UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended      December 31, 1998                               
                          -----------------------------------------------------

                                       OR

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

For the transition period from                     to                          
                                  
                                     333-06609-01
Commission file number               333-06609-02                          
                              
                              SPRINT SPECTRUM L.P.
                      SPRINT SPECTRUM FINANCE CORPORATION                      
              (Exact name of registrant as specified in its charter)

                         DELAWARE                         48-1165245
                         DELAWARE                         43-1746537          
              (State or other jurisdiction of           (IRS Employer
               incorporation or organization)         Identification Nos.)

          4900 Main Street, Kansas City, Missouri            64112             
         (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code      (816) 559-1000        
                                                    ----------------------

Securities registered pursuant to Section 12(b) and 12(g) of the Act: None

The registrants  meet the conditions set forth in General  Instruction I (1) (a)
and (b) of Form  10-K and are  therefore  filing  this  Form  with  the  reduced
disclosure format.

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

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

At March 1, 1999 the Sprint Spectrum  Finance  Corporation had 100 common shares
outstanding.

Documents Incorporated by Reference:  None


<PAGE>





                                                                 
                              SPRINT SPECTRUM L.P.
                       SPRINT SPECTRUM FINANCE CORPORATION

                       SECURITIES AND EXCHANGE COMMISSION
                           ANNUAL REPORT ON FORM 10-K





                                                                   
Part I

--------------------------------------------------------------------------------
Item 1.  Business
--------------------------------------------------------------------------------

Sprint  Spectrum L.P. is  a  Delaware limited partnership formed in  March 1995.
Sprint Spectrum refers to Sprint Spectrum L.P. and its subsidiaries.

The general partner of Sprint Spectrum is Sprint Spectrum Holding Company,  L.P.
(Holdings),  and the limited partner is MinorCo,  L.P. (MinorCo).  Both Holdings
and MinorCo are Delaware limited partnerships. In November 1998, Sprint Spectrum
became an indirect  wholly owned  subsidiary of Sprint  Corporation  when Sprint
acquired the remaining  ownership  interests of  Tele-Communications,  Inc., Cox
Communications, Inc. and Comcast Corporation in Holdings and MinorCo.

Sprint Spectrum is a provider of wireless personal  communication services (PCS)
in the United  States.  It has the largest PCS  license  coverage of  population
equivalents  (Pops) of any U.S. PCS company.  Sprint  Spectrum's 30 wholly owned
markets cover 156 million Pops and include the New York, San Francisco, Detroit,
Dallas/Fort Worth and  Boston/Providence  major trading areas.  Sprint Spectrum,
together with certain affiliates, has licenses to provide service to 270 million
people in all 50 states, Puerto Rico and the U.S. Virgin Islands.

Sprint  Spectrum is subject to the  jurisdiction  of the Federal  Communications
Commission.

Each of the markets in which Sprint Spectrum competes is served by other two-way
wireless service providers,  including cellular and PCS operators and resellers.
A majority of the markets  have five or more  commercial  mobile  radio  service
providers.  Each of the top  metropolitan  markets  has at least  one  other PCS
competitor  in addition to two cellular  incumbents.  Many of these  competitors
have been  operating for a number of years and  currently  service a significant
subscriber base.

Sprint Spectrum Finance  Corporation  (FinCo), a Delaware  corporation formed in
May 1996, is a wholly owned subsidiary of Sprint Spectrum L.P. FinCo has nominal
assets and does not conduct any operations.  It was formed to be a co-obligor of
certain  securities  issued by Sprint  Spectrum.  Because FinCo is a co-obligor,
certain institutional investors, who might otherwise be limited in their ability
to invest in securities  issued by partnerships  due to legal investment laws in
their states of organization or their charter  documents,  may be able to invest
in Sprint Spectrum's securities.

--------------------------------------------------------------------------------
Item 2.  Properties
--------------------------------------------------------------------------------

Sprint  Spectrum's  properties  consist  mainly of  network  equipment,  work in
progress  and  buildings  and  leasehold   improvements.   The  following  table
summarizes  Sprint  Spectrum's  major assets as a percentage of total  property,
plant and equipment at year-end 1998.

Property, plant and equipment
   Network equipment                              64.2%
   Buildings and leasehold improvements
                                                  16.6%
   Construction work in progress                  13.5%
   Other                                           5.7%
-------------------------------------------- -------------

                                                 100.0%
                                             -------------

Property,  plant and equipment totaling $3.6 billion was pledged as security for
revolving credit facilities at year-end 1998.

--------------------------------------------------------------------------------
Item 3.  Legal Proceedings
--------------------------------------------------------------------------------

Sprint  Spectrum  has been  involved  in legal  proceedings  in  various  states
concerning  the  suspension  of the  processing or approval of permits and other
issues arising in connection  with tower siting.  There can be no assurance that
such  litigation  and  similar  actions  taken by  others  seeking  to block the
construction of individual cell sites of Sprint Spectrum's  network will not, in
the  aggregate,  significantly  delay  expansion  of Sprint  Spectrum's  network
coverage.

Sprint Spectrum is involved in various other legal proceedings incidental to the
conduct of its  business.   While it is not possible to  determine the  ultimate
disposition of each of these proceedings, management  believes that the  outcome
of such proceedings,  individually or in the aggregate, will not have a material
adverse   effect  on  Sprint   Spectrum's  financial  condition  or  results  of
operations.


<PAGE>


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

Omitted under the provisions of General Instruction I.

Part II

--------------------------------------------------------------------------------
Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
--------------------------------------------------------------------------------

At year-end 1998, Sprint Spectrum had no common equity.

--------------------------------------------------------------------------------
Item 6.  Selected Financial Data
--------------------------------------------------------------------------------

Omitted under the provisions of General Instruction I.

--------------------------------------------------------------------------------
Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations
--------------------------------------------------------------------------------

For information  required by Item 7, refer to the  "Management's  Discussion and
Analysis  of  Financial  Condition  and  Results of  Operations"  section of the
Financial  Statements  and Financial  Statement  Schedule  filed as part of this
document.

--------------------------------------------------------------------------------
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk
--------------------------------------------------------------------------------

Sprint  Spectrum's  exposure  to  market   risk--through   derivative  financial
instruments  and other  financial  instruments,  such as long-term  debt--is not
material.

--------------------------------------------------------------------------------
Item 8.  Financial Statements and Supplementary Data
--------------------------------------------------------------------------------

For information required by Item 8, refer to the Sprint Spectrum's  consolidated
financial  statements  and FinCo's  financial  statements  filed as part of this
document.

--------------------------------------------------------------------------------
Item 9.  Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
--------------------------------------------------------------------------------

None.

Part III

--------------------------------------------------------------------------------
Item 10.  Directors and Executive Officers of the Registrants
--------------------------------------------------------------------------------

Omitted under the provisions of General Instruction I.

--------------------------------------------------------------------------------
Item 11.  Executive Compensation
--------------------------------------------------------------------------------

Omitted under the provisions of General Instruction I.

--------------------------------------------------------------------------------
Item 12.  Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------------------------

Omitted under the provisions of General Instruction I.

--------------------------------------------------------------------------------
Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------------------------------

Omitted under the provisions of General Instruction I.


<PAGE>







Part IV


Item 14.  Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a)      1.  The  consolidated  financial  statements  of  Sprint  Spectrum  and
         financial  statements  of FinCo filed as part of this report are listed
         in the index to Financial Statements and Financial Statement Schedule.

         2.  The consolidated  financial  statement schedule of  Sprint Spectrum
         filed  as part  of this  report is  listed in  the  Index to  Financial
         Statements and Financial Statement Schedule.

         3.  The following Exhibits are part of this report.

         EXHIBITS

         Articles of Incorporation and Bylaws:

         (3.1)    Certificate  of Limited  Partnership  of Sprint  Spectrum L.P.
                  (incorporated by reference to Exhibit 3.2 to Sprint Spectrum's
                  Form S-1 Registration  Statement,  Registration No. 333-06609,
                  filed on June 21, 1996).

         (3.2)    Agreement of Limited Partnership of MajorCo Sub, L.P. (renamed
                  Sprint  Spectrum  L.P),  dated as of  March  28,  1995,  among
                  MajorCo, L.P. and MinorCo, L.P.  (incorporated by reference to
                  Exhibit  3.6  to  Sprint   Spectrum's  Form  S-1  Registration
                  Statement,  Registration  No.  333-06609,  filed  on June  21,
                  1996).

         (3.3)    Certificate  of   Incorporation  of  Sprint  Spectrum  Finance
                  Corporation  (incorporated  by  reference  to  Exhibit  3.3 to
                  Sprint    Spectrum's   Form   S-1   Registration    Statement,
                  Registration No. 333-06609, filed on June 21, 1996).

         (3.4)    Bylaws of Sprint Spectrum Finance Corporation (incorporated by
                  reference  to  Exhibit  3.4  to  Sprint  Spectrum's  Form  S-1
                  Registration Statement,  Registration No. 333-06609,  filed on
                  June 21, 1996).

         Instruments Defining the Rights of Security Holders

         (4.1)    Senior Note Indenture  (including form of Senior Note),  dated
                  August 23, 1996, between Sprint Spectrum L.P., Sprint Spectrum
                  Finance  Corporation,  and The Bank of New  York,  as  Trustee
                  (incorporated by reference to Exhibit 4.1 to Sprint Spectrum's
                  Form 10-Q for the quarter ended  September 30, 1996,  filed on
                  November 12, 1996).

         (4.2)    Senior  Discount  Note  Indenture  (including  form of  Senior
                  Discount Note), dated August 23, 1996, between Sprint Spectrum
                  L.P., Sprint Spectrum Finance Corporation, and The Bank of New
                  York, as Trustee  (incorporated by reference to Exhibit 4.3 to
                  Sprint  Spectrum's  Form 10-Q for the quarter ended  September
                  30, 1996 filed on November 12, 1996).

         (4.3)    Loans  from Sprint  Corporation to  Sprint  Spectrum L.P.  are
                  governed by  Sprint's Tracking Stock Policies (incorporated by
                  reference to  Exhibit 4D to  Post-Effective Amendment No. 2 to
                  Sprint   Corporation's    Form S-3   Registration   Statement,
                  Registration No. 33-58488, filed on December 3, 1998).

         Executive Compensation Arrangements

         (10.1)   Employment Agreement dated as of July 29, 1996, between Sprint
                  Spectrum   Holding   Company,   L.P.   and   Andrew   Sukawaty
                  (incorporated by reference to Exhibit 10.20 to Amendment No. 4
                  to  Sprint   Spectrum's  Form  S-1   Registration   Statement,
                  Registration No. 333-06609, filed on August 12, 1996).

         (10.2)   Employment  Agreement dated as of September 29, 1995,  between
                  Sprint Spectrum Holding Company, L.P. and Joseph M. Gensheimer
                  (incorporated by reference to Exhibit 10.11 to 

<PAGE>


                  Amendment No. 3 to Sprint Spectrum's  Form  S-1   Registration
                  Statement, Registration No.333-06609, filed on July 30, 1996).

         (10.3)   Employment  Agreement  dated January 21, 1997,  between Sprint
                  Spectrum L.P. and Charles E. Levine (incorporated by reference
                  to Exhibit 10.4 to Sprint Spectrum's Form 10-Q for the quarter
                  ended March 31, 1997 filed on May 13, 1997).

         (27)     Financial Data Schedules
                  (a)  Sprint Spectrum L.P.
                  (b)  Sprint Spectrum Finance Corporation

Sprint  Spectrum L.P. will furnish to the  Securities  and Exchange  Commission,
upon request, a copy of the instruments (other than those listed above) defining
the rights of holders of its long-term debt.

(b)  Reports on Form 8-K

     Sprint  Spectrum L.P. filed a  Current Report on Form 8-K dated October 21,
     1998  in which it  reported the  appointment of William J. Gunter as  Chief
     Financial Officer of Sprint Spectrum L.P.

     Sprint  Spectrum L.P. filed a Current Report on Form 8-K dated November 23,
     1998  in  which  it  reported  the  consummation  of the  restructuring  of
     partnership interests in Sprint Spectrum Holding Company, L.P.



<PAGE>


SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                              SPRINT SPECTRUM L.P. 
                              --------------------------------------------------
                              (Registrant)



                              By /s/  Andrew Sukawaty
                              --------------------------------------------------
                              Andrew Sukawaty
                              President and Chief Executive Officer


Date:  March 25, 1999 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 25th day of March, 1999.


                              /s/  Andrew Sukawaty
                              --------------------------------------------------
                              Andrew Sukawaty
                              President and Chief Executive Officer


                              /s/  William J. Gunter
                              --------------------------------------------------
                              William J. Gunter
                              Chief Financial Officer


                              /s/  Eric R. Slusser
                              --------------------------------------------------
                              Eric R. Slusser
                              Controller
                              (Principal Accounting Officer)


<PAGE>


SIGNATURES

                              SPRINT SPECTRUM L.P.
                              --------------------------------------------------
                              (Registrant)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 25th day of March, 1999.

                              /s/  J. Richard Devlin
                              --------------------------------------------------
                              J. Richard Devlin, Director
                              SWV Six Inc., a general partner of Sprint
                                  Spectrum Holding Company, L.P., a
                                  limited partnership that is general
                                  partner of Sprint Spectrum L.P.


                              /s/  Don A. Jensen
                              --------------------------------------------------
                              Don A. Jensen, Director
                              SWV Six Inc., a general partner of Sprint
                                  Spectrum Holding Company, L.P., a
                                  limited partnership that is general
                                  partner of Sprint Spectrum L.P.


                              /s/  Arthur B. Krause
                              --------------------------------------------------
                              Arthur B. Krause, Director
                              SWV Six Inc., a general partner of Sprint
                                  Spectrum Holding Company, L.P., a
                                  limited partnership that is general
                                  partner of Sprint Spectrum L.P.




<PAGE>


SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.


                                   SPRINT SPECTRUM FINANCE CORPORATION
                                   ---------------------------------------------
                                   (Registrant)



                                   /s/  Andrew Sukawaty  
                                   ---------------------------------------------
                                   Andrew Sukawaty
                                   President


Date:  March 25, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 25th day of March, 1999.



                                   /s/  Andrew Sukawaty
                                   ---------------------------------------------
                                   Andrew Sukawaty
                                   President and Director
                                   (Principal Executive Officer)


                                   /s/  William J. Gunter                       
                                   ---------------------------------------------
                                   William J. Gunter
                                   Vice President, Treasurer and Director
                                   (Principal Financial Officer)


                                   /s/  Eric R. Slusser                         
                                   ---------------------------------------------
                                   Eric R. Slusser
                                   Controller
                                   (Principal Accounting Officer)


                                   /s/  Joseph M. Gensheimer
                                   ---------------------------------------------
                                   Joseph M. Gensheimer
                                   Vice President, Secretary and Director




<PAGE>


                                      
<TABLE>
<CAPTION>


        INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE



                                                                                                        Page
                                                                                                     Reference
                                                                                                 -------------------

SPRINT SPECTRUM L.P.

<S>                                                                                                     <C>
Management's Discussion and Analysis of Financial Condition and Results of Operations                   F-2

Consolidated Financial Statements
     Independent Auditors' Report                                                                       F-4
     Consolidated Statements of Operations                                                              F-5
     Consolidated Balance Sheets                                                                        F-6
     Consolidated Statements of Cash Flows                                                              F-7
     Consolidated Statements of Changes in Partners' Capital                                            F-8
     Notes to Consolidated Financial Statements                                                         F-9

Finance Statement Schedule
     Schedule II                                                                                        F-14


SPRINT SPECTRUM FINANCE CORPORATION

Management's Discussion and Analysis of Financial Condition and Results of Operations                   F-15

Financial Statements
     Statements of Operations                                                                           F-16
     Balance Sheets                                                                                     F-16
     Statements of Cash Flows                                                                           F-16
     Notes to Financial Statements                                                                      F-17
</TABLE>










<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF                     Sprint Spectrum L.P.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



--------------------------------------------------------------------------------
General
--------------------------------------------------------------------------------

Sprint  Spectrum L.P.,  with its wholly owned  subsidiaries,  (Sprint  Spectrum)
began  commercial code division  multiple  access (CDMA)  operations late in the
1996 fourth quarter.

In November 1998, Sprint Corporation purchased the remaining ownership interests
in Sprint  Spectrum  Holding  Company,  L.P.  (Holdings) and MinorCo,  L.P. from
Tele-Communications,  Inc., Comcast Corporation and Cox Communications,  Inc. At
that time,  Sprint  created  the Sprint PCS Group,  which  consists  of Sprint's
domestic wireless mobile phone services, including Sprint Spectrum.

--------------------------------------------------------------------------------
Forward-Looking Information
--------------------------------------------------------------------------------

Sprint   Spectrum   includes   certain   estimates,    projections   and   other
forward-looking  statements  in its reports,  in  presentations  to analysts and
others, and in other publicly available  material.  Future performance cannot be
ensured.  Actual results may differ materially from those in the forward-looking
statements. Some factors that could cause actual results to differ include:

     -    the effects  of vigorous  competition in the  markets in  which Sprint
          Spectrum operates;
     -    the costs and  business  risks  related to entering and expanding  new
          markets necessary to provide nationwide service and new services;
     -    the ability of Sprint Spectrum to establish a significant market
          presence;
     -    the impact of any unusual items resulting from ongoing  evaluations of
          Sprint Spectrum's business strategies;
     -    unexpected results of litigation filed against Sprint Spectrum;
     -    the impact of the Year 2000 issue and any related noncompliance; and
     -    the possibility of one or more of the markets in which Sprint Spectrum
          competes  being affected by changes in  economic or other factors such
          as legal and regulatory  changes or other  external factors over which
          Sprint Spectrum has no control.

--------------------------------------------------------------------------------
Results of Operations
--------------------------------------------------------------------------------

----------------------------------------------------
                                1998         1997
----------------------------------------------------
                                (in millions)
Net operating revenues       $    909.8   $    235.5
----------------------------------------------------

Operating expenses
   Costs of services and
     products                     925.2        541.0
   Selling, general and
     administrative             1,012.0        689.2
   Depreciation and
     amortization                 591.4        304.0
----------------------------------------------------
Total operating expenses        2,528.6      1,534.2
----------------------------------------------------

Operating loss               $ (1,618.8)  $ (1,298.7)
                            ------------------------

The wireless  industry  typically  generates a  significantly  higher  number of
subscriber additions and handset sales in the fourth quarter of each year versus
the remaining quarters. This is due to the use of retail distribution,  which is
dependent on the holiday shopping season; the timing of new products and service
introductions; and aggressive marketing and sales promotions.

Sprint Spectrum  markets its products through  multiple  distribution  channels,
including its own retail stores as well as other retail outlets. Equipment sales
to one retail outlet,  and service revenues generated by sales to its customers,
accounted  for roughly one-fourth of net  operating  revenues  in 1998 and 1997
and the majority of net operating revenues in 1996.

Net Operating Revenues

Net operating revenues include subscriber  revenues (including monthly recurring
charges and usage charges), roaming revenues and sales of handsets and accessory
equipment.  Net operating revenues increased 286% in 1998, reflecting the launch
of new markets and the addition of new customers in 1998.  Approximately  20% of
1998 net operating revenues,  and 50% of 1997 net operating revenues,  were from
sales of handsets and accessories. As part of Sprint Spectrum's marketing plans,
handsets are normally sold at prices well below Sprint Spectrum's cost.

Operating Expenses

Costs of services and products  mainly  includes  handset and  accessory  costs,
interconnection costs, and switch and cell site expenses.  These costs increased
71% in 1998  driven by the  significant  growth in  customers  and the  expanded
market coverage.



<PAGE>

Selling,  general and  administrative  (SG&A) expense mainly includes  marketing
costs to promote  products and  services,  as well as salary and benefit  costs.
SG&A  expense  increased  47%  in  1998  reflecting   increased   marketing  and
advertising  costs to promote products and services, as well as increased  labor
costs to  support  increased subscriber activity.

Depreciation and amortization  expense  increased 95% in 1998 mainly  reflecting
the increase in network assets placed in service during 1998 and 1997 related to
market launches.

--------------------------------------------------------------------------------
Nonoperating Items
--------------------------------------------------------------------------------

Interest Expense

---------------------------------------------------
                                1998        1997
---------------------------------------------------
                                (in millions)
Interest expense on
   outstanding debt         $     386.7  $    117.7
Capitalized interest costs         35.8        97.4
---------------------------------------------------
Total interest costs on
   outstanding debt         $     422.5  $    215.1
                            -----------------------
Average debt outstanding    $   4,465.0  $  1,907.8
                            -----------------------
Effective interest rate            9.5%       11.3%
                            -----------------------

Total  interest costs on  outstanding  debt  increased 96% reflecting  increased
borrowings.  The  1998  effective  interest  rate  decreased  mainly  reflecting
favorable interest rates on revolving credit facilities.

Extraordinary Item

In 1998, Sprint Spectrum redeemed,  prior to scheduled maturities,  $2.9 billion
of vendor  financing  and term loans with a weighted  average  interest  rate of
8.4%.  This resulted in a $43 million  extraordinary  loss.  The debt was repaid
using proceeds from senior notes payable to Sprint.

--------------------------------------------------------------------------------
Liquidity and Capital Resources
--------------------------------------------------------------------------------

Sprint  Spectrum's  liquidity and capital resources are managed by Sprint.
Sprint funds the Sprint PCS Group's (including Sprint Spectrum's) operating
losses, working capital and debt service requirements.

--------------------------------------------------------------------------------
Year 2000 Issue
--------------------------------------------------------------------------------

The "Year 2000" issue affects  Sprint  Spectrum's  installed  computer  systems,
network elements,  software  applications,  and other business systems that have
time-sensitive  programs  that may not properly  reflect or  recognize  the year
2000. Because many computers and computer  applications define dates by the last
two digits of the year,  "00" may not be properly  identified  as the year 2000.
This error could result in miscalculations or system errors. The Year 2000 issue
may also affect the systems and  applications  of Sprint  Spectrum's  customers,
vendors, resellers or affiliates.

At the end of March  1999,  Sprint  Spectrum  has  completed  an  inventory  and
assessment of its computer  systems,  network elements,  software  applications,
products  and other  business  systems.  Sprint  Spectrum  is  progressing  with
developing  plans for remediation and testing of those systems and  applications
which are  impacted  by the Year  2000  issue.  Sprint  Spectrum  is using  both
internal and external resources to identify,  correct or reprogram, and test its
systems for Year 2000  compliance.  It expects  Year 2000  compliance  for these
critical systems to be achieved in 1999.

Sprint  Spectrum is also  contacting  others  with whom it conducts  business to
receive the  appropriate  warranties and assurances that those third parties are
or will be Year 2000 compliant.  Sprint  Spectrum relies on third-party  vendors
for a  significant  portion  of its  important  operating  and  computer  system
functions  and,  therefore,  is highly  dependent on those  vendors to remediate
network  elements,  computer systems,  software  applications and other business
systems. In addition,  Sprint Spectrum uses publicly available services that are
acquired without contract, such as global positioning system timing signal, that
may be affected by the Year 2000 issue.  While Sprint  Spectrum  believes  these
systems will be Year 2000  compliant,  it has no  contractual  or other right to
force compliance.

Sprint Spectrum expects to incur  approximately $50 million in 1999 for its Year
2000  compliance  program.  If  compliance is not achieved in a timely manner by
Sprint  Spectrum,  its affiliates or any significant  third party, the Year 2000
issue  could have a material  adverse  effect on Sprint  Spectrum's  operations.
Sprint  Spectrum is focusing on  identifying  and  addressing all aspects of its
operations  that may be  affected  by the Year 2000  issue.  Sprint  Spectrum is
developing and will implement,  if necessary,  appropriate  contingency plans to
mitigate, to the extent possible, the effects of any Year 2000 noncompliance.

--------------------------------------------------------------------------------
Recently Issued Accounting Pronouncement
--------------------------------------------------------------------------------

See Note 8 of Notes to Consolidated  Financial  Statements for a discussion of a
recently issued accounting pronouncement.



<PAGE>


INDEPENDENT AUDITORS' REPORT


Partners of Sprint Spectrum L.P.

We have audited the accompanying  consolidated balance sheets of Sprint Spectrum
L.P. and  subsidiaries  (Sprint  Spectrum) as of December 31, 1998 and 1997, and
the related consolidated statements of operations,  changes in partners' capital
and cash flows for the three years in the period ended  December  31, 1998.  Our
audits also included the  financial  statement  schedule  (Schedule  II).  These
financial statements and Schedule II are the responsibility of Sprint Spectrum's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements and Schedule II based on our audits.

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

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the consolidated  financial position of Sprint Spectrum L.P.
and  subsidiaries  at  December  31,  1998 and 1997,  and the  results  of their
operations  and their cash flows for the three years then ended,  in  conformity
with generally accepted accounting  principles.  Also, in our opinion,  Schedule
II, when considered in relation to the basic consolidated  financial  statements
taken as a whole,  presents fairly in all material  respects the information set
forth therein.



Deloitte & Touche LLP
Kansas City, Missouri

February 2, 1999










<PAGE>


<TABLE>
<CAPTION>



CONSOLIDATED STATEMENTS OF OPERATIONS                                                          Sprint Spectrum L.P.
(in millions)
-------------------------------------------------------------------------------------------------------------------
Years Ended December 31,                                                    1998           1997            1996
-------------------------------------------------------------------------------------------------------------------

<S>                                                                   <C>             <C>             <C>         
Net Operating Revenues                                                $       909.8   $      235.5    $        4.2
-------------------------------------------------------------------------------------------------------------------

Operating Expenses
      Costs of services and products                                          925.2          541.0            36.1
      Selling, general and administrative                                   1,012.0          689.2           312.7
      Depreciation and amortization                                           591.4          304.0            11.3
-------------------------------------------------------------------------------------------------------------------
      Total operating expenses                                              2,528.6        1,534.2           360.1
-------------------------------------------------------------------------------------------------------------------

Operating Loss                                                             (1,618.8)      (1,298.7)         (355.9)

Interest expense                                                             (386.7)        (117.7)           (0.5)
Other income, net                                                               9.8            9.4            10.1
Equity in loss of unconsolidated partnership                                    -              -             (92.3)
-------------------------------------------------------------------------------------------------------------------

Loss before Extraordinary Item                                             (1,995.7)      (1,407.0)         (438.6)
Extraordinary item                                                            (42.9)           -               -
-------------------------------------------------------------------------------------------------------------------

Net Loss                                                              $    (2,038.6) $    (1,407.0)  $      (438.6)
                                                                     ----------------------------------------------
</TABLE>



































          See accompanying Notes to Consolidated Financial Statements.


<PAGE>

<TABLE>
<CAPTION>


CONSOLIDATED BALANCE SHEETS                                                                         Sprint Spectrum L.P.
(in millions)
-------------------------------------------------------------------------------------------------------------------------
December 31,                                                                                 1998              1997
-------------------------------------------------------------------------------------------------------------------------

    Assets
    Current assets
<S>                                                                                    <C>               <C>           
      Cash and equivalents                                                             $         70.4    $         67.2
      Accounts receivable, net of allowance for doubtful
        accounts of $15.8 and $9.0                                                              225.6              96.3
      Affiliate receivable                                                                      247.8             105.2
      Inventories                                                                                91.7              96.9
      Prepaid expenses and other assets                                                          26.9              25.4
-------------------------------------------------------------------------------------------------------------------------
      Total current assets                                                                      662.4             391.0

    Property, plant and equipment
      Network equipment                                                                       2,936.9           2,137.8
      Buildings and leasehold improvements                                                      757.6             612.2
      Construction work in progress                                                             618.6             495.8
      Other                                                                                     258.8             138.6
-------------------------------------------------------------------------------------------------------------------------
      Total property, plant and equipment                                                     4,571.9           3,384.4
      Accumulated depreciation                                                                 (772.2)           (251.7)
-------------------------------------------------------------------------------------------------------------------------
      Net property, plant and equipment                                                       3,799.7           3,132.7

    Intangible assets
      PCS licenses                                                                            2,130.2           2,130.8
      Microwave relocation costs                                                                298.6             255.6
-------------------------------------------------------------------------------------------------------------------------
      Total intangible assets                                                                 2,428.8           2,386.4
      Accumulated amortization                                                                 (110.2)            (50.2)
-------------------------------------------------------------------------------------------------------------------------
      Net intangible assets                                                                   2,318.6           2,336.2
    Other assets                                                                                 45.1             101.4
-------------------------------------------------------------------------------------------------------------------------

    Total                                                                              $      6,825.8    $      5,961.3
                                                                                      -----------------------------------

Liabilities and Partners' Capital
    Current liabilities
      Current maturities of long-term debt                                             $          5.1    $         11.4
      Accounts payable                                                                          351.3             337.1
      Advances from Sprint                                                                      235.0               -
      Construction obligations                                                                  592.7             705.3
      Accrued payroll                                                                           107.2              71.7
      Accrued advertising                                                                        84.2              51.6
      Accrued expenses and other current liabilities                                            263.9             150.4
-------------------------------------------------------------------------------------------------------------------------
      Total current liabilities                                                               1,639.4           1,327.5
-------------------------------------------------------------------------------------------------------------------------

    Long-term debt                                                                            5,414.1           3,101.5

    Other noncurrent liabilities                                                                 79.9              54.0

    Partners' capital and accumulated deficit:
      Partners' capital                                                                       3,690.3           3,437.6
      Accumulated deficit                                                                    (3,997.9)         (1,959.3)
-------------------------------------------------------------------------------------------------------------------------
      Total partners' capital and accumulated deficit                                          (307.6)          1,478.3
-------------------------------------------------------------------------------------------------------------------------

    Total                                                                              $      6,825.8    $      5,961.3
                                                                                      -----------------------------------
</TABLE>






          See accompanying Notes to Consolidated Financial Statements.


<PAGE>

<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF CASH FLOWS                                                             Sprint Spectrum L.P.
(in millions)
------------------------------------------------------------------ ----------------- ----------------- ----------------
Years Ended December 31,                                                 1998              1997             1996
------------------------------------------------------------------ ----------------- ----------------- ----------------

Operating Activities

<S>                                                                 <C>               <C>              <C>            
Net loss                                                            $     (2,038.6)   $     (1,407.0)  $       (438.6)
Adjustments to reconcile net loss to net cash provided (used) by
   operating activities:
     Equity in loss of unconsolidated partnership                              -                 -               92.3
     Depreciation and amortization                                           591.4             304.0             11.3
     Extraordinary loss                                                       42.9               -                -
     Amortization of debt discount and issuance costs                         53.6              48.1             14.0
     Changes in assets and liabilities:
       Receivables                                                          (271.9)           (184.1)           (17.0)
       Inventories and other current assets                                    9.1             (34.5)           (94.0)
       Accounts payable and accrued expenses                                 240.7             392.4            926.5
       Other noncurrent liabilities                                           25.9              37.6              9.5
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash provided (used) by operating activities                          (1,346.9)           (843.5)           504.0
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Investing Activities

Capital expenditures                                                      (1,201.2)         (1,980.1)        (1,386.4)
Microwave relocation costs                                                   (47.0)           (116.2)          (135.8)
Loan to unconsolidated partnership                                             -                 -             (172.0)
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by investing activities                                     (1,248.2)         (2,096.3)        (1,694.2)
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Financing Activities

Proceeds from long-term debt                                               4,999.2           2,316.2            674.2
Payments on long-term debt                                                (2,888.6)             (3.0)             -
Advances from Sprint                                                         235.0               -                -
Debt issuance costs                                                            -               (20.0)           (71.8)
Partner capital contributions                                                252.7             663.8            669.5
Dividends paid                                                                 -                 -              (32.8)
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash provided by financing activities                                  2,598.3           2,957.0          1,239.1
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Increase in Cash and Equivalents                                               3.2              17.2             48.9
Cash and Equivalents at Beginning of Year                                     67.2              50.0              1.1
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Cash and Equivalents at End of Year                                 $         70.4    $         67.2   $         50.0
                                                                   --- ------------- --- ------------- -- -------------
</TABLE>





















          See accompanying Notes to Consolidated Financial Statements.


<PAGE>

<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL                                         Sprint Spectrum L.P.

---------------------------------------------------------------------------------------------------------------------

                                                                      Partners'        Accumulated
(in millions)                                                          Capital           Deficit           Total
---------------------------------------------------------------------------------------------------------------------

<S>                                                               <C>               <C>              <C>         
Beginning 1996 balance                                            $    2,296.8      $     (113.7)    $    2,183.1
Capital contributions                                                    669.5               -              669.5
Net loss                                                                   -              (438.6)          (438.6)
Transfer of investment in unconsolidated
   partnership to Holdings                                              (165.9)              -             (165.9)
Dividends to Holdings                                                    (32.8)              -              (32.8)
---------------------------------------------------------------------------------------------------------------------

Ending 1996 balance                                                    2,767.6            (552.3)         2,215.3
Capital contributions                                                    670.0               -              670.0
Net loss                                                                   -            (1,407.0)        (1,407.0)
---------------------------------------------------------------------------------------------------------------------

Ending 1997 balance                                                    3,437.6          (1,959.3)         1,478.3
Capital contributions                                                    252.7               -              252.7
Net loss                                                                   -            (2,038.6)        (2,038.6)
---------------------------------------------------------------------------------------------------------------------

Ending 1998 balance                                               $    3,690.3      $   (3,997.9)    $     (307.6)
                                                                 ----------------------------------------------------
</TABLE>





































          See accompanying Notes to Consolidated Financial Statements.


<PAGE>





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 Sprint Spectrum L.P.


--------------------------------------------------------------------------------
1.  PCS Restructuring
--------------------------------------------------------------------------------

In November 1998, Sprint Corporation purchased the remaining ownership interests
in Sprint  Spectrum  Holding  Company,  L.P.  (Holdings) and MinorCo,  L.P. from
Tele-Communications,  Inc., Comcast Corporation and Cox Communications,  Inc. At
that time,  Sprint  created  the Sprint PCS Group,  which  consists  of Sprint's
domestic  wireless  mobile  phone  services,  including  Sprint  Spectrum.  This
transaction is referred to as the PCS Restructuring.

--------------------------------------------------------------------------------
2.  Summary of Significant Accounting Policies
--------------------------------------------------------------------------------

Basis of Consolidation and Presentation

The consolidated  financial  statements  include the accounts of Sprint Spectrum
and its subsidiaries.

The  consolidated  financial  statements are prepared using  generally  accepted
accounting principles. These principles require management to make estimates and
assumptions  that affect the  reported  amounts of assets and  liabilities,  the
disclosure of contingent  assets and  liabilities,  and the reported  amounts of
revenues and expenses. Actual results could differ from those estimates.

Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or partners' capital as previously reported.

At the beginning of July 1996, Holdings transferred almost all of its operations
to Sprint  Spectrum.  The  related  transactions  were  treated as  transactions
between  entities under common control and accounted for similar to a pooling of
interests.  The consolidated  financial statements include the pooled operations
of Holdings through June 1996.

The  financial  position  and  results  of  operations  of the  separate  pooled
operations at the end of June 1996 were as follows:

--------------------------------------------------------
                      Sprint
                     Spectrum    Holdings     Combined
--------------------------------------------------------
                              (in millions)
Total assets      $  2,268.8   $  2,561.3  $    2,561.3
Partners'
capital
   & accumulated     2,258.4      2,469.5       2,472.4
   deficit
Net loss               (81.3)      (158.2)       (158.2)



Allocation of Shared Services

Sprint  directly  assigns,  where possible,  certain general and  administrative
costs to Sprint Spectrum based on its actual use of those services. Where direct
assignment of costs is not possible, or practical,  Sprint uses other methods to
estimate the assignment of costs to Sprint Spectrum.

Allocation of Financing

Financing  activities for Sprint Spectrum are managed by Sprint on a centralized
basis.  Debt  incurred by Sprint on behalf of Sprint  Spectrum  is  specifically
reflected  in Sprint  Spectrum's  consolidated  financial  statements.  Interest
expense  is  allocated  to Sprint  Spectrum  based on an  interest  rate that is
largely  equal to the rate the  Sprint  PCS Group  would be able to obtain  from
third  parties as a direct or  indirect  wholly  owned  Sprint  subsidiary,  but
without the benefit of any guaranty by Sprint.

Income Taxes

Sprint  Spectrum  has not provided for federal or state income taxes since taxes
are the responsibility of the partners.

Revenue Recognition

Sprint  Spectrum  recognizes  operating  revenues as services are rendered or as
products are delivered to customers.  Sprint Spectrum records operating revenues
net of an estimate for uncollectible accounts.
<PAGE>

Cash and Equivalents

Cash equivalents  generally include all highly liquid  investments with original
maturities of three months or less. They are stated at cost, which  approximates
market  value.  Outstanding  checks in excess of cash  balances were included in
accounts  payable.  These  amounts  totaled $49 million at year-end 1998 and $30
million at year-end 1997. Sprint Spectrum had sufficient funds available to fund
these outstanding checks when they were presented for payment.

Inventories

Inventories are stated at the lower of cost (on a first in,  first-out basis) or
replacement value.

<PAGE>


Property, Plant and Equipment

Property,  plant and  equipment  is stated at cost.  Generally,  ordinary  asset
retirements and disposals are charged against  accumulated  depreciation with no
gain or loss  recognized.  Property,  plant and  equipment is  depreciated  on a
straight-line basis over estimated economic useful lives. Repair and maintenance
costs are charged to expense as incurred.

Capitalized Interest

Sprint Spectrum  capitalizes  interest costs related to network buildout and PCS
licenses.  Interest capitalized totaled $36 million in 1998, $97 million in 1997
and $31 million in 1996.

PCS Licenses

Sprint Spectrum acquired licenses from the Federal Communications  Commission to
operate as a PCS service provider.  These licenses are granted for up to 10-year
terms with renewals for additional 10-year terms if license obligations are met.
These licenses are recorded at cost and are amortized on a  straight-line  basis
over 40 years when service  begins in a specific  geographic  area.  Accumulated
amortization  totaled $98  million at year-end  1998 and $45 million at year-end
1997.

Microwave Relocation Costs

Sprint Spectrum  incurred costs related to microwave  relocation in constructing
its PCS  network.  Microwave  relocation  costs  are  being  amortized  over the
remaining  lives  of the PCS  licenses.  Accumulated  amortization  totaled  $12
million at year-end 1998 and $5 million at year-end 1997.

Trademark Agreement

Sprint(R) is a registered trademark of Sprint and Sprint PCS(SM) is a registered
service mark of Sprint. Sprint Spectrum uses these on a royalty-free basis under
trademark license agreements.

--------------------------------------------------------------------------------
3.  Investment in Unconsolidated Partnership
--------------------------------------------------------------------------------

Before the end of August 1996,  Sprint  Spectrum  had a 49% limited  partnership
interest  in  American PCS, L.P. (APC),  which  provides  PCS  services  in  the
Washington  D.C.--Baltimore  major   trading  area (MTA).   The  investment  was
accounted  for  using  the  equity  method.  In  August  1996,  Sprint  Spectrum
transferred  its  interest in APC to  Holdings.  Through August 1996,  APC's net
operating  revenues were $41 million and its net loss was $124 million.

--------------------------------------------------------------------------------
4.  Employee Benefit Plans
--------------------------------------------------------------------------------

Defined Contribution Plan

Sprint  Spectrum   sponsored  a  savings  and  retirement  program  for  certain
employees.   Sprint  Spectrum  matched   contributions   equal  to  50%  of  the
contribution  of each  participant,  up to the first 6% the employee  elected to
contribute. Expense under the savings plan was $6 million in 1998, $5 million in
1997 and $1 million in 1996.  Effective January 1999, Sprint Spectrum  employees
began making  contributions to Sprint's defined  contribution plan. The existing
assets of the Sprint  Spectrum  savings  plan were  transferred  to that defined
contribution plan in early 1999.

Defined Benefit Pension Plan

Effective  January  1999,  Sprint  Spectrum  employees  also became  eligible to
participate in Sprint's pension and postretirement plans.

Long-term Incentive Plan

Sprint Spectrum employees meeting certain eligibility requirements were included
in its long-term incentive plan (LTIP). Under this plan,  participants  received
appreciation  units based on independent  appraisals.  Appreciation on the units
was  based on annual  independent  appraisals.  The 1997 plan year  appreciation
units vest 25% per year  beginning one year from the grant date and expire after
10 years. Under the 1996 plan,  appreciation units vest 25% per year,  beginning
two years from the grant date, and expire after 10 years.

In  connection  with  the PCS  Restructuring,  Sprint  discontinued  the  Sprint
Spectrum  LTIP.  The  appreciation  units were converted to shares of Sprint PCS
stock and  options to buy PCS stock  based on a formula  designed to replace the
appreciated  value of the units at the beginning of July 1998.  For vested units
at year-end 1998,  participants could elect to receive the appreciation in cash,
or in shares and options. Most elected to receive shares and options.

Sprint  will  issue  the  shares  of PCS  stock,  and the  options  will  become
exercisable, based on the vesting requirements of the converted units.





--------------------------------------------------------------------------------
5.  Long term Debt
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Sprint Spectrum's long-term debt at year-end was as follows:


                                                                 Maturing             1998              1997
                                                            ------------------------------------    --------------
                                                                                           (in millions)
Senior notes

<S>                                                           <C>             <C>               <C>         
   8.0% to  8.9%                                              2008 to 2028    $      2,924.7    $          -
  11.0% to 12.5%                                                   2006                613.8             572.3

Revolving credit facilities
   Variable rates                                                  2005              1,695.0             605.0

Vendor financing
   Variable rates                                                  2007                  -             1,612.9

Term loans
   Variable rates                                                  2005                  -               300.0

Other
   6.5% to 10.0%                                               1998 to 2006            185.7              22.7
                                                                               -----------------------------------
                                                                                     5,419.2           3,112.9
Less:  current maturities                                                                5.1              11.4
                                                                               -----------------------------------

Long-term debt                                                                 $     5,414.1    $      3,101.5
                                                                               -----------------------------------
</TABLE>


Long-term debt maturities during each of the next five years are as follows:

------------------------------------------------------
                                        (in millions)

1999                                  $          5.1
2000                                             0.1
2001                                           320.1
2002                                           300.1
2003                                           400.1
------------------------------------------------------

At year-end  1998,  Sprint  Spectrum had  borrowed  $1.7 billion with a weighted
average  interest  rate  of  5.7%  under  its  $1.7  billion   revolving  credit
facilities.  At year-end 1997,  Sprint Spectrum had borrowed $605 million with a
weighted average interest rate of 8.4% under these facilities.

In 1998, Sprint Spectrum redeemed,  prior to scheduled maturities,  $2.9 billion
of vendor  financing  and term loans with a weighted  average  interest  rate of
8.4%.  This resulted in a $43 million  extraordinary  loss.  The debt was repaid
using  proceeds from senior notes payable to Sprint.  See Note 7 "Related  Party
Transactions" for a discussion of notes payable to Sprint.

Sprint  Spectrum's  Senior  Discount  notes  are  recorded  net  of  unamortized
discounts  totaling  $136 million at year-end  1998 and $178 million at year-end
1997.

Sprint Spectrum property,  plant and equipment totaling $3.6 billion was pledged
as security for its revolving credit facilities at year-end 1998.

Sprint  Spectrum  has  complied  with all  restrictive  or  financial  covenants
relating to its debt arrangements at year-end 1998.

Sprint  Spectrum  estimates the fair value of its long-term debt using available
market  information and appropriate  valuation  methodologies.  As a result, the
following  estimates do not  necessarily  represent the values  Sprint  Spectrum
could realize in a current market exchange.  Although management is not aware of
any factors that would affect the year-end  1998  estimated  fair values,  those
amounts have not been  comprehensively  revalued for purposes of these financial
statements  since that date.  Therefore,  estimates of fair value after year-end
1998 may differ significantly.

The estimated fair value of Sprint Spectrum's long-term debt is based on quoted
market prices for publicly traded issues. The estimated fair value of all  other
issues  is based on the  present  value of estimated future cash  flows using a 
discount rate based on the risks involved.  The estimated fair  value of Sprint 
Spectrum's long-term debt was $5.6 billion at year-end 1998 and $3.2 billion  at
year-end 1997.
<PAGE>

--------------------------------------------------------------------------------
6.  Commitments and Contingencies
--------------------------------------------------------------------------------

Litigation, Claims and Assessments

Various  suits  arising in the ordinary  course of business are  pending against
Sprint Spectrum.  Management  cannot predict the final outcome of these actions
but believes they will not be material to the consolidated financial statements.

Commitments

In 1998,  Sprint  Spectrum  amended a procurement  and services  contract with a
vendor for the  engineering  and  construction  of a PCS network.  This contract
provides  for an  initial  term of three  years  with  renewals  for  additional
one-year  terms.  At year-end 1998,  $257 million had been  purchased  under the
commitment, leaving a remaining commitment of $143 million.

Sprint  Spectrum  has a purchase and supply  contract  with a vendor to purchase
handsets and other equipment  through April 2000.  Purchases under the agreement
totaled  $289 million in 1998 and $148 million in 1997.  At year-end  1998,  the
remaining commitments totaled $163 million.

Sprint  Spectrum has an  agreement  with a vendor to provide PCS call record and
retention services.  Annual minimums range from $20 to $60 million through 2001.
The agreement has two automatic,  two-year renewal periods, unless terminated by
Sprint Spectrum, which would be subject to specified termination penalties.

In 1997,  Sprint  Spectrum  entered  into a four and a half  year  contract  for
consulting  services.  Sprint Spectrum used services under the contract totaling
$38 million in 1998 and $20 million in 1997.  At year-end  1998,  the  remaining
commitment was $67 million.

Operating Leases

Minimum rental  commitments at year-end  1998, for all  noncancelable  operating
leases,  consisting  mainly of leases for cell and switch sites and office space
are as follows:

------------------------------------------------------
                                        (in millions)

1999                                  $     111.7
2000                                        109.1
2001                                         74.3
2002                                         32.4
2003                                         11.9
Thereafter                                   29.9
------------------------------------------------------


Gross rental  expense  totaled $139 million in 1998, $81 million in 1997 and $13
million in 1996.  Rental  commitments  for subleases were not  significant.  The
table excludes  renewal  options related to certain cell and switch site leases.
These renewal  options  generally have five-year terms and may be exercised from
time to time.

--------------------------------------------------------------------------------
7.  Additional Financial Information
--------------------------------------------------------------------------------

Supplemental Cash Flows Information

Sprint Spectrum paid cash for interest,  net of capitalized  interest,  totaling
$189 million in 1998, $33 million in 1997 and $0.3 million in 1996.

Noncash activities for Sprint Spectrum included the following:

---------------------------------------------------------
                          1998        1997       1996
---------------------------------------------------------
                                (in millions)
Accrued interest
   converted to
   long-term debt    $      154.2  $     51.7  $      -
                     ------------------------------------
Contribution of PCS
   license from Cox  $        -    $      6.2  $      -
                     ------------------------------------
Transfer of equity
   interest in APC
   to Holdings       $        -    $      -    $    165.9
                     ------------------------------------

Related Party Transactions

Sprint

Sprint  provides  Sprint  Spectrum  with  invoicing and operator  services,  and
switching  equipment.  Sprint Spectrum is also using Sprint as its interexchange
carrier.  Sprint Spectrum  recognized  expense for these services  totaling $125
million  in 1998,  $61  million  in 1997 and $1  million  in 1996.  Sprint  also
provides  management,  printing,  mailing  and  warehousing  services  to Sprint
Spectrum  totaling  $25 million in 1998,  $11 million in 1997 and $12 million in
1996.

Sprint  participated  in the  syndication of $300  million  of Sprint Spectrum's
vendor  financing  in 1997.  As  discussed in Note 5,  all vendor  financing was
repaid in 1998.

At year-end 1998,  Sprint  Spectrum had senior notes payable to Sprint  totaling
$2.9 billion. See Note 2 for a more detailed description of how Sprint allocates
financing  to Sprint  Spectrum.  In  addition,  Sprint  Spectrum had other notes
payable to Sprint totaling $180 million.  These notes mature in 2001 and have an
interest rate of 7.8%.

Sprint had an investment in Sprint  Spectrum's  Senior  Discount  notes totaling
$133 million at year-end 1998 and $118 million at year-end 1997.

<PAGE>

APC

Sprint Spectrum  reimburses APC for certain  allocated  costs. In addition,  APC
pays  affiliation  fees to Sprint  Spectrum.  Reimbursement  costs  totaled  $15
million in 1998 and $14 million in 1997.  Sprint  Spectrum  earned $4 million in
both 1998 and 1997 for affiliation  fees. There were no  reimbursement  costs or
affiliation fees in 1996.

PhillieCo, L.P.

Sprint  Spectrum  provides  various  services  and charges  affiliation  fees to
PhillieCo,  L.P.,  which  provides PCS services in the  Philadelphia  MTA. These
charges  totaled  $21  million in 1998 and $37  million  in 1997.  There were no
service charges or affiliation  fees in 1996.  Related  charges  included in the
affiliate receivable balance were $3 million at year-end 1998 and $37 million at
year-end 1997.

SprintCom, Inc.

In 1997,  Sprint Spectrum began building the PCS network for SprintCom,  Inc., a
wholly owned Sprint subsidiary. These services include engineering,  management,
purchasing,  accounting  and other related  services and totaled $100 million in
1998  and $29  million  in  1997.  Related  charges  included  in the  affiliate
receivable balance were $78 million at year-end 1998 and $14 million at year-end
1997.

Cox Communications PCS, L.P.

Cox   Communications   PCS,  L.P.,  which  provides  PCS  services  in  the  Los
Angeles--San  Diego--Las  Vegas MTAs,  reimburses  Sprint  Spectrum  for certain
allocated costs and participates in certain handset agreements.  Allocated costs
totaled $34 million in 1998, $20 million in 1997 and $7 million in 1996. Related
charges  included  in the  affiliate  receivable  balance  were $27  million  at
year-end 1998 and $33 million at year-end 1997.

Major Customer

Sprint Spectrum  markets its products through  multiple  distribution  channels,
including its own retail stores as well as other retail outlets. Equipment sales
to one retail outlet,  and service revenues generated by sales to its customers,
accounted  for roughly one-fourth of net  operating  revenues  in 1998 and 1997
and the majority of net operating revenues in 1996.

Concentrations of Credit Risk

Sprint  Spectrum's  accounts  receivable are not subject to any concentration of
credit risk.

--------------------------------------------------------------------------------
8.  Recently Issued Accounting Pronouncement
--------------------------------------------------------------------------------

In June 1998,  the  Financial  Accounting  Standards  Board  issued SFAS No.133,
"Accounting for Derivative  Instruments and Hedging  Activities."  This standard
requires all derivatives to be recorded on the balance sheet as either assets or
liabilities  and be measured at fair value.  Gains or losses from changes in the
derivative  values are to be accounted for based on how the  derivative was used
and whether it qualified  for hedge  accounting.  When adopted in January  2000,
this  statement is not expected to have a material  impact on Sprint  Spectrum's
combined financial statements.

--------------------------------------------------------------------------------
9.  Subsequent Event
--------------------------------------------------------------------------------

In the 1999 first quarter,  Sprint  Spectrum used funds from Sprint to repay its
revolving credit  facilities prior to scheduled  maturities.  This resulted in a
$33 million extraordinary loss. As a result,  Sprint Spectrum's property,  plant
and equipment is no longer pledged as security.




<PAGE>





<TABLE>
<CAPTION>



                              SPRINT SPECTRUM L.P.
          SCHEDULE II -- CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
                  Years Ended December 31, 1998, 1997 and 1996


                                                                     Additions
                                                             ---------------------------
                                                Balance                     Charged to                     Balance
                                               Beginning     Charged to        Other          Other        End of
                                                of Year        Income        Accounts       Deductions      Year
----------------------------------------------------------------------------------------------------------------------
                                                                          (in millions)
1998
<S>                                         <C>            <C>           <C>            <C>              <C>          
    Allowance for doubtful accounts         $      9.0     $       60.7  $        -     $       (53.9)(1)$       15.8
                                            --------------------------------------------------------------------------

1997
    Allowance for doubtful accounts         $      0.2     $       11.3  $        -     $        (2.5)(1)$        9.0
                                            --------------------------------------------------------------------------

1996
    Allowance for doubtful accounts         $      -       $        0.2  $        -     $         -      $        0.2
                                            --------------------------------------------------------------------------
</TABLE>


(1) Accounts written off, net of recoveries.




<PAGE>




--------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF                          Sprint Spectrum
FINANCIAL CONDITION AND RESULTS OF OPERATIONS                Finance Corporation


Sprint Spectrum Finance Corporation (FinCo), a wholly owned subsidiary of Sprint
Spectrum  L.P.,  was formed to be a co-obligor of certain  securities  issued by
Sprint Spectrum. FinCo has nominal assets and does not conduct any operations.


<PAGE>


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (Unaudited)                                             Sprint Spectrum Finance Corporation

--------------------------------------------------------------------------------------------------------------------
December 31,                                                                1998           1997            1996
--------------------------------------------------------------------------------------------------------------------

<S>                                                                   <C>            <C>             <C>        
Operating expenses                                                    $         -    $     1,597     $         -
                                                                     -----------------------------------------------
Net loss                                                              $         -    $     1,597     $         -
                                                                     -----------------------------------------------

</TABLE>

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
BALANCE SHEETS (Unaudited)                                                      Sprint Spectrum Finance Corporation

--------------------------------------------------------------------------------------------------------------------
December 31,                                                                               1998            1997
--------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholder's Equity
<S>                                                                                  <C>             <C>        
Payable to Sprint Spectrum                                                           $     1,497     $     1,497
                                                                                     -------------------------------

Shareholder's equity
     Common stock, $1.00 par value; 1,000 shares authorized;
         100 shares issued and outstanding                                                   100             100
     Accumulated deficit                                                                  (1,597)         (1,597)
                                                                                     -------------------------------
     Total shareholder's equity                                                           (1,497)         (1,497)
                                                                                     -------------------------------
Total                                                                                $         -     $         -
                                                                                     -------------------------------
</TABLE>

<TABLE>
<CAPTION>


---------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (Unaudited)                                              Sprint Spectrum Finance Corporation

------------------------------------------------------------------ ----------------- ----------------- --------------
Years Ended December 31,                                                 1998              1997            1996
------------------------------------------------------------------ ----------------- ----------------- --------------

Operating Activities
<S>                                                                 <C>               <C>              <C>         
Net loss                                                            $          -      $     (1,597)    $          -
Adjustments to reconcile net loss to net cash used by operating
   activities:
     Decrease (Increase) in receivable from Sprint Spectrum                    -               100             (100)
     Increase in payable to Sprint Spectrum                                    -             1,497                -
------------------------------------------------------------------ --- ------------- --- ------------- -- -----------
Net cash used by operating activities                                          -                 -             (100)
------------------------------------------------------------------ --- ------------- --- ------------- -- -----------

Financing Activities
Common stock issued                                                            -                 -             (100)
------------------------------------------------------------------ --- ------------- --- ------------- -- -----------
Net cash used by financing activities                                          -                 -             (100)
------------------------------------------------------------------ --- ------------- --- ------------- -- -----------

Change in Cash and Equivalents                                                 -                 -                -
Cash and Equivalents at Beginning of Year                                      -                 -                -
------------------------------------------------------------------ --- ------------- --- ------------- -- -----------

Cash and Equivalents at End of Year                                 $          -      $          -     $          -
                                                                   --- ------------- --- ------------- -- -----------
</TABLE>


                 See accompanying Notes to Financial Statements.


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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)                        Sprint Spectrum
                                                             Finance Corporation


FinCo,  a wholly owned  subsidiary of Sprint  Spectrum  L.P., was formed to be a
co-obligor of certain  securities  issued by Sprint Spectrum.  FinCo has nominal
assets  and  does  not  conduct any  operations.  At year-end 1998,  FinCo was a
co-obligor of $614 million of Sprint Specectrum's  senior notes.   See Note 5 of
Sprint  Spectrum L.P.'s  Notes to  Consolidated  Financial  Statements  for more
information.


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                             EXHIBITS INDEX

Exhibit
Number
(27)      Financial Data Schedules

          (a)  Sprint Spectrum L.P.

          (b)  Sprint Spectrum Finance Corporation