---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---

FORM 10-Q



---

(Mark One)



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

For the quarterly period ended March 31, 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



---

NTELOS Holdings Corp.

(Exact name of registrant as specified in its charter)



---



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 36-4573125                          
|(State or other jurisdiction of 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 41,982,840 shares of the registrants common stock outstanding as of the close of business on May 1, 2007.



---



---

NTELOS HOLDINGS CORP.

QUARTERLY REPORT ON FORM 10-K

MARCH 31, 2007

INDEX



|                               |  |                                                                                                          |  |      
|------------------------------ |  | -------------------------------------------------------------------------------------------------------- |  | -----
|PART I  FINANCIAL INFORMATION |  |                                                                                                         
|                               |  |                                                                                                         
|Item 1.                        |  | Financial Statements                                                                                     |  |      
|                               |  |                                                                                                         
|                               |  | Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006                         |  | 1-2  
|                               |  |                                                                                                         
|                               |  | Condensed Consolidated Statements of Operations for the quarters ended March 31, 2007 and 2006           |  | 3    
|                               |  |                                                                                                         
|                               |  | Condensed Consolidated Statements of Cash Flows for the quarters ended March 31, 2007 and 2006           |  | 4    
|                               |  |                                                                                                         
|                               |  | Condensed Consolidated Statements of Stockholders Equity for the quarters ended March 31, 2007 and 2006 |  | 5    
|                               |  |                                                                                                         
|                               |  | Notes to Condensed Consolidated Financial Statements                                                     |  | 6-14 
|                               |  |                                                                                                         
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                    |  | 15-26
|                               |  |                                                                                                         
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                               |  | 26-27
|                               |  |                                                                                                         
|Item 4.                        |  | Controls and Procedures                                                                                  |  | 28   
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                         
|                               |  |                                                                                                         
|Item 1.                        |  | Legal Proceedings                                                                                        |  | 28   
|                               |  |                                                                                                         
|Item 1A.                       |  | Risk Factors                                                                                             |  | 28   
|                               |  |                                                                                                         
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                      |  | 28   
|                               |  |                                                                                                         
|Item 5.                        |  | Other Information                                                                                        |  | 28   
|                               |  |                                                                                                         
|Item 6.                        |  | Exhibits                                                                                                 |  | 28   
|                               | 
|Signatures                     |  | 29                                                                                                      
|                               | 
|Certifications                 |  | 30-33                                                                                                   





---

Part I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets

NTELOS Holdings Corp.

(Unaudited)



|                                                                              |  |                |         |                   |   |        
|----------------------------------------------------------------------------- |  | -------------- | ------- | ----------------- | - | -------
|(In thousands)                                                                |  | March 31, 2007 |         | December 31, 2006
|Assets                                                                        |  |                |         |                   |   |        
|                                                                              |  |               
|Current Assets                                                                |  |                |         |                   |   |        
|Cash and cash equivalents                                                     |  | $              | 44,277  |                   | $ | 44,180 
|Accounts receivable, net of allowance of $10,483 ($11,412 in 2006)            |  |                | 38,800  |                   |   | 38,396 
|Inventories and supplies                                                      |  |                | 4,843   |                   |   | 5,471  
|Other receivables and deposits                                                |  |                | 3,822   |                   |   | 3,777  
|Prepaid expenses and other                                                    |  |                | 8,262   |                   |   | 6,562  
|                                                                              |  |                |         |                   |   |        
|                                                                              |  |                | 100,004 |                   |   | 98,386 
|                                                                              |  |                |         |                   |   |        
|Securities and Investments                                                    |  |                |         |                   |   |        
|Interest rate swap                                                            |  |                | 2,946   |                   |   | 3,874  
|Securities and investments                                                    |  |                | 312     |                   |   | 294    
|                                                                              |  |                |         |                   |   |        
|                                                                              |  |                | 3,258   |                   |   | 4,168  
|                                                                              |  |                |         |                   |   |        
|Property, Plant and Equipment                                                 |  |                |         |                   |   |        
|Land and buildings                                                            |  |                | 36,934  |                   |   | 36,736 
|Network plant and equipment                                                   |  |                | 412,083 |                   |   | 402,393
|Furniture, fixtures and other equipment                                       |  |                | 38,829  |                   |   | 38,312 
|                                                                              |  |                |         |                   |   |        
|Total in service                                                              |  |                | 487,846 |                   |   | 477,441
|Under construction                                                            |  |                | 17,803  |                   |   | 12,370 
|                                                                              |  |                |         |                   |   |        
|                                                                              |  |                | 505,649 |                   |   | 489,811
|Less accumulated depreciation                                                 |  |                | 129,230 |                   |   | 113,039
|                                                                              |  |                |         |                   |   |        
|                                                                              |  |                | 376,419 |                   |   | 376,772
|                                                                              |  |                |         |                   |   |        
|Other Assets                                                                  |  |                |         |                   |   |        
|Goodwill                                                                      |  |                | 144,074 |                   |   | 151,976
|Franchise rights                                                              |  |                | 32,000  |                   |   | 32,000 
|Other intangibles, less accumulated amortization of $27,222 ($23,671 in 2006) |  |                | 95,828  |                   |   | 99,379 
|Radio spectrum licenses in service                                            |  |                | 114,102 |                   |   | 114,102
|Radio spectrum licenses not in service                                        |  |                | 18,259  |                   |   | 18,250 
|Other radio spectrum licenses                                                 |  |                | 1,344   |                   |   | 1,344  
|Deferred charges                                                              |  |                | 5,010   |                   |   | 4,470  
|                                                                              |  |                |         |                   |   |        
|                                                                              |  |                | 410,617 |                   |   | 421,521
|                                                                              |  |                |         |                   |   |        
|                                                                              |  | $              | 890,298 |                   | $ | 900,847
|                                                                              |  |                |         |                   |   |        

See accompanying Notes to Condensed Consolidated Financial Statements.



1



---

Condensed Consolidated Balance Sheets

NTELOS Holdings Corp.

(Unaudited)



|                                                                                                                 |  |                |         |                   |   |         |  
|---------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ----------------- | - | ------- | -
|(In thousands, except par value per share amounts)                                                               |  | March 31, 2007 |         | December 31, 2006 |  
|Liabilities and Stockholders Equity                                                                             |  |                |         |                   |   |         |  
|                                                                                                                 |  |               
|Current Liabilities                                                                                              |  |                |         |                   |   |         |  
|Current portion of long-term debt                                                                                |  | $              | 6,840   |                   | $ | 13,152  |  
|Accounts payable                                                                                                 |  |                | 21,936  |                   |   | 25,209  |  
|Advance billings and customer deposits                                                                           |  |                | 17,456  |                   |   | 16,709  |  
|Accrued payroll                                                                                                  |  |                | 4,975   |                   |   | 10,021  |  
|Accrued interest                                                                                                 |  |                | 140     |                   |   | 305     |  
|Deferred revenue                                                                                                 |  |                | 556     |                   |   | 683     |  
|Income tax payable                                                                                               |  |                | 3,881   |                   |   |        |  
|Accrued operating taxes                                                                                          |  |                | 3,819   |                   |   | 3,584   |  
|Other accrued liabilities                                                                                        |  |                | 3,481   |                   |   | 3,749   |  
|                                                                                                                 |  |                |         |                   |   |         |  
|                                                                                                                 |  |                | 63,084  |                   |   | 73,412  |  
|                                                                                                                 |  |                |         |                   |   |         |  
|Long-term Liabilities                                                                                            |  |                |         |                   |   |         |  
|Long-term debt                                                                                                   |  |                | 611,802 |                   |   | 613,371 |  
|Other long-term liabilities:                                                                                     |  |                |         |                   |   |         |  
|Retirement benefits                                                                                              |  |                | 28,029  |                   |   | 33,062  |  
|Deferred income taxes                                                                                            |  |                | 972     |                   |   | 7,799   |  
|Long-term deferred liabilities                                                                                   |  |                | 18,107  |                   |   | 17,986  |  
|Income tax payable                                                                                               |  |                | 3,123   |                   |   | 2,576   |  
|Class A common stock deposit                                                                                     |  |                | 419     |                   |   | 419     |  
|                                                                                                                 |  |                |         |                   |   |         |  
|                                                                                                                 |  |                | 662,452 |                   |   | 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; 41,980 issued and outstanding (41,965 in 2006) |  |                | 158,481 |                   |   | 157,376 |  
|Retained earnings (accumulated deficit)                                                                          |  |                | 5,352   |                   |   | (6,087  | )
|Accumulated other comprehensive income                                                                           |  |                | 476     |                   |   | 476     |  
|                                                                                                                 |  |                |         |                   |   |         |  
|                                                                                                                 |  |                | 164,309 |                   |   | 151,765 |  
|                                                                                                                 |  |                |         |                   |   |         |  
|                                                                                                                 |  | $              | 890,298 |                   | $ | 900,847 |  
|                                                                                                                 |  |                |         |                   |   |         |  

See accompanying Notes to Condensed Consolidated Financial Statements.



2



---

Condensed Consolidated Statements of Operations

NTELOS Holdings Corp.

(Unaudited)



|                                                                                                       |  |                             |         |   |                             |   |         |  
|------------------------------------------------------------------------------------------------------ |  | --------------------------- | ------- | - | --------------------------- | - | ------- | -
|(In thousands except per share amounts)                                                                |  | Quarter EndedMarch 31, 2007 |         |   | Quarter EndedMarch 31, 2006 |  
|Operating Revenues                                                                                     |  |                             |         |   |                             |   |         |  
|Wireless communications                                                                                |  | $                           | 91,592  |   |                             | $ | 77,575  |  
|Wireline communications                                                                                |  |                             | 29,785  |   |                             |   | 28,504  |  
|Other communication services                                                                           |  |                             | 198     |   |                             |   | 188     |  
|                                                                                                       |  |                             |         |   |                             |   |         |  
|                                                                                                       |  |                             | 121,575 |   |                             |   | 106,267 |  
|                                                                                                       |  |                             |         |   |                             |   |         |  
|Operating Expenses                                                                                     |  |                             |         |   |                             |   |         |  
|Cost of wireless sales (exclusive of items shown separately below)                                     |  |                             | 19,109  |   |                             |   | 15,799  |  
|Maintenance and support (inclusive of non-cash compensation expense of $93 for 2007 and $840 for 2006) |  |                             | 20,238  |   |                             |   | 19,297  |  
|Customer operations (inclusive of non-cash compensation expense of $140 for 2007 and $1,071 for 2006)  |  |                             | 25,618  |   |                             |   | 24,371  |  
|Corporate operations (inclusive of non-cash compensation expense of $786 for 2007 and $8,545 for 2006) |  |                             | 8,143   |   |                             |   | 14,860  |  
|Depreciation and amortization                                                                          |  |                             | 20,099  |   |                             |   | 20,647  |  
|Accretion of asset retirement obligations                                                              |  |                             | 175     |   |                             |   | 197     |  
|Termination of advisory agreements                                                                     |  |                             |        |   |                             |   | 12,941  |  
|                                                                                                       |  |                             |         |   |                             |   |         |  
|                                                                                                       |  |                             | 93,382  |   |                             |   | 108,112 |  
|                                                                                                       |  |                             |         |   |                             |   |         |  
|Operating Income (Loss)                                                                                |  |                             | 28,193  |   |                             |   | (1,845  | )
|                                                                                                       |  |                            
|Other Income (Expenses)                                                                                |  |                             |         |   |                             |   |         |  
|Interest expense                                                                                       |  |                             | (11,030 | ) |                             |   | (16,746 | )
|(Loss) gain on interest rate swap                                                                      |  |                             | (928    | ) |                             |   | 1,938   |  
|Gain on sale of investment                                                                             |  |                             |        |   |                             |   | 1,723   |  
|Other income                                                                                           |  |                             | 742     |   |                             |   | 1,221   |  
|                                                                                                       |  |                             |         |   |                             |   |         |  
|                                                                                                       |  |                             | (11,216 | ) |                             |   | (11,864 | )
|                                                                                                       |  |                             |         |   |                             |   |         |  
|                                                                                                       |  |                             | 16,977  |   |                             |   | (13,709 | )
|Income Tax Expense                                                                                     |  |                             | 7,222   |   |                             |   | 3,610   |  
|                                                                                                       |  |                             |         |   |                             |   |         |  
|                                                                                                       |  |                             | 9,755   |   |                             |   | (17,319 | )
|Minority Interests in Losses (Earnings) of Subsidiaries                                                |  |                             | 4       |   |                             |   | (3      | )
|                                                                                                       |  |                             |         |   |                             |   |         |  
|Net Income (Loss)                                                                                      |  | $                           | 9,759   |   |                             | $ | (17,322 | )
|                                                                                                       |  |                             |         |   |                             |   |         |  
|Basic and Diluted Earnings (Loss) per Common Share:                                                    |  |                             |         |   |                             |   |         |  
|Income (Loss) per share  basic                                                                        |  | $                           | 0.24    |   |                             | $ | (0.52   | )
|Income (Loss) per share  diluted                                                                      |  | $                           | 0.23    |   |                             | $ | (0.52   | )
|Average shares outstanding  basic                                                                     |  |                             | 41,185  |   |                             |   | 33,471  |  
|Average shares outstanding  diluted                                                                   |  |                             | 42,212  |   |                             |   | 33,471  |  

See accompanying Notes to Condensed Consolidated Financial Statements.



3



---

Condensed Consolidated Statements of Cash Flows

NTELOS Holdings Corp.

(Unaudited)



|                                                                                                   |  |                             |         |   |                             |   |         |  
|-------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | --------------------------- | - | ------- | -
|(In thousands)                                                                                     |  | Quarter EndedMarch 31, 2007 |         |   | Quarter EndedMarch 31, 2006 |  
|Cash flows from operating activities                                                               |  |                             |         |   |                             |   |         |  
|Net income (loss)                                                                                  |  | $                           | 9,759   |   |                             | $ | (17,322 | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                             |         |   |                             |   |         |  
|Gain on sale of investment                                                                         |  |                             |        |   |                             |   | (1,723  | )
|Depreciation                                                                                       |  |                             | 16,548  |   |                             |   | 17,098  |  
|Amortization                                                                                       |  |                             | 3,551   |   |                             |   | 3,549   |  
|Accretion of asset retirement obligations                                                          |  |                             | 175     |   |                             |   | 197     |  
|Deferred income taxes                                                                              |  |                             | 3,341   |   |                             |   |        |  
|Loss (gain) on interest rate swap instrument                                                       |  |                             | 928     |   |                             |   | (1,938  | )
|Interest paid-in-kind on the floating rate notes                                                   |  |                             |        |   |                             |   | 675     |  
|Common stock and stock options non-cash compensation expense                                       |  |                             | 1,019   |   |                             |   | 10,456  |  
|Retirement benefits and other                                                                      |  |                             | 1,040   |   |                             |   | 4,417   |  
|Amortization and write-off of loan origination costs and debt discount                             |  |                             | 190     |   |                             |   | 211     |  
|Changes in assets and liabilities from operations:                                                 |  |                             |         |   |                             |   |         |  
|(Increase) decrease in accounts receivable, net                                                    |  |                             | (404    | ) |                             |   | 477     |  
|Decrease (increase) in inventories and supplies                                                    |  |                             | 628     |   |                             |   | (2,268  | )
|Increase in other current assets                                                                   |  |                             | (1,745  | ) |                             |   | (2,500  | )
|Changes in income taxes                                                                            |  |                             | 3,881   |   |                             |   | (72     | )
|Decrease in accounts payable                                                                       |  |                             | (3,622  | ) |                             |   | (10,934 | )
|Decrease in other current liabilities                                                              |  |                             | (4,173  | ) |                             |   | (2,205  | )
|Retirement benefit contributions and distributions                                                 |  |                             | (6,198  | ) |                             |   | (6,431  | )
|                                                                                                   |  |                             |         |   |                             |   |         |  
|Net cash provided by (used in) operating activities                                                |  |                             | 24,918  |   |                             |   | (8,313  | )
|                                                                                                   |  |                             |         |   |                             |   |         |  
|Cash flows from investing activities                                                               |  |                             |         |   |                             |   |         |  
|Purchases of property, plant and equipment                                                         |  |                             | (16,095 | ) |                             |   | (20,435 | )
|Proceeds from sale of investments                                                                  |  |                             |        |   |                             |   | 105     |  
|                                                                                                   |  |                             |         |   |                             |   |         |  
|Net cash used in investing activities                                                              |  |                             | (16,095 | ) |                             |   | (20,330 | )
|                                                                                                   |  |                             |         |   |                             |   |         |  
|Cash flows from financing activities                                                               |  |                             |         |   |                             |   |         |  
|Proceeds from initial public offering of common stock, net                                         |  |                             |        |   |                             |   | 171,221 |  
|Repayments on senior secured term loans                                                            |  |                             | (7,749  | ) |                             |   | (1,000  | )
|Debt issuance costs                                                                                |  |                             | (931    | ) |                             |   |        |  
|Other                                                                                              |  |                             | (46     | ) |                             |   | (129    | )
|                                                                                                   |  |                             |         |   |                             |   |         |  
|Net cash (used in) provided by financing activities                                                |  |                             | (8,726  | ) |                             |   | 170,092 |  
|                                                                                                   |  |                             |         |   |                             |   |         |  
|Increase in cash and cash equivalents                                                              |  |                             | 97      |   |                             |   | 141,449 |  
|Cash and cash equivalents:                                                                         |  |                             |         |   |                             |   |         |  
|Beginning of period                                                                                |  |                             | 44,180  |   |                             |   | 28,134  |  
|                                                                                                   |  |                             |         |   |                             |   |         |  
|End of period                                                                                      |  | $                           | 44,277  |   |                             | $ | 169,583 |  
|                                                                                                   |  |                             |         |   |                             |   |         |  

See accompanying Notes to Condensed Consolidated Financial Statements.



4



---

Condensed Consolidated Statements of Stockholders Equity

NTELOS Holdings Corp.

(Unaudited)



|                                                                                                                          |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------- |  | ------ |  | ------- | - |  | ------- |  | ------- | ------------------------------------ | ------- | - | ----------------------------------- |  | ------------------------ | ------- |  | - | ------- | - |  | - | --- |  | - | ------- | -
|                                                                                                                          |  | Shares |  |         |   |  |         |  |         | RetainedEarnings(AccumulatedDeficit) |         |   | AccumulatedOtherComprehensiveIncome |  | TotalStockholdersEquity |        
|(In thousands)                                                                                                            |  | Common |  | Class L |   |  | Class B |  | Class L |                                      | Class B |   | CommonStock                         |  |                          |        
|Balance, December 31, 2005                                                                                                |  |       |  | 11,364  |   |  |        |  | $       |                                     |         | $ |                                    |  | $                        |        |  | $ | 1,098   |   |  | $ |    |  | $ | 1,098   |  
|Initial public offering of common stock, net of closing costs                                                             |  | 15,375 |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          | 169,588 |  |   |         |   |  |   |     |  |   | 169,588 |  
|Conversion of Class L shares, Class A non-substantive equity shares and Class L distribution preference to Class B shares |  |        |  | (11,364 | ) |  | 26,493  |  |         |                                      |         |   | 13,970                              |  |                          |         |  |   |         |   |  |   |     |  |   | 13,970  |  
|Non-cash compensation                                                                                                     |  |        |  |         |   |  |         |  |         |                                      |         |   | 597                                 |  |                          |         |  |   |         |   |  |   |     |  |   | 597     |  
|Comprehensive Loss:                                                                                                       |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  
|Net loss                                                                                                                  |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   | (17,322 | ) |  |   |     |  |   | (17,322 | )
|                                                                                                                          |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  
|Balance, March 31, 2006                                                                                                   |  | 15,375 |  |        |   |  | 26,493  |  | $       |                                     |         | $ | 14,567                              |  | $                        | 169,588 |  | $ | (16,224 | ) |  | $ |    |  | $ | 167,931 |  
|                                                                                                                          |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  
|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                                                                                                     |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          | 1,019   |  |   |         |   |  |   |     |  |   | 1,019   |  
|Excess tax deduction related to non-cash compensation recorded for non-qualified stock option exercises                   |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          | 39      |  |   |         |   |  |   |     |  |   | 39      |  
|Shares issued through the Employee Stock Purchase Plan and stock options exercised                                        |  | 15     |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          | 47      |  |   |         |   |  |   |     |  |   | 47      |  
|Comprehensive Income:                                                                                                     |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  
|Net income                                                                                                                |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   | 9,759   |   |  |   |     |  |   | 9,759   |  
|                                                                                                                          |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  
|Balance, March 31, 2007                                                                                                   |  | 41,980 |  |        |   |  |        |  | $       |                                     |         | $ |                                    |  | $                        | 158,481 |  | $ | 5,352   |   |  | $ | 476 |  | $ | 164,309 |  
|                                                                                                                          |  |        |  |         |   |  |         |  |         |                                      |         |   |                                     |  |                          |         |  |   |         |   |  |   |     |  |   |         |  

See accompanying Notes to Condensed Consolidated Financial Statements.



5



---

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 $0.5 million, were charged to corporate operations expense in the
first quarter of 2007.

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 quarter ended March 31,
2007 and for the quarter ended March 31, 2006 contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 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.



6



---

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 March 31, 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 quarter ended March 31, 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 March 31, 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     |  | 25,986                  |  | 113,400     |  | 22,597                 
|Trademarks             |  | 15 yrs.        |  | 9,650       |  | 1,236                   |  | 9,650       |  | 1,074                  

The Company amortizes its definite-lived intangible assets using the straight-line method. Amortization expense
for the quarters ended March 31, 2007 and 2006 was $3.6 million and $3.5 million, respectively. Amortization expense for the remainder of 2007 and the next five years is as follows:



|                  |  |                       |        |            |   |       |  |   |       
|----------------- |  | --------------------- | ------ | ---------- | - | ----- |  | - | ------
|(In thousands)    |  | CustomerRelationships |        | Trademarks |   | Total
|Remainder of 2007 |  | $                     | 10,170 |            | $ | 483   |  | $ | 10,653
|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 



7



---

Pension Benefits and Other Postretirement Benefits

For the quarters ended March 31, 2007 and 2006, the components of the Companys net periodic benefit cost for the Defined Benefit Pension Plan were as follows:



|                               |  |                             |      |   |                             |      |  
|------------------------------ |  | --------------------------- | ---- | - | --------------------------- | ---- | -
|(In thousands)                 |  | Quarter EndedMarch 31, 2007 |      |   | Quarter EndedMarch 31, 2006 |     
|Service cost                   |  | $                           | 699  |   |                             | 720  |  
|Interest cost                  |  |                             | 685  |   |                             | 625  |  
|Expected return on plan assets |  |                             | (749 | ) |                             | (630 | )
|                               |  |                             |      |   |                             |      |  
|Net periodic benefit cost      |  | $                           | 635  |   |                             | 715  |  
|                               |  |                             |      |   |                             |      |  

For the quarters ended March 31, 2007 and 2006, the components of the Companys net periodic benefit
cost for the Other Postretirement Benefit Plan were as follows:



|                              |  |                             |     |                              |    
|----------------------------- |  | --------------------------- | --- | ---------------------------- | ---
|(In thousands)                |  | Quarter EndedMarch 31, 2007 |     | Quarter Ended March 31, 2006
|Service cost                  |  | $                           | 35  |                              | 41 
|Interest cost                 |  |                             | 157 |                              | 168
|Recognized net actuarial loss |  |                             |    |                              | 22 
|                              |  |                             |     |                              |    
|Net periodic benefit cost     |  | $                           | 192 |                              | 231
|                              |  |                             |     |                              |    

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 21.3% and 19.5% of its revenues for the quarters ended March 31, 2007 and 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.



|                                               |  |             |         |      |   |                     |  |       |         |  |       |        |   |  |   |        
|---------------------------------------------- |  | ----------- | ------- | ---- | - | ------------------- |  | ----- | ------- |  | ----- | ------ | - |  | - | -------
|(In thousands)                                 |  | WirelessPCS |         | RLEC |   | CompetitiveWireline |  | Other |         |  | Total
|As of and for the quarter ended March 31, 2007 |  |             |         |      |   |                     |  |       |         |  |       |        |   |  |   |        
|Operating revenues                             |  | $           | 91,592  |      | $ | 15,379              |  | $     | 14,406  |  | $     | 198    |   |  | $ | 121,575
|Operating income (loss)                        |  |             | 21,144  |      |   | 7,805               |  |       | 1,822   |  |       | (2,578 | ) |  |   | 28,193 
|Depreciation and amortization                  |  |             | 13,560  |      |   | 3,503               |  |       | 3,005   |  |       | 31     |   |  |   | 20,099 
|Accretion of asset retirement obligations      |  |             | 157     |      |   | 4                   |  |       | 12      |  |       | 2      |   |  |   | 175    
|Non-cash compensation charges                  |  |             |        |      |   |                    |  |       |        |  |       | 1,019  |   |  |   | 1,019  
|Secondary offering costs                       |  |             |        |      |   |                    |  |       |        |  |       | 500    |   |  |   | 500    
|                                               |  |             |         |      |  
|Goodwill                                       |  |             | 91,426  |      |   | 33,348              |  |       | 19,300  |  |       |       |   |  |   | 144,074
|                                               |  |             |         |      |  
|Total segment assets                           |  |             | 509,800 |      |   | 194,314             |  |       | 102,159 |  |       | 1,134  |   |  |   | 807,407
|Corporate assets                               |  |             |         |      |   |                     |  |       |         |  |       |        |   |  |   | 82,891 
|                                               |  |             |         |      |   |                     |  |       |         |  |       |        |   |  |   |        
|Total assets                                   |  |             |         |      |   |                     |  |       |         |  |       |        |   |  | $ | 890,298
|                                               |  |             |         |      |   |                     |  |       |         |  |       |        |   |  |   |        



8



---

|                                          |  |             |        |      |   |                     |  |       |        |  |       |         |   |  |   |         |  
|----------------------------------------- |  | ----------- | ------ | ---- | - | ------------------- |  | ----- | ------ |  | ----- | ------- | - |  | - | ------- | -
|(In thousands)                            |  | WirelessPCS |        | RLEC |   | CompetitiveWireline |  | Other |        |  | Total |        
|For the quarter ended March 31, 2006      |  |             |        |      |   |                     |  |       |        |  |       |         |   |  |   |         |  
|Operating revenues                        |  | $           | 77,575 |      | $ | 14,720              |  | $     | 13,784 |  | $     | 188     |   |  | $ | 106,267 |  
|Operating income (loss)                   |  |             | 13,636 |      |   | 7,714               |  |       | 1,532  |  |       | (24,727 | ) |  |   | (1,845  | )
|Depreciation and amortization             |  |             | 14,137 |      |   | 3,626               |  |       | 2,843  |  |       | 41      |   |  |   | 20,647  |  
|Accretion of asset retirement obligations |  |             | 180    |      |   | 3                   |  |       | 11     |  |       | 3       |   |  |   | 197     |  
|Termination of advisory agreements        |  |             |       |      |   |                    |  |       |       |  |       | 12,941  |   |  |   | 12,941  |  
|Non-cash compensation charges             |  |             |       |      |   |                    |  |       |       |  |       | 10,456  |   |  |   | 10,456  |  

The Other segment is comprised of the paging operation and the communications services operations.
Depreciation related to corporate assets is allocated to the operating segments and was $1.0 million and $0.7 million for the quarters ended March 31, 2007 and 2006, respectively. Additionally, certain unallocated corporate related items that
do not provide direct benefit to the operating segments are included in the Other segment. For the quarter ended March 31, 2007, total unallocated corporate operating expenses were $1.0 million. Additionally, the Company recorded
$1.0 million of non-cash compensation and $0.5 million of secondary offering costs in the first quarter of 2007, which were not allocated. For the quarter ended March 31, 2006, total unallocated corporate operating expenses were $0.8 million.
Additionally, the Company recorded $0.5 million of advisory fees, $12.9 million for the termination of the advisory agreements and non-cash compensation of $10.5 million, none of which was allocated.

Note 4. Long-Term Debt

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



|                                        |  |               |         |                  |   |        
|--------------------------------------- |  | ------------- | ------- | ---------------- | - | -------
|(In thousands)                          |  | March 31,2007 |         | December 31,2006
|First lien term loan                    |  | $             | 617,488 |                  | $ | 625,237
|Capital lease obligations               |  |               | 1,154   |                  |   | 1,286  
|                                        |  |               |         |                  |   |        
|                                        |  |               | 618,642 |                  |   | 626,523
|Less: current portion of long-term debt |  |               | 6,840   |                  |   | 13,152 
|                                        |  |               |         |                  |   |        
|Long-term debt                          |  | $             | 611,802 |                  | $ | 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 31, 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



9



---

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 $36.5 million as of March 31, 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 quarter ended March 31, 2007 was $0.2 million.

The aggregate maturities of long-term debt outstanding at March 31, 2007, excluding capital lease obligations, based on the contractual terms of the
instruments are $4.7 million in 2007, $6.3 million per year in 2008 and 2009, $153.6 million in 2010 and $446.6 million thereafter.

The Companys
blended average interest rate on its long-term debt as of March 31, 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)     |  | Quarter EndedMarch 31, 2007 |        | Quarter EndedMarch 31, 2006
|Cash payments for: |  |                             |        |                             |   |       
|Interest           |  | $                           | 11,052 |                             | $ | 12,318
|Income taxes       |  |                             | 11     |                             |   | 49    

Interest payments in the above table are net of $1.0 million and $0.3 million related to net interest received on
the interest rate swap agreements for the quarters ended March 31, 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 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 5.35% on March 31, 2007 and 5.36% on
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 to be 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.



10



---

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.

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 related to the original Class A instruments continue for the remaining portion of the shares that were
converted to common stock, with an additional 25% expiring in May 2007 and the final 25% expiring 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 $1.0 million for the quarter ended March 31, 2007 and $10.5 million for the quarter ended March 31, 2006. Future charges for non-cash compensation related to instruments outstanding at
March 31, 2007 for the remainder of 2007 and the years 2008 through 2010 are estimated to be $3.3 million, $1.9 million, $0.8 million and $0.5 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 quarters ended March 31, 2007 and 2006 are as follows:



|                                                                                        |  |      |        |   |      |   |         |  
|--------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------- | -
|(In thousands)                                                                          |  | 2007 |        |   | 2006 |  
|Numerator:                                                                              |  |      |        |   |      |   |         |  
|Income (loss) applicable to common shares for earnings-per-share computation            |  | $    | 9,759  |   |      | $ | (17,322 | )
|                                                                                        |  |      |        |   |      |   |         |  
|Denominator:                                                                            |  |      |        |   |      |   |         |  
|Total shares outstanding                                                                |  |      | 41,980 |   |      |   | 41,868  |  
|Less: unvested shares                                                                   |  |      | (789   | ) |      |   | (789    | )
|Less: effect of calculating weighted average shares                                     |  |      | (6     | ) |      |   | (7,608  | )
|                                                                                        |  |      |        |   |      |   |         |  
|Denominator for basic earnings per common share  weighted average shares outstanding   |  |      | 41,185 |   |      |   | 33,471  |  
|Plus: unvested shares                                                                   |  |      | 789    |   |      |   |        |  
|Plus: common stock equivalents of stock options exercised                               |  |      | 238    |   |      |   |        |  
|                                                                                        |  |      |        |   |      |   |         |  
|Denominator for diluted earnings per common share  weighted average shares outstanding |  |      | 42,212 |   |      |   | 33,471  |  
|                                                                                        |  |      |        |   |      |   |         |  

For the quarter ended March 31, 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.



11



---

Note 8. Stock Plans

On February 13, 2006, in connection with the Companys IPO, the Class A common stock options were converted to approximately 313,250 common stock options exercisable for shares of common stock, based on a 2.15 conversion
ratio. Additionally, one-fourth of these options vested upon completion of the IPO in accordance with the terms of the plan. The Company amended and restated its equity incentive plan (the Equity Incentive Plan) at the time of the IPO.
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. For 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. Options under these plans are issuable to employees or non-employee directors as applicable. 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.

The summary of the activity and status of the Equity Incentive Plans for the
quarter ended March 31, 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              |  | (13    | ) |  |                              | 1.73  |                       |   | (22   | )
|Forfeited during the period              |  | (2     | ) |  |                              | 6.56  |                       |   | (13   | )
|                                         |  |        |   |  |                              |       |                       |   |       |  
|Options outstanding at March 31, 2007    |  | 673    |   |  | $                            | 12.00 |                       | $ | 8,075 |  
|                                         |  |        |   |  |                              |       |                       |   |       |  
|Exercisable at March 31, 2007            |  | 75     |   |  | $                            | 5.95  |                       | $ | 446   |  
|                                         |  |        |   |  |                              |       |                       |   |       |  

There has been no change in the activity and status of the former Class A common stock instruments for the
quarter ended March 31, 2007. Please see Note 10 contained in Part II, Item 8. of our Annual Report on Form 10-K for the year ended December 31, 2006.



12



---

The summary of the Equity Incentive Plans fair value for the quarter ended March 31, 2007 is as follows:



|                                                       |  |           |   |  |                                    |       |                    |   |       |  
|------------------------------------------------------ |  | --------- | - |  | ---------------------------------- | ----- | ------------------ | - | ----- | -
|(In thousands, except per share amounts)               |  | Shares    |   |  | WeightedAverageGrantDate FairValue |       | ExtendedFair Value |  
|Options outstanding at January 1, 2007                 |  | 339       |   |  | $                                  | 9.72  |                    | $ | 3,294 |  
|Granted during the period                              |  | 349       |   |  |                                    | 7.17  |                    |   | 2,503 |  
|Exercised during the period                            |  | (13       | ) |  |                                    | 11.14 |                    |   | (145  | )
|Forfeited during the period                            |  | (2        | ) |  |                                    | 9.25  |                    |   | (18   | )
|                                                       |  |           |   |  |                                    |       |                    |   |       |  
|Options outstanding at March 31, 2007                  |  | 673       |   |  |                                    | 8.37  |                    |   | 5,634 |  
|Less: vested and unexercised at March 31, 2007         |  | (75       | ) |  |                                    | 9.43  |                    |   | (708  | )
|                                                       |  |           |   |  |                                    |       |                    |   |       |  
|Unvested outstanding at March 31, 2007                 |  | 598       |   |  | $                                  | 8.23  |                    | $ | 4,926 |  
|                                                       |  |           |   |  |                                    |       |                    |   |       |  
|Total options that vested in the first quarter of 2007 |  | 34        |   |  | $                                  | 7.24  |                    | $ | 246   |  
|                                                       |  |           |   |  |                                    |       |                    |   |       |  
|Total options vested or expected to vest               |  | 630       |   |  | $                                  | 8.45  |                    | $ | 5,324 |  
|                                                       |  |           |   |  |                                    |       |                    |   |       |  
|Weighted average remaining term of vested options      |  | 8.5 years |  

The intrinsic values of the options that vested and the options that were exercised during the quarter ended
March 31, 2007 were $0.2 million and $0.2 million, respectively. The weighted average exercise price and the aggregate intrinsic value of the options which we expect to vest are $11.69 per share and $4.2 million, respectively, at March 31,
2007 and the aggregate intrinsic value of the options exercisable at March 31, 2007 is $0.9 million.

Note 9. Income Taxes

Income taxes for the three month period ended March 31, 2007 were $7.2 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 three months ended March 31, 2006 were $3.6 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 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.

During March 2007, we resolved the 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 has now been 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



13



---

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.

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 has not recognized revenue related to such matters. The
Company recognizes revenue in the period that it is reliably assured of the collection of these claims.

The Company is periodically involved in disputes
and legal and tax proceedings and filings arising from normal business activities. As of March 31, 2007, the Companys reserve relating to certain operating tax issues was $0.4 million after a $0.4 million credit recorded to corporate
operating expense during the quarter ended March 31, 2007 based on settlements and other activity related to these issues. While the outcome of the remainder of this issue and other such matters are 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 adequate provision for any probable losses has been made
in our consolidated financial statements.

The Company had purchase commitments relating to capital expenditures totaling $13.1 million as of
March 31, 2007. All of these commitments are expected to be satisfied during 2007.



14



---

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 in the first quarter of 2007 and 92% of our total revenue growth from the first quarter of 2006 to the
first quarter of 2007. As of March 31, 2007, our wireless retail business had approximately 383,000 NTELOS-branded subscribers, representing a 7.4% penetration of our total covered population. Additionally, as a result of significant
investments that we made to our network in 2005 and 2006 when we added 147 new wireless cell sites as well as product, system and program initiatives recently employed in all segments, we have realized revenue growth of 14%, with wireless subscriber
revenue growth of 14% and wireless wholesale revenue growth of 25%, from the first quarter of 2006 to the first quarter 2007. We have also accomplished significant wireless customer growth (11% year over year, with 15,900 net adds in the first
quarter of 2007) from increases in customer additions and reductions in 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 which directly connects 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,
broadband voice and data services, and high-capacity network access and transport services) experienced 12% revenue growth from the first quarter of 2006 to the first quarter of 2007.

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,



15



---

which were primarily legal, printing and accounting fees with outside service firms related to the preparation of the registration statement, which totaled
$0.5 million, were charged to corporate operations expense in the first quarter of 2007.

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 $36.5 million as of March 31, 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.

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 to be paid on July 12, 2007 to stockholders of record on June 21, 2007.

During the
first quarter of 2006, we completed an initial public offering (the IPO) of 15,375,000 shares of our common stock at an offering price of $12.00 per share. We received proceeds from the offering of approximately $172.5 million, net of
$12.0 million in underwriting fees which were used to make a $12.9 million payment relating to the termination of our advisory agreements with CVC and Quadrangle, a $143.9 million payment to redeem our Floating Rate Senior Notes in full (including
unpaid accrued interest of $4.6 million) on April 15, 2006, and the remainder, combined with available cash, was used to pay a $30 million dividend on our 26,493,000 shares of Class B common stock on June 6, 2006. The payment of the
dividend represented the payment in full of the $30 million Class B distribution preference provided for in our Restated Certificate of Incorporation. Subsequent to this distribution, all of the 26,493,000 shares of the Class B common stock were
converted into shares of common stock, increasing the shares of common stock outstanding to approximately 41,965,000 at December 31, 2006.

Effects
of Being a Public Company

Upon completion of the initial public offering, 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 (SOX). 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 are required to be in compliance with the Sarbanes-Oxley Act by December 31, 2007. Accordingly, we will incur additional incremental costs over 2006. 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 non-GAAP measures, such as average monthly revenues per handset/unit in service, or ARPU, to measure operating performance for which our operating managers are responsible and upon which we
evaluate their performance.



16



---

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 quarters ended March 31, 2007 and 2006.



|                                                          |  |                         |         |   |      |   |         |  
|--------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | -
|                                                          |  | Quarter Ended March 31, |        
|(Dollars in thousands, other than ARPU data)              |  | 2007                    |         |   | 2006 |  
|Wireless communications revenues                          |  | $                       | 91,592  |   |      | $ | 77,575  |  
|Less: equipment revenues from sales to new customers      |  |                         | (4,746  | ) |      |   | (3,745  | )
|Less: equipment revenues from sales to existing customers |  |                         | (1,991  | ) |      |   | (1,084  | )
|Less: wholesale revenues                                  |  |                         | (22,926 | ) |      |   | (18,287 | )
|Plus: other revenues and adjustments                      |  |                         | 481     |   |      |   | 364     |  
|                                                          |  |                         |         |   |      |   |         |  
|Wireless gross subscriber revenues                        |  | $                       | 62,410  |   |      | $ | 54,823  |  
|                                                          |  |                         |         |   |      |   |         |  
|Average subscribers                                       |  |                         | 375,002 |   |      |   | 340,057 |  
|Total ARPU                                                |  | $                       | 55.48   |   |      | $ | 53.74   |  
|                                                          |  |                         |         |   |      |   |         |  
|                                                          |  |                        
|Wireless gross subscriber revenues                        |  | $                       | 62,410  |   |      | $ | 54,823  |  
|Less: paid in advance and prepay subscriber revenues      |  |                         | (17,108 | ) |      |   | (12,695 | )
|Less: adjustments                                         |  |                         | (674    | ) |      |   | (496    | )
|                                                          |  |                         |         |   |      |   |         |  
|Wireless gross postpay subscriber revenues                |  | $                       | 44,628  |   |      | $ | 41,632  |  
|                                                          |  |                         |         |   |      |   |         |  
|Average postpay subscribers                               |  |                         | 270,283 |   |      |   | 256,588 |  
|Postpay ARPU                                              |  | $                       | 55.04   |   |      | $ | 54.08   |  
|                                                          |  |                         |         |   |      |   |         |  
|                                                          |  |                        
|Wireless gross subscriber revenues                        |  | $                       | 62,410  |   |      | $ | 54,823  |  
|Less: wireless voice and other features revenues          |  |                         | (58,544 | ) |      |   | (52,174 | )
|                                                          |  |                         |         |   |      |   |         |  
|Wireless data revenues                                    |  | $                       | 3,866   |   |      | $ | 2,649   |  
|                                                          |  |                         |         |   |      |   |         |  
|Average subscribers                                       |  |                         | 375,002 |   |      |   | 340,057 |  
|Total data ARPU                                           |  | $                       | 3.44    |   |      | $ | 2.60    |  
|                                                          |  |                         |         |   |      |   |         |  

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 RLEC service revenues, including local service, network access, toll and directory advertising, and Competitive service
revenues, including revenues from our key strategic products (local, 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.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



17



---

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;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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. 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 quarters
ended March 31, 2007 and 2006. Amounts related to the RLEC segment minority interest were not material for all periods presented.

Results of
Operations

Quarter ended March 31, 2007 compared to quarter ended March 31, 2006

OVERVIEW

Operating revenues increased $15.3 million, or 14.4% from $106.3
million for the quarter ended March 31, 2006 to $121.6 million for the quarter ended March 31, 2007. Wireless PCS accounted for 92% of this increase, with growth occurring from both subscriber revenues and wholesale revenues. 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 revenues of other
Competitive segment products.



18



---

Operating income increased $30.0 million over the comparative quarters, from a loss of $1.8 million for the quarter ended
March 31, 2006 to income of $28.2 million for the quarter ended March 31, 2007. Net income increased $27.1 million from net loss of $17.3 million for the quarter ended March 31, 2006 to net income of $9.8 million for the quarter ended
March 31, 2007. Included in the net loss for the quarter ended March 31, 2006 was a charge of $12.9 million for the termination of advisory agreements and interest expense that was $5.7 million higher during the first quarter of 2006 than
the first quarter of 2007, which related to interest on the Floating Rate Notes (retired in April 2006) and lower interest during 2007 as a result of the refinancing transaction in June 2006. In addition, non-cash compensation charges were $1.0
million in the first quarter of 2007 and $10.5 million in the first quarter of 2006. Finally, income tax expense was $7.2 million and $3.6 million for the quarters ended March 31, 2007 and 2006, respectively.

OPERATING REVENUES

The following tables identify our operating revenues on
a business segment basis for the quarters ended March 31, 2007 and 2006:



|                       |  |                         |         |      |   |            |  |            |        |  |      |  
|---------------------- |  | ----------------------- | ------- | ---- | - | ---------- |  | ---------- | ------ |  | ---- | -
|                       |  | Quarter Ended March 31, |         |      |   |            | 
|Operating Revenues     |  | 2007                    |         | 2006 |   | $ Variance |  | % Variance |       
|(Dollars in thousands) |  |                         |         |      |   |            |  |            |       
|Wireless PCS           |  | $                       | 91,592  |      | $ | 77,575     |  | $          | 14,017 |  | 18.1 | %
|                       |  |                         |         |      |   |            |  |            |        |  |      |  
|Wireline               |  |                         |         |      |   |            |  |            |        |  |      |  
|RLEC                   |  |                         | 15,379  |      |   | 14,720     |  |            | 659    |  | 4.5  | %
|Competitive wireline   |  |                         | 14,406  |      |   | 13,784     |  |            | 622    |  | 4.5  | %
|                       |  |                         |         |      |   |            |  |            |        |  |      |  
|Total wireline         |  |                         | 29,785  |      |   | 28,504     |  |            | 1,281  |  | 4.5  | %
|                       |  |                         |         |      |   |            |  |            |        |  |      |  
|Other                  |  |                         | 198     |      |   | 188        |  |            | 10     |  | 5.3  | %
|                       |  |                         |         |      |   |            |  |            |        |  |      |  
|Total                  |  | $                       | 121,575 |      | $ | 106,267    |  | $          | 15,308 |  | 14.4 | %
|                       |  |                         |         |      |   |            |  |            |        |  |      |  

WIRELESS COMMUNICATIONS REVENUESWireless communications revenues increased $14.0 million from the quarter
ended March 31, 2006 to the quarter ended March 31, 2007 due to an increase in our NTELOS-branded net subscriber revenue of $7.4 million, or 13.7%, a $4.6 million, or 25.4%, increase in wholesale and roaming revenues, and a $1.9 million,
or 39.5%, increase in equipment sales revenues.

Subscriber revenues reflected subscriber growth of 11.4% over the comparative quarters, or 39,264
subscribers, from 343,879 subscribers as of March 31, 2006 to 383,143 subscribers as of March 31, 2007. As of March 31, 2007 and 2006, postpay subscribers represented 71.4% and 74.9% of total subscribers, respectively.

For the comparative quarters, subscriber revenues reflected the subscriber growth described above and an increase in ARPU of 3.2%, from $53.74 to $55.48 for the quarters
ended March 31, 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 $3.44 for the first quarter of 2007, up from
$2.60 for the first quarter of 2006. Other subscriber revenue increased 18.8% related in large part to growth in data services including data bundle packages introduced during the second quarter of 2006. Gross subscriber additions were 18.1% higher
for the first quarter of 2007, at 47,579, compared to first quarter 2006 gross subscriber additions of 40,285. This increase in gross adds 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 $1.9 million, or 39.5%, from the quarter ended March 31, 2006 to the quarter ended March 31, 2007. Total subscriber churn decreased 12.3%, from 3.21% for the first quarter of 2006
(32,712 subscribers) to 2.81% for the first quarter of 2007 (31,633 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.

The increase in wholesale revenues for the comparative periods was driven by increased voice and data usage under the Strategic Network Alliance.
Wholesale revenues grew 25.4%, from $18.3 million for the quarter ended March 31, 2006 to $22.9 million for the quarter ended March 31, 2007. Our wholesale revenues are derived primarily from the voice usage (or home minutes of
use) by Sprint Nextel customers who live in the Strategic Network Alliance service area, those customers of Sprint Nextel who use our voice services (travel minutes of use) while traveling through the Strategic Network Alliance
service area 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 63 cell sites within this wholesale
service area over the last five quarters, improving existing service and extending this coverage area.



19



---

Wholesale pricing reductions under the Strategic Network Alliance went into effect on July 1, 2006 relating to
travel minutes of use (minutes from Sprint Nextel customers from outside our region) and relating to 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. Based on notification from Sprint Nextel of its retail yield for voice usage and data usage for 2006, pursuant to the terms of our Strategic Network Agreement, further pricing reductions are expected to go into
effect on July 1, 2007 relating to travel minutes of use and, for the first time since entering into the contract in 2004, for home minutes of use. Sprint Nextels proposed data revenue yield is significantly lower than the comparable rate
for the prior year. We experienced significant growth in data usage in 2006 and expect continued growth in 2007. Our discussions with Sprint Nextel as to the appropriate voice and data rates to commence on July 1, 2007 continue at this time. We
expect continued growth in voice and data usage which should result in continued growth in wholesale revenue for 2007 compared to 2006.

We entered into a
seven-year exclusive wholesale agreement with Sprint Spectrum L.P. in 2004. While the 2005 merger of Sprint and Nextel has not had a negative impact on us to date, the ultimate impact of this merger is not known at this time. Further, Sprint Nextel
acquired controlling ownership interest in Nextel Partners Inc., a wireless affiliate of Sprint Nextel, in 2006 and the potential impact of any such consolidation is unknown. See Risk Factors contained in Item 1A. of our Annual
Report on Form 10-K for the year ended December 31, 2006.

WIRELINE COMMUNICATIONS REVENUESWireline communications revenues increased $1.3
million from $28.5 million for the quarter ended March 31, 2006 to $29.8 million for the quarter ended March 31, 2007.



| |  | RLEC Revenues.    RLEC revenues, which include local service, access and toll service, directory advertising and calling feature revenues
from our RLEC customers increased over the comparative quarters despite a 3.1% access line decrease, with lines totaling 45,054 as of March 31, 2007 compared to 46,492 as of March 31, 2006. Revenues for the comparative periods increased
$0.7 million, or 4.5%, from $14.7 million for the quarter ended March 31, 2006 to $15.4 million for the quarter ended March 31, 2007. This increase was due primarily to an increase in access revenues of $0.9 million, or 10.4%, over the
respective periods driven by an increase in carrier access minutes of 19.5% from the first quarter of 2006 to the first quarter of 2007 due primarily to growth in usage by wireless carriers. Our interstate access rates will be subject to a biennial
reset on July 1, 2007, which we expect will yield a net revenue reduction.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The access line loss noted above is
reflective primarily of wireless substitution and residential second line losses. 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 cable competition from Comcast to commence in 2007. We have estimated that our access line losses may be between 4% and 7% in 2007, assuming cable competition does occur which would impact RLEC revenues, principally from
residential consumers.



| |  | Competitive Wireline Revenues.    Competitive wireline total operating revenues, including revenues from local and long distance, voice
and data, Internet access and network access and transport services increased $0.6 million, or 4.5%, from $13.8 million for the quarter ended March 31, 2006 to $14.4 million for the quarter ended March 31, 2007.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues from our key strategic products in the Competitive wireline segment grew $1.1 million, or 11.6%, over the
comparative quarters, offset by declines in other Competitive revenues. Revenue from Broadband, integrated access and Metro Ethernet services increased $1.0 million, or 34.5%, from 2006 to 2007 due primarily to customer growth of 20.3% with the
Broadband products, particularly in the products with higher bandwidth. Private line, Competitive Access Provider (CAP) and transport revenue increased $0.1 million, or 2.7%, over the comparative quarters primarily from new circuit
additions with carriers. Local, Primary Rate Interface (PRI) and long distance revenue increased $0.1 million collectively, or 3.1%, from 2006 to 2007 due to an increase in customers over the comparable periods. Offsetting this were
declines in dial-up internet, switched access and reciprocal compensation revenues. Dial-up revenue declined $0.3 million from continued customer erosion, with 5,385 fewer customers, or 17.0%, from 31,707 at March 31, 2006 to 26,322 at
March 31, 2007. In addition, switched access and reciprocal compensation revenues declined $0.3 million due to volume reductions.

OTHER
COMMUNICATIONS SERVICES REVENUESOther communications services revenue remained flat at $0.2 million for the quarters ended March 31, 2006 and 2007.



20



---

OPERATING EXPENSES

The
following tables identify our operating expenses on a business segment basis, consistent with the tables presenting operating revenues above, for the quarters ended March 31, 2007 and 2006:



|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ------ | ---- | - | ---------- |  | - | ---------- | - |  | ------ | --
|                                                                                                                                                                                            |  | Quarter EndedMarch 31, |        |      |   |            |  |  
|Operating Expenses                                                                                                                                                                          |  | 2007                   |        | 2006 |   | $ Variance |  |   | % Variance |  
|(Dollars in thousands)                                                                                                                                                                      |  |                        |        |      |   |            |  |   |            |   |  |        |   
|Wireless PCS                                                                                                                                                                                |  | $                      | 56,731 |      | $ | 49,622     |  | $ | 7,109      |   |  | 14.3   | % 
|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   
|Wireline                                                                                                                                                                                    |  |                        |        |      |   |            |  |   |            |   |  |        |   
|RLEC                                                                                                                                                                                        |  |                        | 4,067  |      |   | 3,377      |  |   | 690        |   |  | 20.4   | % 
|Competitive wireline                                                                                                                                                                        |  |                        | 9,567  |      |   | 9,398      |  |   | 169        |   |  | 1.8    | % 
|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   
|Total wireline                                                                                                                                                                              |  |                        | 13,634 |      |   | 12,775     |  |   | 859        |   |  | 6.7    | % 
|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   
|Other                                                                                                                                                                                       |  |                        | 1,224  |      |   | 1,474      |  |   | (250       | ) |  | (17.0  | %)
|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   
|Operating expenses, before depreciation and amortization, accretion of asset retirement obligations, secondary offering costs, termination of
advisory agreements and non-cash compensation |  |                        | 71,589 |      |   | 63,871     |  |   | 7,718      |   |  | 12.1   | % 
|Depreciation and amortization                                                                                                                                                               |  |                        | 20,099 |      |   | 20,647     |  |   | (548       | ) |  | (2.7   | %)
|Accretion of asset retirement obligations                                                                                                                                                   |  |                        | 175    |      |   | 197        |  |   | (22        | ) |  | (11.2  | %)
|Secondary offering costs                                                                                                                                                                    |  |                        | 500    |      |   |           |  |   | 500        |   |  | 100    | % 
|Termination of advisory agreements                                                                                                                                                          |  |                        |       |      |   | 12,941     |  |   | (12,941    | ) |  | N/M    |   
|Non-cash compensation                                                                                                                                                                       |  |                        | 1,019  |      |   | 10,456     |  |   | (9,437     | ) |  | (902.5 | %)
|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   
|Total operating expenses                                                                                                                                                                    |  | $                      | 93,382 |      | $ | 108,112    |  | $ | (14,730    | ) |  | (13.6  | %)
|                                                                                                                                                                                            |  |                        |        |      |   |            |  |   |            |   |  |        |   

The following describes our operating expenses on an aggregate basis and on a basis consistent with our financial
statement presentation.

TOTAL OPERATING EXPENSESAs noted above, total operating expenses decreased $14.7 million, or 13.6%, over the comparative
quarters. Operating expenses before depreciation and amortization, accretion of asset retirement obligations, secondary offering costs (included in corporate operations expense), termination of advisory agreements and non-cash compensation charges
increased $7.7 million, or 12.1%, from the quarter ended March 31, 2006 to the quarter ended March 31, 2007.

Total wireless operating expenses
before depreciation and amortization, accretion of asset retirement obligations, secondary offering costs, termination of advisory agreements and non-cash compensation charges grew primarily from cost of sales and other selling and retention
expenses and from increased cell site expense. Increased cost of sales, particularly roaming costs and features, accounted for $3.3 million of the increase. Excluding cost of sales, the remaining increase of $3.8 million, or 11.2%, over the
comparative quarters was primarily due to increased retention costs of the larger subscriber base, an increase in agent and employee sales commissions due to increased sales, an increase in compensation expense due primarily to annual wage increases
on April 1 of each year and an increase in cell site expense related to a 10.2% increase in the number of cell sites and the increased subscriber base. These increases were primarily offset by favorable changes in advertising and marketing,
operating taxes and bad debt expense.



21



---

Wireline operating expenses before depreciation and amortization, accretion of asset retirement obligations, secondary
offering costs, termination of advisory agreements and non-cash compensation charges increased $0.9 million, or 6.7%, over the comparative quarters. This increase was largely related to revenue-driven increased access and long distance wholesale
expense and increased compensation expense due primarily to annual wage increases on April 1 of each year.

Other operating expenses, before
depreciation and amortization, accretion of asset retirement obligations, secondary offering costs, termination of advisory agreements and non-cash compensation charges from the other communication service businesses decreased $0.3 million from the
quarter ended March 31, 2006 to the quarter ended March 31, 2007 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 $3.3 million, or 21.0%, from $15.8 million for the
quarter ended March 31, 2006 to $19.1 million for the quarter ended March 31, 2007. Equipment cost of sales, or COS, increased $1.2 million in 2007 compared to 2006 primarily due to 7,294 more wireless gross customer additions over the
comparative quarters and sales of feature-rich, more expensive handsets. Roaming costs related to increased sales for national plans and other plans which contain more package roaming minutes increased $1.4 million over the comparative quarters.
Subscribers with a national plan represented 13.1% and 26.8% of the subscriber base at March 31, 2006 and 2007, respectively. The Company expects continued growth in roaming costs as sales of national plans increase. Advanced Data COS and
Access COS increased $0.5 million and $0.4 million, respectively over the comparative quarters due to increased data sales.

MAINTENANCE AND SUPPORT
EXPENSESMaintenance and support expenses increased $0.9 million, or 4.9%, from $19.3 million to $20.2 million for the quarters ended March 31, 2006 and 2007, respectively. Cell site costs for wireless increased $0.7 million over the
comparative quarters as a result of the larger subscriber base and a 10.2% increase in cell sites in service between the comparative quarters. In connection with 2007 planned network expansion and enhancements, we are planning an additional 6% to 7%
increase in the number of cell sites by the end of the year. Accordingly, when these and future cell sites are placed in service, we expect these costs to increase. The increase in maintenance and support is also attributable to transport and access
expense which increased $0.5 million over the comparative quarters due to the wireless PCS growth and growth of the strategic wireline Competitive services and CLEC UNE-loop rate increases. The remaining increase is primarily attributable to
increased compensation expenses related to wage increases on April 1 of each year. Primarily offsetting these increases was a $0.7 million decrease in non-cash compensation related to the original Class A common stock and option
instruments held by certain members of operations and engineering management, which decreased from $0.8 million for the first quarter of 2006 to $0.1 million for the first quarter of 2007.

CUSTOMER OPERATIONS EXPENSESCustomer operations expenses increased $1.2 million, or 5.1%, from $24.4 million for the first quarter of 2006 to $25.6 million for the
first quarter of 2007. This increase is 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, such as customer retention,
commissions and other selling expenses. These increases were 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, which decreased from $1.1 million for the first quarter of 2006 to $0.1 million for the first quarter of 2007. Also offsetting the increases was an improvement in bad debt expense of $0.4 million
over the comparative quarters, net of offsetting increases in collection expense, and a reduction in advertising and marketing expenses of $0.4 million over the comparative quarters.

CORPORATE OPERATIONS EXPENSESFor the comparative periods, corporate operations expenses decreased $6.7 million, or 45.2%, from $14.9 million for the quarter ended March 31, 2006 to $8.1 million for the
quarter ended March 31, 2007. The primary driver of this decrease is a $7.8 million decrease in non-cash compensation expense over the comparative quarters, which decreased from $8.5 million for the first quarter of 2006 to $0.8 million for the
first quarter of 2007. Also contributing to the decrease was a $0.5 million decrease in advisory fees, which were eliminated after the first quarterly payment in 2006 as a result of the termination of our advisory agreements in February 2006. Absent
these changes, corporate operations expense increased $1.5 million over the comparative quarters due primarily to an increase of $0.8 million, or 29.6%, in compensation expense due primarily to increased year over year bonus expense and medical
costs, and an increase in certain insurance expenses and sponsorships and other charitable contributions. Also included in corporate operations for the first quarter of 2007 were $0.5 million in legal, accounting and other costs related to the
secondary stock offering discussed in the overview section above.



22



---

DEPRECIATION AND AMORTIZATION EXPENSESDepreciation and amortization expenses decreased $0.5 million, or 2.7%, from
$20.6 million for the quarter ended March 31, 2006 to $20.1 million for the quarter ended March 31, 2007. A $0.6 million decrease in depreciation expense related to assets that became fully depreciated during 2006 and accelerated
depreciation related to the 3G-1xRTT network upgrade which commenced in 2005 and was completed during the second quarter of 2006 more than offset the $0.1 million increase in depreciation expense related to fixed asset additions.

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.

TERMINATION OF ADVISORY AGREEMENTSThe Company (through NTELOS Inc.) entered into advisory agreements with the Advisors, whereby the Advisors would provide advisory and other services to the Company for a period of ten years for a
combined annual advisory fee of $2.0 million payable quarterly at the beginning of each quarter. 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 for the comparative quarters decreased $5.7 million, or 34%, from $16.7 million to $11.0 million due primarily to the repayment of the Floating Rate Notes in April 2006. During the first quarter of 2006 interest on the Floating Rate
Notes was $4.6 million. The remaining decrease related to 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.

The change in fair value of interest rate swap instrument was a loss of $0.9 million for the quarter ended March 31, 2007 compared with a gain
of $1.9 million for the quarter ended March 31, 2006. 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 $2.9 million at March 31, 2007 has been recorded as deferred asset  interest rate swap on the condensed consolidated
balance sheets. The interest rate swap agreement matures in February 2008.

Other income primarily relates to interest income from cash and cash
equivalents. Other income totaled $0.7 million for the quarter ended March 31, 2007, $0.5 million lower than the prior year due to lower cash balances after the IPO proceeds were used to repay obligations in the second quarter of 2006. We
recorded a gain on sale of investment totaling $1.7 million for the quarter ended March 31, 2006 related to the redemption of the RTB stock for which we received the cash in April 2006. This has been classified in other income below operating
income due to the fact that the RTB stock was of a non-operational nature.

INCOME TAXES

Income tax expense for the quarter ended March 31, 2007 was $7.2 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 quarter ended March 31, 2006 were $3.6 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.

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.



23



---

Liquidity and Capital Resources

For the quarters ended March 31, 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. See Business contained in Item 1, Part I of our annual report on Form 10-K for the year ended December 31, 2006.

As of March 31, 2007, we had $662.5 million in aggregate long term liabilities, consisting of $611.8 million in outstanding long-term debt ($618.6 million including
the short-term element) and approximately $50.7 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 March 31, 2007 is 6.9%. The aggregate maturities of our long-term debt, excluding capital lease obligations, based on the contractual terms of the instruments are $4.7 million in 2007, $6.3 million per
year in 2008 and 2009, $153.6 million in 2010 and $446.6 million in 2011.

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 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. 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, 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 will be amortized to interest expense over the remaining life of the Amended Credit Agreement. 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 repurchase our common stock. Amounts that can be made available to us to
pay cash dividends or repurchase stock are restricted by the NTELOS Inc. Amended Credit Agreement.

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 March 31, 2007, we are in compliance with all of our
debt covenants, and our ratios at March 31, 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 March 31,
2007 are as follows:



|                                                  |  |        |  |                                      
|------------------------------------------------- |  | ------ |  | -------------------------------------
|                                                  |  | Actual |  | Covenant Requirement atMarch 31, 2007
|Leverage ratio (total debt outstanding to EBITDA) |  | 3.38   |  | Not more than 5.50                   
|Minimum interest coverage ratio                   |  | 3.87   |  | 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.



24



---

In addition to the long-term debt discussed above, we also enter into capital leases on vehicles used in our operations
with lease terms of four to five years. At March 31, 2007, the net present value of these future minimum lease payments was $1.2 million.

During the
quarter ended March 31, 2007, net cash provided by operating activities was approximately $24.9 million. We generated $36.6 million of cash from operations before taking into account changes in operating assets and liabilities. During this
period, we recognized $26.8 million of depreciation, amortization, deferred taxes and other non-cash charges (net), including $1.0 million in Class A common stock and stock options non-cash compensation charges. Total net changes in operating
assets and liabilities used $11.6 million. The principal changes in operating assets and liabilities from December 31, 2006 to March 31, 2007 were as follows: accounts receivable increased by $0.4 million, or 1.1%, due to increased
revenues partially offset by improved accounts receivable aging; inventories and supplies decreased $0.6 million driven by the introduction of our loaner phone program in the first quarter of 2007 which resulted in a reduction in handsets required
to support customer exchanges; other current assets increased $1.7 million largely related to increases in prepaid rents; accounts payable decreased by $3.6 million related to operating activities with a significantly higher amount of purchases
occurring at the end of 2006 (paid for after year-end) as compared to the first quarter of 2007 purchase activity; and other current liabilities decreased $4.2 million due primarily to a $4.5 million reduction in accrued compensation primarily
related to a reduction in unpaid annual incentive compensation. Retirement benefit payments for the first quarter of 2007 were approximately $6.2 million due primarily to the $6.0 million pension plan funding.

During the quarter ended March 31, 2006, net cash used in operating activities was approximately $8.3 million. We generated $15.6 million of cash from operations
before taking into account changes in operating assets and liabilities. During this period, we recognized $32.9 million of depreciation, amortization and other non-cash charges (net) including $10.5 million in class A common stock and stock options
non-cash compensation charges. Total net changes in operating assets and liabilities used $23.9 million. The principal changes in operating assets and liabilities from December 31, 2005 to March 31, 2006 were as follows: accounts
receivable decreased by $0.5 million, or 1.3%; inventories and supplies increased $2.3 million; other current assets increased $2.5 million; accounts payable decreased by $10.9 million; and other current liabilities decreased $2.2 million.
Retirement benefit payments in the first quarter of 2006 were approximately $6.4 million due primarily to the $6.3 million pension plan funding.

Our cash
flows used in investing activities for the quarter ended March 31, 2007 were approximately $16.1 million and include the following:



| |  |  | $16.1 million used for the purchase of property and equipment comprised of (i) approximately $9.6 million related to supporting our increasing subscriber base,
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 $5.3 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 and the
planned mid-year launch of a new video service offering, and (iii) approximately $1.2 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 quarter ended March 31, 2006 were approximately $20.3 million, with $20.4 million used for the purchase of
property and equipment.

We currently expect capital expenditures for 2007 to be in the range of $77 million to $81 million (not including any
discretionary capital expenditures for possible upgrades 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 $51 million to $53 million, of which
approximately $20 million to $22 million is expected to be used for 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-



25



---

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 $20 million to $22 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 offering which commenced in the fourth quarter of 2006 and the planned launch of a new video service offering in 2007. In addition, we expect to invest
approximately $6 million in 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 quarter ended March 31, 2007 aggregated $8.7 million, which primarily represents the
following:



| |  |  | $7.7 million in payments on our senior secured term loan; and
| | - |  | -------------------------------------------------------------



| |  |  | $0.9 million in debt issuance costs.
| | - |  | ------------------------------------

Net cash
provided by financing activities for the quarter ended March 31, 2006 aggregated $170.1 million, which primarily represents the following:



| |  |  | $171.2 million in proceeds from the initial public offering of common stock; and,
| | - |  | ---------------------------------------------------------------------------------



| |  |  | $1.1 million in payments on senior secured term loans and other debt instruments.
| | - |  | ---------------------------------------------------------------------------------

As of December 31, 2006 and March 31, 2007, we had approximately $44.2 million and $44.3 million, respectively, in cash and cash equivalents and working capital (current assets minus current liabilities) of
approximately $25.0 million and $36.9 million, respectively. Of the cash and cash equivalents on hand on March 31, 2007, $41.1 million was held by NTELOS Inc. and its subsidiaries which is subject to usage restrictions pursuant to the Amended
Credit Agreement.

We currently intend to continue to pay regular quarterly dividends on our common stock 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 possible higher capital expenditure levels during this period than we have had in 2005 and 2006 as we continue to grow our business and
evaluate additional growth opportunities, including potential discretionary upgrades to our 3G networks for higher-speed data communications applications such as EVDO. 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 $44.3 million at March 31, 2007 and we believe our cash 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 March 31, 2007, $617.5 million was outstanding under the First Lien Term Loan. As of March 31, 2007, NTELOS Inc. achieved a leverage ratio of 3.4:1.0 and an interest coverage ratio of 3.9:1.0, 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 $1.2 million as of March 31, 2007.



26



---

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 LIBOR, which was 2.64% for the initial calculation
period and 5.35% as of March 31, 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 March 31, 2007, we had a $2.9 million exposure to credit loss on interest rate swaps as the swap agreement had a fair value of $2.9 million above its face value.
At March 31, 2007, our senior bank debt of $617.5 million is $305.0 million over the swap agreement.

At March 31, 2007, our financial assets
included cash and cash equivalents of $44.3 million. Other securities and investments totaled $0.3 million at March 31, 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 quarter of 2007 or existing policies that were changed during the first quarter 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 scheduled 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 its 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 its results of operations and financial position.



27



---

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 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 quarter ended March 31, 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

No matter was submitted to a vote of security holders during
the first quarter of 2007.

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.
|- | ---------------



28



---

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: May 10, 2007 |  |  |  | By:                   |  | /s/ James S. Quarforth                                                       
|                    |  |  |  |                       |  | James S. Quarforth                                                           
|                    |  |  |  |                       |  | Chief Executive Officer, President and Chairman of the Board                 
|                    |  |  | 
|Dated: May 10, 2007 |  |  |  | By:                   |  | /s/ Michael B. Moneymaker                                                    
|                    |  |  |  |                       |  | Michael B. Moneymaker                                                        
|                    |  |  |  |                       |  | Executive Vice President and Chief Financial Officer, Treasurer and Secretary



29