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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10-Q



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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006

Commission File Number

000-30761



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UbiquiTel Inc.

(Exact name of Co-Registrant as specified in its charter)



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|                         |  |                                     
|------------------------ |  | ------------------------------------
|Delaware                 |  | 23-3017909                          
|(State of incorporation) |  | (I.R.S. Employer Identification No.)



|                                           |  |           
|------------------------------------------ |  | ----------
|6200 Sprint Parkway, Overland Park, Kansas |  | 66251     
|(Address of principal executive office)    |  | (Zip code)

Co-Registrants telephone number: (610) 832-3300

Commission File Number

333-39950



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UbiquiTel
Operating Company

(Exact name of Co-Registrant as specified in its charter)



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|                         |  |                                     
|------------------------ |  | ------------------------------------
|Delaware                 |  | 23-3024747                          
|(State of incorporation) |  | (I.R.S. Employer Identification No.)



|                                           |  |           
|------------------------------------------ |  | ----------
|6200 Sprint Parkway, Overland Park, Kansas |  | 66251     
|(Address of principal executive office)    |  | (Zip code)

Co-Registrants telephone number: (610) 832-3300



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Indicate by check mark whether each of the
co-registrants (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 each co-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 whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer  x    Accelerated Filer ̈Non-Accelerated Filer ̈

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

There is currently no public market for the Co-Registrants common stock.

There were 1,000 shares of common stock,
$0.01 par value, of UbiquiTel Inc. outstanding at August 1, 2006, all of which were owned by Sprint Nextel Corporation.

There were 1,000 shares of
common stock, $0.01 par value, of UbiquiTel Operating Company outstanding at August 1, 2006, all of which were owned by UbiquiTel Inc.



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##### Table of Contents

UbiquiTel Inc. and Subsidiaries

Form 10-Q for the Quarter Ended June 30, 2006

INDEX



|           |  |                                                                                                 |  |     
|---------- |  | ----------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                 |  | Page
|PART I.    |  | FINANCIAL INFORMATION                                                                           |  |     
|           |  |                                                                                                
|Item 1.    |  | Financial Statements                                                                            |  |     
|           |  |                                                                                                
|           |  | Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005                           |  | 4   
|           |  |                                                                                                
|           |  | Consolidated Statements of Operations for the three and six months ended June 30, 2006 and 2005 |  | 5   
|           |  |                                                                                                
|           |  | Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and 2005           |  | 6   
|           |  |                                                                                                
|           |  | Notes to Consolidated Financial Statements                                                      |  | 7   
|           |  |                                                                                                
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations           |  | 14  
|           |  |                                                                                                
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                      |  | 24  
|           |  |                                                                                                
|Item 4.    |  | Controls and Procedures                                                                         |  | 24  
|           |  |                                                                                                
|PART II.   |  | OTHER INFORMATION                                                                               |  |     
|           |  |                                                                                                
|Item 1.    |  | Legal Proceedings                                                                               |  | 25  
|           |  |                                                                                                
|Item 1A.   |  | Risk Factors                                                                                    |  | 25  
|           |  |                                                                                                
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                     |  | 25  
|           |  |                                                                                                
|Item 3.    |  | Defaults Upon Senior Securities                                                                 |  | 25  
|           |  |                                                                                                
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                             |  | 25  
|           |  |                                                                                                
|Item 5.    |  | Other Information                                                                               |  | 26  
|           |  |                                                                                                
|Item 6.    |  | Exhibits                                                                                        |  | 26  
|           | 
|Signatures |  | 27                                                                                             



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Explanatory Note:

The Consolidated Financial Statements included herein are those of UbiquiTel Inc. (UbiquiTel). The Co-Registrants are UbiquiTel and UbiquiTel Operating Company (Operating Company), which is a
wholly-owned subsidiary of UbiquiTel and the issuer of 9.875% senior notes due 2011. UbiquiTel has provided a full, unconditional, joint and several guaranty of Operating Companys obligations under the 9.875% senior notes due 2011. UbiquiTel
has no operations separate from its investment in Operating Company. Pursuant to Rule 12h-5 of the Securities Exchange Act, no separate financial statements and other disclosures concerning Operating Company other than narrative disclosures set
forth in Notes 6 and 7 to the Consolidated Financial Statements have been presented herein. As used herein and except as the context otherwise may require, the Company, we, us, our or
UbiquiTel means, collectively UbiquiTel, Operating Company and their consolidated subsidiary, UbiquiTel Leasing Company.



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

UbiquiTel Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Per Share Data)



|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | -------- | - | ----------------- | - | -------- | -
|                                                                                                                                                                           |  | June 30, 2006 |          |   | December 31, 2005 |  
|                                                                                                                                                                           |  | (Unaudited)   |          |   |                   |  
|ASSETS                                                                                                                                                                     |  |               |          |   |                   |   |          |  
|CURRENT ASSETS:                                                                                                                                                            |  |               |          |   |                   |   |          |  
|Cash and cash equivalents                                                                                                                                                  |  | $             | 133,813  |   |                   | $ | 121,127  |  
|Restricted cash                                                                                                                                                            |  |               | 5,140    |   |                   |   |         |  
|Accounts receivable, net of allowance for doubtful accounts of $3,629 at June 30, 2006 and $3,435 at December 31,
2005                                                     |  |               | 24,831   |   |                   |   | 30,082   |  
|Inventory                                                                                                                                                                  |  |               | 3,155    |   |                   |   | 4,777    |  
|Prepaid expenses and other assets                                                                                                                                          |  |               | 20,521   |   |                   |   | 17,411   |  
|Deferred income taxes                                                                                                                                                      |  |               | 18,289   |   |                   |   | 20,290   |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total current assets                                                                                                                                                       |  |               | 205,749  |   |                   |   | 193,687  |  
|PROPERTY AND EQUIPMENT, NET                                                                                                                                                |  |               | 237,213  |   |                   |   | 244,163  |  
|CONSTRUCTION IN PROGRESS                                                                                                                                                   |  |               | 5,128    |   |                   |   | 2,169    |  
|DEFERRED FINANCING COSTS, NET                                                                                                                                              |  |               | 8,297    |   |                   |   | 9,184    |  
|GOODWILL                                                                                                                                                                   |  |               | 38,138   |   |                   |   | 38,138   |  
|INTANGIBLES, NET                                                                                                                                                           |  |               | 58,109   |   |                   |   | 60,261   |  
|DEFERRED INCOME TAXES                                                                                                                                                      |  |               | 7,629    |   |                   |   | 13,038   |  
|OTHER LONG-TERM ASSETS                                                                                                                                                     |  |               | 2,103    |   |                   |   | 2,223    |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total assets                                                                                                                                                               |  | $             | 562,366  |   |                   | $ | 562,863  |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                       |  |               |          |   |                   |   |          |  
|CURRENT LIABILITIES:                                                                                                                                                       |  |               |          |   |                   |   |          |  
|Current maturities of long-term debt                                                                                                                                       |  | $             | 248      |   |                   | $ | 240      |  
|Accounts payable                                                                                                                                                           |  |               | 7,554    |   |                   |   | 11,062   |  
|Accrued expenses                                                                                                                                                           |  |               | 14,030   |   |                   |   | 18,230   |  
|Accrued compensation and benefits                                                                                                                                          |  |               | 3,414    |   |                   |   | 4,770    |  
|Interest payable                                                                                                                                                           |  |               | 13,825   |   |                   |   | 13,825   |  
|Taxes payable                                                                                                                                                              |  |               | 2,634    |   |                   |   | 2,677    |  
|Deferred revenue                                                                                                                                                           |  |               | 12,331   |   |                   |   | 12,455   |  
|Other                                                                                                                                                                      |  |               | 3,276    |   |                   |   | 3,165    |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total current liabilities                                                                                                                                                  |  |               | 57,312   |   |                   |   | 66,424   |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES                                                                                                                               |  |               | 423,286  |   |                   |   | 423,475  |  
|OTHER LONG-TERM LIABILITIES                                                                                                                                                |  |               | 11,074   |   |                   |   | 11,357   |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total long-term liabilities                                                                                                                                                |  |               | 434,360  |   |                   |   | 434,832  |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total liabilities                                                                                                                                                          |  |               | 491,672  |   |                   |   | 501,256  |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                                              |  |               |         |   |                   |   |         |  
|STOCKHOLDERS EQUITY:                                                                                                                                                      |  |               |          |   |                   |   |          |  
|Common stock, par value $0.0005 per share; 240,000 shares authorized; 95,123 and 94,209 shares issued and outstanding at June 30, 2006
and December 31, 2005, respectively |  |               | 48       |   |                   |   | 47       |  
|Additional paid-in capital                                                                                                                                                 |  |               | 316,521  |   |                   |   | 312,305  |  
|Accumulated deficit                                                                                                                                                        |  |               | (245,875 | ) |                   |   | (250,745 | )
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total stockholders equity                                                                                                                                                 |  |               | 70,694   |   |                   |   | 61,607   |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  
|Total liabilities and stockholders equity                                                                                                                                 |  | $             | 562,366  |   |                   | $ | 562,863  |  
|                                                                                                                                                                           |  |               |          |   |                   |   |          |  

The accompanying notes are an integral part of these consolidated financial statements.



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UbiquiTel Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

(In Thousands, Except
Per Share Data)



|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                 |  | Three Months Ended June 30, |         |   | Six Months Ended June 30, |  
|                                                                                                                 |  | 2006                        |         |   | 2005                      |   |         | 2006 |  |   | 2005    |  
|REVENUES:                                                                                                        |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Subscriber revenue                                                                                               |  | $                           | 76,296  |   |                           | $ | 69,895  |      |  | $ | 150,943 |   |  | $ | 136,787 |  
|Roaming and wholesale revenue                                                                                    |  |                             | 34,614  |   |                           |   | 31,613  |      |  |   | 65,167  |   |  |   | 61,219  |  
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Service revenue                                                                                                  |  |                             | 110,910 |   |                           |   | 101,508 |      |  |   | 216,110 |   |  |   | 198,006 |  
|Equipment revenue                                                                                                |  |                             | 3,632   |   |                           |   | 4,685   |      |  |   | 7,858   |   |  |   | 8,118   |  
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total revenues                                                                                                   |  |                             | 114,542 |   |                           |   | 106,193 |      |  |   | 223,968 |   |  |   | 206,124 |  
|COSTS AND EXPENSES:                                                                                              |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Cost of service and operations (exclusive of depreciation, amortization and accretion as shown separately below) |  |                             | 53,076  |   |                           |   | 45,239  |      |  |   | 101,210 |   |  |   | 89,245  |  
|Cost of products sold                                                                                            |  |                             | 7,679   |   |                           |   | 9,922   |      |  |   | 15,180  |   |  |   | 20,307  |  
|Selling and marketing                                                                                            |  |                             | 14,730  |   |                           |   | 16,885  |      |  |   | 29,257  |   |  |   | 32,811  |  
|General and administrative expenses                                                                              |  |                             | 4,280   |   |                           |   | 4,953   |      |  |   | 11,781  |   |  |   | 9,941   |  
|Merger related transaction expenses                                                                              |  |                             | 12,113  |   |                           |   |        |      |  |   | 12,113  |   |  |   |        |  
|Non-cash compensation                                                                                            |  |                             |        |   |                           |   | 1,603   |      |  |   |        |   |  |   | 1,082   |  
|Depreciation, amortization and accretion                                                                         |  |                             | 12,177  |   |                           |   | 12,878  |      |  |   | 23,954  |   |  |   | 25,035  |  
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total costs and expenses                                                                                         |  |                             | 104,055 |   |                           |   | 91,480  |      |  |   | 193,495 |   |  |   | 178,421 |  
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|OPERATING INCOME                                                                                                 |  |                             | 10,487  |   |                           |   | 14,713  |      |  |   | 30,473  |   |  |   | 27,703  |  
|INTEREST INCOME                                                                                                  |  |                             | 1,684   |   |                           |   | 619     |      |  |   | 3,236   |   |  |   | 1,145   |  
|INTEREST EXPENSE                                                                                                 |  |                             | (10,832 | ) |                           |   | (10,864 | )    |  |   | (21,666 | ) |  |   | (21,799 | )
|GAIN ON DEBT RETIREMENT                                                                                          |  |                             |        |   |                           |   | 40      |      |  |   |        |   |  |   | 40      |  
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|INCOME BEFORE INCOME TAXES                                                                                       |  |                             | 1,339   |   |                           |   | 4,508   |      |  |   | 12,043  |   |  |   | 7,089   |  
|INCOME TAX EXPENSE                                                                                               |  |                             | (2,837  | ) |                           |   | (124    | )    |  |   | (7,173  | ) |  |   | (253    | )
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|NET INCOME (LOSS)                                                                                                |  | $                           | (1,498  | ) |                           | $ | 4,384   |      |  | $ | 4,870   |   |  | $ | 6,836   |  
|                                                                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|NET INCOME (LOSS) PER COMMON SHARE:                                                                              |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|BASIC                                                                                                            |  | $                           | (0.02   | ) |                           | $ | 0.05    |      |  | $ | 0.05    |   |  | $ | 0.07    |  
|DILUTED                                                                                                          |  | $                           | (0.02   | ) |                           | $ | 0.04    |      |  | $ | 0.05    |   |  | $ | 0.07    |  
|                                                                                                                 |  |                             |         |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:                                                                      |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|BASIC                                                                                                            |  |                             | 94,742  |   |                           |   | 93,319  |      |  |   | 94,512  |   |  |   | 93,212  |  
|DILUTED                                                                                                          |  |                             | 94,742  |   |                           |   | 98,820  |      |  |   | 99,395  |   |  |   | 98,680  |  

The accompanying notes are an integral part of these consolidated financial statements.



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UbiquiTel Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)



|                                                                                  |  |                           |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Six Months Ended June 30, |        
|                                                                                  |  | 2006                      |         |   | 2005 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                           |         |   |      |   |         |  
|Net income                                                                        |  | $                         | 4,870   |   |      | $ | 6,836   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |         |   |      |   |         |  
|Bad debt expense                                                                  |  |                           | 2,668   |   |      |   | 1,651   |  
|Amortization of deferred financing costs                                          |  |                           | 887     |   |      |   | 890     |  
|Amortization of debt premium                                                      |  |                           | (63     | ) |      |   | (62     | )
|Amortization of intangible assets                                                 |  |                           | 2,152   |   |      |   | 2,152   |  
|Depreciation and accretion                                                        |  |                           | 21,802  |   |      |   | 22,883  |  
|Share-based payment expense                                                       |  |                           | 931     |   |      |   | 1,082   |  
|Deferred income taxes                                                             |  |                           | 7,410   |   |      |   | 133     |  
|Gain on disposal of equipment                                                     |  |                           | (277    | ) |      |   | (207    | )
|Gain on debt retirement                                                           |  |                           |        |   |      |   | (40     | )
|Changes in operating assets and liabilities exclusive of capital expenditures:    |  |                           |         |   |      |   |         |  
|Accounts receivable                                                               |  |                           | 2,583   |   |      |   | (7,730  | )
|Inventory                                                                         |  |                           | 1,622   |   |      |   | 396     |  
|Prepaid expenses and other assets                                                 |  |                           | (2,990  | ) |      |   | (356    | )
|Accounts payable and accrued expenses                                             |  |                           | (9,898  | ) |      |   | (1,021  | )
|                                                                                  |  |                           |         |   |      |   |         |  
|Net cash provided by operating activities                                         |  |                           | 31,697  |   |      |   | 26,607  |  
|                                                                                  |  |                           |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                           |         |   |      |   |         |  
|Capital expenditures                                                              |  |                           | (17,041 | ) |      |   | (30,118 | )
|Proceeds from disposal of equipment                                               |  |                           | 2       |   |      |   |        |  
|Increase in restricted cash                                                       |  |                           | (5,140  | ) |      |   |        |  
|                                                                                  |  |                           |         |   |      |   |         |  
|Net cash used in investing activities                                             |  |                           | (22,179 | ) |      |   | (30,118 | )
|                                                                                  |  |                           |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                           |         |   |      |   |         |  
|Proceeds from issuance of common stock                                            |  |                           | 181     |   |      |   | 202     |  
|Proceeds from exercise of stock options                                           |  |                           | 3,105   |   |      |   | 927     |  
|Repayments of long-term debt                                                      |  |                           | (118    | ) |      |   | (125    | )
|Financing costs                                                                   |  |                           |        |   |      |   | (92     | )
|Repurchase of common stock                                                        |  |                           |        |   |      |   | (49     | )
|                                                                                  |  |                           |         |   |      |   |         |  
|Net cash provided by financing activities                                         |  |                           | 3,168   |   |      |   | 863     |  
|                                                                                  |  |                           |         |   |      |   |         |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |  |                           | 12,686  |   |      |   | (2,648  | )
|CASH AND CASH EQUIVALENTS, beginning of period                                    |  |                           | 121,127 |   |      |   | 91,781  |  
|                                                                                  |  |                           |         |   |      |   |         |  
|CASH AND CASH EQUIVALENTS, end of period                                          |  | $                         | 133,813 |   |      | $ | 89,133  |  
|                                                                                  |  |                           |         |   |      |   |         |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                 |  |                           |         |   |      |   |         |  
|Cash paid for interest                                                            |  | $                         | 20,842  |   |      | $ | 20,901  |  
|Cash paid for income taxes                                                        |  |                           | 219     |   |      |   | 142     |  
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY:                           |  |                           |         |   |      |   |         |  
|Network equipment acquired but not yet paid                                       |  | $                         | 697     |   |      | $ | 3,180   |  

The accompanying notes are an integral part of these consolidated financial statements.



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UbiquiTel Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

Basis of Presentation of Unaudited Interim Financial Information

The consolidated financial information as of June 30, 2006 and for the three and six months ended June 30, 2006 and 2005 is unaudited, but has
been prepared in accordance with generally accepted accounting principles for interim financial information and Article 10 of Regulation S-X. Accordingly, it does not include all the information and footnotes required annually by generally accepted
accounting principles. In the opinion of management, the interim data reflects all adjustments necessary for a fair statement of the Companys results for the periods presented. Operating results for the three and six months ended June 30,
2006 are not necessarily indicative of results that may be expected for the entire year. This financial information should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended
December 31, 2005 of UbiquiTel which are included in its and Operating Companys Annual Report on Form 10-K/A for the year ended December 31, 2005.

Certain prior year amounts presented in the consolidated statements of cash flows have been reclassified to conform with current year presentation.

Principles of Consolidation and Use of Estimates

The accompanying financial statements include the
accounts of UbiquiTel Inc. and its subsidiaries (see Note 2). All significant intercompany balances and transactions have been eliminated.

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

Recent Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement
No. 109 (FIN 48). FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides
guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently assessing
the impact and timing of adopting FIN 48.

2. ORGANIZATION AND NATURE OF BUSINESS

Organization and Nature of Business

UbiquiTel Inc. and its subsidiaries (UbiquiTel or the Company) was formed for the purpose of becoming the provider of Sprint-branded personal communications services in certain defined midsize markets in the
western and midwestern United States.



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The Company has the right under its management agreement to provide digital wireless personal
communications services, or PCS, under the Sprint brand name in certain markets in the western and midwestern United States which include a total population of approximately 10.8 million residents covering portions of California, Nevada,
Washington, Idaho, Utah, Wyoming, Indiana, Kentucky and Tennessee. On July 1, 2006, Sprint Nextel Corporation (Sprint Nextel) acquired the Company in a merger transaction (the Merger), and the Company became a
wholly-owned subsidiary of Sprint Nextel. See Note 8 (Recent Developments) for a discussion of Sprint Nextels acquisition of the Company.

The consolidated financial statements contain the financial information of UbiquiTel Inc. and its subsidiaries, UbiquiTel Operating Company and UbiquiTel Leasing Company. The Company operates under one segment.

3. SHARE-BASED PAYMENT EXPENSE

Effective
January 1, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R), and related interpretative guidance issued by the
FASB and the Securities and Exchange Commission. SFAS No. 123R requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and measurement based on the grant-date
fair value of the award. It requires the cost to be recognized over the period during which an employee is required to provide service in exchange for the award. Additionally, compensation expense will be recognized over the remaining employee
service period for the outstanding portion of any awards for which compensation expense had not been previously recognized or disclosed under SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123).
SFAS No. 123R replaces SFAS No. 123 and supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25), and its related interpretations. The
Company previously recognized expense in accordance with the provisions requiring variable accounting under APB No. 25 and its related interpretations for previously modified stock options, all of which were fully vested as of December 31,
2005. Upon the adoption of SFAS 123R, the Company discontinued recognizing compensation expense under variable accounting.

In its adoption
of SFAS No. 123R, the Company has applied the modified prospective transition method to all past awards outstanding and unvested as of January 1, 2006 and is recognizing the associated expense over the remaining vesting period of such
awards based on the fair values previously determined and disclosed as part of its pro forma disclosures under SFAS No. 123. As such, the Company is not restating the results of prior periods.

Through June 30, 2006, the Company had two share-based payment plans, which provided for equity awards and are described below. For the three and
six months ended June 30, 2006, the share-based payment expense recognized in the consolidated statement of operations in accordance with SFAS No. 123R was approximately $0.5 million and $0.9 million, respectively. This expense was
recognized in the same expense component in the consolidated statement of operations as the salary or other cash compensation paid to the employee receiving the award. Net of income tax effects, the adoption of SFAS No. 123R reduced the
Companys net income for the six months ended June 30, 2006 by approximately $0.6 million and its effect on both basic and diluted net income per common share was less than $0.01 per share. The adoption of SFAS No. 123R did not affect
the Companys cash flow from operating activities or cash flow from financing activities.

At the time of the Merger with Sprint
Nextel, the Companys Equity Incentive Plan and Employee Stock Purchase Plan were terminated, and options to acquire UbiquiTel common shares, whether vested or unvested, were cancelled and option holders received the excess, if any, of $10.35
per share over the option exercise price for each share subject to the option, less any applicable withholding taxes.



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Equity Incentive Plan

Prior to the closing of the Merger, the Company had an equity incentive plan (Equity Incentive Plan) for the purpose of attracting, retaining and rewarding key employees, consultants and non-employee
directors. A committee consisting of independent members of the Companys board of directors administered the Equity Incentive Plan. The Equity Incentive Plan authorized up to 7,500,000 shares of common stock for issuance. Stock options were
normally granted with an exercise price equal to the fair value of the common stock on the date of grant. Stock options granted to employees generally vested in four equal annual amounts beginning on the anniversary date of each grant. Stock options
granted to non-employee directors generally vested immediately, except for initial grants, which vested over three years. All options granted under the Equity Incentive Plan had a maximum term of ten years.

Prior to establishment of the Equity Incentive Plan, the Company had also granted non-qualified stock options to its chief executive officer pursuant to
an employment agreement. These stock options were fully vested as of December 31, 2005. As such, no share-based payment expense is recognized for these options.

As there were no options granted during the six months ended June 30, 2006, the typical disclosures required by SFAS No. 123R regarding assumptions used in determining the fair value of options granted
during the reporting period are excluded. For the three and six months ended June 30, 2006, the share-based payment expense recognized for options awarded under the Equity Incentive Plan was approximately $0.5 million and $0.9 million,
respectively, and consisted only of the cost associated with the unvested awards made prior to January 1, 2006, which was calculated based on the fair values of the granted options on their respective grant dates in accordance with SFAS
No. 123. In accordance with the recognition provisions of SFAS No. 123R, the amount of this expense has been adjusted to reflect an assumed forfeiture rate and is now determined based on estimated forfeitures, thereby discontinuing the
previously allowable method of calculating expense based on the actual forfeitures.

As of June 30, 2006, the total unrecognized
share-based payment expense related to unvested options was approximately $2.9 million, which is expected to be recognized over a weighted-average period of approximately 1.9 years. The Companys policy is to recognize share-based payment
expense on a straight-line basis over the option awards requisite service period, which is generally the vesting period, provided that this expense is at least equal to the portion of the grant-date value of the award that is vested as of the
date of the Companys consolidated balance sheet.

In determining the fair value of each option granted under the Equity Incentive
Plan, the Company uses the Black-Scholes model, which involves the determination of assumptions that become inputs into the model. The primary inputs are expected volatility, expected term of the option, risk-free interest rate and dividend yield.
Expected volatility is based on the historical performance of the Companys common stock. Historical data of exercise behavior is used to estimate the average number of years that an option will remain outstanding prior to its exercise,
factoring in the vesting period, contractual life of the option and post-vesting employment termination behavior. The risk-free interest rate is the implied yield available as of the grant date on U.S. Treasury zero-coupon issues with a remaining
term equal to the options expected term. As the Company has never paid dividends and has not declared any intentions of doing so, the dividend yield is assumed to be zero.



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The following table presents a summary of the option activity under the Equity Incentive Plan and any
other share-based payment arrangements involving Company stock options for the six months ended June 30, 2006:



|                                     |  |                   |   |  |                                |      |                                           |           |                                         |   |       
|------------------------------------ |  | ----------------- | - |  | ------------------------------ | ---- | ----------------------------------------- | --------- | --------------------------------------- | - | ------
|                                     |  | Number of Options |   |  | Weighted AverageExercise Price |      | Weighted-AverageRemainingContractual Term |           | Aggregate IntrinsicValue (in thousands)
|Outstanding at January 1, 2006       |  | 7,356,375         |   |  | $                              | 2.55 |                                           |           |                                         |   |       
|Granted                              |  |                  |   |  |                                |     |                                           |           |                                         |   |       
|Exercised                            |  | (891,171          | ) |  |                                | 3.48 |                                           |           |                                         |   |       
|Forfeited                            |  | (176,200          | ) |  |                                | 4.34 |                                           |           |                                         |   |       
|Expired                              |  | (200              | ) |  |                                | 3.52 |                                           |           |                                         |   |       
|                                     |  |                   |   |  |                                |      |                                           |           |                                         |   |       
|Outstanding at June 30, 2006         |  | 6,288,804         |   |  | $                              | 2.37 |                                           | 5.5 years |                                         | $ | 50,181
|                                     |  |                   |   |  |                                |      |                                           |           |                                         |   |       
|Options exercisable at June 30, 2006 |  | 4,554,821         |   |  | $                              | 1.79 |                                           | 4.6 years |                                         | $ | 38,975

The intrinsic value for stock options outstanding and exercisable is defined as the difference
between the market value of the Companys common stock as of the end of the period and the options exercise price. The aggregate intrinsic value of and cash received from options exercised during the six months ended June 30, 2006
was approximately $6.0 million and $3.1 million, respectively. As the Company has a net operating loss carryforward for income tax purposes, there were no benefits realized from income tax deductions for stock options exercised.

Employee Stock Purchase Plan

Through June 30,
2006, under the terms of the Companys employee stock purchase plan (the ESP Plan), during any calendar year there were four quarterly offering periods beginning January 1st, April 1st,
July 1stand October 1st, during which eligible employees could participate and purchase shares of the Companys common stock. The ESP Plan was terminated June 30, 2006
pursuant to the Merger. The purchase price was the lower of 85% of the fair market value of the common stock on the first trading day of the offering period or 85% of the fair market value of the common stock on the last trading day of the offering
period. For the six months ended June 30, 2006, the numbers of shares purchased under the ESP Plan was 22,856, and the cash received from employee purchases of common stock was approximately $0.2 million. The Company recognized share-based
payment expense for awards under the ESP Plan using the same methodology as it employs for options awarded under the Equity Incentive Plan. Share-based payment expense for awards under the ESP Plan for the three and six months ended June 30,
2006 was approximately $20,000 and $40,000, respectively.

Stock-Based Compensation Expense Prior to January 1, 2006

Prior to January 1, 2006, the Company recognized stock-based compensation expense in accordance with the appropriate provisions of APB No. 25
and related interpretations requiring variable accounting for the Companys previously modified stock options, all of which were fully vested as of December 31, 2005. Under variable accounting, quarterly increases or decreases in the share
price of the Companys common stock resulted in expense or reduction in expense, as reflected in non-cash compensation in the Companys consolidated statements of operations. The Company provided pro forma disclosure of stock-based
compensation expense in accordance with SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure, as if the fair value method of SFAS No. 123 had been applied to stock-based compensation. Pro forma
compensation expense determined in accordance with SFAS No. 123 did not consider potential forfeitures, but was based on actual forfeitures as they occurred. The following table illustrates the effect on net income and net income per share if
the Company had applied the fair value recognition provisions of SFAS No. 123 for the three and six months ended June 30, 2005:



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|                                                                                                                            |  |                                         |       |   |                                |   |       |  
|--------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ----- | - | ------------------------------ | - | ----- | -
|                                                                                                                            |  | Three Months EndedJune 30, 2005         |       |   | Six Months Ended June 30, 2005 |  
|                                                                                                                            |  | (In Thousands, Except Per Share Amount) |      
|Net income, as reported                                                                                                     |  | $                                       | 4,384 |   |                                | $ | 6,836 |  
|Add: stock-based employee compensation included in reported net income, net of related income tax                           |  |                                         | 1,603 |   |                                |   | 1,082 |  
|Deduct: total stock-based employee compensation expense determined under fair value-based method, net of related income tax |  |                                         | (447  | ) |                                |   | (897  | )
|                                                                                                                            |  |                                         |       |   |                                |   |       |  
|Pro forma net income                                                                                                        |  | $                                       | 5,540 |   |                                | $ | 7,021 |  
|                                                                                                                            |  |                                         |       |   |                                |   |       |  
|Basic net income per common share:                                                                                          |  |                                         |       |   |                                |   |       |  
|As reported                                                                                                                 |  | $                                       | 0.05  |   |                                | $ | 0.07  |  
|Pro forma                                                                                                                   |  | $                                       | 0.06  |   |                                | $ | 0.08  |  
|                                                                                                                            |  |                                        
|Diluted net income per common share:                                                                                        |  |                                         |       |   |                                |   |       |  
|As reported                                                                                                                 |  | $                                       | 0.04  |   |                                | $ | 0.07  |  
|Pro forma                                                                                                                   |  | $                                       | 0.06  |   |                                | $ | 0.07  |  

For the three and six months ended June 30, 2005, the fair value of all options granted
during such periods was estimated on the date of grant using the Black-Scholes model based on the following weighted-average assumptions:



|                                         |  |      |  
|---------------------------------------- |  | ---- | -
|                                         |  | 2005 |  
|Weighted-average risk-free interest rate |  | 3.83 | %
|Expected term (in years)                 |  | 4.2  |  
|Expected volatility                      |  | 46   | %
|Expected dividend yield                  |  | 0    | %

4. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

The Company computes net income (loss) per common share in accordance with SFAS No. 128, Earnings per Share (SFAS
No. 128). In accordance with SFAS No. 128, incremental potential common shares from stock options and warrants are included in the calculation of diluted net income per common share except when the effect would be antidilutive.
During any period in which the Company has a net loss, incremental potential common shares are excluded from the calculation of diluted net loss per common share, as an inclusion of such securities would be antidilutive.

The calculations for basic and diluted net income (loss) per common share were as follows:



|                                                             |  |                                          |        |                           |      |   |        |  |      |        |  |   |       
|------------------------------------------------------------ |  | ---------------------------------------- | ------ | ------------------------- | ---- | - | ------ |  | ---- | ------ |  | - | ------
|                                                             |  | Three Months Ended June 30,              |        | Six Months Ended June 30,
|                                                             |  | 2006                                     |        |                           | 2005 |   | 2006   |  | 2005
|                                                             |  | (In Thousands, Except Per Share Amounts)
|Basic                                                        |  |                                          |        |                           |      |   |        |  |      |        |  |   |       
|Net income (loss)                                            |  | $                                        | (1,498 | )                         |      | $ | 4,384  |  | $    | 4,870  |  | $ | 6,836 
|Weighted average common shares outstanding                   |  |                                          | 94,742 |                           |      |   | 93,319 |  |      | 94,512 |  |   | 93,212
|Net income (loss) per common share                           |  | $                                        | (0.02  | )                         |      | $ | 0.05   |  | $    | 0.05   |  | $ | 0.07  
|                                                             |  |                                          |        |                          
|Diluted                                                      |  |                                          |        |                           |      |   |        |  |      |        |  |   |       
|Net income (loss)                                            |  | $                                        | (1,498 | )                         |      | $ | 4,384  |  | $    | 4,870  |  | $ | 6,836 
|                                                             |  |                                          |        |                           |      |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding                   |  |                                          | 94,742 |                           |      |   | 93,319 |  |      | 94,512 |  |   | 93,212
|Effect of dilutive options                                   |  |                                          |       |                           |      |   | 5,501  |  |      | 4,883  |  |   | 5,468 
|                                                             |  |                                          |        |                           |      |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding assuming dilution |  |                                          | 94,742 |                           |      |   | 98,820 |  |      | 99,395 |  |   | 98,680
|                                                             |  |                                          |        |                           |      |   |        |  |      |        |  |   |       
|Net income (loss) per common share                           |  | $                                        | (0.02  | )                         |      | $ | 0.04   |  | $    | 0.05   |  | $ | 0.07  



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The following table summarizes the securities that are excluded from the diluted net income (loss) per
share calculation, as amounts would have an antidilutive effect.



|              |  |                             |  |                           |  |           |  |          
|------------- |  | --------------------------- |  | ------------------------- |  | --------- |  | ---------
|              |  | Three Months Ended June 30, |  | Six Months Ended June 30,
|              |  | 2006                        |  | 2005                      |  | 2006      |  | 2005     
|Stock options |  | 6,288,804                   |  | 774,600                   |  |          |  | 774,600  
|Warrants      |  | 3,579,000                   |  | 3,665,183                 |  | 3,579,000 |  | 3,665,183
|              |  |                             |  |                           |  |           |  |          
|Total         |  | 9,867,804                   |  | 4,439,783                 |  | 3,579,000 |  | 4,439,783
|              |  |                             |  |                           |  |           |  |          

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:



|                                |  |                |          |   |                   |   |          |  
|------------------------------- |  | -------------- | -------- | - | ----------------- | - | -------- | -
|                                |  | June 30, 2006  |          |   | December 31, 2005 |  
|                                |  | (In Thousands) |         
|Network equipment               |  | $              | 393,430  |   |                   | $ | 383,371  |  
|Vehicles                        |  |                | 1,628    |   |                   |   | 1,594    |  
|Furniture and office equipment  |  |                | 5,791    |   |                   |   | 5,551    |  
|Computer equipment and software |  |                | 10,850   |   |                   |   | 10,647   |  
|Leasehold improvements          |  |                | 5,816    |   |                   |   | 5,284    |  
|Land                            |  |                | 130      |   |                   |   | 130      |  
|Buildings                       |  |                | 4,670    |   |                   |   | 4,670    |  
|                                |  |                |          |   |                   |   |          |  
|                                |  |                | 422,315  |   |                   |   | 411,247  |  
|Accumulated depreciation        |  |                | (185,102 | ) |                   |   | (167,084 | )
|                                |  |                |          |   |                   |   |          |  
|Property and equipment, net     |  | $              | 237,213  |   |                   | $ | 244,163  |  
|                                |  |                |          |   |                   |   |          |  

Depreciation expense was approximately $11.1 million and $11.7 million for the three months ended
June 30, 2006 and 2005, respectively, and approximately $21.8 million and $22.8 million for the six months ended June 30, 2006 and 2005, respectively.

6. LONG-TERM DEBT

Long-term debt outstanding was as follows:



|                                                   |  |                |         |                   |   |        
|-------------------------------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                                                   |  | June 30, 2006  |         | December 31, 2005
|                                                   |  | (In Thousands)
|9.875% senior notes                                |  | $              | 420,000 |                   | $ | 420,000
|Plus: premium                                      |  |                | 647     |                   |   | 710    
|Building mortgage                                  |  |                | 2,887   |                   |   | 3,005  
|                                                   |  |                |         |                   |   |        
|Total long-term debt                               |  |                | 423,534 |                   |   | 423,715
|Less: current maturities                           |  |                | 248     |                   |   | 240    
|                                                   |  |                |         |                   |   |        
|Total long-term debt, excluding current maturities |  | $              | 423,286 |                   | $ | 423,475
|                                                   |  |                |         |                   |   |        

Notes

During 2004, Operating Company issued $420.0 million aggregate principal amount of 9.875% senior notes due March 1, 2011 (9.875% Senior Notes), in transactions exempt from the registration requirements of the Securities
Act. The 9.875% Senior Notes were subsequently registered under the Securities Act. Interest on the



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9.875% Senior Notes is payable semiannually on March 1 and September 1 at semiannual payments of approximately
$20.7 million. The 9.875% Senior Notes are redeemable in whole or in part on or after March 1, 2007. Prior to March 1, 2007, Operating Company may redeem up to 35% of the aggregate principal amount of the 9.875% Senior Notes with net cash
proceeds of a sale of its equity or a contribution to its common equity capital, provided that at least 65% of the principal amount of 9.875% Senior Notes originally issued under the indenture remains outstanding after giving effect to such
redemption and such redemption occurs within 45 days of the date of such sale of equity interests or contribution. The indenture governing the 9.875% Senior Notes contains customary covenants, including covenants limiting indebtedness, dividends and
distributions on, and redemptions and repurchases of, capital stock and other similar payments, the acquisition and disposition of assets, and transactions with affiliates or related persons. The indenture governing the 9.875% Senior Notes provides
for customary events of default, including cross defaults, judgment defaults and events of bankruptcy. Operating Company is permitted to issue additional 9.875% Senior Notes under the indenture from time to time. The Company presently is in
compliance with all covenants associated with the 9.875% Senior Notes. UbiquiTel has fully and unconditionally guaranteed Operating Companys obligations under the 9.875% Senior Notes. The Company may from time to time purchase outstanding
9.875% Senior Notes in the open market, in privately negotiated transactions or otherwise in accordance with its debt instruments and applicable law.

7. WHOLLY-OWNED OPERATING SUBSIDIARY

UbiquiTel has fully and unconditionally guaranteed Operating Companys
obligations under the 9.875% Senior Notes (see Note 6). UbiquiTel has no independent assets or operations separate from its investment in Operating Company. UbiquiTel Leasing Company is a minor subsidiary.

8. RECENT DEVELOPMENTS

On April 19, 2006,
UbiquiTel entered into an agreement and plan of merger (Merger Agreement) with Sprint Nextel and Eagle Merger Sub Inc., a wholly owned subsidiary of Sprint Nextel (Merger Sub). The Merger, pursuant to which Merger Sub merged
with and into UbiquiTel with UbiquiTel surviving the Merger, closed on July 1, 2006. Upon completion of the Merger, UbiquiTel became a wholly owned subsidiary of Sprint Nextel. Immediately subsequent to the Merger, there were 1,000 shares of
common stock at $0.01 par value of UbiquiTel. In the Merger, each issued and outstanding share of UbiquiTels common stock was converted into the right to receive $10.35 per share in cash. In addition, options to acquire UbiquiTel common
shares, whether vested or unvested, were cancelled and option holders received the excess, if any, of $10.35 per share over the option exercise price for each share subject to the option, less any applicable withholding taxes. The total
consideration for the acquisition of UbiquiTel was approximately $1.3 billion, which included the assumption of approximately $300 million in net debt.

In connection with the Merger, the Company recorded restricted cash of approximately $5.1 million in the three months ended June 30, 2006 for the establishment of a trust account for severance to be paid in
future periods for ten officers of the Company pursuant to severance arrangements entered into with the officers. The severance payments are expected to be funded from the trust account promptly after the six-month anniversary of the officers
termination of employment by the Company subsequent to the Merger.

The Company incurred transaction costs of approximately $12.1 million
in the three months ended June 30, 2006, which included investment banking fees, legal fees and other fees and expenses to consummate the Merger.



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking
Statements

This Quarterly Report includes forward-looking statements that involve known and unknown risks, uncertainties and other
factors. Our actual results could differ materially from the results anticipated in these forward-looking statements. Risk factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not
limited to:



| |  |  | our dependence on Sprint Nextel;
| | - |  | --------------------------------



| |  |  | modifications or amendments to the terms of our agreements with Sprint PCS, including fees paid or charged to us and other program requirements;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the competitiveness of Sprint Nextels pricing plans, products and services;
| | - |  | ----------------------------------------------------------------------------



| |  |  | the effects of vigorous competition and the overall demand for our service offerings in the markets in which we operate and the impact of new, emerging and competing technologies on
our business;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | rates of penetration in the wireless communications industry;
| | - |  | -------------------------------------------------------------



| |  |  | the potential to experience a high rate of customer turnover;
| | - |  | -------------------------------------------------------------



| |  |  | customer credit quality;
| | - |  | ------------------------



| |  |  | potential declines in roaming and wholesale revenue;
| | - |  | ----------------------------------------------------



| |  |  | one or more markets in which we compete being impacted by changes in political or other factors, such as monetary policy, legal and regulatory changes or other external factors over
which we have no control;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | effects of mergers and consolidations within the wireless communications industry and unexpected announcements or developments from others in the wireless communications industry;
and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | general economic and business conditions, like equipment failure, natural disasters, terrorist acts, or other breaches of network or information technology security.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

These and other applicable risks are described under Part I, Item 1A. Risk Factors and elsewhere in
UbiquiTels and Operating Companys Annual Report on Form 10-K/A for the year ended December 31, 2005 filed with the Securities and Exchange Commission, and under the caption Cash Flows, Liquidity and Capital Resources in
this Item 2 and elsewhere in this Quarterly Report. We assume no obligation to publicly update or revise any forward-looking statement made in this report, whether as a result of new information, future events, changes in assumptions or
otherwise, after the date of this report. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.

Use of Certain Terms

In 2003, we initiated a reseller program under which mobile virtual network
operators (MVNOs) use our network and resell wireless service under a private label. In this report, unless the context indicates otherwise, all references to subscribers or customers and other operating metrics mean
subscribers or customers excluding reseller subscribers.



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Recent Developments and Overview

UbiquiTel Inc. and its subsidiaries (UbiquiTel or the Company) was formed for the purpose of becoming the exclusive provider of Sprint personal communications services (PCS) in
certain defined midsize markets in the western and midwestern United States.

On April 19, 2006, UbiquiTel entered into an agreement
and plan of merger (Merger Agreement) with Sprint Nextel Corporation (Sprint Nextel) and Eagle Merger Sub Inc., a wholly owned subsidiary of Sprint Nextel (Merger Sub), for the proposed acquisition of UbiquiTel by
Sprint Nextel for cash in a merger transaction (the Merger). The Merger, pursuant to which Merger Sub merged with and into UbiquiTel with UbiquiTel surviving the Merger, closed on July 1, 2006. Upon completion of the Merger,
UbiquiTel became a wholly owned subsidiary of Sprint Nextel. In the Merger, each issued and outstanding share of UbiquiTels common stock was converted into the right to receive $10.35 per share in cash. In addition, options to acquire
UbiquiTel common shares, whether vested or unvested, were cancelled and option holders received the excess, if any, of $10.35 per share over the option exercise price for each share subject to the option, less any applicable withholding taxes. The
total consideration for the acquisition of UbiquiTel was approximately $1.3 billion, which included the assumption of approximately $300 million in net debt.

We have the right under our management agreement to provide digital wireless personal communications services, or PCS, under the Sprint brand name to certain markets in the western and midwestern United States which
include a total population of approximately 10.8 million residents covering portions of California, Nevada, Washington, Idaho, Utah, Wyoming, Indiana, Kentucky and Tennessee. We do not own any PCS licenses. Sprint Nextel has PCS licenses to
cover more than 280 million people across all 50 states, Puerto Rico and the U.S. Virgin Islands.

As of June 30, 2006, we had
approximately 458,500 subscribers excluding reseller subscribers and approximately 149,900 reseller subscribers, for a total subscriber base of approximately 608,400. As of June 30, 2006, our network covered approximately 8.3 million
residents which represented approximately 77% of the licensed population in our markets.

The following discussion is applicable to the
period prior to the closing of the Merger. As a PCS affiliate of Sprint Nextel, we do not own the licenses to operate our network and instead paid Sprint Nextel for, among other things, the use of its licenses. Under our management agreement, Sprint
Nextel was entitled to receive 8.0% of billed revenue from subscribers based in our markets less current period bad debts, net of bad debt recoveries, from subscribers based in our markets and fees from wireless service providers other than Sprint
Nextel when their subscribers roamed into our network. We were entitled to 100% of revenues collected from the sale of handsets and accessories from our stores, roaming revenues received when Sprint Nextel customers from a different territory made a
wireless call on our PCS network, and outbound non-Sprint Nextel roaming billed to subscribers based in our markets. We were responsible for building, owning and managing the PCS network located in our markets under the Sprint brand name. Our
results of operations were dependent on the Sprint Nextel network and, to a lesser extent, on the networks of other PCS affiliates of Sprint Nextel. As a PCS affiliate of Sprint Nextel, we purchased a full suite of support services from Sprint
Nextel including billing, customer care, collections and national platform services and paid a monthly per subscriber rate for these services.

Adoption
of New Accounting Standard for Share-Based Payment Expense

Effective January 1, 2006, we adopted Statement of Financial Accounting
Standards (SFAS) No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R), and related interpretative guidance issued by the



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Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission. SFAS No. 123R
requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and measurement based on the grant-date fair value of the award. It requires the cost to be recognized over
the period during which an employee is required to provide service in exchange for the award. Additionally, compensation expense will be recognized over the remaining employee service period for the outstanding portion of any awards for which
compensation expense had not been previously recognized or disclosed under SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). SFAS No. 123R replaces SFAS No. 123 and supersedes
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25), and its related interpretations. We previously recognized expense in accordance with the
provisions requiring variable accounting under APB No. 25 and its related interpretations for previously modified stock options, all of which were fully vested as of December 31, 2005. Upon the adoption of SFAS 123R, we discontinued
recognizing compensation expense under variable accounting.

In our adoption of SFAS No. 123R, we have applied the modified
prospective transition method to all past awards outstanding and unvested as of January 1, 2006 and are recognizing the associated expense over the remaining vesting period of such awards based on the fair values previously determined and
disclosed as part of our pro forma disclosures under SFAS No. 123. As such, we are not restating the results of prior periods.

For
the six months ended June 30, 2006, the share-based payment expense recognized in the consolidated statement of operations in accordance with SFAS No. 123R was approximately $0.9 million. This expense was recognized in the same expense
component in the consolidated statement of operations as the salary or other cash compensation paid to the employee receiving the award. Net of income tax effects, the adoption of SFAS No. 123R reduced our net income by approximately $0.6
million and its effect on both basic and diluted net income per common share was less than $0.01 per share. The adoption of SFAS No. 123R did not affect our cash flow from operating activities or cash flow from financing activities.

As there were no stock options granted during the six months ended June 30, 2006, share-based payment expense recognized for options consisted
only of the cost associated with the unvested awards made prior to January 1, 2006, which was calculated based on the fair values of the granted options on their respective grant dates in accordance with SFAS No. 123. In accordance with
the recognition provisions of SFAS No. 123R, the amount of this expense has been adjusted to reflect an assumed forfeiture rate and is now determined based on estimated forfeitures, thereby discontinuing the previously allowable method of
calculating expense based on the actual forfeitures.

As of January 1, 2006, the total unrecognized share-based payment expense
related to unvested options was approximately $3.5 million, which is expected to be recognized over a weighted-average period of approximately 2.3 years.

At the time of the Merger with Sprint Nextel, options to acquire UbiquiTel common shares, whether vested or unvested, were cancelled and option holders received the excess, if any, of $10.35 per share over the option
exercise price for each share subject to the option, less any applicable withholding taxes.

Recent Accounting Pronouncements

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement
No. 109 (FIN 48). FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides
guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We are currently assessing the
impact and timing of adopting FIN 48.



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Results of Operations

Analysis of the three months ended June 30, 2006 compared to the three months ended June 30, 2005

Customer Net Additions

As of June 30, 2006, we provided personal communications services to approximately
458,500 customers compared to approximately 423,600 customers as of June 30, 2005. During the three months ended June 30, 2006, we added 6,800 net new subscribers compared to 14,600 net new subscribers for the three months ended
June 30, 2005. The decrease was primarily attributable to more customer disconnects primarily due to a larger subscriber base and higher churn.

Churn

Churn is the monthly rate of customer turnover expressed as the percentage of customers
of the beginning customer base that both voluntarily and involuntarily discontinued service during the period. Churn is computed by dividing the number of customers that discontinued service during the month, net of 30 day returns, by the beginning
customer base for the period. Churn for the three months ended June 30, 2006 was approximately 2.6% compared to approximately 2.3% for the three months ended June 30, 2005. Voluntary churn increased 0.2% primarily due to the impact of
aggressive handset promotions by certain competitors.

Average Revenue Per User (ARPU)

Average revenue per user (ARPU) summarizes the average monthly subscriber revenue per customer. ARPU is computed by dividing subscriber revenue by the
average subscribers for the period. During each of the three months ended June 30, 2006 and 2005, our ARPU was approximately $56. Data ARPU increased $4 to $10 for the three months ended June 30, 2006 compared to the three months ended
June 30, 2005, offset by a decline in voice ARPU of $4 to $46 for the same periods.

Revenues



| |  |  | Subscriber Revenue. Subscriber revenue during the three months ended June 30, 2006 and 2005 was approximately $76.3 million and $69.9 million, respectively. Subscriber
revenue consists of monthly recurring service charges for voice and data usage and monthly non-recurring charges for local, long distance, travel and roaming airtime usage and data usage in excess of the pre-subscribed usage plan amount,
cancellation and late fee revenues and surcharges, less reductions for billing adjustments and billing corrections. Our customers charges are dependent on their rate plans, based on the number of minutes and data usage included in their plans.
The increase in subscriber revenue was primarily attributable to the effect of the increase in our subscriber base.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Roaming and Wholesale Revenue. Roaming and wholesale revenue consists of Sprint PCS travel revenue, non-Sprint PCS roaming revenue and reseller revenue. Travel revenue is
generated on a per minute rate for voice services and on a per kilobit rate for data services when a Sprint PCS subscriber based outside our markets uses our network. An additional long distance rate per minute is generated when that customer
initiates a call from our network to call outside the local calling area. Non-Sprint PCS roaming revenue is generated when a non-Sprint PCS subscriber uses our network. Reseller revenue is generated when a reseller subscriber uses our PCS network.
We have reseller programs with several companies, including Virgin Mobile USA and Qwest Communications.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Roaming and wholesale
revenue during the three months ended June 30, 2006 and 2005 was approximately $34.6 million and $31.6 million, respectively. The increase in roaming and wholesale revenue was due to an



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increase in Sprint PCS travel revenue for data services of approximately $4.8 million, partially offset
by a decrease in non-Sprint PCS roaming revenue of approximately $1.8 million. The increase in Sprint PCS travel revenue for data services was primarily due to an increase in travel data usage of 156%. The decrease in non-Sprint PCS roaming revenue
was primarily due to a reduction in roaming minutes of use with a significant roaming partner. Despite approximately 23% growth in reseller minutes, reseller revenues were comparable to the amount recorded in the prior year due to a reduction in the
reseller rate with a significant reseller.



| |  |  | Equipment Revenue. Equipment revenue is generated from the sale of handsets and accessories and is recorded at the time of sale. We record and retain 100% of the revenue from
the sale of handsets and accessories, net of rebates, discounts and other sales incentives, as equipment revenue. Equipment revenue recorded during the three months ended June 30, 2006 and 2005 totaled approximately $3.6 million and $4.7
million, respectively. Equipment revenue for the three months ended June 30, 2005 included sales of certain promotional products to a third party vendor totaling approximately $1.5 million.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost of Service and Operations



| |  |  | Network Operations Expenses. Network operations expenses include radio communications site lease costs, utilities, network control maintenance, network control site leases,
engineering personnel, transport facilities and interconnection charges. Network operations expenses totaled approximately $17.0 million during the three months ended June 30, 2006 compared to approximately $16.0 million during the three
months ended June 30, 2005. The increase was primarily attributable to increases in backhaul expense, radio communications site lease expense and property taxes.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Travel and Roaming Expenses. We pay Sprint PCS travel fees on a per minute rate for voice services and on a per kilobit rate for data services when our customers use the
Sprint PCS network outside our markets and we incur additional long distance fees when our customers call long distance originating outside our markets. We also pay roaming fees to other wireless providers when our customers use their network.
Travel and roaming expenses totaled approximately $19.1 million and $14.0 million for the three months ended June 30, 2006 and 2005, respectively. Voice travel expense increased approximately $1.0 million due to a larger subscriber base. Data
travel expense increased approximately $3.6 million due primarily to an increase in travel data usage per subscriber.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bad Debt Expense. Bad debt expense during the three months ended June 30, 2006 and 2005 was approximately $1.6 million and $0.6 million, respectively. The increase in
bad debt expense was due primarily to the increase in subscriber revenue and higher involuntary churn.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sprint Nextel Operating Expenses.Sprint Nextel operating expenses during the three months ended June 30, 2006 and 2005 were approximately $15.4 million and $14.6
million, respectively. Sprint Nextel operating expenses included Sprint Nextel management fee expense and other fees we pay to Sprint Nextel for the use of its support services, including billing and collections services and customer care. The
increase in Sprint Nextel operating expenses was primarily attributable to the effect of the increase in our subscriber base.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost of Products Sold

The cost of products sold includes the costs of handsets and accessories and totaled
approximately $7.7 million and $9.9 million during the three months ended June 30, 2006 and 2005, respectively. The cost of handsets generally exceeds the sales price because we subsidize the cost of handsets to subscribers, consistent with
industry practice. Handset subsidies on units sold by third parties totaled approximately $1.6 million and $1.7 million for the three months ended June 30, 2006 and 2005, respectively. Cost of products sold for the three months ended
June 30, 2005 included the cost of certain promotional products sold to a third party vendor totaling approximately $1.7 million. The remaining decrease in cost of products sold was primarily due to the effects of sales of less expensive
handset models of approximately $0.9 million.



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Selling and Marketing

Selling and marketing expenses relate to our distribution channels, sales representatives, sales support personnel, retail stores, advertising programs
and commissions. We incurred selling and marketing expenses of approximately $14.7 million and $16.9 million during the three months ended June 30, 2006 and 2005, respectively. The decrease in selling and marketing expenses was primarily
attributable to lower advertising expense of approximately $0.9 million and lower compensation and benefit expenses of approximately $1.1 million primarily resulting from the restructuring of the sales and marketing functions that was completed in
the third quarter of 2005.

General and Administrative

We incurred general and administrative expenses totaling approximately $4.3 million and $5.0 million during the three months ended June 30, 2006 and
2005, respectively. The decrease in general and administrative expenses was due primarily to lower compensation and benefit expenses.

Merger Related Transaction Expenses

We incurred transaction costs of approximately $12.1 million
during the three months ended June 30, 2006, which included investment banking fees, legal fees and other fees and expenses to consummate the Merger.

Non-Cash Compensation

Prior to our adoption of SFAS No. 123R on
January 1, 2006, we applied the provisions of APB No. 25 and related interpretations in accounting for our equity incentive plan. A reduction in the exercise price of certain previously issued stock options resulted in variable accounting
for these options during the years 2002 through 2005. During the three months ended June 30, 2005, the increase in the fair market value of our common stock resulted in non-cash compensation expense of approximately $1.6 million. Upon the
adoption of SFAS No. 123R, we discontinued recognizing non-cash compensation expense under variable accounting, and we began recognizing share-based payment expense in accordance with SFAS No. 123R in the same expense component in the
consolidated statement of operations as the salary or other cash compensation paid to the employee receiving the stock options.

Depreciation, Amortization and Accretion

Depreciation, amortization and accretion expense for the
three months ended June 30, 2006 and 2005 totaled approximately $12.2 million and $12.9 million, respectively. As we accelerated depreciation of certain minicell base stations during the years 2003 through the end of 2005, depreciation expense
for the three months ended June 30, 2005 included depreciation expense of approximately $1.2 million related to these assets, all of which became fully depreciated as of December 31, 2005. The effect of this decrease in depreciation
expense for the three months ended June 30, 2006 was partially offset by higher depreciation expense resulting from net additions to our network equipment during the previous twelve months.

Interest Income

For the three months ended June 30, 2006 and 2005, interest income was approximately $1.7 million and $0.6 million, respectively. Interest income increased as a result of maintaining higher average cash and cash equivalent balances and
earning more interest due to higher interest rates as compared to the same period in 2005.



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Interest Expense

Interest expense totaled approximately $10.8 million and $10.9 million during the three months ended June 30, 2006 and 2005, respectively.

Income Taxes

For the three months ended June 30, 2006 and 2005, we recognized income tax expense of approximately $2.8 million and $0.1 million, respectively. During the fourth quarter of 2005, we released the valuation
allowance on our deferred income tax assets, which primarily consisted of the tax benefit of our net operating loss carryforwards. As such, we are now recognizing income tax expense based on the estimated effective annual federal and state income
tax rates applied to our pre-tax income, even though we do not expect to pay cash income taxes during 2006, other than the required alternative minimum tax and state income tax payments, as a result of the utilization of some portion of our net
operating loss carryforwards. Our income tax expense was higher than an amount computed based on statutory federal and state income tax rates applied to our pre-tax income. This variation in the customary relationship between income tax expense and
pre-tax income was due primarily to the nondeductibility of the merger related transaction expenses, which totaled approximately $12.1 million, partially offset by a federal income tax refund.

Analysis of the six months ended June 30, 2006 compared to the six months ended June 30, 2005

Customer Net Additions

During the six months ended June 30, 2006, we added 10,600 net new subscribers compared to 29,000 net new subscribers for the six months ended June 30, 2005. The decrease was primarily attributable to lower gross customer
additions of approximately 4,600 primarily resulting from the effects of aggressive handset promotions by certain competitors and customer confusion resulting from the Sprint-Nextel merger, and 13,800 more customer disconnects primarily due to a
larger subscriber base and higher voluntary churn.

Churn

Churn for the six months ended June 30, 2006 was approximately 2.7% compared to approximately 2.5% for the six months ended June 30, 2005.
Voluntary churn increased 0.2% primarily due to the impacts of aggressive handset promotions by certain competitors and lower service levels experienced at Sprint Nextel call centers.

Average Revenue Per User (ARPU)

During each of the six months ended June 30, 2006 and 2005, our ARPU was approximately $56. Data ARPU increased $4 to $9 for the six months ended June 30, 2006 compared to the six months ended June 30,
2005, offset by a decline in voice ARPU of $4 to $47 for the same periods.

Revenues



| |  | Subscriber Revenue. Subscriber revenue during the six months ended June 30, 2006 and 2005 was approximately $150.9 million and $136.8 million, respectively. The increase
in subscriber revenue was primarily attributable to the effect of the increase in our subscriber base.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Roaming and Wholesale Revenue. Roaming and wholesale revenue during the six months ended June 30, 2006 and 2005 was approximately $65.2 million and $61.2 million,
respectively. The increase in roaming
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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and wholesale revenue was due to increases in Sprint PCS travel revenues for voice and data services of
approximately $1.7 million and $7.4 million, respectively, partially offset by a decrease in non-Sprint PCS roaming revenue of approximately $4.6 million. The increase in Sprint PCS travel revenue was primarily due to increases in travel minutes of
use and data usage of 6% and 132%, respectively. The decrease in non-Sprint PCS roaming revenue was primarily due to a reduction in roaming minutes of use with a significant roaming partner. Despite approximately 19% growth in reseller minutes,
reseller revenues were comparable to the amount recorded in the prior year due to a reduction in the reseller rate with a significant reseller.



| |  | Equipment Revenue. Equipment revenue recorded during the six months ended June 30, 2006 and 2005 totaled approximately $7.9 million and $8.1 million, respectively.
Equipment revenue for the six months ended June 30, 2005 included sales of certain promotional products to a third party vendor totaling approximately $1.5 million. The remaining increase in equipment revenue was primarily attributable to
reductions in handset promotional discounts.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost of Service and Operations



| |  | Network Operations Expenses. Network operations expenses totaled approximately $33.3 million during the six months ended June 30, 2006 compared to approximately
$32.5 million during the six months ended June 30, 2005. The increase was primarily due to an increase in radio communications site lease expense.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Travel and Roaming Expenses. Travel and roaming expenses totaled approximately $34.6 million and $26.5 million for the six months ended June 30, 2006 and 2005,
respectively. Voice travel expense increased approximately $2.1 million due to a larger subscriber base. Data travel expense increased approximately $5.0 million due primarily to an increase in travel data usage per subscriber. Roaming expense
increased approximately $1.0 million due primarily to an increase in roaming usage per subscriber.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Bad Debt Expense. Bad debt expense during the six months ended June 30, 2006 and 2005 was approximately $2.7 million and $1.6 million, respectively. The increase in bad
debt expense was due primarily to the increase in subscriber revenue and higher involuntary churn.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint Nextel Operating Expenses.Sprint Nextel operating expenses during the six months ended June 30, 2006 and 2005 were approximately $30.6 million and $28.6 million,
respectively. The increase in Sprint Nextel operating expenses was primarily attributable to the effect of the increase in our subscriber base.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost of Products Sold

The cost of products sold totaled approximately $15.2
million and $20.3 million during the six months ended June 30, 2006 and 2005, respectively. Handset subsidies on units sold by third parties totaled approximately $3.0 million and $4.6 million for the six months ended June 30, 2006 and
2005, respectively. Cost of products sold for the six months ended June 30, 2005 included the cost of certain promotional products sold to a third party vendor totaling approximately $1.7 million. The remaining decrease in cost of products sold
was primarily due to the effects of sales of less expensive handset models of approximately $2.2 million and a decrease in gross customer additions of approximately $0.7 million.

Selling and Marketing

We incurred selling and marketing expenses of approximately $29.3 million and $32.8 million during the six months ended June 30, 2006 and 2005, respectively. The decrease in selling and marketing expenses was primarily attributable to
lower advertising expense of approximately $1.4 million and lower compensation and benefit expenses of approximately $1.8 million primarily resulting from the restructuring of the sales and marketing functions that was completed in the third quarter
of 2005.



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General and Administrative

We incurred general and administrative expenses totaling approximately $11.8 million and $9.9 million during the six months ended June 30, 2006 and
2005, respectively. For the six months ended June 30, 2006, general and administrative expenses included expenses incurred in connection with litigation against Sprint Nextel of approximately $2.8 million.

Non-Cash Compensation

Prior to our adoption of SFAS No. 123R on January 1, 2006, we applied the provisions of APB No. 25 and related interpretations in accounting for our equity incentive plan. A reduction in the exercise price of certain
previously issued stock options resulted in variable accounting for these options during the years 2002 through 2005. During the six months ended June 30, 2005, the increase in the fair market value of our common stock resulted in non-cash
compensation expense of approximately $1.1 million.

Depreciation, Amortization and Accretion

Depreciation, amortization and accretion expense for the six months ended June 30, 2006 and 2005 totaled approximately $24.0 million and $25.0
million, respectively. As we accelerated depreciation of certain minicell base stations during the years 2003 through the end of 2005, depreciation expense for the six months ended June 30, 2005 included depreciation expense of approximately
$2.4 million related to these assets, all of which became fully depreciated as of December 31, 2005. The effect of this decrease in depreciation expense for the six months ended June 30, 2006 was partially offset by higher depreciation
expense resulting from net additions to our network equipment during the previous twelve months.

Interest Income

For the six months ended June 30, 2006 and 2005, interest income was approximately $3.2 million and $1.1 million, respectively.
Interest income increased as a result of maintaining higher average cash and cash equivalent balances and earning more interest due to higher interest rates as compared to the same period in 2005.

Interest Expense

Interest expense totaled approximately $21.7 million and $21.8 million during the six months ended June 30, 2006 and 2005, respectively.

Income Taxes

For the six months ended June 30, 2006 and 2005, we
recognized income tax expense of approximately $7.2 million and $0.3 million, respectively. During the fourth quarter of 2005, we released the valuation allowance on our deferred income tax assets, which primarily consisted of the tax benefit of our
net operating loss carryforwards. As such, we are now recognizing income tax expense. For the six months ended June 30, 2006, our effective income tax rate was approximately 59.6%. Accordingly, our income tax expense was higher than an amount
computed based on statutory federal and state income tax rates applied to our pre-tax income. This variation in the customary relationship between income tax expense and pre-tax income was due primarily to the nondeductibility of the merger related
transaction expenses, which totaled approximately $12.1 million, partially offset by a federal income tax refund.



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Cash Flows, Liquidity and Capital Resources

A significant portion of our revenues is generated from customers who subscribe to service from us on contracts that range from one to two years, our
resellers or Sprint Nextel. Our cash flow from operating activities has fluctuated with the size of our subscriber base and indirectly from the size of Sprint Nextels PCS subscriber base and the recurring subscriber, reseller and roaming
revenue streams generated from Sprint PCS customers. Net cash provided by operating activities was approximately $31.7 million and $26.6 million for the six months ended June 30, 2006 and 2005, respectively. Net cash provided by operating
activities for the six months ended June 30, 2006 included cash payments for transaction costs necessary to consummate the Merger totaling approximately $12.1 million. We expect cash flows from operating activities will continue to grow during
the remainder of 2006 and in future periods at a pace consistent with changes in our subscriber base and that of our resellers and roaming partners. Since 2004, we have funded all of our capital expenditures through cash flows from operating
activities and expect to continue to do so in 2006.

In February 2005, we announced a network coverage expansion, expected to be completed
in 2006. As part of this expansion, we entered into an agreement with an equipment vendor to acquire network equipment. The agreement provides for a minimum purchase commitment of $18 million in each of the years 2006 through 2008 for all network
equipment and performance services that we purchase.

In December 2004, Sprint Nextel announced its intention to deploy the next generation
of CDMA technology known as EV-DO throughout its network. EV-DO technology is expected to generate higher network data speeds and allow the introduction of new data products and features. We began deploying EV-DO in selected markets in the third
quarter of 2005 and covered approximately 10% of the population in our markets as of June 30, 2006 for an approximate cost of $3.5 million.

During 2004, Operating Company issued $420.0 million aggregate principal amount of 9.875% senior notes due March 1, 2011 (9.875% Senior Notes). Interest on the 9.875% Senior Notes is payable semiannually on March 1 and
September 1, requiring annual payments of approximately $41.5 million. The 9.875% Senior Notes are redeemable in whole or in part on or after March 1, 2007. UbiquiTel has fully and unconditionally guaranteed Operating Companys
obligations under the 9.875% Senior Notes.

Under the indenture governing the 9.875% Senior Notes, Operating Company is permitted to issue
additional notes from time to time. Prior to March 1, 2007, Operating Company may redeem up to 35% of the aggregate principal amount of the 9.875% Senior Notes with net cash proceeds of a sale of its equity or a contribution to its common
equity capital, provided that at least 65% of the principal amount of 9.875% Senior Notes originally issued under the indenture remains outstanding after giving effect to such redemption and such redemption occurs within 45 days of the date of such
sale of equity interests or contribution.

We presently are in compliance with all covenants in the indenture associated with the 9.875%
Senior Notes. We may from time to time purchase outstanding 9.875% Senior Notes in the open market, in privately negotiated transactions or otherwise in accordance with our debt agreements and applicable law.

As of June 30, 2006, we had approximately $148.4 million of working capital, including $133.8 million in cash and cash equivalents. Management
expects cash and cash equivalents, combined with cash flow from operating activities, to be sufficient to meet capital expenditures needs and service debt requirements through June 30, 2007 and into the foreseeable future. While management does
not anticipate the need to raise additional capital to meet our operating or capital expenditure requirements in the foreseeable future, our funding status is dependent on a number of factors influencing projections of operating cash flows,
including those related to gross new customer additions,



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customer turnover, revenues, marketing costs, bad debt expense and roaming and reseller revenue. Management believes our
financial position will be sufficient to meet the cash requirements of the business including capital expenditures, cash interest and working capital needs. However, if actual results differ significantly from these assumptions, our liquidity
position could be adversely affected.

Seasonality

Our business is seasonal because the wireless industry is moderately dependent on fourth quarter results. Among other things, the industry relies on
higher customer additions and handset sales in the fourth quarter as compared to the other three fiscal quarters. The factors contributing to this trend include the increasing use of retail distribution, which is dependent on year-end holiday
shopping, the timing of new product and service offerings, competitive pricing pressures and aggressive marketing and promotions during the holiday season. The increased level of activity requires a greater use of our available financial resources
during this period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss
arising from adverse changes in market prices and rates, including interest rates. The interest rate on our notes is fixed at 9.875%. We have not entered into derivatives or other financial instruments for trading, speculative or hedging purposes.
No principal repayments on our notes are due until March 2011.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (who serves as our principal
financial and accounting officer), conducted an evaluation of our disclosure controls and procedures as of June 30, 2006. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls
and procedures were effective as of June 30, 2006 in providing reasonable assurance that information required to be disclosed in reports we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management
and recorded, processed, summarized and reported in a timely manner.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of
Exchange Act Rules 13a-15 or 15d-15 that occurred during the three months ended June 30, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management is responsible for all of our disclosure controls and procedures and internal control over financial reporting including those relating to
functions outsourced to Sprint Nextel through June 30, 2006, and including controls over the information flow to and from the third party service organization. We also are responsible for assessing the identified controls over financial
reporting over the outsourced operations. Prior to the closing of the Merger, we placed reliance on Sprint Nextel to adequately design its internal controls with respect to the processes established to provide financial information and other
information to us. To address this issue, Sprint Nextel engaged its independent auditors to perform a periodic evaluation of these controls and to provide a Report on Controls Placed in Operation and Tests of Operating Effectiveness for
Affiliates under guidance provided in Statement of Auditing Standards No. 70 (SAS 70). This report was provided semi-annually to us and we have placed reliance on this SAS 70 report for assessing the identified controls over
financial reporting over the outsourced operations.



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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 8 (Recent Developments) to the Notes to Consolidated Financial
Statements in Part I, Item 1, of this report with respect to the Companys acquisition on July 1, 2006 by Sprint Nextel Corporation for cash in the Merger. In connection with the Merger and in accordance with the parties
Settlement Agreement, in early July 2006, the Company dismissed with prejudice the action pending by the Company in the Delaware Court of Chancery against Sprint Corporation, Sprint Spectrum L.P., WirelessCo, L.P., Sprint Communications Company
L.P., Sprint Telephony PCS, L.P., Sprint PCS License, L.L.C. and Nextel Communications, Inc.

Item 1A. Risk Factors

No changes.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

UbiquiTels 2006 annual meeting of
stockholders was held on June 27, 2006 at the Philadelphia Marriott West Hotel, 111 Crawford Avenue, West Conshohocken, Pennsylvania, to vote on (1) the adoption of the Agreement and Plan of Merger, dated as of April 19, 2006, by
and among UbiquiTel Inc., Sprint Nextel Corporation and Sprint Nextel Corporations wholly owned subsidiary, Eagle Merger Sub Inc., and the approval of the Merger and related transactions contemplated by the Agreement and Plan of Merger, and
(2) the election of three Class III directors, each for a term ending on the earlier to occur of the effective date of the Merger and UbiquiTels annual meeting of stockholders in 2009.

Proxies for the annual meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and there was a
solicitation in opposition by Deephaven Capital Management LLC to UbiquiTels solicitation of proxies for the second proposal described above, the election of three Class III directors nominated by the independent members of
UbiquiTels Board of Directors. The holders of record of an aggregate of 89,022,007 shares of UbiquiTels common stock, out of 94,453,100 shares outstanding on the record date (May 11, 2006) for the annual meeting,
were present either in person or by proxy, and constituted a quorum for the transaction of business at the annual meeting.

The nominees
for Class III director nominated by the independent members of UbiquiTels board of directors, Robert A. Berlacher, Donald A. Harris, and Joseph N. Walter, were elected, and the stockholders adopted the Agreement and Plan of Merger
and approved the Merger and related transactions, with voting as detailed below:



|(1) | Adoption of the Agreement and Plan of Merger, dated as of April 19, 2006, by and among UbiquiTel Inc., Sprint Nextel Corporation and Eagle Merger Sub Inc., and approval of the
Merger and related transactions contemplated by the Agreement and Plan of Merger:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|           |  |               |  |                
|---------- |  | ------------- |  | ---------------
|Votes For  |  | Votes Against |  | Votes Abstained
|51,163,198 |  | 8,122,784     |  | 100,425        



|(2) | Election of Class III Directors:
|--- | --------------------------------



|                      |  |            |  |               
|--------------------- |  | ---------- |  | --------------
|Director Nominee      |  | Votes For  |  | Votes Withheld
|Robert A. Berlacher * |  | 53,450,041 |  | 1,279,179     
|Donald A. Harris *    |  | 51,279,873 |  | 3,449,347     
|Joseph N. Walter *    |  | 53,450,041 |  | 1,279,179     
|Edmond J. Thomas **   |  | 34,292,787 |  |              
|Matthew Halbower **   |  | 34,292,787 |  |              
|Mark H. Rose **       |  | 34,292,787 |  |              

---

|* | Nominated by the independent members of UbiquiTels board of directors.
|- | -----------------------------------------------------------------------

|** | Nominated by Deephaven Capital Management LLC.
|-- | ----------------------------------------------

In
connection with the Merger with Sprint Nextel, the then current directors of UbiquiTel resigned and certain officers of Sprint Nextel were appointed in their place.

Item 5. Other Information

None.

Item 6. Exhibits



|            |  |                                                                                                                                                                                                                                                                   
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                       
|2.1         |  | Agreement and plan of Merger among Sprint Nextel Corporation, Eagle Merger Sub Inc. and UbiquiTel Inc. dated as of April 19, 2006 (filed as Exhibit 2.1 to UbiquiTel Inc.s Current
Report on Form 8-K filed April 20, 2006 and incorporated herein by reference).
|            | 
|3.1         |  | Amended and Restated Certificate of Incorporation of UbiquiTel Inc. (filed as Exhibit 3.1 to UbiquiTel Inc.s Current Report on Form 8-K filed July 3, 2006 and incorporated herein
by reference).                                                                
|            | 
|3.2         |  | Amended and Restated Bylaws of UbiquiTel Inc. (filed as Exhibit 3.2 to UbiquiTel Inc.s Current Report on Form 8-K filed July 3, 2006 and incorporated herein by
reference).                                                                                      
|            | 
|31.1        |  | Certification of Chief Executive Officer Pursuant to Securities Exchange Act of 1934 Rule 13a-14(a).                                                                                                                                                              
|            | 
|31.2        |  | Certification of Chief Financial Officer Pursuant to Securities Exchange Act of 1934 Rule 13a-14(a).                                                                                                                                                              
|            | 
|32.1        |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 9.06 of the Sarbanes-Oxley Act of 2002.                                                                                                               
|            | 
|32.2        |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 9.06 of the Sarbanes-Oxley Act of 2002.                                                                                                               



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SIGNATURES

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



CO-REGISTRANTS:UBIQUITEL INC.UBIQUITEL OPERATING COMPANYBy:

/s/ William G. ArendtWilliam G. ArendtVice President and ControllerPrincipal Accounting Officer


September 8, 2006



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