannot be cured or should
we be unable to obtain a waiver from the lenders of the NTELOS Inc. senior secured credit facilities. As of June 30, 2007, we are in compliance with all of our debt covenants, and our ratios at June 30, 2007 would be in compliance with any
future period financial covenant ratio requirement under the Amended Credit Agreement. Our ratios under the foregoing restrictive covenants as of June 30, 2007 are as follows:



|                                                  |  |        |  |                                     
|------------------------------------------------- |  | ------ |  | ------------------------------------
|                                                  |  | Actual |  | Covenant Requirementat June 30, 2007
|Leverage ratio (total debt outstanding to EBITDA) |  | 3.22   |  | Not more than 5.50                  
|Minimum interest coverage ratio                   |  | 4.37   |  | Not less than 2.25                  

On October 17, 2005, we issued $135 million in aggregate principal amount of Floating Rate Notes. On the same
day, we paid approximately $125 million of the net proceeds from this offering as a dividend to the holders of our Class L common stock. The Floating Rate Notes were repaid in full on April 15, 2006 with approximately $143.9 million in proceeds
from our February 13, 2006 IPO.

During the six months ended June 30, 2007, net cash provided by operating activities was approximately $61.6
million. We generated $74.1 million of cash from operations before taking into account changes in operating assets and liabilities. During this period, we recognized $53.5 million of depreciation, amortization, deferred taxes and other non-cash
charges (net). Total net changes in operating assets and liabilities used $12.5 million. The principal changes in operating assets and liabilities from December 31, 2006 to June 30, 2007 were as follows: accounts receivable increased by
$3.1 million, or 8.2%, due to increased revenues partially offset by improved accounts receivable aging; inventories and supplies increased $1.8 million driven by an increase in average handset cost and supply on hand due to volume purchase
incentives; other current assets increased $1.6 million largely related to increases in prepaid maintenance contracts; accounts payable increased by $1.8 million related to higher utility tax payables; and other current liabilities decreased $2.3
million due primarily to a $3.3 million reduction in accrued compensation primarily related to a reduction in 2006 unpaid annual incentive compensation offset by additional accrued compensation for the 2007 annual incentive compensation. Retirement
benefit payments for the first six months of 2007 were approximately $6.5 million which includes a $6.0 million pension plan funding.

During the six
months ended June 30, 2006, net cash provided by operating activities was approximately $26.6 million. We generated $47.9 million of cash from operations before taking into account changes in operating assets and liabilities. During this
period, we recognized $62.7 million of depreciation, amortization and other non-cash charges (net), including $11.4 million in Class A common stock and stock options non-cash compensation charges. Additionally, we paid a $2.3 million prepayment
penalty associated with the debt refinancing in June 2006 which was recorded as interest expense. Total net changes in operating assets and liabilities used $21.3 million. The principal changes in operating assets and liabilities from
December 31, 2005 to June 30, 2006 were as follows: accounts receivable decreased by $0.5 million, or 1.2%; inventories and supplies remained flat due to slightly improved inventory turnover; other current assets increased $0.8 million;
accounts payable decreased by $8.7 million; and other current liabilities decreased $4.8 million. Retirement benefit payments in the first six months of 2006 were approximately $6.8 million due primarily to the $6.3 million pension plan funding.



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Our cash flows used in investing activities for the six months ended June 30, 2007 were approximately $38.3 million
used for the purchase of property and equipment comprised of (i) approximately $22.0 million related to supporting our increasing subscriber base and wholesale growth, continuing our incremental network expansion, installing network software
upgrades and upgrading our Home Location Register (HLR), a central database that contains details of each of our mobile subscribers and which manages calls between our wireless customers and calls to and from the public switched
telephone network, (ii) approximately $13.3 million for routine capital outlays and facility upgrades supporting our RLEC operations, for the actual and projected growth of our Competitive wireline voice and data offerings, and for fiber
deployment in the RLEC territory related to an infrastructure upgrade to offer, among other services, an enhanced broadband service offering which commenced in the fourth quarter of 2006 and the planned third quarter 2007 launch of a new video
service offering, and (iii) approximately $3.0 million related to information technology and corporate expenditures to enhance and maintain the back office support systems.

Our cash flows used in investing activities for the six months ended June 30, 2006 were approximately $38.7 million, with $43.2 million used for the purchase of property and equipment, offset by $4.5 million
proceeds received from the liquidation of our investment in the Class C stock of RTB.

We currently expect capital expenditures for 2007 to be in the range
of $103 million to $107 million, including incremental capital expenditures for an upgrade to our wireless network related to EVDO. We expect that our capital expenditures associated with our wireless business in 2007 will be in the range of $76
million to $78 million, of which approximately $45 million to $47 million is expected to be used for initial capital expenditures related to our network upgrade to EVDO and continued incremental network coverage expansion and enhancements within our
coverage area, which we consider discretionary expansion projects, $19 million to provide additional capacity to support our projected growth in our NTELOS-branded subscribers and increased usage by existing subscribers and growth in voice and data
usage under the Strategic Network Alliance, and the remaining $12 million is targeted to maintain and support our existing networks and other business needs. We expect that our capital expenditures associated with our wireline business in 2007 will
be in the range of $21 million to $23 million, which is targeted to provide regular maintenance and support for our RLEC operations, to support the projected growth of our Competitive wireline voice and data offerings, including strategic fiber
builds, and fiber deployment in the RLEC territory related to an infrastructure upgrade to offer, among other services, an enhanced broadband service which commenced in the fourth quarter of 2006 and the planned launch of a new video service
offering in the third quarter of 2007. In addition, we expect to invest a total of approximately $6 million in 2007 for enhancements and upgrades to our information technology and corporate expenditures to enhance and maintain the back office
support systems to support the continued growth and introduction of new service offerings and applications.

Net cash used in financing activities for the
six months ended June 30, 2007 aggregated $9.9 million, which primarily represents the following:



| |  | $9.3 million in payments on our senior secured term loan; and
|- |  | -------------------------------------------------------------



| |  | $1.0 million in debt issuance costs.
|- |  | ------------------------------------



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Net cash provided by financing activities for the six months ended June 30, 2006 aggregated $5.7 million, which
primarily represents the following:



| |  | $170.5 million in proceeds from the initial public offering of common stock;
|- |  | ----------------------------------------------------------------------------



| |  | $235.0 million in proceeds from the issuance of long-term debt;
|- |  | ---------------------------------------------------------------



| |  | $139.3 million used to pay off the high yield Floating Rate Notes and accrued interest;
|- |  | ---------------------------------------------------------------------------------------



| |  | $227.3 million used to retire the $225 million second lien credit facility and pay a $2.3 million prepayment penalty;
|- |  | ---------------------------------------------------------------------------------------------------------------------



| |  | $30.0 million used for the payment of a dividend to the Class B stockholders;
|- |  | -----------------------------------------------------------------------------



| |  | $0.8 million used for the payment of debt issuance costs; and
|- |  | -------------------------------------------------------------



| |  | $2.6 million in payments on senior secured term loans and other debt instruments.
|- |  | ---------------------------------------------------------------------------------

As of December 31, 2006 and June 30, 2007, we had approximately $44.2 million and $57.5 million, respectively, in cash and cash equivalents and working capital (current assets minus current liabilities) of
approximately $25.0 million and $44.9 million, respectively. Of the cash and cash equivalents on hand on June 30, 2007, $54.5 million was held by NTELOS Inc. and its subsidiaries which are subject to usage restrictions pursuant to the Amended
Credit Agreement.

We intend to continue to pay regular quarterly dividends on our common stock, currently paid at a rate of $0.15 per share. Any decision
to declare future dividends will be made at the discretion of the board of directors and will depend on, among other things, our results of operations, cash requirements, investment opportunities, financial condition, contractual restrictions and
other factors that the board of directors may deem relevant. We are a holding company that does not operate any business of our own. As a result, we are dependent on cash dividends and distributions and other transfers from our subsidiaries to make
dividend payments or to make other distributions to our stockholders, including by means of a stock repurchase. Amounts that can be made available to us to pay cash dividends or repurchase stock are restricted by the NTELOS Inc. Amended Credit
Agreement.

We believe that our existing borrowing availability, our current cash balances and our cash flow from operations will be sufficient to satisfy
our foreseeable working capital and capital expenditures for at least the next 24 months. This takes into account higher capital expenditure levels during this period than we have had in 2005 and 2006 as we commence making capital expenditures in
connection with the EVDO network upgrade and continue to grow our business and evaluate additional growth opportunities. If our growth opportunities result in unforeseeable capital expenditures during this period, we may seek additional financing in
the future. However, as noted above, we have a cash balance of $57.5 million at June 30, 2007 and we believe our cash flow from operations will continue to grow.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

We are exposed to market risks primarily related to interest rates. As of June 30, 2007, $615.9 million was outstanding under the First Lien Term Loan. As of June 30, 2007, NTELOS Inc. achieved a leverage ratio of 3.2:1.0 and an
interest coverage ratio of 4.4:1.0, both of which are favorable to any future covenant requirement. This facility bears interest at 2.25% above the Eurodollar rate or 1.25% above the Federal Funds rate. We have other fixed rate, long-term debt
totaling $1.3 million as of June 30, 2007.

We have a $312.5 million interest rate swap agreement which is used to manage our exposure to interest
rate market risks and to comply with the terms and conditions of the First Lien Term Loan. This swap agreement helps minimize our exposure to interest rate movements by effectively converting a portion of our long-term debt from variable rate debt
to fixed rate debt. Our fixed rate payments due under the swap agreement are calculated at a per annum rate of 4.1066%. Our swap counterpartys variable rate payments are based on three month U.S. Dollar



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LIBOR, which was 2.64% for the initial calculation period and 5.36% as of June 30, 2007. Interest rate differentials paid or received under the swap
agreement are recognized for GAAP purposes over the three month maturity periods as adjustments to our interest expense. We have interest rate risk on borrowings under the First Lien Term Loan in excess of the $312.5 million covered by the swap
agreement and we are exposed to loss if the counterparty to the swap agreement defaults.

At June 30, 2007, we had a $2.5 million exposure to credit
loss on interest rate swaps as the swap agreement had a fair value of $2.5 million above its face value. At June 30, 2007, our senior bank debt of $615.9 million is $303.4 million over the swap agreement.

At June 30, 2007, our financial assets included cash and cash equivalents of $57.5 million. Other securities and investments totaled $0.4 million at June 30,
2007.

Critical Accounting Policies

The fundamental
objective of financial reporting is to provide useful information that allows a reader to comprehend our business activities. To aid in that understanding, management has identified our critical accounting policies for discussion in our Annual
Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 13, 2007. These policies have the potential to have a more significant impact on our financial statements, either because of the significance of the
financial statement item to which they relate, or because they require judgment and estimation due to the uncertainty involved in measuring, at a specific point in time, events which are continuous in nature. The following policies are related to
new policies adopted during the first six months of 2007 or existing policies that were changed during the first six months of 2007.

The Company adopted
the provisions of FASB Interpretation No. 48 (FIN No. 48), Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement 109. As a result of the implementation of FIN No. 48, the Company recognized
an increase to retained earnings of approximately $1.7 million on January 1, 2007. The balance of the unrecognized tax benefits at adoption was $3.3 million, of which $3.1 million would affect earnings if recognized. While we believe we have
adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than our accrued position. Accordingly, additional provisions could be recorded in the future as revised estimates are made or the underlying matters
are settled or otherwise resolved. We accrue interest and penalties related to unrecognized tax benefits in interest expense and income tax expense, respectively, all of which have been immaterial to date.

With limited exception, the Company is no longer subject to U.S. federal, state or local income tax audits by taxing authorities for the years through 2002. None of the
unrecognized benefits are expected to reverse during the next twelve months.

In September 2006, the FASB issued FASB Statement No. 157, Fair Value
Measurement (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for the measurement of fair value, and enhances disclosures about fair value measurements. SFAS No. 157 does not require any new fair value
measures. SFAS No. 157 is effective for fair value measures already required or permitted by other standards for fiscal years beginning after November 15, 2007. The Company is required to adopt SFAS No. 157 beginning on
January 1, 2008. SFAS No. 157 is required to be applied prospectively, except for certain financial instruments. Any transition adjustment will be recognized as an adjustment to opening retained earnings in the year of adoption. The
Company is currently evaluating the impact of adopting SFAS No. 157 on our results of operations and financial position.

In February 2007, the FASB
issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities  Including an amendment of FASB Statement No. 115.SFAS No. 159 permits entities to choose to measure certain financial assets and
liabilities at fair value (the fair value option). Unrealized gains and losses, arising subsequent to adoption, are reported in earnings. The Company is required to adopt SFAS 159 in the first quarter of 2008. The Company is currently
evaluating the impact of adopting SFAS No. 159 on our results of operations and financial position.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Conclusion Regarding the
Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is



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defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and
our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred
during the six months ended June 30, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II  OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

We are involved in routine litigation in
the ordinary course of our business. We do not believe that any pending or threatened litigation of which we are aware would have a material adverse effect on our financial condition, results of operations or cash flows.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

In addition to the other information set
forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors (pages 21 to 36) in our Annual Report on Form 10-K for the year ended December 31, 2006, which could materially affect our
business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial
also may materially adversely affect our business, financial condition and/or operating results. We do not believe that there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year
ended December 31, 2006.



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

Our
annual meeting of stockholders was held on May 4, 2007. At that meeting, stockholders voted on the following:



| | i. | election of eight directors to serve until the 2008 Annual Meeting of Stockholders; and
| | -- | ---------------------------------------------------------------------------------------



| | ii. | ratification of the appointment by our Audit Committee of the board of directors of KPMG LLP as our independent registered public accounting firm for the year ending
December 31, 2007.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The results of such votes were as follows:



| | i. | The following votes were cast for the election of each director to serve on our board for a term of one year until the 2008 Annual Meeting of Stockholders or until a successor has
been elected and qualified:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                   |  |               |  |              
|------------------ |  | ------------- |  | -------------
|Name of Nominee    |  | Votes CastFor |  | VotesWithheld
|Timothy G. Biltz   |  | 40,418,707    |  | 145,278      
|Christopher Bloise |  | 36,617,853    |  | 3,946,132    
|Andrew Gesell      |  | 36,617,839    |  | 3,946,146    
|Daniel J. Heneghan |  | 40,419,271    |  | 144,714      
|Eric B. Hertz      |  | 40,419,257    |  | 144,728      
|Michael Huber      |  | 36,617,823    |  | 3,946,162    
|James S. Quarforth |  | 38,247,292    |  | 2,316,693    
|Steven Rattner     |  | 34,853,557    |  | 5,710,428    



| | ii. | KPMG LLP was ratified as independent registered public accounting firm for the year ending December 31, 2007 with 40,548,034 votes cast for ratification, 15,086 votes cast
against ratification and 865 abstentions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.

ITEM 6. EXHIBITS

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                               
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                   
|31.1*       |  | Certificate of James S. Quarforth, Chief Executive Officer and President pursuant to Rule 13a-14(a).                                                                                                                          
|31.2*       |  | Certificate of Michael B. Moneymaker, Executive Vice President and Chief Financial Officer, Treasurer and Secretary pursuant to Rule 13a-14(a).                                                                               
|32.1*       |  | Certificate of James S. Quarforth, Chief Executive Officer and President pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                           
|32.2*       |  | Certificate of Michael B. Moneymaker, Executive Vice President and Chief Financial Officer, Treasurer and Secretary pursuant to 18 U.S.C., Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

---

|* | Filed herewith.
|- | ---------------



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##### Table of Contents

SIGNATURES

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



|                      |  |                       |  |                                                                              
|--------------------- |  | --------------------- |  | -----------------------------------------------------------------------------
|                      |  | NTELOS HOLDINGS CORP.
|                      |  |                      
|Dated: August 2, 2007 |  | By:                   |  | /s/ James S. Quarforth                                                       
|                      |  |                       |  | James S. Quarforth                                                           
|                      |  |                       |  | Chief Executive Officer, President and Chairman of the Board                 
|                      |  |                      
|Dated: August 2, 2007 |  | By:                   |  | /s/ Michael B. Moneymaker                                                    
|                      |  |                       |  | Michael B. Moneymaker                                                        
|                      |  |                       |  | Executive Vice President and Chief Financial Officer, Treasurer and Secretary



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