SECURITIES
  AND EXCHANGE COMMISSION

WASHINGTON,
  D.C. 20549

FORM 10-K

ANNUAL REPORT
  PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES
  EXCHANGE ACT OF 1934

For the fiscal
  year ended December 31, 2000 Commission File Number 0-24064



CONESTOGA
  ENTERPRISES, INC.

a Pennsylvania
  Corporation Employer IRS No. 23-2565087

202
  East First Street, Birdsboro, Pennsylvania 19508



Registrants
  telephone number, including area code (610) 582-8711



SECURITIES
  REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:



Common Stock
  (par value $1.00 per share)



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

Yes __X____ No _______

Indicate by check mark if
  disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
  contained herein, and will not be contained, to the best of registrants knowledge,
  in definitive proxy or information statements incorporated by reference in Part
  III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate the number of shares
  outstanding of each of the issuers classes of Common Stock, as of the close
  of the period covered by this report.



|Class                               | Outstanding at December
      31, 2000
|----------------------------------- | --------------------------------------
|Common Stock, $1.00
      par value | 7,864,487                             

The aggregate market value of the voting stock held by non-affiliates on February
  28, 2001, was $105,948,694. The stock of the Company is traded on NASDAQ National
  Market (ticker symbol "CENI"). Therefore, the price is based on the most recent
  price at which the Companys stock has been traded.

DOCUMENTS INCORPORATED BY
  REFERENCE



Portions of the Proxy Statement
  relating to the Annual Meeting of Shareholders to be held on May 30, 2001, are
  incorporated by reference into Part III of this report.

PART I

ITEM 1. BUSINESS

Conestoga Enterprises, Inc.
  (CEI, or the Company) is a Pennsylvania corporation that is doing business as
  a holding company owning all of the outstanding shares of the following operating
  companies: Conestoga Telephone and Telegraph Company (CTT); Buffalo Valley Telephone
  Company (BVT); Conestoga Communications, Inc. (CCI); Conestoga Mobile Systems,
  Inc. (CMS); Conestoga Wireless Company (CWC); Infocore Inc. (INF); and TeleBeam,
  Inc. (TBI). CEIs subsidiary CTT owns a 10.951% interest in the PenTeleData
  Limited Partnership I. CEIs subsidiaries until April, 1998 owned a 70% partnership
  interest in the Berks and Reading Area Cellular Enterprises Limited Partnership
  (BRACE); and until August, 1997 a 10 % interest in the Lancaster Area Cellular
  Enterprises (LACE).

CTT and BVT are independent
  local exchange carriers (ILEC), which furnish communication services, mainly
  local and toll telephone service in their respective service areas. CTT serves
  an area of approximately 300 square miles which includes parts of the counties
  of Berks, Chester, Lancaster, and Montgomery, in the Commonwealth of Pennsylvania.
  BVT serves an area of approximately 275 square miles in Union and Northumberland
  Counties in the Commonwealth of Pennsylvania. Both Companies services are distributed
  through their telephone exchanges and systems of overhead and underground wire
  and cables. CTTs and BVTs entire telephone systems are digitally equipped.
  The population of CTTs service area is estimated to be 123,550, with an average
  annual growth rate of .7%. The population of BVTs service area is estimated
  to be 37,150, with an average annual growth rate of .4%.

CTT was incorporated on
  August 20, 1902 and the original BVT, on September 13, 1904. CEI acquired BVT
  on May 31, 1996. Both are incorporated under the laws of the Commonwealth of
  Pennsylvania. They are subject to the jurisdiction of the Pennsylvania Public
  Utility Commission (PUC), which franchised and established their geographical
  service areas. Within their areas, at the present time, they are not in competition
  with any other company in providing local exchange telephone service. They are
  subject to the jurisdiction of the Federal Communications Commission (FCC) with
  respect to interstate services.

ITEM 1. BUSINESS (Continued)

CEI acquired INF on April
  30, 1997. INF is a diversified telecommunications service company founded in
  1981, which designs, installs and maintains telephone and computer systems and
  resells local exchange and toll services. CWC was formed on March 17, 1995 as
  a Limited Liability Company owned 60% by CEI and 40% by INF. The limited liability
  company was merged into a corporation by the same name on January 1, 1998, with
  the result that CEI now owns 100% of the outstanding shares of CWC, the corporation.
  CWC began providing digital wireless telecommunication called PCS services in
  Eastern and Central Pennsylvania in May 1998, pursuant to Federal Communications
  Commission PCS licenses.

CEI acquired TBI on January
  31, 2000. The transaction is accounted for as a pooling of interests, which
  accordingly required restatement of the financial statements. All financial
  information presented for current and prior periods include the results of TBI.
  TeleBeam Inc. (TBI) was founded in 1992, as a Delaware Corporation, headquarters
  in State College Pennsylvania, to develop a broadband fiber network to provide
  multiple communication services to customers in central Pennsylvania as a bundled
  package through one service delivery venue. TBI is a diversified telecommunications
  service company, which provides its services primarily to business and multi-dwelling
  unit residential customers. TBI provides a variety of individual and bundled
  services to its customers including, long distance voice services, internet
  access and high-speed data transport, video and other enhanced communication
  services. Effective on December 31, 2000 TBI's name was changed to CEI Networks,
  Inc (CNI).

PenTeleData Limited Partnership
  I provides data transmission and interconnection services, including Internet
  services.

CEI
  liquidated its interest in BRACE in April 1998. BRACE was a limited partner
  in the Reading SMSA Limited Partnership, which provides cellular telephone service
  in the Reading metropolitan area.

CMS
  is engaged in the business of providing radio paging services in the Eastern
  and Central Pennsylvania regions.



CEIs earnings for 2000
  were impacted by several events as follows:



1. CEI sold investment
      securities which provided a before tax gain totaling $2.1 million.
2. CWC continued its aggressive
      expansion, adding 35 additional towers and base stations and opening 2 new
      retail stores. For the year, CWC incurred a loss of $7.1 million.
3. CEI incurred over $800
      thousand of one-time acquisition costs associated with the acquisition of
      TBI.
4. CNI grew its long distance
      service customer base (IXC Service) and continued aggressively to market
      its competitive local exchange service (CLEC), while moving existing resale
      customers to facilities based service. CNI incurred an operating loss of
      $753 thousand for the year (not including the one-time acquisition costs).
5. CEI also incurred a
      loss from its limited partnership interest in PenTeleData L.P. for the year
      of $339 thousand.



ITEM 1. BUSINESS (Continued)

Percentages of the Companys
  consolidated operating revenue in local, long distance and access, wireless,
  equipment and other services are shown on the following table:

|                               | 2000 | 1999 | 1998 | 1997 | 1996
|------------------------------ | ---- | ---- | ---- | ---- | ----
|Local*                         | 17%  | 14%  | 14%  | 16%  | 17% 
|Long
      Distance and Access | 55%  | 59%  | 61%  | 58%  | 63% 
|Wireless                       | 5%   | 3%   | 1%   | 1%   | 1%  
|Equipment and Other**          | 23%  | 24%  | 24%  | 25%  | 19% 
|                               | 100% | 100% | 100% | 100% | 100%



*CTT and BVT bill for local
  service on a flat rate basis.



** Includes revenues from
  all entities for their nonregulated sale or lease of telecommunication, pager
  or video equipment.  Also included is consulting revenue, rent revenues,
  billing and collection revenues, directory advertising revenues, Cable TV revenues,
  net of uncollectible revenues.

The local, long distance
  and access services gross revenues, which are regulated by the Pa. Public Utility
  Commission and the Federal Communications Commission, contribute a greater percentage
  to net income than the more competitive wireless and nonregulated sale and lease
  gross revenues.

On December 31, 2000, the
  Company had 82,844 telephone access lines inservice,
  of which 24% served business customers. The Company also had 10,928CLEC lines in service as well as 15,405 PCS lines, as set forth in the
  following table:

|LINES
        BY COMPANY
|------------------------
|Year
        End 12/31  
|1996                    
|1997                    
|1998                    
|1999                    
|2000                    



CTT had a total of 167 employees
  as of December 31, 2000, of which 98 were covered by one collective bargaining
  agreement. BVT had a total of 57 employees; INF had a total of 52; CWC had a
  total of 46; CNI had a total of 53, none of which are covered by a bargaining
  agreement.

ITEM 2. PROPERTIES

CTT, BVT, CWC CNI and CMS
  are engaged in the business of furnishing communication service. Their properties
  do not lend themselves to description by character and location of principal
  unit because their plant is widely distributed in their service territories.

As of December 31, 2000,
  investment in telephone plant in service by CTT and BVT consisted of the following
  categories and approximate percentages:

> A. Digital Switching equipment
>     35%;
>   B. Land and buildings
>     (occupied principally by digital switching equipment) 4%;
>   C. Connecting lines not
>     on subscribers premises (a majority of which are on or under public highways,
>     streets, andalleys,
>     and the remainder on or under private property) 56%;
>   D. General purpose computers
>     2%;
>   E. Motor vehicles, other
>     work equipment and furniture andoffice
>     equipment 3%.

As of December 31, 2000
  investment in plant in service by CWC, CNI, INF and CMS consisted of the following
  categories and approximate percentages:

> A. Land, Buildings, and
>     Towers 36%;
>   B. Transmitters and terminal
>     equipment 44%;
>   C. Plant 5%;
>   D. Computers and other
>     plant 9%;
>   E. Digital Switching equipment
>     6%;

CTT and BVT own most of
  their occupied buildings as well as most of the land on which the buildings
  are located. Several of the remote switching center buildings of CTT and BVT
  are located on leased properties, as are the towers of CWC. CTT, BVT, CNI and
  CWC are leasing some office space for corporate purposes.



INF has fixed assets consisting
  of vehicles and furniture and fixtures. INF leases office space for its operations.

Standard practices prevailing
  in the telephone industry are followed by both CTT and BVT in the construction
  and maintenance of their plant and facilities. Both consider their plant and
  facilities, as a whole, to be in sound physical and operating condition. Modernization
  of plant and facilities is very important in the telecommunications industry.
  CTT and BVT together added 16.6 miles of fiber optic cable during 2000 and at
  the end of 2000 had 472 miles of fiber optic cable in service. Software additions
  to both of their digital switches are added each year in order to fulfill the
  demand for enhanced service through the digital network.

ITEM 3. LEGAL PROCEEDINGS

As of December 31, 2000,
  there was no litigation that was material, as defined in Regulation S-K Item
  103, pending against the Company and its subsidiaries.

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

There was nothing submitted
  to a vote of security holders during the fourth quarter of the fiscal year covered
  by this report.

PART II



ITEM 5. MARKET FOR REGISTRANTS
  COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) CEIs Common Stock is
  trading on the NASDAQ National Market under the Ticker Symbol "CENI". The high
  and low sales prices for each quarter of 2000 and 1999 are listed below.

|2000              | High    | Low    
|----------------- | ------- | -------
|1st Quarter       | $25.000 | $16.500
|2nd Quarter       | $22.000 | $16.000
|3rd Quarter       | $21.000 | $17.625
|4th Quarter       | $19.625 | $15.500
|                  |         |        
|1999              | High    | Low    
|1st Quarter       | $23.825 | $19.833
|2nd Quarter       | $24.000 | $18.167
|3rd
      Quarter | $22.000 | $18.250
|4th Quarter       | $20.250 | $17.000

(b) Approximate Number of Equity Security Holders.

|Title
      of Class  | Approximate Number of Record Holders
        (as of Title of Class December 31, 2000)
|--------------------- | -------------------------------------------------------------------------------------
|Common
      Stock    | 1,911 (1)                                                                            
|Preferred
      Stock | 46 (1)                                                                               





(1) Included in the number
  of stockholders of record are shares held in "nominee" or "street" name.



(c) Dividends

Payments of common stock
  dividends will be within the discretion of the Companys Board of Directors
  and will depend, among other factors, on earnings, capital requirements, and
  the operating and financial condition of the Company. During the years 1999
  and 2000, the total cash dividend paid each year by the Company was $.833 and
  $.84 per share respectively. Dividends were paid quarterly throughout the years.
  Under the most restrictive covenants of the Companys debt agreements, $4.9
  million of the consolidated retained earnings as of December 31, 2000 plus seventy-five
  percent of 2001 consolidated net income (as defined in the agreement), is available
  for payment of cash dividends in 2001.

During the second quarter
  of 1996 the Company issued Series AConvertible
  Preferred Stock. Cumulative dividends of $3.42 per share per annum are paid
  semi-annually. During 1999 and 2000, the Company paid annual cash dividends
  of $3.42 per share on the Series A Convertible Preferred Stock.





ITEM 6. SELECTED FINANCIAL
  DATA

|                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                          
|Selected
      Income Statement Data:                                                                                                                                                                                                                                     
|Operating
      Revenue                                                                                                                                                                                                                                                   
|Net
      Income                                                                                                                                                                                                                                                          
|Basic
      Earnings per Common Share*                                                                                                                                                                                                                                    
|Diluted
      Earnings per Common Share*                                                                                                                                                                                                                                  
|Cash
      Dividends declared per Common Share*                                                                                                                                                                                                                           
|*Earnings
          and dividends per share are adjusted for the 3-for-2 stock split in
          1999. Dividends per share represent the historical dividends of the
          Company. There was no dividends paid by TeleBeam for any of the years
          presented.
|Selected
      Balance Sheet Data:                                                                                                                                                                                                                                        
|Net
      Plant                                                                                                                                                                                                                                                           
|Total
      Assets                                                                                                                                                                                                                                                        
|Long-term
      Debt Less Current Maturities                                                                                                                                                                                                                              
|Redeemable
      Preferred Stock                                                                                                                                                                                                                                          
|Stockholders
      Equity                                                                                                                                                                                                                                                 
|*includes
        towers to be sold as per footnote # 19                                                                                                                                                                                                                  



ITEM 7. MANAGEMENTS DISCUSSION
  AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

In 2000, the Company continued
  its strategic plan of becoming a full service integrated communications provider.
  It remained focused on growing its core telecommunications businesses by offering
  new services, such as high speed data DSL service, in the territories of its
  local exchange telephone companies, and entering new wireless personal communication
  service ("PCS") markets, such as State College Pennsylvania. In January 2000,
  it acquired TeleBeam, Inc. (TBI), a competitive communications company, providing
  high-speed data, long distance voice and cable television, located in State
  College, Pennsylvania.

The acquisition of TBI was
  accounted for as a pooling of interests, which required the restatement of the
  Company's financial statements for prior years. Consequently, the Company's
  financial results for the years discussed herein have been restated to include
  the financial results of TBI prior to the acquisition transaction.

TBI and Conestoga Communications,
  Inc. (CCI) provided many duplicative services, so effective December 31, 2000,
  TBI and CCI were merged into one company with the name CEI Networks, Inc. (CNI).

Consolidated Operating Revenue
  increased from $87.069 million in 1999 to $87.588 million in 2000, an increase
  of 0.6%. Such increases included (1) a 20% increase in the local service revenues
  of the Company's telephone utilities and CLEC subsidiaries from the provision
  of local exchange services, due in substantial part to the continued increase
  in access lines in service; and (2) a 90% increase in the PCS wireless service
  revenues of CWC, the Company's provider of wireless telecommunications services
  due to the continued expansion of CWC's customer base. Long distance and access
  revenues decreased 5.0% in 2000, lead by a decline in CNI's long distance service
  revenues due in substantial part by TBI's pre-acquisition sale of certain long
  distance revenue producing assets.

2000 Net Income grew to
  $3.114 million, or $0.33 per common share, from 1999 net income of $2.440 million,
  or $0.24 per common share. The increase in net income was directly impacted
  by a $2.1 million before tax gain from the sale of investment securities in
  2000.

Operating income declined
  from $11.010 million in 1999 to $9.059 million in 2000. The decline was caused
  by (1) the impact of the operating expenses of the new businesses of CWC and
  CNI in a very competitive environment; (2) the investment in the infrastructure
  of CWC's wireless and CNI's CLEC systems; and (3) one-time merger costs associated
  with the acquisition of TBI.

The continued strong operating
  performance of the Companys local networks and related markets provides the
  Company with the financial resources to pursue its strategic plan to become
  a fully integrated communications provider.





RESULTS OF OPERATIONS:

REVENUES

0perating Revenues:

|          | Increase
        (in thousands) |     
|--------- | ------------------------------- | ----
|1999-2000 | $
        519                   | 0.6%
|1998-1999 | 9,721                           | 12.6



The 0.6% increase in Operating
  Revenues in 2000, resulted from increases in local service and wireless revenues,
  offset by decreases in access, long distance and equipment revenues. CNI generated
  $23.2 million, CTT and BVT together generated $54.7 million, and CWC generated
  $4.0 million in revenues during 2000, compared with $23.9 million, $54.0 million,
  and $2.1 million, respectively, in 1999.

Local Service Revenues:

|          | Increase
        (in thousands) |      
|--------- | ------------------------------- | -----
|1999-2000 | $
        2,538                 | 20.4%
|1998-1999 | 2,009                           | 19.3 







Local Service Revenues are
  generated from the provision of local exchange services, including enhanced
  services, by the Companys incumbent local exchange carrier ("ILEC") subsidiaries,
  CTT and BVT, and the Company's competitive local exchange carrier ("CLEC") subsidiary,
  CNI. Enhanced services include Caller ID, Call Waiting and Return Call. The
  substantial increase in Local Service Revenues in 2000 and 1999 reflected the
  continued growth in access lines in service of the Company's ILEC and CLEC subsidiaries.

Local service revenues are
  regulated by the Pennsylvania Public Utility Commission (PUC). The PUC approved
  a rate re-balancing order for the ILEC's in the second quarter of 2000. This
  order, while revenue neutral, permitted an increase in local service rates,
  and resulted in a 1% increase in local service revenues in 2000.

The number of CTT's, BVT's,
  and CNI's access lines in service has increased substantially in recent years.
  During 2000, the number of CTT's and BVT's ILEC access lines in service increased
  3,975, or 5.0%, to a total of 82,844; and CNI's CLEC access lines in service
  increased by over 7,000, or 184%, to a total of 10,928. The installation of
  more than one access line for a residential customer, largely as a result of
  increasing Internet usage, has been a major factor in such increases within
  the Company's franchised territories in recent years. The Company in 2000 began
  offering high-speed digital subscriber line service (DSL) in its franchised
  territories. The availability of DSL service could adversely impact the growth
  of access lines, because a DSL line can carry voice traffic while simultaneously
  connected to the internet. Of course, DSL's potential adverse impact on the
  growth of access lines is likely to be at least partially offset by the fact
  that the Company is likely to realize greater revenues from providing DSL service
  to a residential customer than from providing an additional access line to the
  same customer. The Company had 567 DSL subscribers as of December 31, 2000,
  and anticipates this service to grow rapidly.

Long Distance and Access
  Service Revenues:



|          | Increase/(Decrease)
        (in thousands) |       
|--------- | ------------------------------------------ | ------
|1999-2000 | $
        (2,495)                          | (4.9%)
|1998-1999 | 3,724                                      | 7.9   



Long Distance and Access
  Service Revenues are generated by the telephone companies and CNI. Long Distance
  Service Revenues are derived from customer calls to locations outside of the
  customers local calling area. CTT and BVT provide intralata toll services for
  calls outside of the customers local calling area but within the same local
  access and transport area. CNI provides intralata and interlata toll services,
  the latter being for calls outside of the customers local calling area and
  local access and transport area.

Long distance toll service
  is becoming increasingly competitive. The PUC adopted regulations, effective
  January 1, 1998, requiring intralata toll competition within the Commonwealth
  of Pennsylvania. The intralata toll revenues of CTT and BVT have declined as
  a result of such increased competition. In response to competitive pressure
  in 2000, both CTT and BVT reduced their intralata toll rates as part of the
  rate-rebalancing order mentioned above, and their long distance revenues fell
  26.3%, or $1.1 million, compared to 1999.

In late 1997, the Company
  instituted full long distance service by converting its long distance resale
  operations to a full service, facilities based interexchange carrier, in order
  to attract new long distance customers, as well as retain its existing customer
  base. A large portion of the telephone companies long distance customers were
  picked up by CNI. Long distance service is very price competitive, and is, therefore,
  susceptible to customer churn. In 2000, CNI's long distance revenues were $18.7
  million, a decline of 7% from 1999. This decline was partially due to TBI's
  sale of certain lines of business in mid 1999, prior to the merger, and to the
  rate reduction from the telephone companies. Also, the increase in 1999 when
  compared with 1998 was primarily due to TBI's acquisition of an IXC in March
  1998. As of December 31, 2000, CNI had over 36,000 long distance customers.
  CNI is the long distance provider with the largest number of customers within
  the franchised territories of CTT and BVT.

Access Service Revenues
  consist of payments from end-user subscribers and long distance carriers to
  access the Companys local exchange facilities to provide long distance services.
  Total switched access minutes of use on the Companys networks increased 7.7%
  during 2000. Intrastate access rates were reduced in 2000, as a result of the
  PUC's rate-rebalancing order. The Company anticipates that access rates will
  continue to decline as local competition in the telecommunications industry
  becomes more widespread. This could negatively impact the future Access Service
  Revenues of CTT and BVT.

Long Distance and Access
  Service Revenues increased by 2.6% during the 1998 to 2000 period, but declined
  as a percentage of total Company revenues from 61% in 1998 to 55% in 2000.

Wireless Service Revenues:



|          | Increase/(Decrease)
        (in thousands) |      
|--------- | ------------------------------------------ | -----
|1999-2000 | $
        1,622                            | 66.9%
|1998-1999 | 1,687                                      | 228.3



Wireless Service Revenues
  are derived from the PCS service of CWC and the paging service of Conestoga
  Mobile Systems. CWC commenced the commercial operation of its PCS system in
  May 1998. In 2000, CWC's PCS revenues were $3.550 million compared with $1.866
  million in 1999. As of December 31, 2000, CWC had 15,405 customers, an increase
  of over 5,600 customers during 2000. The Company expanded its geographic service
  area to State College, Pennsylvania, and opened two additional retail centers.

Equipment and Other Revenues:

|          | Increase/(Decrease)
        (in thousands) |       
|--------- | ------------------------------------------ | ------
|1999-2000 | $
        (1,146)                          | (5.4%)
|1998-1999 | 2,301                                      | 12.2  



Equipment and Other Revenues
  include: (1) sale and lease of telephone equipment, such as telephones, PBX
  equipment, pagers and PCS wireless telephones by all of the Company's subsidiaries;
  (2) the revenues of CTT and BVT from directory advertising, rents, and billing
  and collection; (3) the revenues of INF from facility management and consulting
  services; (4) the cable TV and phone card revenues of CNI; and (5) the uncollectible
  accounts of all subsidiaries which are netted against such revenues.

Equipment sales and lease
  revenues which, in 2000, accounted for 56% of Equipment and Other Revenues,
  increased by 16.8% during the 1998 to 2000 period. The decline in 2000 was due
  to the fact that 1999 was an unusually good year with the sale and installation
  of several large telephone systems and security systems that year. The directory
  advertising revenues of both CTT and BVT, which, in 2000, made up 32% of Equipment
  and Other Revenues, continue to increase with a 12% increase in 2000. Billing
  and collection revenues of both CTT and BVT declined 30% during 2000, primarily
  as a result of long distance toll competition, whereby other long distance carriers
  do their own billing.

Uncollectible revenues for
  2000 and 1999, respectively, were 1.9% and 1.3% of gross operating revenues.
  CTT's and BVT's combined bad debt expense improved in 2000 over 1999. During
  2000, CTT and BVT wrote off $125,000, 0.2% of their gross operating revenues.
  The Company's more competitive business segments experience a greater percentage
  of uncollectible accounts, and during 2000 wrote-off over $860 thousand or 2.4%
  of gross operating revenues.

EXPENSES

|          | Increase
        (in thousands) |     
|--------- | ------------------------------- | ----
|1999-2000 | $
        2,470                 | 3.3%
|1998-1999 | 12,864                          | 20.4



The 3.3% increase in Operating
  Expenses in 2000 resulted from a decrease in cost of operations offset by increases
  in Depreciation and Amortization Expenses and Selling, General and Administrative
  Expenses. Operating expenses also include approximately $800 thousand in one-time
  merger costs incurred in the acquisition of TBI. CTT and CWC sustained the largest
  increases in operating expenses during 2000. CTT's operating expenses increased
  from $22.7 million in 1999, to $23.8 million in 2000, mostly as the result of
  increased costs of labor in marketing and sales and customer service. CWC's
  2000 operating costs increased from $10.2 million in 1999 to $13.0 million in
  2000, mostly as the result of increased customer care and acquisition costs
  and the substantially higher volume of business being conducted by CWC in 2000.
  CNI's operating expenses decreased in 2000 due to TBI's lower costs resulting
  from the disposition of certain assets prior to the acquisition. INFs operating
  expenses in 2000 were $9.2 million compared with $10.2 million in 1999. The
  decrease was caused by decreased equipment sales and the completion of the amortization
  of goodwill, during the second quarter of 2000, associated with the Company's
  acquisition of INF in 1997.

The 24.3% increase in Operating
  Expenses from 1998 through 2000 was primarily caused by the greater volume of
  business being conducted by CWC and CNI and the very competitive nature of their
  businesses, which necessitates high customer acquisition costs through advertising
  and marketing.

Cost of Operations:

|          | Increase
        (decrease)
        (in thousands) |       
|--------- | -------------------------------------------------- | ------
|1999-2000 | $
        (486)                                    | (1.3%)
|1998-1999 | 6,999                                              | 23.7  



Cost of Operations Expenses
  include outside plant expenses, digital switching and other network expenses,
  engineering expenses, cost of sales and related administrative expenses. The
  expenses of CTT and BVT, the local exchange carriers, are primarily regulated
  expenses for network and outside plant maintenance. Cost of sales expenses are
  incurred by CTT, BVT, CWC and INF mostly for equipment sales and leases.

Cost of Operations Expenses
  increased by 22.1% during the 1998 to 2000 period mostly due to the continued
  business expansion expenses of CWC and CNI.

Depreciation and Amortization
  Expenses:

|          | Increase
        (in thousands) |     
|--------- | ------------------------------- | ----
|1999-2000 | $
        1,242                 | 8.0%
|1998-1999 | 2,195                           | 16.5



Depreciation and Amortization
  expenses include charges from all of the subsidiaries. The increases in 2000
  were partly off set by the completion of the amortization of the goodwill related
  to the 1997 acquisition of INF. This reduced depreciation and amortization expense
  approximately $600 thousand for the year. The depreciation rates of CTT and
  BVT deceased slightly in 1999, as the result of a depreciation study. Depreciation
  expense for 2000, computed by the straight-line method, totaled $14.8 million
  and equated to a 7.72% effective composite rate, compared with 7.58% for 1999,
  and 7.51% in 1998.

Selling, General and Administrative
  Expenses:

|          | Increase
        (in thousands) |     
|--------- | ------------------------------- | ----
|1999-2000 | $
        1,714                 | 7.1%
|1998-1999 | 3,670                           | 18.0



Selling, General and Administrative
  Expenses (SG&A), include expenses from all of the Companys subsidiaries
  and consist of customer services for ordering and billing, customer acquisition
  costs for marketing and advertising expenses, regulatory, finance, executive,
  management information expenses, human relations expenses and insurance expenses,
  professional fees, such as fees for legal and accounting services, and taxes
  other than income taxes. The increase in the 1998 to 2000 period is directly
  related to the expanding operations of CWC and CNI, along with increased personnel
  in CTT"s management information and human resources departments. During 2000
  the SG&A expenses of CTT and BVT increased 5%, mostly in customer care and
  customer acquisition costs. CWC's SG&A expenses increased 35.8% also due
  to increased customer care and acquisition costs. Included in 2000 SG&A
  expenses were one-time merger related costs for the TBI acquisition in excess
  of $800 thousand.

Operating Income:

|          | Increase
        (decrease)
        (in thousands) |        
|--------- | -------------------------------------------------- | -------
|1999-2000 | $
        (1,951)                                  | (17.7)%
|1998-1999 | (3,143)                                            | (22.2) 



The combined operating income
  of CTT and BVT, the local exchange carriers, decreased by 1.6% in 2000, to $20.5
  million. They both had excellent growth in access lines, but experienced decreases
  in long distance and equipment sale and lease revenues, along with increased
  customer care and acquisition costs. CNI and CWC both experienced excellent
  growth in their respective customer bases and revenues. CNI and CWC recorded
  net operating losses for 2000 of $1.6 million and $8.9 million respectively
  primarily due to the more competitive nature of their businesses which carries
  higher customer care and acquisition costs.



Other Income/Expenses (net):

|          | Increase
        (decrease) 
        (in thousands) |        
|--------- | --------------------------------------------------- | -------
|1999-2000 | $
        1,587                                     | 37.3%  
|1998-1999 | (9,601)                                             | (179.4)



Other Income/Expenses (net)
  consist primarily of interest and dividend income, interest expense, income
  from unconsolidated partnership interests, and gains from the sale of unconsolidated
  partnership interest or assets in 1998 and gains from sale of investment securities
  in 2000. In 1999 and 2000, respectively, the Company incurred losses of $350,000
  and $339,000 as a result of its limited partnership interest in PenTeleData,
  L.P.

The increase in interest
  expense during 2000, was caused by the Company's borrowing of $35 million to
  finance the acquisition of TBI and the build-out of the State College fiber
  ring and the PCS system.

The Company drew on its
  bank lines of credit for interim financing in 2000, and 1999. As of December
  31, 2000 and 1999, respectively, it had balances of $0 and $1.0 million, outstanding
  on its bank lines of credit.

During 2000 the Company
  recorded a before tax gain of $2.1 million from the sale of a portion of its
  investment securities. As of December 31, 2000 the Company still held investment
  securities with an approximate value of $491,000.



During 1998, the Berks and
  Reading Area Cellular Enterprises, limited partnership ("BRACE"), in which subsidiaries
  of the Company held a 70% interest, sold its 39% limited partnership interest
  in the Reading SMSA Limited Partnership. The Reading SMSA Limited Partnership
  provides cellular telephone service in the Reading metropolitan area. The Company
  received $11.1 million and realized a $7.7 million pretax gain upon the liquidation
  of BRACE after the sale. BRACEs income for 1998 was $493 thousand. CTT owns
  an 10.95% limited partnership interest in the PenTeleData, L.P., which provides
  Internet access to customers in Pennsylvania and parts of New Jersey.



Income Taxes:

Income taxes decreased in
  2000 as a result of the decline in the Company's income and reduction in the
  effective tax rate. The statutory federal and state income tax rates over the
  period remained unchanged. The Company's effective tax rate (income tax expense
  as a percentage of income before income taxes) was 51.3%, 63.9% and 45.2% in
  2000, 1999 and 1998, respectively. The changes in the effective tax rates in
  2000, 1999 and 1998 are due primarily to valuation allowances on net operating
  losses, merger costs and the relationship of nondeductible goodwill amortization
  to pretax income.



NET INCOME:

|          | Increase
        (decrease)
        (in thousands) |       
|--------- | -------------------------------------------------- | ------
|1999-2000 | $
        674                                      | 27.6% 
|1998-1999 | (8,242)                                            | (77.2)



2000 Net Income was $3.114
  million, an increase of 28% over 1999. 1998 Net Income included a one-time after
  tax gain of $4.6 million from the sale of BRACE's interest in the Reading SMSA
  Limited Partnership.

2000 net income included
  an after tax gain of $1.4 million on the sale of the investment securities,
  as mentioned above. 2000 net income was negatively impacted by the operating
  losses of CWC and CNI, and the goodwill amortization associated with the acquisitions
  of BVT, INF for the first four months of 2000 and TBI's acquisition of a facilities
  based interexchange carrier (NAC). The Company anticipates that net income will
  be negatively impacted in the near future as a result of (i) the expenses associated
  with the continued build-out and development of CWC's wireless PCS business,
  (ii) the continued amortization of goodwill arising from the acquisitions of
  BVT and NAC, and (iii) the expansion of, and the build out of, CNI's telecommunications
  system in State College, Pennsylvania, and other areas.





FINANCIAL CONDITION

Liquidity and Capital Commitments:

|Years Ended
      December 31,
      Cash Flows From (Used In): | 2000                 | 1999     | 1998    
|--------------------------------------------------------------- | -------------------- | -------- | --------
|                                                                | (in
      thousands)
|Operating
      activities                                      | $18,234              | $20,488  | $14,721 
|Investing
      activities                                      | (25,577)             | (20,076) | (30,846)
|Financing
      activities                                      | 10,365               | (6,706)  | 22,334  



The Company uses the net
  cash generated from its operations and from external financing to fund capital
  expenditures for network expansion and modernization, and investment in new
  businesses. The Companys sources of funds, primarily from operations and, to
  the extent necessary, from readily available external financing arrangements,
  are sufficient to meet ongoing operating and investing requirements. The Company
  expects that presently foreseeable capital requirements, including the CNI build-out
  of its CLEC business and the expansion of the PCS business into State College,
  will require additional debt financing in order to maintain the Company's capital
  structure and ensure its financial flexibility.

On December 31, 2000, the
  Company had commitments totaling $3.6 million, including commitments to purchase
  equipment and materials to continue the upgrade of its telecommunications plant
  base and build the PCS network. The Company plans to finance its projected capital
  budget requirements for 2001, including the CNI build-out, totaling $27.4 million,
  from internally generated funds, sale of the PCS towers and some additional
  debt financing.

Cash Flows From Operating
  Activities:

The Company's primary source
  of funds continues to be cash generated from operations. Taking into account
  net income plus the various adjustments for depreciation and amortization, cash
  flows from operating activities in 2000 were $18 million. Although net income
  for accounting purposes is decreased by the amortization of the goodwill and
  the higher depreciation expenses arising from the capital investments in CLEC
  and PCS, amortization and depreciation are non-cash expenses and, consequently,
  a source of cash that the Company can use for the capital investments necessary
  to maintain and upgrade its network and build and develop PCS and CLEC.

Cash Flows Used in Investing
  Activities:

Capital expenditures are
  the Companys primary use of cash resources. The Companys capital expenditures
  in 2000 included $10.5 million for the Companys local exchange operations,
  $8.2 million for the build-out and further development of its PCS operation,
  and $9.3 million for the build-out of its CLEC operations. The investment in
  local exchange operations was consistent with the investments made in 1999 and
  1998. The investment in the CLEC business was under $1.3 million in 1999. The
  investment in the PCS business was $ 7.0 million in 1999 and $20.8 million in
  1998. The investments are made to support the Companys businesses in order
  to facilitate the introduction of new products and services, enhance responsiveness
  to competitive challenges and increase the operating efficiency and productivity
  of its networks. The investments in the PCS and CLEC systems by the Company
  are treated as investments in new businesses.

During 2000, the Company
  received proceeds, totaling $3.0 million from the sale of equity securities.
  During 1998, the Company received proceeds in excess of $11 million from the
  liquidation of its partnership interest in BRACE. In 1998, it also received
  proceeds, totaling $220,000 from the sale of equity securities.

Substantial amounts of additional
  capital will be needed for the remaining build-out of the PCS network and the
  build-out of the CLEC network. CWCs capital requirements over the next several
  years to complete the build out of its entire PCS network and the CLEC network
  could exceed $20 million. Additional financing could come from (1) internal
  sources, (2) long term debt, (3) common stock issue, or a combination of the
  three.

The Company has decided
  to sell the telecommunication towers owned by its various subsidiaries and apply
  the proceeds to fund the Company's capital requirements.



Cash Flows Used in Financing
  Activities:

As in prior years, dividend
  payments were a significant use of cash. In 2000 the Company paid dividends
  totaling $7.1 million and $1.0 million to redeem preferred stock.

In 2000, the Company borrowed
  $21 million to finance the capital requirements for the build-out and develop
  of CWCs wireless PCS network, and $13.8 million for development of the CNI
  State College network. At the end of 2000, the Company also had unadvanced amounts
  from each of two bank lines of credit in the amount of $10 million, and from
  another bank a $50 million unsecured line of credit.

In January, 1998, the Company
  in a private transaction purchased 86,074 shares of common stock at $31.00 per
  share. Some of these shares have been reissued under the Companys Dividend
  Reinvestment Plan and Employee Stock Purchase Plan. As of December 31, 2000,
  a balance of 33,427 of these shares remained in Treasury.

Equity Investments

The Company holds the publicly
  traded stock of another telecommunications company, which had a market value
  of approximately $491 thousand as of December 31, 2000. During 2000, the Company
  sold a portion of its stock portfolio for $3.0 million.



OTHER FACTORS

Personal Communication Services
  (PCS)



CWC holds Personal Communication
  Services ("PCS") licenses issued by the Federal Communications Commission to
  provide wireless telecommunication services. PCS is a wireless service based
  on lower power and a higher frequency bandwidth than cellular service. The Basic
  Trading Area in which CWC holds C and D blocks licenses are Reading, Pottsville,
  Sunbury, Williamsport and State College, Pennsylvania, covering a population
  of one millon people in ten counties in Pennsylvania. In April 1999 CWC was
  the successful bidder in the Federal Communications Commission C Block re-auction
  for additional bandwidth in the Basic Trading Areas (BTA) where the Company
  already held licenses and for bandwidth in the State College BTA.

CWC began commercial operations
  as a provider of highly mobile wireless telecommunications services in May 1998.
  By the end of 2000, the company had 126 base stations covering more than 70%
  of the population in its service area. CWC plans to put an additional 25 base
  stations into service during 2001 to augment coverage in those markets. CWC
  has 8 retail locations in its 10 county operating territory.

The development of the PCS
  network and business is subject to the risks and delays associated with the
  design and construction of the wireless system and the commencement of a new
  business. The Company has already invested almost $43 million in the PCS network
  and business and could invest an additional $20 million over the next several
  years. The Company is projecting PCS operating losses for the near future. The
  capital cost of the PCS system, the depreciation expense of the PCS assets,
  and the projected PCS operating losses will significantly impact the Company's
  earnings.

Management views participation
  in PCS as an important part of its future. PCS is a reliable, convenient and
  inexpensive vehicle for providing wireless telephone service. It will provide
  the Company with an opportunity to expand its business into neighboring territories.



Effects of Substantial Indebtedness
  and Preferred Stock on Future Operations

At December 31, 2000, the
  Company had approximately $73.3 million of long-term debt outstanding, approximately
  $2.8 million of long-term capital leases and approximately $9.2 million of redeemable
  preferred stock, compared to approximately $72.5 million of common equity. This
  resulted in a ratio of 54% debt and preferred stock to 46% equity. At December
  31, 1999 the ratio was 46% debt to 54% equity. The increased debt ratio reflects
  the additional debt acquired during 2000.

Although a higher level
  of debt and preferred stock is not unusual in the telecommunications industry,
  the additional debt and preferred stock may have important consequences on the
  Companys future operations, including: (i) the Company will incur additional
  interest expense and significant principal repayment obligations; (ii) the Company
  is subject to significant unscheduled preferred stock redemption obligations;
  (iii) the Companys increased leverage may make it more vulnerable to economic
  downturns and reduce its flexibility in responding to changing business and
  economic conditions; and (iv) payment of dividends on the Companys common shares
  may be restricted by the level of financial resources needed to service the
  Companys additional debt and preferred stock.

Regulated Industry

CTT and BVT are both regulated
  by the Pennsylvania Public Utility Commission (PUC) and the Federal Communications
  Commission (FCC). An amendment to the Pennsylvania Public Utility Act passed
  in 1993, provides for streamlined rate regulation and a method for determining
  rates other than the historic method of rate of return regulation for the state
  jurisdiction. This new regulation referred to as Chapter 30, provides a price
  stability mechanism in which a telephone companys annual revenues from non-competitive
  services may be permitted to change in line with the Gross Domestic Product
  Price Index, minus a productivity offset, with no limitation on earnings by
  the regulated company. In order for the Company to avail itself of the procedures
  permitted by Chapter 30, CTT and BVT must commit to providing universal broadband
  services by 2015. Both Companies filed Chapter 30 Plans in July 1998 and approval
  was received in January 2001. The interstate jurisdiction remains subject to
  rate of return regulation.

The telecommunication industry
  continues to undergo fundamental changes, which may have a significant impact
  on financial performance. The Federal Telecommunications Act of 1996, creates
  a regulatory environment that encourages competition. As rural companies, CTT
  and BVT are exempt from many of the most onerous aspects of competition unless
  prospective competitors can pass a public interest standard and agree to offer
  service throughout the telephone companies territories. In addition, in March
  1998 CTT and BVT received approval by the Pennsylvania PUC of a petition that
  has significantly strengthened the companies competitive position relative
  to non-facilities based competition. However, facilities based competition is
  not precluded.

Management believes that
  competition will continue to bring many new opportunities for our competitive
  businesses. Management is endeavoring to position the Company to take advantage
  of these opportunities as they arise and remains optimistic about the future.
  During 2000 CNI grew its long distance business both in the CTT and BVT franchise
  territories, as well a surrounding areas. In addition the Company's competitive
  local telephone business became operational in 1998 and began offering service
  in Bell Atlantics franchise territory. Strong growth in this business segment
  was experienced in 2000 as a result of the addition of the State College, Pennsylvania
  territory. Strong growth is expected to continue in 2001.

Accounting for the Effects
  of Certain Types of Regulation ("SFAS 71")

The Company follows the
  accounting statement which recognizes theeconomic
  effect of rate regulation by recording costs and return oninvestment
  as such amounts are recovered through regulatory authorized rates. As of December
  31, 2000, the Company had no regulated assets but had regulated liabilities
  totaling $552 thousand. The Company currently expects to follow the accounting
  practices prescribed by SFAS 71 in the foreseeable future, but, if the Company
  discontinued this practice, the effect of writing off any regulatory assets
  and liabilities would not be material to the Companys operations.



Effects of Inflation

It is the opinion of management
  that the effects of inflation on operating revenues and expenses over the past
  three years have been immaterial. Management anticipates that this trend will
  continue in the near future.



Forward-Looking Statements

Information contained above
  in this Managements Discussion and Analysis and elsewhere in this Annual Report
  with respect to expected financial results and future events and trends is forward-looking,
  based on our estimates and assumptions and subject to risks and uncertainties.
  For those statements, we claim the protection of the safe harbor for forward-looking
  statements contained in the Private Securities Litigation Reform Act of 1995.

The following important
  factors could affect the future results of our company and could cause those
  results to differ materially from those expressed in the forward-looking statements:
  (i) changes in economic and market conditions; (ii) effects of state and federal
  regulation; and (iii) the impact of new technologies. You should not place undue
  reliance on these forward- looking statements, which are applicable only as
  of the date hereof. We have no obligation to revise or update these forward-looking
  statements to reflect events or circumstances that arise after the date hereof
  or to reflect the occurrence of unanticipated events.



ITEM 7A. QUANTITATIVE and
  QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

The Company does not invest
  funds in derivative financial instruments or other market risk sensitive instruments
  for any purpose. Furthermore, management believes that the market risk of its
  fixed-rate debt is immaterial to the Companys financial statements as a whole.





































PART II



ITEM 8. FINANCIAL STATEMENTS
  AND SUPPLEMENTAL DATA













































INDEPENDENT
  AUDITORS REPORT











To the Board of Directors

Conestoga Enterprises, Inc.

Birdsboro, Pennsylvania



We have audited
  the accompanying consolidated balance sheets of Conestoga Enterprises, Inc.
  and subsidiaries as of December 31, 2000 and 1999, and the related consolidated
  statements of income, common stockholders equity and cash flows for each of
  the three years in the period ended December 31, 2000. These financial
  statements are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audits.





We conducted
  our audits in accordance with auditing standards generally accepted in the United
  States of America. Those standards require that we plan and perform the audit
  to obtain reasonable assurance about whether the financial statements are free
  of material misstatement. An audit includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the financial statements. An audit
  also includes assessing the accounting principles used and significant estimates
  made by management, as well as evaluating the overall financial statement presentation.
  We believe that our audits provide a reasonable basis for our opinion.





In our opinion,
  the consolidated financial statements referred to above present fairly, in all
  material respects, the financial position of Conestoga Enterprises, Inc. and
  subsidiaries as of December 31, 2000 and 1999, and the results of their
  operations and their cash flows for each of the three years in the period ended
  December 31, 2000 in conformity with accounting principles generally accepted
  in the United States of America.





Our audits
  were made for the purpose of forming an opinion on the basic financial statements
  taken as a whole. The financial statement schedule included in Item 14(a)
  (2) of Conestoga Enterprises, Inc.'s Form 10-K for each of the three years
  in the period ended December 31, 2000 is the responsibility of Conestoga
  Enterprises, Inc.'s management and is presented for purposes of complying with
  the Securities and Exchange Commission's rules and is not part of the basic
  financial statements. This schedule has been subjected to the auditing procedures
  applied in the audits of the basic financial statements and, in our opinion,
  fairly states in all material respects the financial data required to be set
  forth therein in relation to the basic financial statements taken as a whole.





BEARD MILLER
  COMPANY LLP









Reading, Pennsylvania

January 26,
  2001









|CONESTOGA
      ENTERPRISES, INC. CONSOLIDATED BALANCE SHEETS                                                           
|------------------------------------------------------------------------------------------------------------------------
|December 31,                                                                                                            
|                                                                                                                        
|                                                                                                                        
|ASSETS                                                                                                                  
|                                                                                                                        
|CURRENT ASSETS                                                                                                          
|Cash
      and cash equivalents                                                                                         
|Accounts
      receivable, including unbilled revenue, less allowance for doubtful accounts
      2000 $ 747; 1999 $ 609
|Inventories,
      at average cost                                                                                      
|Prepaid
      expenses and other current assets                                                                         
|                                                                                                                        
|Total
      current assets                                                                                              
|                                                                                                                        
|INVESTMENTS AND OTHER ASSETS                                                                                            
|Assets
      held for sale                                                                                              
|Cost
      in excess of net assets of businesses acquired,less
      amortization 2000 $ 8,309; 1999 $ 6,603            
|Investment
      in partnership                                                                                         
|Investments
      in equity securities                                                                                  
|Prepaid
      pension costs                                                                                             
|Other                                                                                                                   
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|PLANT                                                                                                                   
|In
      service                                                                                                        
|Under
      construction                                                                                                
|                                                                                                                        
|Less
      accumulated depreciation                                                                                     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        





See Notes to Consolidated Financial Statements.

|                                                                                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------------------------
|December 31,                                                                                                                                                    
|                                                                                                                                                                
|                                                                                                                                                                
|LIABILITIES AND COMMON STOCKHOLDERS EQUITY                                                                                                                      
|                                                                                                                                                                
|CURRENT LIABILITIES                                                                                                                                             
|Current maturities of long-term debt                                                                                                                            
|Current liability under capital lease                                                                                                                           
|Note payable                                                                                                                                                    
|Accounts payable                                                                                                                                                
|Accrued expenses:                                                                                                                                               
|Payroll and vacation pay                                                                                                                                        
|Taxes                                                                                                                                                           
|Other                                                                                                                                                           
|                                                                                                                                                                
|Total current liabilities                                                                                                                                       
|                                                                                                                                                                
|LONG-TERM LIABILITIES                                                                                                                                           
|Long-term debt, less current maturities                                                                                                                         
|Liability under capital lease, less current portion                                                                                                             
|Accrued postretirement benefit cost                                                                                                                             
|Other                                                                                                                                                           
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|DEFERRED INCOME TAXES                                                                                                                                           
|                                                                                                                                                                
|COMMITMENTS                                                                                                                                                     
|                                                                                                                                                                
|REDEEMABLE
      PREFERRED STOCK, par value $ 65 per share;authorized
      900,000 shares; issued and outstanding 2000141,288
      shares; 1999 156,779 shares
|                                                                                                                                                                
|COMMON STOCKHOLDERS EQUITY                                                                                                                                      
|Common stock, par value
      $ 1 per share; authorized200,000,000
      shares; issued 7,897,914 shares                                                        
|Additional paid-in capital                                                                                                                                      
|Retained earnings                                                                                                                                               
|Accumulated other comprehensive income                                                                                                                          
|Less
      cost of treasury stock 2000 33,427 shares; 199982,225
      shares                                                                                   
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                



|CONESTOGA
      ENTERPRISES, INC.CONSOLIDATED STATEMENTS OF INCOME
|------------------------------------------------------------------
|Three Years Ended December 31,                                    
|                                                                  
|                                                                  
|Operating revenues:                                               
|Local service                                                     
|Long distance and access service                                  
|Wireless
      service                                            
|Equipment
      and other                                         
|                                                                  
|                                                                  
|                                                                  
|Operating expenses:                                               
|Cost of
      operations                                          
|Depreciation
      and amortization                               
|Selling,
      general and administrative                         
|                                                                  
|                                                                  
|                                                                  
|Operating
      income                                            
|                                                                  
|Other income
      (expense), net:                                
|Interest
      expense                                            
|Income
      (loss) from unconsolidated partnership interests     
|Gain on
      sale of unconsolidated partnership interest         
|Gain on
      sale of investments in equity securities            
|Interest
      and dividend income                                
|Other,
      net                                                  
|                                                                  
|                                                                  
|                                                                  
|Income
      before income taxes                                  
|                                                                  
|Income taxes                                                      
|                                                                  
|Net income                                                        
|                                                                  
|Basic earnings
      per share                                    
|                                                                  
|Diluted earnings
      per share                                  





See Notes
  to Consolidated Financial Statements.



|CONESTOGA ENTERPRISES, INC.
      CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY             
|-----------------------------------------------------------------------------------------------------
|Three Years Ended December 31, 2000, 1999 and 1998                                                   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Balance, December 31, 1997                                                                           
|Comprehensive
      income:                                                                          
|Net income                                                                                           
|Change
      in net unrealized gains (losses) on securities, net
      of reclassification adjustment
|                                                                                                     
|Total comprehensive
      income                                                                     
|                                                                                                     
|Common stock
      dividends ($ 0.81 per share)                                                      
|Preferred stock dividends ($ 3.42 per share)                                                         
|Common stock
      issued under stock-based plans and other equity changes                           
|Conversion of preferred shares                                                                       
|Purchase of
      common stock for the treasury                                                      
|3-for-2 stock split in the form of a 50% stock dividend                                              
|                                                                                                     
|Balance, December 31, 1998                                                                           
|Comprehensive
      income:                                                                          
|Net income                                                                                           
|Change in net
      unrealized gains (losses) on securities                                          
|                                                                                                     
|Total comprehensive
      income                                                                     
|                                                                                                     
|Reduction in
      par value from $ 5 per share to $ 1 per share                                     
|Common stock dividends ($ 0.83 per share)                                                            
|Preferred stock
      dividends ($ 3.42 per share)                                                   
|Common stock issued under stock-based plans and other equity changes                                 
|Conversion
      of preferred shares                                                                 
|                                                                                                     
|Balance, December 31,
      1999                                                                     
|Comprehensive income:                                                                                
|Net income                                                                                           
|Change in net unrealized gains (losses) on securities                                                
|                                                                                                     
|Total comprehensive income                                                                           
|                                                                                                     
|Common stock
      dividends ($ 0.84 per share)                                                      
|Preferred stock
      dividends ($ 3.42 per share)                                                   
|Common stock
      issued under stock-based plans and other equity changes                           
|                                                                                                     
|Balance, December 31,
      2000                                                                     





See Notes
  to Consolidated Financial Statements.

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|Retained
|Earnings
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|CONESTOGA
      ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS                
|---------------------------------------------------------------------------------------
|Three Years Ended December 31,                                                         
|                                                                                       
|                                                                                       
|                                                                                       
|CASH FLOWS
      FROM OPERATING ACTIVITIES                                             
|Net income                                                                             
|Adjustments
      to reconcile net income to net cash provided by operating activities:
|Depreciation and amortization                                                          
|(Income) loss from unconsolidated partnership interests                                
|Gain on sale of unconsolidated partnership interest                                    
|(Gain)
      loss on sale of nonregulated property                                     
|Gain on sale of equity securities                                                      
|Change in assets and liabilities, net of effects from acquisition of business:         
|(Increase) decrease in:                                                                
|Accounts
      receivable                                                              
|Materials and supplies                                                                 
|Prepaid
      expenses                                                                 
|Prepaid pension costs                                                                  
|Other
      assets                                                                     
|Increase (decrease) in:                                                                
|Accounts
      payable                                                                 
|Accrued
      expenses and other current liabilities                                   
|Other
      liabilities                                                                
|Deferred income taxes                                                                  
|                                                                                       
|Net cash provided by operating activities                                              
|                                                                                       
|CASH FLOWS
      FROM INVESTING ACTIVITIES                                             
|Purchase of plant, net of removal costs and salvage from retirements                   
|Purchase
      of FCC licenses                                                         
|Proceeds on sale of nonregulated property                                              
|Capital investments in unconsolidated partnership interests                            
|Proceeds from sale of unconsolidated partnership interest                              
|Purchase
      of equity securities                                                    
|Proceeds from sale of equity securities                                                
|Acquisition
      of business, net of cash andcash
      equivalents acquired          
|                                                                                       
|Net cash used in investing Activities                                                  



|CONESTOGA ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)                                            
|-------------------------------------------------------------------------------------------------------------------------
|Three Years Ended December 31,                                                                                           
|                                                                                                                         
|                                                                                                                         
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                     
|Proceeds from long-term borrowings                                                                                       
|Principal payments on long-term debt                                                                                     
|Principal payments on capital lease obligation                                                                           
|Debt issuance costs                                                                                                      
|Borrowings on line of credit                                                                                             
|Principal payments on line of credit                                                                                     
|Issuance of common stock under the employee stock purchase and dividend
      reinvestment plans and other equity changes
|Common and preferred dividends paid                                                                                      
|Purchase of common stock for the treasury                                                                                
|Redemption of preferred stock                                                                                            
|                                                                                                                         
|Net cash provided by
      (used in) financing activities                                                                
|                                                                                                                         
|Increase (decrease) in cash and cash equivalents                                                                         
|                                                                                                                         
|Cash and cash equivalents:                                                                                               
|Beginning                                                                                                                
|                                                                                                                         
|Ending                                                                                                                   
|                                                                                                                         
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                                                        
|Cash payments for:                                                                                                       
|Interest                                                                                                                 
|                                                                                                                         
|Income taxes                                                                                                             
|                                                                                                                         
|SUPPLEMENTAL
      SCHEDULE OF NONCASHINVESTING AND
      FINANCING ACTIVITIES                                           
|Capital lease obligation incurred for use of building                                                                    
|                                                                                                                         
|Acquisition of business:                                                                                                 
|Current assets, net of cash acquired                                                                                     
|Property and equipment                                                                                                   
|Cost in excess of assets acquired                                                                                        
|Liabilities assumed                                                                                                      
|                                                                                                                         
|                                                                                                                         





See Notes to Consolidated Financial Statements.



CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









1



---

SIGNIFICANT ACCOUNTING
  POLICIES







> Principles
>       of consolidation and nature of operations:
>     The
>         consolidated financial statements include the accounts of Conestoga Enterprises,
>         Inc. (CEI) and its subsidiaries. CEI's wholly-owned operating subsidiaries
>         include:
>       
>       The
>           Conestoga Telephone and Telegraph Company (CTT) and Buffalo Valley Telephone
>           Company (BVT), which are independent local exchange carriers providing
>           both regulated and nonregulated communication services.
>         
>         CEI
>           Networks, Inc. (CNI), which provides long distance and competitive local
>           telephone services. CEI Networks was formed by a merger of two of CEI's
>           wholly-owned subsidiaries, Conestoga Communications, Inc. and TeleBeam,
>           Incorporated.
>         
>         Conestoga
>           Mobile Systems, Inc. (CMS), which provides paging communication services.
>         
>         Conestoga
>           Wireless Company (CWC), which provides wireless personal communication
>           services (PCS).
>         
>         Infocore,
>           Inc. (INF), which provides communication consulting services including
>           the design and installation of communication systems.
>       The
>         Companies are collectively referred to herein as the Company. All significant
>         intercompany transactions have been eliminated in consolidation.
>       
>       The
>         Company operates predominately in the communications and related services
>         industry providing services to customers in eastern and central Pennsylvania.
>       
>       The
>         Company's local exchange carriers are subject to rate regulations by the
>         Federal Communications Commission (FCC) and the Pennsylvania Public Utility
>         Commission (PUC) and, accordingly, follow the accounting prescribed by
>         Statement of Financial Accounting Standards No. 71, "Accounting for
>         Certain Types of Regulation."
>       
>       Use
>         of estimates:
>       The
>         preparation of financial statements in conformity with generally accepted
>         accounting principles 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
>         period. Actual results could differ from those estimates.
>       
>       Revenue
>         recognition:
>       The
>         Company's revenues are recognized when earned. Access service and long
>         distance service revenues are derived from access charges, toll rates
>         and settlement arrangements. The Company records retroactive settlements
>         as revenues in the year the settlements become known in accordance with
>         industry practice.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









1



---

SIGNIFICANT
  ACCOUNTING POLICIES (CONTINUED)



Cash and cash equivalents:

> For purposes
>       of reporting the statements of cash flows, the Company considers all highly
>       liquid debt instruments purchased with a maturity of three months or less
>       to be cash equivalents. At times, cash balances exceed F.D.I.C. limits.

Cost in excess of net assets
  of business acquired:

> The excess
>       of the acquisition cost over the net assets of the businesses acquired are
>       being amortized by the straight-line method over 25 to 40 years. Management
>       continually reviews the appropriateness of the carrying value of the excess
>       acquisition cost and the related amortization period. Amortization expense
>       for the years 2000, 1999 and 1998 was approximately $ 1,706,000, $ 2,287,000
>       and $ 2,203,000, respectively.

Investments:

> All marketable equity
>       securities are classified as available for sale. These securities are recorded
>       at fair value based on quoted market prices, and unrealized gains, net of
>       taxes, are reported in other comprehensive income. Gains and losses are
>       determined using the specific-identification method.
>     The Company is accounting
>       for its investment in partnership by the equity method.
>     Plant and depreciation:
>     Plant is recorded at
>       cost. Depreciation is computed by the straight-line method. Depreciation
>       expense on assets acquired under capital lease is included with depreciation
>       expense on owned assets. Rates used for calculating depreciation are based
>       on the economic useful lives of the assets. The effective composite depreciation
>       rates for the years 2000, 1999 and 1998 were 7.72%, 7.58% and 7.51%, respectively.
> 
>   Telephone plant:
>     Normal renewals and betterments
>       of units of property are charged to plant accounts, while ordinary repairs
>       and replacements of items considered to be less than units of property are
>       charged to plant specific expenses. When telephone plant is replaced or
>       retired, the cost of the plant retired, plus removal costs, less salvage
>       is charged to accumulated depreciation. Accordingly, no gain or loss is
>       recognized in connection with ordinary retirements.
>     Other property:
>     When other property
>       is retired or otherwise disposed of, the property's cost and accumulated
>       depreciation are removed from the plant accounts and any gain or loss on
>       disposition is recognized in income.

CONESTOGA ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS









1



---

SIGNIFICANT
  ACCOUNTING POLICIES (CONTINUED)







> Advertising:
>     Advertising
>         costs are expensed when incurred. Advertising expense for the years ended
>         December 31, 2000, 1999 and 1998 was approximately $ 2,235,000,
>         $ 1,513,000 and $ 1,307,000, respectively.
>     Income
>       taxes:
>     Deferred
>         taxes are provided on the liability method whereby deferred tax assets
>         are recognized for deductible temporary differences and deferred tax liabilities
>         are recognized for taxable temporary differences. Temporary differences
>         are the differences between the reported amounts of assets and liabilities
>         and their tax basis and net operating loss carryforwards. Deferred tax
>         assets are reduced by a valuation allowance when, in the opinion of management,
>         it is more likely than not that some portion or all of the deferred tax
>         assets will not be realized. Deferred tax assets and liabilities are adjusted
>         for the effects of changes in tax laws and rates on the date of enactment.
>     
>     Employee benefits:
>     Pension plans:
>     All eligible employees
>         of CTT and BVT are covered under noncontributory defined benefit pension
>         plans. The plans provide benefits based on years of service and employee
>         compensation. The Company's funding policy is to make contributions in
>         compliance with applicable regulations.
>       Postretirement benefit
>         plan:
>       A subsidiary of the
>         Company sponsors a postretirement health care plan for substantially all
>         of its salaried employees and their spouses. The plan is contributory,
>         with retirees contributing 50% of the premiums. The plan is unfunded.
>         The Company's share of the estimated costs that will be paid after retirement
>         is generally being accrued by charges to expense over the employees' active
>         service periods to the dates they are fully eligible for benefits, except
>         that the Company's unfunded cost that existed at January 1, 1993
>         is being accrued primarily under the straight-line method that will result
>         in full accrual by December 31, 2012.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









1



---

SIGNIFICANT ACCOUNTING
  POLICIES (CONTINUED)







> Employee benefits (continued):
>     401(k) savings plans:
>       The Company has contributory
>         401(k) savings plans for substantially all employees. The Company contributes
>         matching amounts for participating employees in accordance with the provisions
>         of the plans. The Company contributed approximately $ 530,000, $ 478,000
>         and $ 411,000 to the plans for 2000, 1999 and 1998, respectively.
>     Deferred compensation
>       agreement:
>     The Company has a
>         deferred compensation agreement with an officer which provides benefits
>         payable to him upon retirement. The estimated liability under the agreement
>         is being accrued over the expected remaining years of employment.
>     Reclassification:
>     Certain
>         items in the 1999 and 1998 financial statements have been reclassified
>         to conform to the 2000 financial statement presentation. Such reclassifications
>         had no impact on net income.

2



---

ACQUISITIONS

> 

> On January 31, 2000, the Company acquired
>         all the outstanding shares of TeleBeam, Incorporated. The Company issued
>         734,962 shares to TeleBeam shareholders. The transaction is accounted
>         for as a pooling of interests which, accordingly, required restatement
>         of the financial statements. All financial information presented for current
>         and prior periods include the results of TeleBeam, Incorporated.



> 

> 

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









2



---

ACQUISITIONS
  (CONTINUED)







> The results of operations of the separate entities for periods
>       prior to the combination were as follows:



|                                                                                | Company        | TeleBeam | Combined
|------------------------------------------------------------------------------- | -------------- | -------- | --------
|                                                                                | (In Thousands)
|                                                                                |                |          |         
|For
      the period from January 1, 2000 toJanuary 31,
      2000 (unaudited): |                |          |         
|Revenues                                                                        | $              | 6,090    | $       
|Net income (loss)                                                               |                | 327      |         
|                                                                                |                |          |         
|For the year ended December 31, 1999:                                           |                |          |         
|Revenues                                                                        |                | 71,199   |         
|Net income (loss)                                                               |                | 3,826    |         
|                                                                                |                |          |         
|For the year ended December 31, 1998:                                           |                |          |         
|Revenues                                                                        |                | 62,833   |         
|Net income                                                                      |                | 10,352   |         





> Net income
>       for the period from January 1, 2000 to January 31, 2000 excludes
>       merger costs for the Company and TeleBeam of approximately $ 100,000
>       and $ 745,000, respectively.
>     
>     Dividends
>       per share in the accompanying statements of common stockholders' equity
>       represent the historical dividends per share of the Company. TeleBeam did
>       not pay dividends in any of the years presented.
>     
>     On March 10,
>       1998, TeleBeam acquired all of the outstanding shares of North American
>       Communications, Inc. (NAC), a facilities-based interexchange company, for
>       approximately $ 12.3 million. The acquisition was recorded under the
>       purchase method of accounting and, accordingly, the results of operations
>       of NAC are included in the Company's financial statements beginning on March 10,
>       1998. The initial purchase price was allocated to assets acquired and liabilities
>       assumed based on estimated fair values. The excess purchase price over the
>       fair value of net assets acquired is being amortized over 25 years on the
>       straight-line method.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









3



---

INVESTMENTS
  IN EQUITY SECURITIES







> The following is a summary of the Companys investments in
>       equity securities:



|                              | December 31,  
|----------------------------- | --------------
|                              | 2000          
|                              | (In Thousands)
|Marketable equity securities: |               
|Aggregate cost                | $             
|Gross unrealized gains        |               
|                              |               
|Fair value                    | $             





> The Companys investments in equity securities are concentrated
>       in the telecommunications industry. The Company also had a $ 200,000
>       investment in a non-marketable equity security at December 31, 1999.
>     
>     Proceeds and gross gains from the sale of equity securities
>       were $ 2,986,000 and $ 2,118,000, respectively, for the year ended
>       December 31, 2000.
>     
>     Proceeds and gross gains from the sale of equity securities
>       were $ 220,000 and $ 73,000, respectively, for the year ended
>       December 31, 1998. There were no sales of equity securities in 1999.

4



---

INVESTMENT
  IN PARTNERSHIP







The following
  is a summary of the Company's investment in partnership:





|                              | December 31,  
|----------------------------- | --------------
|                              | 2000          
|                              | (In Thousands)
|                              |               
|PenTeleData, 10.951% interest | $             









> PenTeleData
>       is a limited partnership which provides Internet access services in central
>       and eastern Pennsylvania. PenTeleData is reported on the equity method in
>       accordance with Statement of Position 78-9.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









4



---

INVESTMENT IN PARTNERSHIP
  (CONTINUED)



> In May 1998, Berks and Reading Area Cellular Enterprises
>       (BRACE), in which subsidiaries of the Company held a 70% interest, sold
>       its partnership interest in Reading SMSA for $ 15,835,000, of which
>       the Company received $ 11,084,000 and realized a pretax gain of $ 7,740,000.
>       BRACE's sole activity was a 39% limited partnership interest in the Reading
>       SMSA Limited Partnership, which provides cellular telephone service to the
>       Reading metropolitan area. BRACE was reported on the equity method since
>       the Company effectively had a 27.3% interest in the operating partnership.The Companys equity in net income (loss) of the partnerships
>       was approximately $ (339,000), $ (350,000) and $ 424,000
>       for 2000, 1999 and 1998, respectively, which in 1998 includes $ 493,000
>       from BRACE.

5



---





> Plant
>       is carried at cost less accumulated depreciation and consists of the following:



|                                     | December 31,  
|------------------------------------ | --------------
|                                     | 2000          
|                                     | (In Thousands)
|Telephone plant:                     |               
|In service:                          |               
|Land and buildings                   | $             
|Digital switching equipment          |               
|Other equipment                      |               
|Outside plant facilities             |               
|                                     |               
|Under construction                   |               
|                                     |               
|Less accumulated depreciation        |               
|                                     |               
|                                     |               
|Nonregulated property and equipment: |               
|Land and buildings                   |               
|Equipment                            |               
|                                     |               
|Under construction                   |               
|                                     |               
|Less accumulated depreciation        |               
|                                     |               
|                                     |               
|                                     |               
|                                     | $             







CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









6



---





Long-term
  debt is summarized as follows:





|                                                                                                                                                       | December
      31,
|------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------
|                                                                                                                                                       | 2000              
|                                                                                                                                                       | (In Thousands)    
|                                                                                                                                                       |                   
|7.59%
      Series B Senior Notes, interest payable quarterly, principal due
      in annual installments of $ 1,454,000 from
      2001 through 2011. | $                 
|6.22%Senior Notes, interest payable quarterly, principal due in quarterly
      installments of $ 750,000 from 2001 through 2008.                      |                   
|6.89% term loan, interest payable quarterly, principal due in quarterly
      installments of $ 250,000 through 2002.                                  |                   
|7.84% term loan, interest payable quarterly, principal due in quarterly
      installments of $ 500,000 from 2005 through 2014.                        |                   
|7.86% term loan, interest payable quarterly, principal due in quarterly
      installments of $ 375,000 from 2005 through 2014.                        |                   
|Other notes payable.                                                                                                                                   |                   
|                                                                                                                                                       |                   
|Less current maturities                                                                                                                                |                   
|                                                                                                                                                       |                   
|                                                                                                                                                       | $                 





> The aggregate
>       amounts of maturities of long-term debt for each of the five years subsequent
>       to December 31, 2000 are as follows (in thousands):



|2001 | $ | 4,705
|---- | - | -----
|2002 |   | 4,705
|2003 |   | 4,455
|2004 |   | 4,455
|2005 |   | 7,955







CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









6



---

LONG-TERM DEBT AND CREDIT
  ARRANGEMENTS (CONTINUED)







> The Company
>       has an unsecured credit agreement through June 30, 2001 with a bank
>       under which it may borrow up to $ 10,000,000 for working capital or
>       general business purposes in the form of line of credit loans or letters
>       of credit. Interest is payable monthly on advances at the Company's option
>       of either one percent below the bank's prime rate or .35 percent above the
>       one month London Interbank Offered Rate (LIBOR) rate. There were no borrowings
>       outstanding at December 31, 2000. There was $ 1,000,000 outstanding
>       on the line of credit at December 31, 1999. The prime and one month
>       LIBOR interest rates were 9.50% and 6.56% at December 31, 2000 and
>       8.50% and 5.63% at December 31, 1999. Issuance fees on letters of credit
>       shall be mutually agreed between the bank and the Company on a case-by-case
>       basis.
>     
>     The Company
>       also has an unsecured $ 10,000,000 line of credit from a bank available
>       until June 30, 2001 with interest at the London Interbank Offered Rate
>       plus .75% or at a rate to be negotiated. There were no borrowings outstanding
>       on the line of credit at December 31, 2000 and 1999. The interest rate
>       applicable to the line of credit was 7.31% and 6.58% at December 31,
>       2000 and 1999, respectively. In 1999, the available line of credit was $ 5,000,000.
>     
>     On April 28,
>       2000, the Company entered into an unsecured $ 50,000,000 line of credit
>       from a bank available until April 28, 2001 with interest at a rate
>       selected at the option of the Company. The line of credit is automatically
>       renewed on each anniversary date through April 28, 2005, unless either
>       party gives written notice no less than 30 days prior to the anniversary
>       date. The bank charges a commitment fee at an annual rate of 0.125% on the
>       average daily unused portion of the line, payable quarterly. There were
>       no borrowings outstanding on the line of credit at December 31, 2000.
>     
>     The credit
>       agreements contain provisions which, among other things, require maintenance
>       of certain financial ratios and limit the amount of additional indebtedness.
>       The Senior Notes also contain provisions which, among other things, restrict
>       mergers and consolidations, encumbrances and sales of certain assets, redemptions
>       of preferred stock and purchases of restricted investments. Under the most
>       restrictive covenants of the debt agreements, approximately $ 4,889,000
>       of the consolidated retained earnings as of December 31, 2000 plus
>       75% of 2001 consolidated net income (as defined in the agreement) is available
>       for payment of cash dividends in 2001.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









7



---

CAPITAL
  LEASE







> In 2000,
>       the Company entered into a long-term lease agreement for a building, that
>       provides for monthly rentals of approximately $ 24,000 per month, including
>       interest at 7.95% through April 2020.
>     
>     The following
>       is a schedule, by year, of the future minimum lease payments under the capital
>       lease together with the present value of the net minimum lease payments
>       (in thousands):



|2001                                          |  |  | $ | 290  
|--------------------------------------------- |  |  | - | -----
|2002                                          |  |  |   | 290  
|2003                                          |  |  |   | 290  
|2004                                          |  |  |   | 290  
|2005                                          |  |  |   | 290  
|Thereafter                                    |  |  |   | 4,157
|Total minimum lease payments                  |  |  |   | 5,607
|Less amount representing interest             |  |  |   | 2,748
|Present value of net minimum lease payments   |  |  |   | 2,859
|Less portion reflected as current liabilities |  |  |   | 65   
|                                              |  |  |   |      
|                                              |  |  | $ | 2,794





At December 31,
  2000, the building under capital lease was recorded as follows:





|Cost                     |  |  | $ | 2,900
|------------------------ |  |  | - | -----
|Accumulated depreciation |  |  |   | 91   
|                         |  |  |   |      
|                         |  |  | $ | 2,809









CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









8



---

INCOME
  TAX MATTERS







> The provision
>       for income taxes for the years ended December 31, 2000, 1999 and 1998
>       was as follows:



|          | 2000           | 1999  | 1998
|--------- | -------------- | ----- | ----
|          | (In Thousands)
|Current:  |                |       |     
|Federal   | $              | 1,591 | $   
|State     |                | 1,952 |     
|          |                |       |     
|          |                | 3,543 |     
|Deferred: |                |       |     
|Federal   |                | 190   |     
|State     |                | (450) |     
|          |                |       |     
|          |                | (260) |     
|          |                |       |     
|          | $              | 3,283 | $   





> The income
>       tax provision differs from the amount of income tax determined by applying
>       the federal income tax rate to pretax income for the years ended December 31,
>       2000, 1999 and 1998 due to the following:



|                                             | 2000  | 1999 | 1998 
|-------------------------------------------- | ----- | ---- | -----
|                                             |       |      |      
|Normal statutory federal income tax rate     | 34.0  | %    | 34.0 
|Increase (decrease) resulting from:          |       |      |      
|State income tax, net of federal tax benefit | 2.4   |      | 5.7  
|Valuation allowance                          | 7.9   |      | 16.1 
|Goodwill amortization                        | 6.9   |      | 9.5  
|Merger costs                                 | 3.5   |      | -    
|Other                                        | (3.4) |      | (1.4)
|                                             |       |      |      
|                                             | 51.3  | %    | 63.9 









CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









8



---

INCOME
  TAX MATTERS (CONTINUED)







> Net deferred
>       tax liabilities consist of the following components as of December 31,
>       2000 and 1999:



|                                 | 2000           | 1999   
|-------------------------------- | -------------- | -------
|                                 | (In Thousands)
|Deferred tax liabilities:        |                |        
|Plant, in service                | $              | 11,794 
|Prepaid pension costs            |                | 1,239  
|Investments                      |                | 123    
|                                 |                |        
|                                 |                | 13,156 
|                                 |                |        
|Deferred tax assets:             |                |        
|Employee benefits                |                | (720)  
|Net operating loss carryforwards |                | (4,438)
|Other                            |                | (479)  
|                                 |                |        
|                                 |                | (5,637)
|                                 |                |        
|Valuation allowance              |                | 2,275  
|                                 |                |        
|                                 | $              | 9,794  



Company
      has approximately $ 2,457,000 of net operating loss carryforwards for
      federal income tax purposes, which expire between the years 2006 and 2019.

> Certain subsidiaries
>       of the company
>       have approximately $ 47,764,000 of net operating loss carryforwards
>       for state income tax purposes which expire between the years 2005 and 2010.
>       A valuation allowance of $ 2,275,000 and $ 1,767,000 was recorded
>       at December 31, 2000 and 1999 for these state loss carryforwards which
>       may expire unutilized. The valuation allowance was increased by approximately
>       $ 508,000, $ 1,090,000 and $ 398,000 in 2000, 1999 and 1998,
>       respectively.
>     Utilization of the net operating
>       loss carryforwards is dependant upon future taxable income and is subject
>       to statutory limitations.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









9



---

DEFINED
  BENEFIT PENSION PLANS







> Information
>       pertaining to the activity in the Company's defined benefit pension plans
>       is as follows:



|                                                     | Years Ended December 31,
|---------------------------------------------------- | ------------------------
|                                                     | 2000                    
|                                                     | (In Thousands)          
|                                                     |                         
|Change in benefit obligation:                        |                         
|Benefit
      obligation at beginning of year        | $                       
|Service
      cost                                   |                         
|Interest
      cost                                  |                         
|Amendment                                            |                         
|Actuarial
      (gain) loss                          |                         
|Benefits
      paid                                  |                         
|                                                     |                         
|Benefit
      obligation at end of year              |                         
|                                                     |                         
|Change in plan assets:                               |                         
|Fair
      value of plan assets at beginning of year |                         
|Actual
      return on plan assets                   |                         
|Employer
      contribution                          |                         
|Benefits
      paid                                  |                         
|                                                     |                         
|Fair
      value of plan assets at end of year       |                         
|                                                     |                         
|Funded status                                        |                         
|                                                     |                         
|Unrecognized net actuarial (gain)                    |                         
|Unrecognized prior service cost                      |                         
|Unrecognized net transition (asset)                  |                         
|                                                     |                         
|Prepaid
      pension costs                          | $                       







CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









9



---

DEFINED
  BENEFIT PENSION PLANS (CONTINUED)







> Net pension
>       cost (benefit) for these Plans consisted of the following components:



|                                                    | Years Ended December 31,
|--------------------------------------------------- | ------------------------
|                                                    | 2000                    
|                                                    | (In Thousands)          
|                                                    |                         
|Service cost                                        | $                       
|Interest cost
      on projected benefit obligation |                         
|Expected return on plan assets                      |                         
|Net amortization
      and deferral                 |                         
|                                                    |                         
|                                                    | $                       



> Assumptions
>       used by the Company in the determination of pension plan information for
>       2000, 1999 and 1998 consisted of the following:



|                                                 | 2000 | 1999 | 1998
|------------------------------------------------ | ---- | ---- | ----
|                                                 |      |      |     
|Discount rate                                    | 7.00 | %    | 7.00
|Rate of increase in compensation levels          | 5.00 |      | 5.00
|Expected long-term rate of return on plan assets | 8.50 |      | 8.50





> Plan assets
>       consist primarily of U.S. Government securities, corporate bonds and common
>       stocks, including CEI's common stock of $ 215,000, $ 215,000 and
>       $ 293,000 at December 31, 2000, 1999 and 1998, respectively.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









10



---

POSTRETIREMENT
  BENEFIT PLAN







Information
  pertaining to the activity in the postretirement benefit plan is as follows:





|                                               | Years Ended December 31,
|---------------------------------------------- | ------------------------
|                                               | 2000                    
|                                               | (In Thousands)          
|Change in benefit
      obligation:            |                         
|Benefit obligation at beginning of year        | $                       
|Service cost                                   |                         
|Interest cost                                  |                         
|Actuarial (gain)                               |                         
|Benefits paid                                  |                         
|                                               |                         
|Benefit obligation at end of year              |                         
|                                               |                         
|Fair value of plan assets at end of year       |                         
|                                               |                         
|Funded status                                  |                         
|                                               |                         
|Unrecognized net actuarial (gain)              |                         
|Unrecognized net
        transition obligation |                         
|                                               |                         
|Accrued postretirement benefit cost            | $                       









Net postretirement
  benefit cost for this Plan consisted of the following components:





|                                              | Years
      Ended December 31,
|--------------------------------------------- | ------------------------------
|                                              | 2000                          
|                                              | (In Thousands)                
|                                              |                               
|Service cost                                  | $                             
|Interest cost on projected benefit obligation |                               
|Net amortization and deferral                 |                               
|                                              |                               
|                                              | $                             



Assumptions
  used by the Company in the determination of postretirement benefit plan information
  consisted of the following:





|              | Years
      Ended December 31,
|------------- | ------------------------------
|              | 2000                          
|              |                               
|Discount rate | 7.00%                         









CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









10



---

POSTRETIREMENT BENEFIT
  PLAN (CONTINUED)



> For measurement
>       purposes, a 5.5 percent (6.0 percent for 1999) annual rate of increase in
>       the per capita cost of covered health care benefits was assumed for 2000
>       and thereafter.
>     
>     Assumed
>       health care trend rates have a significant impact on the amounts reported.
>       A one-percentage-point change in assumed health care cost trend rates would
>       have the following effects:



|                                                        | One-Percentage-
        PointIncrease | One-Percentage- Point Decrease
|------------------------------------------------------- | ------------------------------------- | ------------------------------
|                                                        | (In Thousands)                       
|                                                        |                                       |                               
|Effect on total of service and interest cost components | $                                     | 30                            
|Effect on postretirement benefit obligation             |                                       | 229                           







11



---

REDEEMABLE PREFERRED
  STOCK

The Company
      has 141,288 outstanding shares of Series A Convertible Preferred Stock.
      Cumulative dividends of $ 3.42 per share per annum are paid semi-annually.
      Each share of preferred stock may be converted, at the option of the holder,
      into shares of Common Stock at a conversion price of $ 22.95, subject
      to adjustment under certain circumstances. Each holder may require the Company
      to redeem all or a portion of such holder's preferred stock for $ 65
      per share plus accrued dividends.
    
    The Company
      may redeem the stock, in whole or in part for $ 66.30, $ 65.65
      and $ 65.00 per share beginning on May 31, 2001, 2002 and 2003
      and thereafter respectively, plus all accumulated and unpaid dividends.
      In the event of liquidation of the Company, the holders of preferred stock
      shall be entitled to receive a distribution of $ 65 per share plus
      accrued dividends.
    
    The number
      of preferred shares exchanged for shares of common stock and number of preferred
      shares redeemed for cash is as follows:



|                                     | 2000 | 1999      | 1998
|------------------------------------ | ---- | --------- | ----
|                                     |      |           |     
|Number of preferred shares exchanged |      | -         |     
|Number of common shares issued       |      | -         |     
|                                     |      |           |     
|Number of preferred shares redeemed  |      | 15,491    |     
|Amount paid for redeemed shares      | $    | 1,007,000 | $   









CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









12



---

STOCKHOLDERS' EQUITY



> Stock split:
>     On January 26, 1999, the Company's Board of Directors
>         authorized a 3-for-2 stock split effected in the form of a 50% stock dividend
>         which was distributed on May 14, 1999. Stockholders' equity was restated
>         to give retroactive recognition to the stock split as of December 31,
>         1998. References in the consolidated financial statements and the notes
>         thereto with regard to per share and related data were restated in 1998
>         to give effect to this transaction.Reduction in par value and increase in number of authorized
>         shares:
>       On May 6, 2000, the stockholders approved an amendment
>         to the Company's Articles of Incorporation increasing the number of authorized
>         shares from 20 million shares to 200 million shares.
>       
>       On May 1, 1999, the stockholders approved an amendment
>         to the Company's Articles of Incorporation reducing the par value of the
>         common stock from $ 5 per share to $ 1 per share, and increasing
>         the number of authorized shares from 10 million to 20 million shares.
>         As a result of the reduction in par value, common stock was reduced by
>         $ 28,650,000 and additional paid-in capital was increased by the
>         same amount.
>     Stock Purchase Plan:
>     Effective January 1, 1998, CEI established an employee
>         stock purchase plan for eligible employees of CEI and its subsidiaries.
>         Shares of common stock are purchased monthly by participating employees
>         at a price of 95% of the stock's fair market value, as defined in the
>         Plan document. A maximum of 150,000 shares are reserved for issuance under
>         the Plan.
>     Dividend Reinvestment Plan:
>     The
>         Company sponsors a Dividend Reinvestment Plan for all stockholders who
>         wish to participate. Participants dividends and optional cash considerations
>         are used to purchase shares of common stock. A participant's purchase
>         price per share is fair market value, as defined in the Plan document.
>     Shareholder Rights Plan:
>     The
>         Company adopted a Shareholder Rights Plan (the Rights Plan) in 2000 to
>         protect stockholders from attempts to acquire control of the Company at
>         an inadequate price. Under the Rights Plan, the Company will issue one
>         right to purchase one share of the Company's common stock for $ 180
>         per share for each outstanding common share held.

CONESTOGA ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS









12



---

STOCKHOLDERS'
  EQUITY (CONTINUED)







> Shareholder
>       Rights Plan (continued):
>     Upon
>       acquisition of 15 percent or more of the Company's shares by an adverse
>       party, or upon a tender offer by an adverse party to purchase 15 percent
>       or more of the Company's shares, the rights of the adverse party are void,
>       while the rights of all other shareholders entitle them to purchase $ 360
>       worth of common stock, at its then current market price, for $ 180.
>     The
>       Rights Plan was not adopted in response to any specific effort to acquire
>       control of the Company. The adoption of the Rights Plan had no dilutive
>       effect, did not affect the Company's reported earnings per share, and was
>       not taxable to the Company or its shareholders.

13



---

STOCK
  OPTION PLAN







> The Company
>       has a Stock Option Plan for the officers and employees of the Company. An
>       aggregate of 450,000 shares of authorized but unissued common stock of the
>       Company are reserved for future issuance under the Plan. The stock options
>       have an expiration term of 10 years. The per share exercise price of a stock
>       option shall be not less than the fair market value of the underlying common
>       stock on the date the option is granted. There were 304,250 options available
>       for grant at December 31, 2000.
>     
>     A summary
>       of the Company's stock option activity and related information for the years
>       ended December 31, 2000 and 1999 is as follows:



|                               | 2000    | 1999                                                   
|------------------------------ | ------- | -------------------------------------------------------
|                               | Options | Weighted
        Average
        Exercise
        Price
|                               |         |                                                        
|Outstanding, beginning of year | 41,750  | $                                                      
|Granted                        | 109,000 |                                                        
|Forfeited                      | (5,000) |                                                        
|                               |         |                                                        
|Outstanding, end of year       | 145,750 | $                                                      







CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









13



---

STOCK
  OPTION PLAN (CONTINUED)







> There were no options
>     exercisable at December 31, 2000. Exercise prices for options outstanding
>     ranged from $ 17.48 to $ 22.34 per share. The weighted average remaining
>     contractual life is 9.1 years.
>   The Company applies APB
>     Opinion 25 and related interpretations in accounting for the stock option
>     plan. Accordingly, no compensation cost has been recognized. Had compensation
>     cost for the Company's Stock Option Plan been determined based on the fair
>     value at the grant dates for awards under the Plan consistent with the method
>     prescribed by FASB Statement No. 123, the Company's net income and earnings
>     per share for the year ended December 31, 2000 and 1999 would have been
>     adjusted to the pro forma amounts indicated below (in thousands, except per
>     share data):



|                                      | 2000 | 1999 
|------------------------------------- | ---- | -----
|                                      |      |      
|Net income:                           |      |      
|As reported                           | $    | 3,114
|Pro forma                             |      | 2,950
|                                      |      |      
|Basic and diluted earnings per share: |      |      
|As reported                           | $    | 0.33 
|Pro forma                             |      | 0.31 



> The
>     fair value of each option grant of $ 4.95 and $ 3.27 for the years
>     ended December 31, 2000 and 1999, respectively, is estimated on the date
>     of the grant using the Black-Scholes option pricing model with the following
>     weighted average assumptions:





|                        | 2000    | 1999   
|----------------------- | ------- | -------
|                        |         |        
|Dividend
      yield    | 4.25%   | 4.00%  
|Expected life           | 9 years | 9 years
|Expected volatility     | 30.23%  | 14.80% 
|Risk-free interest rate | 6.10%   | 6.01%  





CONESTOGA ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS





14



---

COMPREHENSIVE INCOME







> Accounting
>       principles generally require that recognized revenue, expenses, gains and
>       losses be included in net income. Although certain changes in assets and
>       liabilities, such as unrealized gains and losses on available for sale securities,
>       are reported as a separate component of the equity section of the balance
>       sheet, such items, along with net income, are components at comprehensive
>       income.
>     
>     The components
>       of other comprehensive income and related tax effects for the years ended
>       December 31, 2000, 1999 and 1998 are as follows:



|                                                                                                                               | 2000           | 1999    | 1998
|------------------------------------------------------------------------------------------------------------------------------ | -------------- | ------- | ----
|                                                                                                                               | (In Thousands)
|                                                                                                                               |                |         |     
|Unrealized
      holding gains on available for sale securities, less tax effect 2000 $ (16);
      1999 $ 74; 1998 $ 415      | $              | (31)    | $   
|Less
      reclassification adjustment for gains realized in netincome,
      less tax effect 2000 $ 720; 1999 $ -0-; 1998$ 31 |                | 1,398   |     
|                                                                                                                               |                |         |     
|                                                                                                                               | $              | (1,429) | $   









CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









15



---

EARNINGS PER SHARE







> The following
>       table sets forth the computation of basic and diluted earnings per share:



|                                                                                                                                             | 2000                                  | 1999  | 1998
|-------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ----- | ----
|                                                                                                                                             | (In Thousands, Except Per Share Data)
|Numerator:                                                                                                                                   |                                       |       |     
|Net
      income                                                                                                                             | $                                     | 3,114 | $   
|Preferred stock
      dividends                                                                                                              |                                       | (532) |     
|Numerator
      for basic earnings per share, income available to common stockholders                                                        |                                       | 2,582 |     
|Effect
      of dilutive securities, preferred stock dividends                                                                               |                                       | -     |     
|                                                                                                                                             |                                       |       |     
|Numerator
      for diluted earnings per share, income available to common stockholders
      after assumed conversions                      | $                                     | 2,582 | $   
|                                                                                                                                             |                                       |       |     
|Denominator:                                                                                                                                 |                                       |       |     
|Denominator for basic earnings per share, weighted average
      shares                                                                      |                                       | 7,833 |     
|Effect
      of dilutive securities, convertible preferred stock and stock options                                                           |                                       | 7     |     
|                                                                                                                                             |                                       |       |     
|Dilutive potential common shares, denominator for diluted earnings per share,
      adjusted weighted average shares and assumed conversions |                                       | 7,840 |     
|                                                                                                                                             |                                       |       |     
|Basic earnings
      per share                                                                                                               | $                                     | 0.33  | $   
|                                                                                                                                             |                                       |       |     
|Diluted
      earnings per share                                                                                                             | $                                     | 0.33  | $   







> The Company has excluded the convertible preferred stock
>       from the computation of diluted earnings per share for 2000 and 1999, since
>       they would have had an anti-dilutive effect. In addition, options to purchase
>       36,750 shares of common stock outstanding since June 1, 1999 were not
>       included in the computation of diluted earnings per share since they were
>       also anti-dilutive.

CONESTOGA ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS









16



---

COMMITMENTS







> At December 31,
>       2000, the Company had commitments for the purchase of equipment and materials
>       approximating $ 3,578,000.
>     
>     The Company
>       leases remote sites and buildings under operating lease agreements which
>       expire between August 2002 and June 2026. Future minimum payments under
>       the leases are (in thousands):



|2001       | $ | 1,605
|---------- | - | -----
|2002       |   | 1,461
|2003       |   | 1,083
|2004       |   | 702  
|2005       |   | 326  
|Thereafter |   | 521  
|           |   |      
|           | $ | 5,698





> Rental expense included in the financial statements for the
>       years ended December 31, 2000, 1999 and 1998 approximated $ 1,557,000,
>       $ 1,205,000 and $ 721,000, respectively.

17



---

OPERATING SEGMENTS







> The Company's
>       reportable segments are strategic business units that offer different services.
>       They are managed separately because each business unit requires different
>       technology and marketing strategies. The Company has three reportable segments:
>       Telephone - traditional telephone service provided by CTT and BVT; Wireless
>       - paging and PCS communication services provided by CWC and CMS; and CLEC
>       and Long- Distance - competitive local and long distance services provided
>       by CNI. The "Other" column primarily includes the the equipment sales and
>       consulting services provided by INF and corporate related items.
>     
>     The accounting
>       policies of the segments are the same as those described in the summary
>       of accounting policies. The Company evaluates performance based on profit
>       or loss from operations before corporate allocations, interest, income taxes
>       and non-recurring gains and losses. Transactions occurring between segments
>       are recorded on the same basis as transactions with third parties.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









17



---

OPERATING
  SEGMENTS (CONTINUED)







> Segment information as of and for the years ended December 31,
>       2000, 1999 and 1998 is as follows:



|                                                        | Telephone      | Wireless | CLEC
      
      AndLongDistance | Other   | Total
|------------------------------------------------------- | -------------- | -------- | --------------------------------- | ------- | -----
|                                                        | (In Thousands)
|2000:                                                   |                |          |                                   |         |      
|Operating revenues from external customers:             |                |          |                                   |         |      
|Local service                                           | $              | 13,299   | $                                 | -       | $    
|Long
      distance andaccess
      service             |                | 29,978   |                                   | -       |      
|Wireless service                                        |                | -        |                                   | 4,048   |      
|Equipment and other                                     |                | 7,897    |                                   | 637     |      
|                                                        |                | 51,174   |                                   | 4,685   |      
|Intersegment operating revenues                         |                | 3,535    |                                   | 110     |      
|Operating profit (loss)                                 |                | 20,513   |                                   | (8,956) |      
|Total assets                                            |                | 108,264  |                                   | 37,978  |      
|Capital expenditures                                    |                | 10,524   |                                   | 8,195   |      
|Depreciation and amortization                           |                | 10,743   |                                   | 4,030   |      
|                                                        |                |          |                                   |         |      
|1999:                                                   |                |          |                                   |         |      
|Operating
      revenues from external
      customers: |                |          |                                   |         |      
|Local service                                           | $              | 11,640   | $                                 | -       | $    
|Long
      distance and access
      service            |                | 30,978   |                                   | -       |      
|Wireless service                                        |                | -        |                                   | 2,426   |      
|Equipment and other                                     |                | 8,609    |                                   | 493     |      
|                                                        |                | 51,227   |                                   | 2,919   |      
|Intersegment operating revenues                         |                | 2,835    |                                   | 15      |      
|Operating profit (loss)                                 |                | 20,839   |                                   | (8,035) |      
|Total assets                                            |                | 110,718  |                                   | 33,704  |      
|Capital expenditures                                    |                | 10,373   |                                   | 6,987   |      
|Depreciation and amortization                           |                | 10,110   |                                   | 3,153   |      







CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS







17



---

OPERATING
  SEGMENTS (CONTINUED)









|                                                       | Telephone      | Wireless | CLEC
      AndLongDistance | Other   | Total
|------------------------------------------------------ | -------------- | -------- | -------------------------- | ------- | -----
|                                                       | (In Thousands)
|                                                       |                |          |                            |         |      
|1998:                                                  |                |          |                            |         |      
|Operating
      revenues fromexternal
      customers: |                |          |                            |         |      
|Local service                                          | $              | 10,352   | $                          | -       | $    
|Long
      distance andaccess
      service            |                | 31,674   |                            | -       |      
|Wireless service                                       |                | -        |                            | 739     |      
|Equipment and
      other                              |                | 7,449    |                            | 532     |      
|                                                       |                | 49,475   |                            | 1,271   |      
|Intersegment
      operating revenues                  |                | 1,676    |                            | 19      |      
|Operating profit
      (loss)                          |                | 18,779   |                            | (5,265) |      
|Total assets                                           |                | 106,924  |                            | 33,315  |      
|Capital expenditures                                   |                | 7,477    |                            | 20,848  |      
|Depreciation
      and amortization                    |                | 9,932    |                            | 1,432   |      



> Certain
>       items in the schedule above need to be reconciled to the consolidated financial
>       statements and are provided in the schedules below:



|                                                | Years Ended December 31,
|----------------------------------------------- | ------------------------
|                                                | 2000                    
|                                                | (In Thousands)          
|                                                |                         
|Revenues:                                       |                         
|Total
      revenues for reportable segments    | $                       
|Other
      revenues                            |                         
|Elimination
        of intersegment revenues    |                         
|                                                |                         
|Total consolidated
        revenues             | $                       
|                                                |                         
|Total assets:                                   |                         
|Total
      assets for reportable segments      | $                       
|Other
      assets                              |                         
|Elimination
        of intersegment receivables |                         
|                                                |                         
|Total consolidated
        assets               | $                       







CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









18



---

FAIR
  VALUE OF FINANCIAL INSTRUMENTS







> The following
>       methods and assumptions were used to estimate the fair value of each class
>       of financial instruments for which it is practicable to estimate that value.
>     
>     Cash and
>       cash equivalents:
>     The
>         carrying amount approximates fair value because of the short maturity
>         of those instruments.
>     Investments in equity
>       securities:
>     The
>         fair values of investments in equity securities are based on quoted market
>         prices.
>       
>       Letters
>         of credit:
>       It was
>         not practicable to estimate the fair value of the letters of credit due
>         to the absence of definite issuance fee terms.
>     Note
>       payable and long-term debt:

> The
>         fair values of the note payable and long-term debt are estimated based
>         on interest rates for the same or similar debt offered to the Company
>         having the same or similar remaining maturities. The carrying amounts
>         approximate fair value.
>       
>       Redeemable
>         preferred stock:
>       The
>         carrying amount approximates fair value based on the fixed redemption
>         price available to holders of preferred stock.

19



---

SUBSEQUENT EVENT







> During 2000, the Company decided to sell its existing towers,
>       lease back space on the towers for its antennae and utilize the proceeds
>       for capital expenditures. Accordingly, the book value of the towers, which
>       are included in the Companys wireless segment, have be classified as assets
>       held for sale.
>     In January 2001, the Company approved a letter of intent to sell the towers.
>       As part of the transaction the Company would lease back antenna space on
>       the towers for an initial term of ten years, engage the acquirer to develop
>       and build additional towers to meet the Companys tower requirements, and
>       lease antenna space on the additional towers. The transaction is contingent
>       upon , among other things, the assignment of the Companys existing land
>       leases for the towers, certain approvals or consents from the landlords
>       and other parties, and the ability of the Company to give clear title to
>       the towers and land to be conveyed as part of the transaction.

CONESTOGA
  ENTERPRISES, INC.

NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS









20



---

QUARTERLY DATA (UNAUDITED)









|                                        | First                                 | Second | Third | Fourth
|--------------------------------------- | ------------------------------------- | ------ | ----- | ------
|                                        | (In Thousands, Except Per Share Data)
|                                        |                                       |        |       |       
|2000                                    |                                       |        |       |       
|                                        |                                       |        |       |       
|Operating revenues                      | $                                     | 21,947 | $     | 22,024
|Operating income                        |                                       | 1,592  |       | 2,794 
|Net income                              |                                       | 381    |       | 1,360 
|Basic earnings
      per share          |                                       | 0.03   |       | 0.16  
|Diluted earnings per share              |                                       | 0.03   |       | 0.16  
|                                        |                                       |        |       |       
|1999                                    |                                       |        |       |       
|                                        |                                       |        |       |       
|Operating revenues                      | $                                     | 20,533 | $     | 21,806
|Operating income                        |                                       | 3,132  |       | 3,497 
|Net income
      (loss)                 |                                       | 1,055  |       | 1,259 
|Basic earnings
      (loss) per share   |                                       | 0.12   |       | 0.14  
|Diluted earnings
      (loss) per share |                                       | 0.12   |       | 0.14  

















ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

None

























PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS



The names, ages, and positions of the executive officers
  of the Company are set forth below. All officers of the Company serve for terms
  of one year and until re-elected or until a successor is duly elected at the
  Annual Meeting of directors, which follows the annual shareholders meeting.
  No officers have any arrangements or understandings with any other person pursuant
  to which such officer was or is to be selected as an officer.

Albert H. Kramer; Age 46;
  President

> Mr. Kramer was appointed
>     President in May, 1998. He has been employed by
>     the Company since September, 1995, serving as Vice President, Finance and
>     Administration from September, 1995, until August, 1997, and as Executive
>     Vice President from August, 1997 until May, 1998. Prior to that he was employed
>     by Denver and Ephrata Telephone Company for 11 years, serving as Chief Financial
>     Officer during the last 5 years of his employment.

Joseph P. Laffey; Age 48;
  Sr. Vice President, Administration

> Mr. Laffey has been employed
>     by the Company as Vice President, Regulatory and External Affairs, since May
>     1996. Prior to that he was employed by Commonwealth Telephone Company for
>     17 years, serving as Vice President of Revenue Requirements during the last
>     year of his employment; and Director of Revenue Requirements for four years
>     prior thereto.

Donald R. Breitenstein;
  Age 60; Sr. Vice President, Chief Financial Officer

> Mr. Breitenstein has been
>     employed by CT&T since 1962. He worked as Accountant until September,
>     1979, when he was appointed Accounting Supervisor. He was appointed CT&Ts
>     Accounting Manager in 1981, and Controller in 1986. He was appointed to the
>     board of directors of CT&T in 1987. He was elected the Companys Controller
>     and a member of its Board at its organizational meeting in June, 1989.

ITEM
  10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)

Thomas C. Keim; Age 55;
  Sr. Vice President Local Exchange services

> Mr. Keim was appointed
>     Vice President Telecom Group in August, 1997. He had previously served as
>     Vice President, Operations, since October, 1994, and prior to that as Network
>     Services Manager since February 1984. Mr. Keim has been employed by CT&T
>     since 1964.

Kenneth A. Benner; Age 53;
  Secretary/Treasurer

> Mr. Benner has been employed
>     by CT&T since 1974. He was elected to the board of directors of CT&T
>     in 1972, and has served as its Secretary/Treasurer since 1982. He was elected
>     Secretary/Treasurer and a member of the Companys Board at its organizational
>     meeting in June, 1989. In June, 1996, he was appointed Vice President and
>     General Manager of BVT.

Harrison H. Clement, Jr.;
  Age 57; Sr. Vice President Wireless Group

> Mr. Clement began his
>     career in the telecommunications industry in 1966 with the Bell system holding
>     a variety of management positions of increasing responsibility until 1981.
>     In 1981 he co-founded Infocore, Inc. serving as president since that time.

Ara Kervandjian; Age 34;
  Sr. Vice President Competitive Wireline Services

> Mr. Kervandjian is Senior
>     Vice President Wireline Services and is currently serving as President of
>     CEI Networks, Inc., a wholly-owned subsidiary of the Company. Prior to joining
>     the Company, Mr. Kervandjian founded and was the Chairman, President and Chief
>     Executive Officer of TeleBeam, Inc. He served in this capacity from November
>     1992 through January 2000, when TeleBeam was acquired by the Company. In addition,
>     Mr. Kervandjian has served as a director of Unico Corporation since November
>     1997, a real estate development company.

Stuart L. Kirkwood; Age
  47; Sr. Vice President Technology Planning

> Mr. Kirkwood is Senior
>     Vice President of Technology Planning for the Company. Mr. Kirkwood joined
>     the Company in June 2000. Prior to that he was employed by Commonwealth Telephone
>     Enterprises, for 16 years, serving in various engineering and operations roles,
>     the most recent being Vice President of Technology and Strategic Planning.

The information as to the
  Directors as set forth under the caption "Election of Directors" of
  the Proxy Statement relating to the Annual Meeting of Shareholders to be held
  on May 30, 2001 is incorporated by reference into this Report.

ITEM
  11. EXECUTIVE COMPENSATION

The information as to the
  Executive Officers Compensation set forth under the caption "Executive
  Compensation" of the Proxy Statement relating to the Annual Meeting of
  Shareholders to be held on May 30, 2001 is incorporated by reference into this
  Report.

ITEM
  12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information set forth
  under the captions "Election of Directors" and "Security Ownership
  of Management" of the Proxy Statement relating to the Annual Meeting of
  Shareholders to be held on May 30, 2001 is incorporated by reference into this
  Report.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

> The information
>   as to Certain Relationships and Related Transactions set forth under the caption
>   "Directors Compensation" of the Proxy Statementrelating
>   to the Annual Meeting of Shareholders to be held on May 30, 2001 isincorporated
>   by reference into this Report.



ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

> (a)(1) Financial Statements:
>   The following consolidated
>     financial statements of Conestoga Enterprises,
>   Inc. and subsidiaries
>     are included in Part II, Item 8: Opinion of Independent Certified Public Accountants
>   Consolidated balance sheets
>     - December 31, 2000 and 1999
>   Consolidated statements
>     of income - years ended December 31, 2000,1999
>     and 1998
>   Consolidated statements
>     of common stockholders equity - years endedDecember
>     31, 2000, 1999, and 1998
>   Consolidated statements
>     of cash flows - years ended December 31,2000,
>     1999 and 1998
>   Notes to consolidated
>     financial statements

(a)(2) Financial Statement Schedules



CONESTOGA ENTERPRISES, INC.
  AND SUBSIDIARIES



SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

|                                                    
|----------------------------------------------------
|For the Years Ended December 31, 2000, 1999 and 1998
|                                                    
|Description                                         
|                                                    
|                                                    
|                                                    
|Allowance for uncollectible accounts receivable:    
|Year ended December 31, 2000                        
|Year ended December 31, 1999                        
|Year ended December 31, 1998                        
|                                                    
|Valuation allowance for deferred tax assets:        
|Year ended December 31, 2000                        
|Year ended December 31, 1999                        
|Year ended December 31, 1998                        
|                                                    





All other schedules are
  omitted because they are not applicable, not required, or because the required
  information is included in the financial statements or notes thereto.



(a)(3) Exhibits -



(10) Material contracts
  Attachment 10K

(12) Statement re: Computation
  of Ratios Attachment 12



(21) Subsidiaries of the
  registrant Attachment 21E



(23) Letter of Consent of
  Independent Certified Public Accountants

(b)Reports on Form 8-K

None



|INDEX
      TO EXHIBITS                                                                                                                  | Page           
|---------------------------------------------------------------------------------------------------------------------------------------- | ---------------
|(a) Articles of Incorporation, as amended                                                                                                | 53
      - 56* 
|(b)
      By-laws                                                                                                                        | 57
      - 66* 
|Instruments defining the rights of security holders                                                                                      |                
|(b)
      Relevant portions of the by-laws                                                                                               | 67*            
|Material
      contracts                                                                                                                 |                
|(a)
      Amendment dated June 1, 1999 to Agreement Dated March, 22 1989 with Donald
      R. Breitenstein, Sr. Vice President, CFO      | 72-74***       
|(b)
      Agreement dated September 1, 1998 with 
               Albert H. Kramer,
      President                                       | 59
      - 67**
|(c)
      Agreement dated May 29, 1999 with
               Joseph J. Laffey,
      Sr. Vice-President, Administration                    | 61-67***       
|(d) Agreement dated June 30, 1999 with                                                                                                   | 67-72***       
|Harrison H. Clement, Jr., Sr. Vice President
      Wireless Services                                                                     |                
|(e) Agreement dated June 1, 1999 with                                                                                                    | 55-61***       
|Thomas C. Keim Sr. Vice President Local Exchange Services                                                                                |                
|(f) Agreement
      dated June 5, 2000 with 56 - 62
        Stuart
      L. Kirkwood Sr. Vice President Technology Planning              | 56-62          
|                                                                                                                                         |                
|The following
      agreements appear in the December 16, 2000 S-4 filing;                                                               |                
|                                                                                                                                         |                
|Exhibit
      10.1 Agreement dated January 31, 2000 with Ara M. Kervandjian Sr. Vice President
      Competitive Wireline Services       |                
|                                                                                                                                         |                
|Exhibit
      10.2 Agreement dated January 31, 2000 with Heidi A. Nicholas Vice President
      Investor Relations-Corporate Development |                
|                                                                                                                                         |                
|Exhibit
      10.5 Agreement dated January 31, 2000 with Troy A Knecht Vice President
      
      Technical Operations                  |                
|                                                                                                                                         |                
|Statement re: Computation of Ratios                                                                                                      | 63             
|Letter
      of Consent of Independent Public Accountants                                                                                | 63             
|Subsidiaries
      of the registrant                                                                                                     | 64             
|                                                                                                                                         |                
|*These
      exhibits appear in the 1992 10K.
      ** This exhibit appears in the 1998 10K.                                             |                
|***This
      exhibit appears in the 1999 10K.                                                                                           |                









EMPLOYMENT
  AGREEMENT



AGREEMENT made this 5th
  day of June, 2000, between CONESTOGA ENTERPRISES, INC., a Pennsylvania business
  corporation, having its principal office in the Borough of Birdsboro, County
  of Berks and State of Pennsylvania (hereinafter called "Employer") and STUART
  L. KIRKWOOD, of 14 Rice Drive, Dallas, Pennsylvania 18612 (hereinafter called
  the "Employee").

A G R E E M
  E N T

1. Employment. The
  Employer employs the Employee and the Employee accepts employment by Employer
  and its subsidiaries and affiliates, upon the terms and conditions of this Agreement.

2. Term. The term
  of this Agreement shall be three (3) years commencing on June 5, 2000 and shall
  terminate on June 4, 2003. It is the intention of the Employer and the Employee
  that this relationship shall continue beyond the three (3) years period but
  either party may terminate the same under the terms hereinafter set forth in
  this Agreement.

3. Compensation.

(a) For all services rendered
  by the Employee, the Employer shall (i) pay Employee a base salary of One Hundred
  Forty-Five Thousand Dollars ($145,000.00) per year, payable in equal weekly
  installments at the end of each week, (ii) include the Employee as a participant
  in the Employer's Executive Incentive Plan, and (iii) include the Employee as
  a participant in the Employer's salaried employees' benefit programs. Salary
  payments shall be subject to withholding and other applicable taxes.

(b) Employer will review
  Employees compensation on an annual basis along with the review of all its
  management employees.

4. Duties. The Employee
  shall serve as the Employers Senior Vice President of Technology Planning and
  shall be responsible for the Employer's overall Technology Planning matters.
  The exact responsibilities for the position are set forth in the job description
  for Senior Vice President of Technology Planning of the Employer. A copy of
  said job description is attached hereto and referred to as Schedule A.

5. Extent of Services.
  The Employee shall devote his entire time and attention to the Employers business.
  During the term of this Agreement, the Employee shall not engage in any other
  business activity, regardless of whether it is pursued for gain or profit. Employee,
  however, may invest his assets in other companies so long as they do not require
  the Employees services in the operation of their affairs.

6. Working Facilities.
  The Employee shall have a private office, stenographic help, a personal computer
  and other facilities and services that are suitable to his position and appropriate
  for the performance of his duties.

7. Disclosure of Information.
  The Employee acknowledges that the list of the Employers customers, as the
  Employer may determine from time to time, is a valuable, special and unique
  asset of the Employers business. The Employee shall not, during and after the
  term of his employment, disclose all or any part of the Employers customer
  list to any person, firm, corporation, association, or other entity for any
  reason or purpose. In the event of the Employees breach or threatened breach
  of this paragraph, the Employer shall be entitled to a preliminary restraining
  order and an injunction restraining and enjoining the Employee from disclosing
  all or any part of the Employers customer list to any person, firm, corporation,
  association, or other entity for any reason or purpose and from rendering any
  services to any person, firm, corporation, association, or other entity to whom
  all or any part of such list has been, or is threatened to be, disclosed. In
  addition to or in lieu of the above, the Employer may pursue all other remedies
  available to the Employer for such breach or threatened breach, including the
  recovery of damages from the Employee.

8. Expenses. The
  Employer shall reimburse Employee for all reasonable and necessary expenses
  incurred in carrying out his duties under this Agreement. Employee shall present
  to the Employer, from time to time, an itemized account of such expenses in
  any form required by the Employer.

9. Vacations. The
  Employee shall be entitled each year to a vacation of four (4) weeks, during
  which time his compensation shall be paid in full.

10. Termination By Employee.
  Employee may, without cause, terminate this Agreement by giving sixty (60) days
  written notice to the Employer. In such event, the Employee shall continue to
  render his services and shall be paid his regular compensation up until the
  date of termination.

11. Termination for Proper
  Cause. Employer may terminate Employees employment at any time for "proper
  cause". Proper cause for the termination of Employees employment shall be as
  follows:

(a) Violation by Employee
  of the restrictive covenants set forth in paragraph 7 hereof;

(b) Employee's illegal conduct;
  or.

(c) Employees willful dereliction
  of his duties to the Company.

12. Severance Compensation.

12.1 General Rule.
  Unless the provisions of Paragraph 12.2 apply, in the event of the termination
  of the Employees employment by the Employer, other than for cause, prior to
  the expiration of the three (3) year term referred to in Paragraph 2, the Employer
  shall be obligated to pay to the Employee, within fifteen (15) days after the
  date of termination, an amount equal to the greater of: (i) fifty percent (50%)
  of the Employees annual salary determined as of the date of termination of
  employment, or (ii) the aggregate salary otherwise payable to the Employee for
  the balance of the three (3) year term referred to in Paragraph 2, determined
  as of the date of termination of employment. Additionally, all granted Executive
  Stock Options vest and are exercisable over the next three years.

12.2 Change of Control.
  If, during the term of this Agreement, the Employees employment with the Employer
  is terminated after a change of control, as defined below, (hereinafter called
  "Control Termination"), either by the Employee or by the Employer, the Employer
  shall pay to the Employee the Employee's annual salary, determined as of the
  date of the Control Termination, for a period of three (3) years from and after
  the date of the Control Termination in such periodic installments as were being
  paid at the time of the Control Termination. The Employer shall be obligated
  to make such payment in lieu of, and not in addition to, the Employers payment
  obligations under Paragraph 12.1. Additionally, all Executive Stock Options
  both granted and future obligations as stated in the employer's April 28, 2000
  employment offer letter to employee will become immediately exercisable. For
  purposes of this Agreement, a change of control shall be deemed to have occurred
  in the event of: (i) the acquisition, directly or indirectly, by any person
  or entity, or persons or entities acting in concert, whether by purchase, merger,
  consolidation or otherwise, of voting power over that number of voting shares
  of the capital stock of the Employer which, when combined with the existing
  voting power of such persons or entities, would enable them to cast fifty percent
  (50%) or more of the votes which all shareholders of the Employer would be entitled
  to cast in the election of directors of the Employer, or (ii) the sale, lease,
  exchange or other transfer (in one transaction or a series of related transactions)
  of all, or substantially all, of the assets of the Employer to a transferee
  other than Employer or an entity of which a controlling interest is owned by
  Employer.

12.3 Termination for
  Cause. In the event of the termination of the Employees employment at any
  time by the Employer for cause, except for a Control Termination, the Employer
  shall have no obligation to pay the Employee any sums following the termination
  of his employment.

13. Death During Employment.
  If the Employee dies during the term of employment, the Employer shall pay to
  the Employees estate the compensation that would otherwise be payable to the
  Employee up to the end of the month in which his death occurs. In addition,
  if Employee qualifies under the terms of the Employers existing life insurance
  coverage, Employer will provide life insurance on the life of Employee amounting
  to two and one-half (2-1/2) times his annual salary up to a maximum of Three
  Hundred Thousand Dollars ($300,000.00).

14. Restricted Covenant.
  For a period of three (3) years after the termination or expiration of this
  Agreement, the Employee shall not within Berks County or Union County, Pennsylvania,
  directly or indirectly, own, manage, operate, control, be employed by, participate
  in, or be materially connected in any manner with the ownership, management,
  operation or control of any business, which generates more than 30% of its overall
  revenue in Berks or Union Counties, that is similar and competitive to the type
  of business conducted by the Employer. In the event of the Employee's actual
  or threatened breach of this paragraph, the Employer shall be entitled to a
  preliminary restraining order and injunction restraining the Employee from violating
  its provisions. Nothing in this Agreement shall be construed to prohibit the
  Employer from pursuing any other available remedies for such breach or threatened
  breach, including the recovery of damages from the Employee.

15. Arbitration.
  Any controversy or claim arising out of, or relating to this Agreement, or its
  breach, shall be settled by arbitration in the City of Reading in accordance
  with the then governing rules of the American Arbitration Association. Judgment
  upon the award rendered may be entered and enforced in any court of competent
  jurisdiction.

16. Notices. Any
  notice required or desired to be given under this Agreement shall be deemed
  given if in writing and sent by certified mail, return receipt requested, to
  the Employees residence or to the Employers principal office, as the case
  may be.

17. Waiver of Breach.
  The Employers waiver of a breach of any provision in this Agreement by the
  Employee shall not operate or be construed as a waiver of any subsequent breach
  by the Employee. No waiver shall be valid unless in writing and signed by an
  authorized officer of the Employer.

18. Assignment. The
  Employee acknowledges that his services are unique and personal. Accordingly,
  the Employee may not assign his rights or delegate his duties or obligations
  under this Agreement. The Employers rights and obligations under this Agreement
  shall inure to the benefit of, and shall be binding upon, the Employers successors
  and assigns.

19. Entire Agreement.
  This Agreement contains the entire understanding of the parties. It may not
  be changed orally but only by an agreement in writing signed by the party against
  whom enforcement of any waiver, change, modification, extension, or discharge
  is sought.

20. Headings. Headings
  in this Agreement are for convenience only and shall not be used to interpret
  or construe its provisions.

21. Counterparts.
  This Agreement may be executed in two (2) or more counterparts, each of which
  shall be deemed an original but all of which together shall constitute one and
  the same instrument.

IN WITNESS WHEREOF, the
  parties hereto have executed this Agreement the day and year first above written.



CONESTOGA ENTERPRISES, INC.



By ____________________________________

Chairman

Attest _________________________________

Secretary





_________________________________(SEAL)

Stuart L. Kirkwood







|EXHIBIT 12                                                                                                    
|--------------------------------------------------------------------------------------------------------------
|CONESTOGA
        ENTERPRISES, INC.                                                                           
|                                                                                                              
|STATEMENT
        RE: COMPUTATION OF RATIO OF EARNINGS TO 
        FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
|                                                                                                              
|                                                                                                              
|Years Ended December 31,                                                                                      
|                                                                                                              
|                                                                                                              
|Consolidated pre-tax income                                                                                   
|                                                                                                              
|Undistributed
        earnings from unconsolidated partnership interests                                      
|                                                                                                              
|Equity in losses from
        unconsolidated partnership interests                                            
|                                                                                                              
|Interest                                                                                                      
|                                                                                                              
|Earnings                                                                                                      
|                                                                                                              
|Interest                                                                                                      
|                                                                                                              
|Preferred stock dividends (1)                                                                                 
|                                                                                                              
|Fixed
        charges and preferred stock dividends                                                           
|                                                                                                              
|Ratio                                                                                                         







(1) Preferred stock dividends/(100%
  - income tax rate)







EXHIBIT 23

CONSENT OF
  BEARD MILLER COMPANY, LLP.







We hereby consent to the incorporation by reference in the Registration Statements
  (Forms S-8, File No. 333-79503 and File No. 333-41283 and Form S-3, File No.
  333-26663) of our report, dated January 26, 2001, relating to the consolidated
  financial statements of Conestoga Enterprises, Inc. included in its Annual Report
  (Form 10-K) for the year ended December 31, 2000.





/s/ BEARD
  MILLER COMPANY LLP





Reading, Pennsylvania

March 29,
  2001



Attachment 21E

SUBSIDIARIES OF CONESTOGA
  ENTERPRISES, INC.

|1. | The
      Conestoga Telephone and Telegraph Company
      Incorporated August 20, 1902
      Pennsylvania
      Operates - The Conestoga Telephone and Telegraph Company
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Buffalo
      Valley Telephone Company
      Incorporated October 18, 1995
      Pennsylvania
      Operates - Buffalo Valley Telephone Company                         
|3. | CEI
      Networks, Inc.
      Incorporated November 4, 1999
      Pennsylvania
      Operates - CEI Networks, Inc.                                                     
|4. | Conestoga
      Mobile Systems, Inc.
      Incorporated April 1, 1991
      Pennsylvania
      Operates Conestoga Mobile Systems, Inc.                                  
|5. | Conestoga
      Wireless Company
      Incorporated January 1, 1998
      Pennsylvania
      Operates
        - Conestoga Wireless Company                              
|6. | Conestoga
      Investment Corporation
      Incorporated November 27, 1996
      Delaware
      Operates
        - Conestoga Investment Corporation                    
|7. | Infocore,
      Inc.
      Incorporated March 3, 1997
      Pennsylvania
      Operates
        - Infocore, Inc.                                                        
|8. | TeleBeam
      USA, Inc.
      Incorporated December, 1994
      Delaware
      Operates - TeleBeam USA, Inc.                                                           





Pursuant to the requirement
  of Section 13 or 15(d) of the Securities

Exchange Act of 1934, the
  Company has duly caused this report to be signedon
  its behalf by the undersigned, thereunto duly authorized.

CONESTOGA ENTERPRISES, INC.



|Date
      March 30 2001                                                                                                                                                                                            | By
      __\s\ Albert H. Kramer__
      Albert H. Kramer
      President                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------
|Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report
      signed below by the following persons on behalf of the Company and in the
      capacities and on the dates indicated.
|Date
      __3/30/01___                                                                                                                                                                                             | __\s\
      John R. Bentz___________
      John R. Bentz
      Chairman of the Board           
|Date
      __3/30/01___                                                                                                                                                                                             | __\s\
      James H. Murray_________
      James H. Murray
      Vice Chairman                 
|Date
      __3/30/01___                                                                                                                                                                                             | __\s\
      Kenneth A Benner________
      Kenneth A. Benner
      Secretary/Treasurer         
|Date
      __3/30/01___                                                                                                                                                                                             | ___\s\
      Donald R. Breitenstein_
      Donald R. Breitenstein
      Sr. Vice President, CFO
|Date
      __3/30/01___                                                                                                                                                                                             | __\s\
      Thomas E. Brown_________
      Thomas E. Brown
      Director                      
|Date
      __3/30/01___                                                                                                                                                                                             | ___\s\ John M. Sausen_________
      John M. Sausen
      Director                             
|Date
      __3/30/01___                                                                                                                                                                                             | __\s\
      Richard G. Weidner_______
      Richard G. Weidner
      Director                  
|Date
      __3/30/01___                                                                                                                                                                                             | __\s\ Robert M. Myers__________
      Robert M. Myers
      Director                           
|Date
      __3/30/01___                                                                                                                                                                                             | ___\s\ Jean M. Ruhl____________
      Jean M. Ruhl
      Director