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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(MARK ONE)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
|- | -----------------------------------------------------------------------------------------------------------------------------------------

OR



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

FOR THE TRANSITION PERIOD FROM ____________ TO ____________.

COMMISSION FILE NUMBER 000-29667

T-MOBILE USA, INC.

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(Exact name of registrant as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|DELAWARE                                                       |  | 91-1983600                       
|                                                               |  |                                  
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification No.)
|                                                               |  |                                  
|12920 - 38 TH STREET S.E.
BELLEVUE, WASHINGTON                 |  | 98006                            
|                                                               |  |                                  
|(Address of principal executive offices)                       |  | (Zip Code)                       

(425) 378-4000

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(Registrants telephone number, including area code)


VOICESTREAM WIRELESS CORPORATION

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(Former name, former address and former fiscal year, if changed since last report)


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 o

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.

|                                           |  |                                            |             | 
|------------------------------------------ |  | ------------------------------------------ | ----------- | 
|Title                                      |  | Shares Outstanding as of November 14, 2002
|                                           |  |                                           
|Common Stock, par value $.000001 per share |  |                                            | 269,738,185 | 

This registrant meets the conditions set forth in General Instruction H
(1) (a) and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.



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TABLE OF CONTENTS



|                            |                                                                                               |                                                                        |  |  |  |  |  | 
|--------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- |  |  |  |  |  | 
|                            |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                                 
|                            |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|                            |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                       
|                            |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                  
|                            | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                            | ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|                            | ITEM 4  CONTROLS AND PROCEDURES                                                             
|PART II  OTHER INFORMATION
|                            | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                            | ITEM 2. CHANGES IN SECURITIES                                                                
|                            | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                            | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                            | ITEM 5. OTHER INFORMATION                                                                    
|                            | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                 



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##### Table of Contents



T-MOBILE USA, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2002

TABLE OF CONTENTS

|                                                                        |                                                                                                                                                |                                                                        |    |      |   | 
|----------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | -- | ---- | - | 
|                                                                        |                                                                                                                                                |                                                                        |    | Page
|                                                                        |                                                                                                                                                |                                                                        |    |     
|PART I  FINANCIAL INFORMATION                                          |                                                                                                                                                |                                                                        |    |     
|                                                                        | ITEM 1. FINANCIAL STATEMENTS                                                                                                                   |                                                                        |    |      |  
|                                                                        |                                                                                                                                                | Condensed Consolidated Balance Sheets                                  |    |      | 3 | 
|                                                                        |                                                                                                                                                | Condensed Consolidated Statements of Operations and Comprehensive Loss |    |      | 4 | 
|                                                                        |                                                                                                                                                | Condensed Consolidated Statements of Cash Flows                        |    |      | 5 | 
|                                                                        |                                                                                                                                                | Notes to Condensed Consolidated Financial Statements                   |    |      | 6 | 
|                                                                        | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Abbreviated pursuant to General Instruction H.) |                                                                        |    | 14   |  
|                                                                        | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Omitted under the provisions of
General Instruction H.)                    |                                                                        |    | 24   |  
|                                                                        | ITEM 4. CONTROLS AND PROCEDURES                                                                                                                |                                                                        |    | 24   |  
|PART II  OTHER INFORMATION                                             |                                                                                                                                                |                                                                        |    |     
|                                                                        | ITEM 1. LEGAL PROCEEDINGS                                                                                                                      |                                                                        |    | 25   |  
|                                                                        | ITEM
2. CHANGES IN SECURITIES AND USE OF PROCEEDS (Omitted under the
provisions of General Instruction H.)                                     |                                                                        |    | 25   |  
|                                                                        | ITEM 3. DEFAULTS UPON SENIOR SECURITIES (Omitted under the
provisions of General Instruction H.)                                               |                                                                        |    | 25   |  
|                                                                        | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (Omitted under the
provisions of General Instruction H.)                           |                                                                        |    | 25   |  
|                                                                        | ITEM 5. OTHER INFORMATION                                                                                                                      |                                                                        |    | 25   |  
|                                                                        | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                                                                       |                                                                        |    | 25   |  
|SIGNATURES                                                              |                                                                                                                                                |                                                                        | 26 |     
|CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |                                                                                                                                                |                                                                        | 27 |     

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T-MOBILE USA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(dollars in thousands, except share and per share amounts)

|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |            |            |  | 
|---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ---------- | ----------- | ------------- | - | ------------ | ---------- | ---------- |  | 
|                                                                                                                 |                                                                                                                                  |                             |            |             | September 30, |   | December 31,
|                                                                                                                 |                                                                                                                                  |                             |            |             | 2002          |   | 2001        
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |             
|                                                                                                                 |                                                                                                                                  |                             |            |             | (unaudited)   |   |              |            |           
|ASSETS                                                                                                           |                                                                                                                                  |                             |            |             |               |   |              |           
|Current assets:                                                                                                  |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 | Cash and cash equivalents                                                                                                        |                             | $          | 80,095      |               |   | $            |           |           
|                                                                                                                 | Accounts receivable, net of allowance for doubtful accounts
of $122,719 and $119,794, respectively                               |                             |            | 730,959     |               |   |              | 602,767    |           
|                                                                                                                 | Inventory                                                                                                                        |                             |            | 156,200     |               |   |              | 153,432    |           
|                                                                                                                 | Other current assets                                                                                                             |                             |            | 207,217     |               |   |              | 308,528    |           
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 |                                                                                                                                  | Total current assets        |            |             | 1,174,471     |   |              |            | 1,064,727  | 
|                                                                                                                
|Property and equipment, net of accumulated depreciation of
$970,315 and $384,372, respectively                   |                                                                                                                                  |                             | 4,046,210  |             |               |   | 3,390,103    |           
|Goodwill                                                                                                         |                                                                                                                                  |                             | 9,865,755  |             |               |   | 16,265,790   |           
|Spectrum licenses                                                                                                |                                                                                                                                  |                             | 9,948,377  |             |               |   | 18,791,696   |           
|Other intangible assets, net of accumulated amortization
of $316,281 and $184,057, respectively                  |                                                                                                                                  |                             | 439,349    |             |               |   | 695,573      |           
|Investments in and advances to unconsolidated affiliates                                                         |                                                                                                                                  |                             | 760,778    |             |               |   | 994,976      |           
|Other assets and investments                                                                                     |                                                                                                                                  |                             | 122,708    |             |               |   | 37,055       |           
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 |                                                                                                                                  | $                           | 26,357,648 |             |               | $ | 41,239,920   |           
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                             |                                                                                                                                  |                             |            |             |               |   |              |           
|Current liabilities:                                                                                             |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 | Accounts payable                                                                                                                 |                             | $          | 285,854     |               |   | $            | 198,530    |           
|                                                                                                                 | Accrued liabilities                                                                                                              |                             |            | 822,478     |               |   |              | 633,069    |           
|                                                                                                                 | Deferred revenue                                                                                                                 |                             |            | 141,610     |               |   |              | 75,996     |           
|                                                                                                                 | Construction accounts payable                                                                                                    |                             |            | 300,173     |               |   |              | 348,600    |           
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 |                                                                                                                                  | Total current liabilities   |            |             | 1,550,115     |   |              |            | 1,256,195  | 
|                                                                                                                
|Long-term debt                                                                                                   |                                                                                                                                  |                             | 1,276,963  |             |               |   | 1,861,518    |           
|Long-term notes payable to affiliates                                                                            |                                                                                                                                  |                             | 6,135,411  |             |               |   | 4,115,433    |           
|Deferred tax liabilities                                                                                         |                                                                                                                                  |                             | 3,219,878  |             |               |   | 3,565,286    |           
|Other long-term liabilities                                                                                      |                                                                                                                                  |                             | 65,126     |             |               |   | 33,817       |           
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 |                                                                                                                                  | Total long-term liabilities |            |             | 10,697,378    |   |              |            | 9,576,054  | 
|                                                                                                                
|Minority interest in equity of consolidated subsidiaries                                                         |                                                                                                                                  |                             | 8,590      |             |               |   | 51,287       |           
|Voting preferred stock; $0.001 par value;
100,000,000 shares authorized; 3,906,250 shares issued and
outstanding |                                                                                                                                  |                             | 5,000,000  |             |               |   | 5,000,000    |           
|Commitments and contingencies (see Note 6)                                                                       |                                                                                                                                  |                             |            |             |               |   |              |           
|Shareholders equity:                                                                                            |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 | Common stock, $0.000001 par value, and paid-in capital; 1.0
billion shares authorized, 269,738,185 shares issued
and outstanding |                             |            | 26,851,821  |               |   |              | 26,851,821 |           
|                                                                                                                 | Deferred stock compensation                                                                                                      |                             |            | (24,752     | )             |   |              | (35,891    | )         
|                                                                                                                 | Accumulated other comprehensive income (loss)                                                                                    |                             |            | (336        | )             |   |              | 655        |           
|                                                                                                                 | Accumulated deficit                                                                                                              |                             |            | (17,725,168 | )             |   |              | (1,460,201 | )         
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 |                                                                                                                                  | Total shareholders equity  |            |             | 9,101,565     |   |              |            | 25,356,384 | 
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           
|                                                                                                                 |                                                                                                                                  | $                           | 26,357,648 |             |               | $ | 41,239,920   |           
|                                                                                                                 |                                                                                                                                  |                             |            |             |               |   |              |           

See accompanying notes to condensed consolidated financial statements.

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T-MOBILE USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(dollars in thousands)
(unaudited)

|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |          |           |   | 
|--------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ----------- | ------------------- | ---------- | ------------- | ------------------ | ------------- | --------- | ------------- | ----------- | ---------- | ---------- | ----------- | ---------- | -------- | --------- | - | - | ---------- | -------- | --------- | - | 
|                                  |                                                                                                                           |                              |             | Three month periods |            |               | Nine month periods
|                                  |                                                                                                                           |                              |             |                     |            |               |                   
|                                  |                                                                                                                           |                              |             | Three months        |            | Three months  |                    | Nine months   |           | Four months   |             |            |            | Five months
|                                  |                                                                                                                           |                              |             | ended               |            | ended         |                    | ended         |           | ended         |             |            | ended     
|                                  |                                                                                                                           |                              |             | September 30,       |            | September 30, |                    | September 30, |           | September 30, |             |            | May 31,   
|                                  |                                                                                                                           |                              |             | 2002                |            | 2001          |                    | 2002          |           | 2001          |             |            | 2001      
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |            
|Revenues:                         |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|                                  | Post pay revenues                                                                                                         |                              | $           | 968,928             |            |               | $                  | 624,832       |           |               | $           | 2,547,363  |            |             | $          | 808,056  |           |   |   | $          | 868,667  |          
|                                  | Prepaid revenues                                                                                                          |                              |             | 88,276              |            |               |                    | 100,347       |           |               |             | 292,484    |            |             |            | 135,110  |           |   |   |            | 158,893  |          
|                                  | Roaming revenues                                                                                                          |                              |             | 59,240              |            |               |                    | 42,817        |           |               |             | 165,879    |            |             |            | 59,667   |           |   |   |            | 73,128   |          
|                                  | Equipment sales                                                                                                           |                              |             | 206,105             |            |               |                    | 82,840        |           |               |             | 432,254    |            |             |            | 116,482  |           |   |   |            | 150,958  |          
|                                  | Affiliate and other revenues                                                                                              |                              |             | 11,731              |            |               |                    | 19,939        |           |               |             | 54,564     |            |             |            | 30,184   |           |   |   |            | 18,922   |          
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|                                  |                                                                                                                           | Total revenues               |             |                     | 1,334,280  |               |                    |               | 870,775   |               |             |            | 3,492,544  |             |            |          | 1,149,499 |   |   |            |          | 1,270,568 |  
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|Operating expenses:               |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|                                  | Cost of service (excludes
stock-based
compensation of $891, $949,
$2,673, $1,188,
and $610, respectively)                 |                              |             | 238,286             |            |               |                    | 213,002       |           |               |             | 669,797    |            |             |            | 283,552  |           |   |   |            | 286,897  |          
|                                  | Cost of equipment sales                                                                                                   |                              |             | 306,403             |            |               |                    | 188,383       |           |               |             | 691,267    |            |             |            | 250,544  |           |   |   |            | 265,629  |          
|                                  | General and administrative
(excludes stock-based
compensation of $2,079,
$2,216, $6,237,
$2,772 and $2,298,
respectively) |                              |             | 254,423             |            |               |                    | 305,306       |           |               |             | 807,701    |            |             |            | 399,981  |           |   |   |            | 466,641  |          
|                                  | Sales and marketing (excludes
stock-based
compensation of $743, $791,
$2,229, $990,
and $508, respectively)               |                              |             | 474,069             |            |               |                    | 310,093       |           |               |             | 1,092,887  |            |             |            | 412,264  |           |   |   |            | 466,513  |          
|                                  | Depreciation and amortization                                                                                             |                              |             | 300,142             |            |               |                    | 675,184       |           |               |             | 828,917    |            |             |            | 900,988  |           |   |   |            | 559,409  |          
|                                  | Impairment charges                                                                                                        |                              |             | 15,628,000          |            |               |                    |              |           |               |             | 15,628,000 |            |             |            |         |           |   |   |            |         |          
|                                  | Stock-based compensation                                                                                                  |                              |             | 3,713               |            |               |                    | 3,956         |           |               |             | 11,139     |            |             |            | 4,950    |           |   |   |            | 3,416    |          
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|                                  |                                                                                                                           | Total operating expenses     |             |                     | 17,205,036 |               |                    |               | 1,695,924 |               |             |            | 19,729,708 |             |            |          | 2,252,279 |   |   |            |          | 2,048,505 |  
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|Operating loss                    |                                                                                                                           |                              | (15,870,756 | )                   |            |               | (825,149           | )             |           |               | (16,237,164 | )          |            |             | (1,102,780 | )        |           |   |   | (777,937   | )       
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|Other income (expense):           |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|                                  | Interest and financing expense                                                                                            |                              |             | (128,777            | )          |               |                    | (95,502       | )         |               |             | (238,045   | )          |             |            | (134,935 | )         |   |   |            | (224,471 | )        
|                                  | Equity in net losses of
unconsolidated affiliates                                                                         |                              |             | (20,472             | )          |               |                    | (8,678        | )         |               |             | (143,239   | )          |             |            | (13,467  | )         |   |   |            | (63,477  | )        
|                                  | Interest income and other, net                                                                                            |                              |             | 23,740              |            |               |                    | 7,892         |           |               |             | 41,418     |            |             |            | 9,683    |           |   |   |            | 35,968   |          
|                                  | T-Mobile merger related costs                                                                                             |                              |             |                    |            |               |                    | (971          | )         |               |             |           |            |             |            | (1,448   | )         |   |   |            | (118,885 | )        
|                                  | Accretion of preferred stock
of consolidated
subsidiary                                                                   |                              |             |                    |            |               |                    |              |           |               |             |           |            |             |            |         |           |   |   |            | (4,699   | )        
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|                                  |                                                                                                                           | Total other income (expense) |             |                     | (125,509   | )             |                    |               | (97,259   | )             |             |            | (339,866   | )           |            |          | (140,167  | ) |   |            |          | (375,564  | )
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|Net loss before income taxes      |                                                                                                                           |                              | (15,996,265 | )                   |            |               | (922,408           | )             |           |               | (16,577,030 | )          |            |             | (1,242,947 | )        |           |   |   | (1,153,501 | )       
|Income tax benefit                |                                                                                                                           |                              | 3,633,081   |                     |            |               | 289,015            |               |           |               | 312,063     |            |            |             | 390,271    |          |           |   |   |           |         
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|Net loss                          |                                                                                                                           |                              | (12,363,184 | )                   |            |               | (633,393           | )             |           |               | (16,264,967 | )          |            |             | (852,676   | )        |           |   |   | (1,153,501 | )       
|Other comprehensive income (loss) |                                                                                                                           |                              | (194        | )                   |            |               | 1,566              |               |           |               | (991        | )          |            |             | 1,566      |          |           |   |   | 29,047     |         
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         
|Comprehensive loss                |                                                                                                                           | $                            | (12,363,378 | )                   |            | $             | (631,827           | )             |           | $             | (16,265,958 | )          |            | $           | (851,110   | )        |           |   | $ | (1,124,454 | )       
|                                  |                                                                                                                           |                              |             |                     |            |               |                    |               |           |               |             |            |            |             |            |          |           |   |   |            |         



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##### Table of Contents






T-MOBILE USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in thousands)
(unaudited)

|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |            |          |         |         |   | 
|---------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------------------------------------------------- | -------------------- | ---------- | ------------- | -------- | ------------- | -------- | -------- | ------- | ----------- | ---------- | -------- | ------- | ------- | - | 
|                                               |                                                                                           |                                                     |                                                                                     |                      |            | Nine months   |          | Four months   |          |          |         | Five months
|                                               |                                                                                           |                                                     |                                                                                     |                      |            | ended         |          | ended         |          |          | ended  
|                                               |                                                                                           |                                                     |                                                                                     |                      |            | September 30, |          | September 30, |          |          | May 31,
|                                               |                                                                                           |                                                     |                                                                                     |                      |            | 2002          |          | 2001          |          |          | 2001   
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |        
|Operating activities:                          |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|                                               | Net loss                                                                                  |                                                     | $                                                                                   | (16,264,967          | )          |               | $        | (852,676      | )        |          |         | $           | (1,153,501 | )       
|                                               | Adjustments to reconcile net loss to
net cash provided by (used in) operating activities: |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |            |         
|                                               |                                                                                           |                                                     | Depreciation and amortization                                                       |                      |            | 828,917       |          |               |          | 900,988  |         |             |            |          | 559,409 |        
|                                               |                                                                                           |                                                     | Impairment charges                                                                  |                      |            | 15,628,000    |          |               |          |         |         |             |            |          |        |        
|                                               |                                                                                           |                                                     | Income tax benefit                                                                  |                      |            | (312,063      | )        |               |          | (390,271 | )       |             |            |          |        |        
|                                               |                                                                                           |                                                     | Amortization of debt discount and premium, net                                      |                      |            | 12,858        |          |               |          | 969      |         |             |            |          | 22,783  |        
|                                               |                                                                                           |                                                     | Equity in net losses of unconsolidated affiliates                                   |                      |            | 143,239       |          |               |          | 13,467   |         |             |            |          | 63,477  |        
|                                               |                                                                                           |                                                     | Stock-based compensation                                                            |                      |            | 11,139        |          |               |          | 4,950    |         |             |            |          | 3,416   |        
|                                               |                                                                                           |                                                     | Allowance for bad debts                                                             |                      |            | 2,925         |          |               |          | (1,809   | )       |             |            |          | 1,776   |        
|                                               |                                                                                           |                                                     | Other, net                                                                          |                      |            | (33,976       | )        |               |          | 1,576    |         |             |            |          | (25,119 | )      
|                                               |                                                                                           |                                                     | Changes in operating assets and
liabilities, net of
effects of purchase accounting: |                      |            |               |          |               |          |          |         |             |            |          |        
|                                               |                                                                                           |                                                     |                                                                                     | Accounts receivable  |            |               | (126,881 | )             |          |          | (66,558 | )           |            |          |         | (6,264  | )
|                                               |                                                                                           |                                                     |                                                                                     | Inventory            |            |               | (1,808   | )             |          |          | 103,751 |             |            |          |         | 107,957 |  
|                                               |                                                                                           |                                                     |                                                                                     | Other current assets |            |               | (44,553  | )             |          |          | 10,361  |             |            |          |         | 1,766   |  
|                                               |                                                                                           |                                                     |                                                                                     | Accounts payable     |            |               | 72,900   |               |          |          | 37,832  |             |            |          |         | (52,429 | )
|                                               |                                                                                           |                                                     |                                                                                     | Accrued liabilities  |            |               | 264,388  |               |          |          | 36,827  |             |            |          |         | 56,797  |  
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|                                               |                                                                                           | Net cash provided by (used in)
operating activities |                                                                                     |                      | 180,118    |               |          |               | (200,593 | )        |         |             |            | (419,932 | )      
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|Investing activities:                          |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|                                               | Purchases of property and equipment                                                       |                                                     |                                                                                     | (1,233,937           | )          |               |          | (449,107      | )        |          |         |             | (809,983   | )       
|                                               | Acquisitions of wireless properties,
net of cash acquired                                 |                                                     |                                                                                     | (77,819              | )          |               |          | (253,228      | )        |          |         |             | (299,292   | )       
|                                               | Sales of short-term investments, net                                                      |                                                     |                                                                                     |                     |            |               |          |              |          |          |         |             | 1,175,636  |         
|                                               | Investments in and advances to
unconsolidated affiliates, net                             |                                                     |                                                                                     | (218,897             | )          |               |          | 1,597         |          |          |         |             | (37,193    | )       
|                                               | Refund of deposits held by FCC                                                            |                                                     |                                                                                     | 166,563              |            |               |          |              |          |          |         |             | 49,589     |         
|                                               | Other, net                                                                                |                                                     |                                                                                     | 532                  |            |               |          | 6,139         |          |          |         |             | 26,863     |         
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|                                               |                                                                                           | Net
cash provided by (used in) investing activities |                                                                                     |                      | (1,363,558 | )             |          |               | (694,599 | )        |         |             |            | 105,620  |        
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|Financing activities:                          |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|                                               | Net proceeds from issuance of common
and preferred stock                                  |                                                     |                                                                                     |                     |            |               |          |              |          |          |         |             | 43,468     |         
|                                               | Long-term debt repayments                                                                 |                                                     |                                                                                     | (646,812             | )          |               |          | (3,329,582    | )        |          |         |             | (32,113    | )       
|                                               | Long-term debt borrowings from
affiliates, net                                            |                                                     |                                                                                     | 2,001,475            |            |               |          | 3,453,550     |          |          |         |             |           |         
|                                               | Other                                                                                     |                                                     |                                                                                     | (91,128              | )          |               |          |              |          |          |         |             | 27,470     |         
|                                               | Cash entitlements on conversion of
preferred stock of consolidated
subsidiary             |                                                     |                                                                                     |                     |            |               |          |              |          |          |         |             | (81,711    | )       
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|                                               |                                                                                           | Net cash provided by (used in)
financing activities |                                                                                     |                      | 1,263,535  |               |          |               | 123,968  |          |         |             |            | (42,886  | )      
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|Change in cash and cash equivalents            |                                                                                           |                                                     | 80,095                                                                              |                      |            |               | (771,224 | )             |          |          |         | (357,198    | )         
|Cash and cash equivalents, beginning of
period |                                                                                           |                                                     |                                                                                    |                      |            |               | 797,698  |               |          |          |         | 1,154,896   |           
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           
|Cash and cash equivalents, end of period       |                                                                                           | $                                                   | 80,095                                                                              |                      |            | $             | 26,474   |               |          |          | $       | 797,698     |           
|                                               |                                                                                           |                                                     |                                                                                     |                      |            |               |          |               |          |          |         |             |           

See accompanying notes to condensed consolidated financial statements.

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T-MOBILE USA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. ORGANIZATION

T-Mobile USA, Inc., (T-Mobile, we or us, as described in
Note 2 below), formerly known as VoiceStream Wireless Corporation
(VoiceStream), provides personal communications services (PCS)
under the T-Mobile brand primarily in urban markets in the United
States using the Global System for Mobile Communications, or GSM,
technology. T-Mobile is the brand name under which Deutsche Telekom
AGs (Deutsche Telekom) principal wireless subsidiaries operate.

On May 31, 2001, Deutsche Telekom acquired 100% of the common shares of VoiceStream in a transaction that qualified as a tax-free
reorganization. VoiceStream shareholders received for each VoiceStream
common share either 3.6693 shares of Deutsche Telekom stock and
$15.7262 in cash, 3.6683 shares of Deutsche Telekom stock and $15.9062
in cash or 3.7647 shares of Deutsche Telekom stock (hereafter referred
to as the T-Mobile merger). Following the closing of the merger,
Deutsche Telekom transferred all of its VoiceStream common shares to
T-Mobile International AG (T-Mobile International). T-Mobile
International is a wholly-owned subsidiary of Deutsche Telekom and is
the holding company for Deutsche Telekoms principal GSM wireless
operations in Europe and the United States.

Upon consummation of the T-Mobile merger and the transfer by
Deutsche Telekom of all of its VoiceStream common shares to T-Mobile
International, VoiceStream common shares were deregistered and delisted
from NASDAQ and are no longer publicly traded. We are now relying on
funding from T-Mobile International, Deutsche Telekom or its affiliates
to meet our working capital, capital expenditure, debt service and
other obligations.

Simultaneous with the T-Mobile merger, Deutsche Telekom also
acquired 100% of the common shares of Powertel, Inc. (Powertel), a
GSM service provider in the southeastern United States. Following the
closing of the merger, Deutsche Telekom transferred all of its Powertel
common shares to T-Mobile International. Powertel now provides and
bills for its services under the T-Mobile brand name. Powertels
wireless network is fully integrated with ours such that, from a
customers perspective, its services are indistinguishable from ours
(see Note 7 for a description of certain cost sharing agreements).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation and basis of presentation

The condensed consolidated financial statements (the interim
financial statements) of T-Mobile include the accounts of all majority
and minority-owned subsidiaries that are either controlled by T-Mobile
or for which accounting principles generally accepted in the United
States (GAAP) require consolidation. Affiliates that are 20 percent
to 50 percent owned are generally accounted for using the equity method
of accounting. Affiliates that are less than 20 percent owned and for
which control does not otherwise exist are accounted for under the cost
method.

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We have prepared the interim financial statements pursuant to the
Securities and Exchange Commission (SEC) rules and regulations for
interim reporting. These rules and regulations allow certain
information required under GAAP to be condensed or omitted, provided
that the interim financial statements, when read in conjunction with
our annual audited financial statements included in our most recent
Form 10-K, provide a fair presentation of our interim financial
position, results of operations and cash flows. The interim financial
statements presented herein are unaudited; however, we believe that the
interim financial statements reflect all adjustments necessary for a
fair presentation of our financial position, results of operations and
cash flows. Such adjustments include those of a normal, recurring
nature and those related to the T-Mobile merger as described below. The
results for interim periods are not necessarily indicative of expected
operating results for the full fiscal year or any future periods.

The T-Mobile merger was accounted for as a purchase business
combination and resulted in adjustment of the basis of our assets,
liabilities and shareholders equity to reflect fair value on the
closing date of the merger. As a result of this new basis, our interim
statements of financial position, results of operations and cash flows
for periods subsequent to May 31, 2001, the closing date of the merger,
are not necessarily comparable to periods prior to the merger.

Long-lived assets

On January 1, 2002, we adopted Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets. This statement replaces SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. SFAS No. 144 retains the fundamental
provisions of SFAS No. 121 for recognition and measurement of the
impairment of long-lived assets to be held and used. This statement
requires recognition of an impairment loss only if the carrying amount
of a long-lived asset is not recoverable and exceeds its fair value.
The carrying value of an asset is not recoverable if it exceeds the sum
of the undiscounted cash flows expected to result from the use and
eventual disposition of the asset. An impairment loss shall be measured
as the amount by which the carrying amount exceeds the fair value. The
adoption of SFAS No. 144 did not have a material impact on our
financial position, results of operations or cash flows.

On January 1, 2002, we changed the useful lives of our towers and
related assets from 10 years to 20 years, which we believe more
accurately represents the economic lives of these assets. This change
in estimate resulted in a decrease in depreciation and amortization
expense of $37.2 million and $123.6 million for the three and nine
months ended September 30, 2002, respectively.

Intangible assets

On January 1, 2002, we adopted SFAS No. 142 Goodwill and Other
Intangible Assets. Upon adoption, we discontinued amortizing goodwill.
Additionally, we discontinued amortizing our spectrum licenses as we
determined that these assets meet the definition of indefinite life
intangible assets under SFAS No. 142. Upon adoption, the standard
requires that we determine the fair value of our goodwill and spectrum
licenses in order to assess the carrying value of these assets for
potential impairment. The standard further requires that we assess
these assets for impairment annually, or when indications of impairment
exist. Under SFAS No. 142, goodwill impairment is deemed to exist if
the net book value of a reporting unit exceeds its fair value.
Similarly, other indefinite life intangible assets are deemed to be
impaired if the net book value of the assets exceeds fair value. In the
first quarter of 2002, we completed this assessment and determined that
there was no indication of such impairment.

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The discontinuance of amortization of our spectrum licenses upon
adoption of SFAS No. 142 resulted in a change to the reported deferred
taxes related to the spectrum licenses. The realization of income, as
defined under SFAS No. 109 (Accounting for Income Taxes), from the
reversal of the spectrum license-related deferred tax liabilities is no
longer assured within the carryforward periods of our existing net
operating losses (NOLs). As a result, they cannot be treated as a
realization of income and applied against the deferred tax assets
arising from our NOLs. Accordingly, we recorded a non-cash charge to
income tax expense of $3.3 billion in the first quarter of 2002 to
establish a valuation allowance against our deferred tax assets. The
valuation allowance does not affect our NOLs for tax purposes and does
not reflect a change in our expectations regarding the ability to
utilize them in the future.

We completed our annual tests for
impairment of our indefinite life intangible assets based on the
carrying values at September 30, 2002 and recorded
non-cash pretax impairment charges of $6.4 billion and $9.2 billion for
goodwill and spectrum licenses, respectively. We recorded a related
non-cash deferred income tax benefit of $3.7 billion to reduce the
deferred tax liability related to the reduced book/tax differential of our spectrum licenses. The impairment tests were
completed using fair value measurement techniques as required under
SFAS No. 142. In testing goodwill, we utilized a discounted cash flow
approach to determine enterprise fair value. We assessed the
reasonableness of our valuation by considering other information
available such as the market capitalization of other wireless carriers
and associated implied enterprise fair values, projected industry
trends and investment analyst reports on us and other wireless
carriers, and information regarding recent acquisitions in the
industry. The current valuation reflects recent changes in expectations
regarding future industry growth rates, future
funding commitments from Deutsche Telekom and the resulting impact on our future operating results and cash flows.

We also used a discounted cash flow approach to estimate the fair
value of spectrum licenses. The use of this valuation method represents
a change in valuation methodology, as previously we used a market
approach based primarily on the prices for spectrum licenses
established in the Federal Communications Commissions (FCC) Auction
35. However, due to the length of time that has elapsed since Auction
35, and the current status of that auction, along with the general lack
of an active marketplace for spectrum license transactions, there is
insufficient evidence to use a market-based approach at this time.

In the future, we will assess the value of our indefinite life
intangible assets as of the end of the third quarter of each fiscal
year, or when indications of impairment exist. Such indications of
impairment would include the impacts of significant adverse changes in
legal factors, market and economic conditions, the results of our
operational performance and strategic plans; adverse actions by
regulators; unanticipated changes in competition and market share; the
potential for the sale or disposal of all or a significant portion of
our business; and the cost and continued availability of funding from
T-Mobile International, Deutsche Telekom or its affiliates for the
expansion and enhancement of our wireless network and funding of our
operations.

Recently issued accounting standards

In June 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 143, Accounting for Asset Retirement Obligations.
This statement requires entities to record the fair value of future
liabilities for asset retirement obligations as an increase in the
carrying amount of the related long-lived asset if a reasonable
estimate of fair value can be made. Over time, the liability is
accreted to its present value, and the capitalized cost is depreciated
over the useful life of the related asset. We are currently assessing
the impact of this statement on our financial position, results of
operations and cash flows. We will adopt this statement effective
January 1, 2003.

On April 30, 2002, we adopted SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13 and
Technical Corrections. SFAS No. 145 eliminates the requirement in SFAS
No. 4 that gains and losses from the extinguishment of debt be
aggregated and classified as extraordinary items, net of the related
income tax effect. Adoption of SFAS No. 145 did not have a material
impact on our financial position, results of operations or cash flows.

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Reclassifications

Certain of the comparative figures in the prior period financial
statements have been reclassified to conform to the current period
presentation. Net operating results have not been affected by these
reclassifications.

Use of estimates

The preparation of the accompanying interim financial statements
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
amounts at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual amounts could
differ materially from such estimates.

3. GOODWILL, SPECTRUM LICENSES AND OTHER INTANGIBLE ASSETS

Adjusted net loss

The following table reconciles our reported net loss to adjusted
net loss, which excludes depreciation and amortization expense related
to goodwill and spectrum licenses, assuming the adoption of SFAS No.
142 had occurred on January 1 of each of the years presented:

|                       |                        |                     |             |                     |   |               |                    |               |          |               |             |   |         |             |          |   |          |   |   |            |   |         |  | 
|---------------------- | ---------------------- | ------------------- | ----------- | ------------------- | - | ------------- | ------------------ | ------------- | -------- | ------------- | ----------- | - | ------- | ----------- | -------- | - | -------- | - | - | ---------- | - | ------- |  | 
|                       |                        |                     |             | Three month periods |   |               | Nine month periods
|                       |                        |                     |             |                     |   |              
|                       |                        |                     |             | Three months        |   | Three months  |                    | Nine months   |          | Four months   |             |   |         | Five months
|                       |                        |                     |             | ended               |   | ended         |                    | ended         |          | ended         |             |   | ended  
|                       |                        |                     |             | September 30,       |   | September 30, |                    | September 30, |          | September 30, |             |   | May 31,
|(dollars in thousands) |                        | 2002                |             | 2001                |   | 2002          |                    | 2001          |          |               | 2001       
|                       |                        |                     |             |                     |   |               |                    |               |          |               |             |   |        
|Reported net loss      |                        | $                   | (12,363,184 | )                   |   | $             | (633,393           | )             |          | $             | (16,264,967 | ) |         | $           | (852,676 | ) |          |   | $ | (1,153,501 | )
|                       | Add back
amortization: |                     |             |                     |   |               |                    |               |          |               |             |   |         |             |          |   |          |   |   |            |   |        
|                       |                        | Goodwill            |             |                     |  |               |                    |               | 198,373  |               |             |   |        |             |          |   | 264,473  |   |   |            |   | 196,300 | 
|                       |                        | Spectrum
licenses   |             |                     |  |               |                    |               | 255,840  |               |             |   |        |             |          |   | 322,340  |   |   |            |   | 85,300  | 
|                       |                        | Tax related
impacts |             |                     |  |               |                    |               | (289,015 | )             |             |   |        |             |          |   | (390,271 | ) |   |            |   |        | 
|                       |                        |                     |             |                     |   |               |                    |               |          |               |             |   |         |             |          |   |          |   |   |            |  
|Adjusted net loss      |                        | $                   | (12,363,184 | )                   |   | $             | (468,195           | )             |          | $             | (16,264,967 | ) |         | $           | (656,134 | ) |          |   | $ | (871,901   | )
|                       |                        |                     |             |                     |   |               |                    |               |          |               |             |   |         |             |          |   |          |   |   |            |  

Other intangible assets

|                                           |               |       |           |      |               |         |              |   |   |         |          |   | 
|------------------------------------------ | ------------- | ----- | --------- | ---- | ------------- | ------- | ------------ | - | - | ------- | -------- | - | 
|                                           |               |       | Useful    |      | September 30, |         | December 31,
|(dollars in thousands)                     |               | Lives |           | 2002 |               | 2001   
|                                           |               |       |           |      |               |         |             
|Intangible assets subject to amortization: |               |       |           |      |               |         |              |   |   |         |          |  
|                                           | Customer list |       | 3 years   |      | $             | 579,630 |              |   | $ | 579,630 |         
|                                           | Tradenames    |       | 1-4 years |      |               | 176,000 |              |   |   | 300,000 |         
|                                           |               |       |           |      |               |         |              |   |   |         |          |  
|                                           |               |       |           |      |               |         | 755,630      |   |   |         | 879,630  |  
|Accumulated amortization                   |               |       |           |      |               |         | (316,281     | ) |   |         | (184,057 | )
|                                           |               |       |           |      |               |         |              |   |   |         |          |  
|                                           |               |       |           |      |               | $       | 439,349      |   |   | $       | 695,573  |  
|                                           |               |       |           |      |               |         |              |   |   |         |          |  

At September 30, 2002, in connection with the rebranding of all
our markets to T-Mobile, we retired the fully amortized VoiceStream
Wireless tradename. The tradename was recorded at a cost of $124.0
million in conjunction with the T-Mobile merger at May 31, 2001.

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Amortization expense

The following table presents current and expected amortization
expense for the current year and the subsequent five years:

|                                |                                               |      |   |         |         | 
|------------------------------- | --------------------------------------------- | ---- | - | ------- | ------- | 
|(dollars in thousands)          |                                               |      |   |        
|Aggregate amortization expense: |                                               |      |   |        
|                                | For the three months ended September 30, 2002 |      | $ | 98,462  |        
|                                | For the nine months ended September 30, 2002  |      | $ | 256,224 |        
|Expected amortization expense:  |                                               |      |   |        
|                                | For the remainder of 2002                     |      | $ | 59,302  |        
|                                | For the years ending December 31,             |      |   |         |        
|                                |                                               | 2003 |   | $       | 237,210 | 
|                                |                                               | 2004 |   | $       | 124,504 | 
|                                |                                               | 2005 |   | $       | 18,333  | 
|                                |                                               | 2006 |   | $       |        | 
|                                |                                               | 2007 |   | $       |        | 

4. BUSINESS COMBINATIONS AND INVESTMENTS

CIVS IV and PCS One

During April 2002, we acquired the remaining outstanding 16.35%
interest in Cook Inlet/VS GSM IV PCS Holdings, LLC (CIVS IV) and the
remaining outstanding 50% interest in PCS One Corporation (PCS One).
We have accounted for the acquisitions in accordance with SFAS No. 141,
Business Combinations. The aggregate purchase price of the remaining
interests in these entities consisted of $85.3 million in cash and
1,277,048 Deutsche Telekom shares with a fair market value of $18.5
million. The Deutsche Telekom shares were issued on our behalf in
return for a note payable of $18.5 million to Deutsche Telekom.
Additionally, we assumed $78.5 million in long-term debt in connection
with the purchase of PCS One, which we repaid immediately following the
acquisition. These acquisitions resulted in our recording $20.6 million
of goodwill. The results of CIVS IV and PCS One are included in our
results on a consolidated basis since their respective dates of
acquisition.

Prior to acquiring these entities, we accounted for our ownership
interests in CIVS IV and PCS One using the equity method. As of the
acquisition dates, our combined investment in the two entities totaled
$306.1 million. In performing the purchase price allocations, the
consideration, including the existing investment balances, was
principally allocated to spectrum licenses.

Pro forma information relating to these acquisitions is not
material to our results of operations and financial position, and has
been omitted.

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Infrastructure Venture with Cingular (GSM Facilities)

We entered into an agreement with Cingular Wireless LLC
(Cingular) in November 2001 to share in the ownership and operation
of GSM network infrastructures in specified markets. We contributed our
network assets in the New York Basic Trading Area (BTA), and Cingular
contributed its network assets in the Los Angeles and San Francisco
Major Trading Areas (MTAs), which cover most of California and parts
of Nevada, to a newly formed joint venture entity, GSM Facilities, LLC
(GSM Facilities). In July 2002 we began marketing our commercial
service in and around the major population centers of California and
Nevada, including San Francisco, Los Angeles and Las Vegas (the
California/Nevada market), and Cingular began marketing its commercial
service in the New York City market. The monthly cash operating
expenses of GSM Facilities are charged to T-Mobile and Cingular based
on each partys proportionate share of spectrum in each market. Through
a separate reciprocal home roaming agreement, Cingular and T-Mobile
charge each other for usage that differs from the spectrum based
allocations in each market. GSM Facilities typically generates losses
equal to depreciation on assets in the joint venture and interest charges on certain tower leases. Our
economic interest in the joint venture at September 30, 2002 was 20%.
For the three and nine months ended September 30, 2002, we recorded
equity in net losses of unconsolidated affiliates of $18.7 million and
$54.9 million, respectively, related to our share of the unreimbursed
non-cash expenses of GSM Facilities.

The capital expenditure requirements of the joint venture are
funded through capital contributions from T-Mobile and Cingular. Each
partys proportionate share of the contributions varies depending on
the nature of the capital expenditure. Contributions to fund capacity
increases are allocated based on each partys incremental growth in
minutes of use. Contributions to fund technology upgrades and footprint
expansion generally are allocated evenly. Under the terms of the
agreement, Cingular is obligated to contribute up to $450 million of capital expenditures through 2003.

Microcell

In June 2002, we recorded a write-down of $65.1 million in our
investment in Microcell Telecommunications Inc. (Microcell), a
Canadian GSM provider, based on our assessment that the decline in
value of the investment was other than temporary. The non-cash charge
is included in equity in net losses of unconsolidated affiliates in our
condensed consolidated statement of operations and comprehensive loss.
As of September 30, 2002, our investment in Microcell has been written
down to zero. We no longer recognize additional losses related to this
investment as we have not guaranteed obligations or otherwise committed
to provide further financial support for Microcell.

5. LONG-TERM DEBT AND NOTES PAYABLE TO AFFILIATES

During the nine months ended September 30, 2002, we purchased on
the open market and retired outstanding debt as follows: $322.3 million
of our 10 3/8% Senior Notes due in 2009, together with premiums of
$31.2 million; $182.0 million of our 11 7/8% Senior Notes due in 2009,
together with discounts of $28.0 million; and $49.7 million of our 11
1/2% Senior Notes due in 2009, together with premiums of $5.9 million.
These repayments were funded by borrowings from Deutsche Telekom.

The weighted average effective interest rate for all outstanding
long-term debt and long-term notes payable to affiliates was 7.2% and
6.8% for the three and nine months ended September 30, 2002,
respectively, as compared with 6.5% and 8.7% for the same periods in
2001.

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6. COMMITMENTS AND CONTINGENCIES

Western Wireless

On May 3, 1999, Western Wireless Corporation (Western Wireless)
distributed its entire 80.1% interest in our common shares to its
stockholders. Prior to this spin-off, Western Wireless obtained a
favorable ruling from the IRS indicating that the spin-off would not
result in the recognition of a gain or taxable income to Western
Wireless or its stockholders. However, Western Wireless could still
recognize a gain upon the spin-off, notwithstanding the favorable IRS
ruling, if it is determined that the spin-off was part of a prohibited
plan, that is, a plan or series of related transactions in which one
or more persons acquire, directly or indirectly, 50% or more of our
stock. Acquisitions of 50% or more of our stock occurring during the
four-year period beginning two years before the spin-off could give
rise to a rebuttable presumption that the spin-off was part of a
prohibited plan. Although it is not assured, we believe that the
spin-off, subsequent mergers, including the T-Mobile merger in 2001,
and certain investments by Hutchison Telecommunications PCS (USA)
Limited and Sonera Corporation in 2000 were not pursuant to a
prohibited plan.

We have agreed to indemnify Western Wireless on an after-tax basis
for any taxes, penalties, interest and various other expenses incurred
by Western Wireless if it is required to recognize such a gain. The
amount of such gain that Western Wireless would recognize would be
equal to the difference between the fair market value of our common shares at the time of the spin-off and Western Wireless adjusted tax
basis in such shares at the time. The estimated range of our possible
liability, not including interest and penalties, if any, is from zero
to $400 million.

FCC Auction 35

We, along with Cook Inlet/VS GSM V PCS Holdings, LLC (CIVS V), a
consolidated affiliate in which we hold a non-controlling interest,
participated in FCC Auction 35, which concluded in January 2001.
Certain of the spectrum licenses that were included in the auction have
not yet been granted to the high bidders pending administrative and
judicial challenges related to the auction process. A federal appeals
court has held that the FCC erroneously cancelled certain of these
spectrum licenses when the owners of the spectrum licenses failed to
make installment payments upon declaring bankruptcy. This decision is
being reviewed by the United States Supreme Court, which heard
arguments on October 8, 2002 and is expected to render a decision in
the first half of 2003.

We, along with CIVS V, had winning bids totaling $989.0 million
related to these spectrum licenses and had previously paid the FCC
deposits totaling $196.3 million. Pursuant to an order released by the
FCC on March 27, 2002, $166.6 million of these deposits was refunded in
April 2002, and the FCC has retained $29.7 million of our and CIVS Vs
original deposits pending the outcome of the litigation. We distributed
$42.3 million of this refund to Cook Inlet Region Inc. (CIRI), a
member of CIVS V, in April 2002. Since we consolidate CIVS V for
accounting purposes, the distribution to CIRI is included in other
financing activities in the interim statement of cash flows and is a
reduction of minority interest. However, by the same March 27, 2002
order, the FCC declared that if it prevailed before the United States
Supreme Court, the auction winners would be required to pay the full
amount of their winning bids. Verizon Wireless (Verizon) has filed
lawsuits in a federal court of appeals and in a federal court of claims
seeking to force the FCC to return 100% of the deposits that Verizon
paid in connection with the spectrum licenses in Auction 35 that have
not yet been granted and to release the auction winners from their
obligations to purchase the spectrum licenses. We have preserved our
right to make a similar assertion. Further, on September 12, 2002, the
FCC released a public notice seeking comment on whether the FCC should
fully refund all of these deposits and voluntarily dismiss all pending
applications or, in the alternative, voluntarily dismiss applications
for selected spectrum licenses. If the FCC is successful before the
Supreme Court and the challenges to the validity of Auction 35 fail, we
and CIVS V could be required to purchase spectrum licenses with an
outstanding balance due of $959.3 million.

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7. RELATED PARTY TRANSACTIONS

Following the T-Mobile merger, employees of Powertel, a wholly
owned subsidiary of T-Mobile International, became employees of
T-Mobile. While Powertels results are not consolidated with ours, we
are reimbursed by Powertel for the compensation and benefit costs of
our employees working on Powertel business. We also charge Powertel for
certain centralized services and functions, including accounting and
other administrative functions. These centralized services and
functions are charged to Powertel in a manner that intends to reflect
the relative time and associated costs devoted to it. Powertel was
charged $10.6 million and $39.3 million for the costs of these
centralized services and functions for the three and nine months ended
September 30, 2002. At September 30, 2002, we have a receivable from
Powertel of $304.6 million including $140.0 million related to our
funding of a credit facility repayment on behalf of Powertel in the
first quarter of 2002. The remainder is a result of the charges as
discussed above and transfers in the ordinary course of business
including fixed assets and inventory. The receivable is included in
investments in and advances to unconsolidated affiliates in our
condensed consolidated balance sheet. Deutsche Telekom is incurring
the expenses to develop T-Mobile as a brand name and will charge us
royalties for our use of the T-Mobile brand in the future.

We rely on funding from T-Mobile International, Deutsche Telekom
or its affiliates to meet our working capital, capital expenditure,
debt service and other obligations. At September 30, 2002, we have
long-term notes payable to Deutsche Telekom of $6.1 billion, net of a
$56.2 million receivable from Deutsche Telekom for the reimbursement of
the direct expenses incurred in connection with the rebranding of
VoiceStream to T-Mobile.

T-Mobile is party to an agreement with Cingular through GSM
Facilities (see note 4). We were charged market related operating
expenses based on minutes of use of $25.0 million and $53.8 million for
the three and nine months ended September 30, 2002. At September 30,
2002, we have a payable to GSM Facilities of $18.0 million.

T-Mobile is party to technical service, system access and
reciprocal wholesale agreements with certain affiliates, controlled by
CIRI, through its subsidiaries. The agreements entitle each party to
utilize airtime on the others spectrum, and/or utilize wireless system
infrastructure in certain agreed upon markets. The agreements are
structured such that each party re-sells airtime purchased from the
other, and related fees are charged and paid between the parties. We
earned revenues and incurred expenses relative to these agreements as
follows (dollars in thousands):

|         |  |                     |     |                    |  |               |        |               |  |   |         |             |  |   |        |  |  |  |   |       |  | 
|-------- |  | ------------------- | --- | ------------------ |  | ------------- | ------ | ------------- |  | - | ------- | ----------- |  | - | ------ |  |  |  | - | ----- |  | 
|         |  | Three month periods |     | Nine month periods
|         |  |                     |     |                   
|         |  | Three months        |     | Three months       |  | Nine months   |        | Four months   |  |   |         | Five months
|         |  | ended               |     | ended              |  | ended         |        | ended         |  |   | ended  
|         |  | September 30,       |     | September 30,      |  | September 30, |        | September 30, |  |   | May 31,
|         |  | 2002                |     | 2001               |  | 2002          |        | 2001          |  |   | 2001   
|         |  |                     |     |                    |  |               |        |               |  |   |        
|Revenues |  | $                   | 136 |                    |  | $             | 9,404  |               |  | $ | 24,097  |             |  | $ | 16,683 |  |  |  | $ | 3,625 | 
|Expenses |  | $                   | 155 |                    |  | $             | 11,060 |               |  | $ | 30,699  |             |  | $ | 19,369 |  |  |  | $ | 3,804 | 

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

(Abbreviated pursuant to General Instruction H as our equity
securities are owned indirectly by Deutsche Telekom, who is a
registered filer under the Securities Exchange Act of 1934.)

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF
THE PRIVATE LITIGATION REFORM ACT OF 1995.

Information contained or incorporated by reference herein that is
not based on historical fact, including without limitation, statements
containing the words believes, may, will, estimate, continue,
anticipates, intends, expects and words of similar import,
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, events or developments to be
materially different from any future results, events or developments
expressed or implied by such forward-looking statements. Such factors
include, among others, the following: general economic and business
conditions, both nationally and regionally; technology changes;
competition; changes in business strategy or development plans; the
leverage of T-Mobile USA Inc. (T-Mobile); the availability of funding
from Deutsche Telekom AG (Deutsche Telekom); the ability to attract
and retain qualified personnel; existing governmental regulations and
changes in, or the failure to comply with, governmental regulations;
liability and other claims asserted against T-Mobile; industry consolidation; ability to acquire and cost of
acquiring additional spectrum licenses; and other factors
referenced in T-Mobiles filings with the Securities and Exchange
Commission (SEC). GIVEN THESE UNCERTAINTIES, READERS ARE CAUTIONED
NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS.
T-Mobile disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future results,
events or developments.

Unless the context requires otherwise, T-Mobile, we, our and
us includes us, our predecessors and consolidated subsidiaries.

The following discussion and analysis is based upon our interim
condensed consolidated financial statements (interim financial
statements), which have been prepared pursuant to SEC rules and
regulations for interim reporting. These rules and regulations allow
certain information required under accounting principles generally
accepted in the United States (GAAP) to be condensed or omitted,
provided that the interim financial statements, when read in
conjunction with the annual audited financial statements included in
our most recent Form 10-K, provide a fair presentation of the financial
position, results of operations and cash flows. Accordingly, this
discussion and analysis should be read in conjunction with our
consolidated financial statements and notes thereto and any other
financial information included herein and in our Form 10-K for the year
ended December 31, 2001.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our interim financial statements requires
management to make estimates and assumptions that affect the reported
amounts of revenue, expenses, assets and liabilities during the periods
reported. We base our estimates on historical experience, where
applicable, and other assumptions that we believe are reasonable under
the circumstances. Actual results may differ from our estimates due to
changing conditions or the validity of our assumptions. The critical
accounting policies and estimates used in the preparation of our
interim financial statements include the following:



| |  |  | We recognize service revenues based upon minutes of use
processed and contracted fees, net of credits and adjustments
for service discounts. Because our customer billings are
cycle-based with cut-offs throughout each month, we make
estimates for service revenues earned but not yet billed at the
end of each period.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  |  | We maintain allowances for doubtful accounts for estimated losses
resulting from our inability to collect balances due from our
customers. We base our estimates on the aging of our accounts
receivable balances and our historical write-off experience, net
of recoveries. If collections are lower or more customers elect
to terminate their service than we expect, actual write-offs may
be different than expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | When recording depreciation expense associated with our
wireless communications equipment, we use estimated useful
lives. As a result of changes in technology and industry
conditions, we periodically evaluate the useful lives of our
wireless communications equipment. These evaluations could
result in a change in estimated useful lives in future periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  |  | We review long-lived assets, consisting primarily of
property, plant and equipment and intangible assets with finite
lives, for impairment in accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  |  | We review goodwill and intangible assets with indefinite
lives for impairment on an annual basis or when an event occurs
or circumstances change that would reduce the fair value of a
reporting unit below its carrying value in accordance with SFAS
No. 142 Goodwill and Other Intangible Assets. The
determination of fair values, generally based on either
appraised value or discounted estimated future cash flows, is
critical to assessing impairment under SFAS No. 142 and
requires the use of significant assumptions and estimates. The
determination of fair values is sensitive to the assumptions and
estimates used. Accordingly, any changes in such assumptions or
estimates could have a material impact on the determination of fair
values and thus in the assessment of impairment. Likewise, any
decrease in appraised values or discounted estimate of future cash
flows resulting from future events or performance could result in
additional impairment charges.
|
| |  |  | We hold non-controlling investments in several entities
for which we apply the equity or cost method of accounting. We
record impairment charges associated with these investments
when we determine that the fair value of the investment is
below our net book value and the decline is deemed to be other
than temporary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  |  | We record accruals associated with sales and marketing
promotions and incentives. These accruals are based primarily
on historical take-rates of similar promotions or offers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  |  | We account for acquisitions in accordance with SFAS No.
141, Business Combinations which requires the purchase price
to be allocated to the identifiable tangible and intangible
assets based upon their fair value. The allocation of a
purchase price is highly judgmental and requires extensive use
of estimates and fair value assumptions, which can have a
significant impact on operating results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

OVERVIEW

We provide personal communications services (PCS) using the
Global System for Mobile Communications, or GSM, technology primarily
in urban markets in the United States through the ownership and
operation of our spectrum licenses, through contractual relationships
with entities in which we have non-controlling ownership interests and
through arrangements with third parties that own and operate similar
spectrum licenses. During the third quarter of 2002, as part of
Deutsche Telekoms plan to develop a global brand name for its wireless
operations, all of the VoiceStream markets were substantially rebranded
to T-Mobile. We now operate under the T-Mobile brand name, which is the
brand under which Deutsche Telekoms and T-Mobile International AGs
(T-Mobile International) wireless subsidiaries operate. We are
relying on funding from T-Mobile International, Deutsche Telekom or its
affiliates to meet our working capital, capital expenditure, debt
service and other obligations.

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Powertel, Inc. (Powertel), also a subsidiary of T-Mobile
International, now provides the same service under the T-Mobile brand
in the southeastern United States. While Powertels results are not
consolidated with ours, we are directly reimbursed by Powertel for the
compensation and benefit costs of our employees working on Powertel
business. We also charge Powertel for certain centralized services and
functions including accounting and other administrative functions.
These centralized services and functions are charged to Powertel in a
manner that is intended to reflect the relative time and associated
costs devoted to it.

The following discussion and analysis highlights the key events
for the three and nine months ended September 30, 2002, as compared to
the same periods in 2001:

T-Mobile merger

On May 31, 2001, Deutsche Telekom acquired 100% of the common shares of VoiceStream Wireless Corporation (VoiceStream) in a
transaction that qualified as a tax-free reorganization (hereafter
referred to as the T-Mobile merger). Following the closing of the
merger, Deutsche Telekom transferred all of its VoiceStream shares to
T-Mobile International. T-Mobile International is a wholly-owned
subsidiary of Deutsche Telekom and is the holding company for Deutsche
Telekoms principal GSM wireless operations in Europe and the United
States.

The T-Mobile merger was accounted for as a purchase business
combination and resulted in adjustment of the basis of our assets,
liabilities and shareholders equity to reflect fair value on the
closing date of the merger. As a result of this new basis, our
financial position, results of operations and cash flows for periods
subsequent to May 31, 2001, the closing date of the merger, are not
necessarily comparable to periods prior to the merger. The following
discussion and analysis refers to the results and activities for the
three and nine months ended September 30, 2002, as compared to the same
periods in 2001. Where necessary, we have provided explanations to
improve comparability between the pre-merger and post-merger activity.

Other factors affecting comparability between periods

We commenced operations in 1996 in various markets in the western
United States and have expanded operations through the addition of
numerous new markets in subsequent years. We launched major markets at
various times in 2001, including Chicago, St. Louis, Cincinnati-Dayton,
Milwaukee and New Orleans. In July 2002, we began marketing our
commercial service in and around the major population centers of
California and Nevada, including San Francisco, Los Angeles and Las
Vegas (the California/Nevada market), with a covered population of
approximately 35 million people. We also launched the Cleveland,
Richmond and Buffalo/Rochester markets during the third quarter of
2002. The addition of these markets substantially completes the
national footprint for the T-Mobile brand, including Powertel. We cover
23 of the top 25 markets and 41 of the top 50 markets, and including
Powertel, 24 of the top 25 markets and 45 of the top 50 markets.

We also acquired significant operational markets at varying stages
of maturity, primarily in 2000, and converted the acquired markets to
our brand and otherwise integrated the operations of the acquired
businesses.

Due to these factors, revenues and expenses recognized during any
period may not be comparable to other periods and may not be
representative of future operations.

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##### Table of Contents



RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2002 AND 2001

The following table lists certain financial data as it relates to our
operations (dollars in thousands):

|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |         |       |      | 
|--------------------------------- | ----------------------------- | ------------------------ | ------------------ | ----------- | -------------------------------- | ------ | ------------------------------- | ----------- | --------- | -------- | ------- | ----- | -------- | --- | ----------- | ----------- | ---------- | ------- | ---------- | ----------- | --------- | -------- | ----- | ------- | ----- | ---- | 
|                                  |                               |                          |                    |             | Three months ended September 30, |        | Nine months ended September 30,
|                                  |                               |                          |                    |             |                                  |        |                                
|                                  |                               |                          |                    |             | 2002                             |        | 2001                            |             | % Change  |          | 2002    |       | 2001 (1) |     | % Change   
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |            
|Revenues:                         |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Post pay revenues             |                          | $                  | 968,928     |                                  |        | $                               | 624,832     |           |          |         | 55.1  | %        |     | $           | 2,547,363   |            |         | $          | 1,676,723   |           |          |       | 51.9    | %    
|                                  | Prepaid revenues              |                          |                    | 88,276      |                                  |        |                                 | 100,347     |           |          |         | (12.0 | %)       |     |             | 292,484     |            |         |            | 294,003     |           |          |       | (0.5    | %)   
|                                  | Roaming revenues              |                          |                    | 59,240      |                                  |        |                                 | 42,817      |           |          |         | 38.4  | %        |     |             | 165,879     |            |         |            | 132,795     |           |          |       | 24.9    | %    
|                                  | Equipment sales               |                          |                    | 206,105     |                                  |        |                                 | 82,840      |           |          |         | 148.8 | %        |     |             | 432,254     |            |         |            | 267,440     |           |          |       | 61.6    | %    
|                                  | Affiliate and other revenues  |                          |                    | 11,731      |                                  |        |                                 | 19,939      |           |          |         | (41.2 | %)       |     |             | 54,564      |            |         |            | 49,106      |           |          |       | 11.1    | %    
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  |                               | Total revenues           |                    |             | 1,334,280                        |        |                                 |             | 870,775   |          |         |       | 53.2     | %   |             |             | 3,492,544  |         |            |             | 2,420,067 |          |       |         | 44.3  | %   
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|Operating expenses:               |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Cost of service               |                          |                    | 238,286     |                                  |        |                                 | 213,002     |           |          |         | 11.9  | %        |     |             | 669,797     |            |         |            | 570,449     |           |          |       | 17.4    | %    
|                                  | Cost of equipment sales       |                          |                    | 306,403     |                                  |        |                                 | 188,383     |           |          |         | 62.6  | %        |     |             | 691,267     |            |         |            | 516,173     |           |          |       | 33.9    | %    
|                                  | General and administrative    |                          |                    | 254,423     |                                  |        |                                 | 305,306     |           |          |         | (16.7 | %)       |     |             | 807,701     |            |         |            | 866,622     |           |          |       | (6.8    | %)   
|                                  | Sales and marketing           |                          |                    | 474,069     |                                  |        |                                 | 310,093     |           |          |         | 52.9  | %        |     |             | 1,092,887   |            |         |            | 878,777     |           |          |       | 24.4    | %    
|                                  | Depreciation and amortization |                          |                    | 300,142     |                                  |        |                                 | 675,184     |           |          |         | (55.5 | %)       |     |             | 828,917     |            |         |            | 1,460,397   |           |          |       | (43.2   | %)   
|                                  | Impairment charges            |                          |                    | 15,628,000  |                                  |        |                                 |            |           |          |         | N.M   |          |     |             | 15,628,000  |            |         |            |            |           |          |       | N.M.    |      
|                                  | Stock-based compensation      |                          |                    | 3,713       |                                  |        |                                 | 3,956       |           |          |         | (6.1  | %)       |     |             | 11,139      |            |         |            | 8,366       |           |          |       | 33.1    | %    
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |         |      
|                                  |                               | Total operating expenses |                    |             | 17,205,036                       |        |                                 |             | 1,695,924 |          |         |       | 914.5    | %   |             |             | 19,729,708 |         |            |             | 4,300,784 |          |       |         | 358.7 | %   
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|Operating Loss                    |                               |                          | (15,870,756        | )           |                                  |        | (825,149                        | )           |           |          | 1,823.4 | %     |          |     | (16,237,164 | )           |            |         | (1,880,717 | )           |           |          | 763.3 | %      
|Other expense                     |                               |                          | (125,509           | )           |                                  |        | (97,259                         | )           |           |          | 29.0    | %     |          |     | (339,866    | )           |            |         | (515,731   | )           |           |          | (34.1 | %)     
|Income tax benefit                |                               |                          | 3,633,081          |             |                                  |        | 289,015                         |             |           |          | 1,157.1 | %     |          |     | 312,063     |             |            |         | 390,271    |             |           |          | (20.0 | %)     
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |         |      
|Net loss                          |                               | $                        | (12,363,184        | )           |                                  | $      | (633,393                        | )           |           |          | 1,851.9 | %     |          | $   | (16,264,967 | )           |            | $       | (2,006,177 | )           |           |          | 710.7 | %      
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  |                               |                          | Adjusted EBITDA(2) |             | $                                | 61,099 |                                 |             | $         | (146,009 | )       |       |          | N.M |             |             | $          | 230,892 |            |             | $         | (411,954 | )     |         |       | N.M. | 
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|Cash flows provided by (used in): |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Operating activities          |                          | $                  | 183,746     |                                  |        | $                               | (104,290    | )         |          |         | N.M   |          |     | $           | 180,118     |            |         | $          | (620,525    | )         |          |       | N.M.    |      
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Investing activities          |                          | $                  | 23,398      |                                  |        | $                               | (375,139    | )         |          |         | N.M   |          |     | $           | (1,363,558  | )          |         | $          | (588,979    | )         |          |       | 131.5   | %    
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Financing activities          |                          | $                  | (148,860    | )                                |        | $                               | 448,968     |           |          |         | N.M   |          |     | $           | 1,263,535   |            |         | $          | 81,082      |           |          |       | 1,458.3 | %    
|                                  |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|Other Data:                       |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Licensed population           |                          |                    | 242,477,000 |                                  |        |                                 | 237,894,000 |           |          |         | 1.9   | %        |     |             | 242,477,000 |            |         |            | 237,894,000 |           |          |       | 1.9     | %    
|                                  | Covered population            |                          |                    | 192,344,000 |                                  |        |                                 | 149,853,000 |           |          |         | 28.4  | %        |     |             | 192,344,000 |            |         |            | 149,853,000 |           |          |       | 28.4    | %    
|Customers:                        |                               |                          |                    |             |                                  |        |                                 |             |           |          |         |       |          |     |             |             |            |         |            |             |           |          |       |        
|                                  | Post pay                      |                          |                    | 6,710,000   |                                  |        |                                 | 4,012,800   |           |          |         | 67.2  | %        |     |             | 6,710,000   |            |         |            | 4,012,800   |           |          |       | 67.2    | %    
|                                  | Prepaid                       |                          |                    | 1,018,000   |                                  |        |                                 | 1,142,000   |           |          |         | (10.9 | %)       |     |             | 1,018,000   |            |         |            | 1,142,000   |           |          |       | (10.9   | %)   



---

|N.M. |  | Not meaningful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(1)  |  | Reflects the combination of results for the five months
ended May 31, 2001, and the four months ended September 30, 2001.                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|    
|    
|    
|(2)  |  | Adjusted EBITDA represents operating income (loss) before
depreciation, amortization, impairment charges and non-cash
stock-based compensation. Adjusted EBITDA should not be construed
as an alternative to operating income (loss) as determined in
accordance with GAAP, as an alternative to cash flows from
operating activities as determined in accordance with GAAP, or as
a measure of liquidity. See reconciliation of Adjusted EBITDA
(loss) to net loss in discussion of Adjusted EBITDA and Operating
Cash Flow below.

17



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##### Table of Contents



REVENUES

Service revenues (post pay, prepaid and roaming revenues)
increased $348.4 million (45.4%) and $902.2 million (42.9%) to $1.1
billion and $3.0 billion for the three and nine months ended September
30, 2002. These increases are due to growth in our postpay customer
base, including significant additions from the launch of commercial
service in the California/Nevada market in July 2002.

Post pay revenues increased $344.1 million (55.1%) and $870.6
million (51.9%) to $968.9 million and $2.5 billion for the three and
nine months ended September 30, 2002. These increases result primarily
from growth in our post pay customer base from 4,012,800 at September
30, 2001 to 6,710,000 at September 30, 2002. There were 988,000 and
2,107,000 net customer additions during the three and nine months ended
September 30, 2002, as compared with 345,800 and 1,104,800 for the 2001
periods. We also added 45,000 new customers through acquisitions in the
second quarter of 2002. We launched several new markets during the
third quarter of 2002, most significantly the California/Nevada market,
which included promotional rate plan offers that contributed to the
high number of customers added during the quarter. The higher rate of
net post pay customer growth in 2002 also reflects higher growth in the
number of new customers in existing markets, due to our competitive
rate plan offerings and the success of our advertising campaigns, and
lower customer churn rates, as compared to 2001.

Historically, our Get More marketing strategy, featuring our
former spokesperson Jamie Lee Curtis, along with our competitive rate
plans, has contributed to our success and rapid post pay customer
growth. In the third quarter of 2002, while continuing our Get More
strategy, we changed our brand name from VoiceStream to T-Mobile, as
part of Deutsche Telekoms plan to establish an international wireless
brand. Along with our new brand name, we introduced our new global
spokesperson, Catherine Zeta-Jones. As part of a global GSM company, we
can offer our customers the ability to roam internationally in over 90
countries at a flat rate usage fee per minute through our WorldClass
Roaming plan. In the limited time period subsequent to the brand
transition, we have continued to experience strong customer growth
leading us to believe that our new brand name and spokesperson have
been well received.

Prepaid revenues decreased $12.1 million (12.0%) and $1.5 million
(0.5%) to $88.3 million and $292.5 million for the three and nine
months ended September 30, 2002. Our prepaid customer base was
1,018,000 at September 30, 2002 and 1,142,000 at September 30, 2001.
Our prepaid customer base decreased 92,000 and 271,000 for the three
and nine months ended September 30, 2002, as compared to increases of
38,100 and 171,000 during the same periods in 2001. The decreases in
our prepaid customer base reflect the impact of our overall business
strategy that emphasizes post pay customer growth and changes in our
prepaid offering aimed at attracting customers with the potential for a
longer-term customer relationship. We are targeting a specific
population of potential prepaid customers with our Gold Rewards program
that offers more minutes at a lower price based on the duration of the
customer relationship. We expect our prepaid customer base to continue
to decline in the short-term as the mix in our customer base changes.

Total service revenue
per average customer (ARPU) was $51.10 and
$50.32 for the three and nine months ended September 30, 2002, as
compared to $51.58 and $51.63 for the same periods in 2001. Post pay
ARPU was $51.86 and $51.71 for the three and nine months ended
September 30, 2002, and $54.24 and $53.68 for the same periods in 2001.
The 2002 decline in total service revenue ARPU is lower than the
decline in post pay ARPU due to the continued shift in the mix of our
customers toward post pay. At September 30, 2002, post pay customers
represented 86.8% of our customer base as compared to 77.8% at
September 30, 2001. The decreases in post pay ARPU are due primarily to
the migration of customers from older rate plans to our current
offerings and the continuing popularity of the Get More pooling plans
that allow multiple users to share minutes under one plan at a lower
overall cost, partially offset by increased data and short message
service revenues. Prepaid ARPU was $27.89 and $27.94 for the three and
nine months ended September 30, 2002, and $29.79 and $30.92 for the
same periods in 2001.

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##### Table of Contents



Roaming revenues increased $16.4 million (38.4%) and $33.1 million
(24.9%) to $59.2 million and $165.9 million for the three and nine
months ended September 30, 2002. These increases are due primarily to
the expansion of our network coverage area, an increase in the number
of international roaming partners, and to the introduction of the
T-Mobile WorldClass Roaming plan as described above.

Equipment sales increased $123.3 million (148.8%) and $164.8
million (61.6%) to $206.1 million and $432.3 million for the three and
nine months ended September 30, 2002. These increases are due to
reduced subsidies to our dealers and to the higher unit sales volumes
associated with the higher growth in new customers in 2002 as compared
to 2001.

Affiliate and other revenue is primarily related to technical
service, system access and reciprocal wholesale agreements with certain
of our unconsolidated affiliates. Each party re-sells airtime purchased
from the other, and related fees are charged and paid between the
parties. The increase of $5.5 million (11.1%) to $54.6 million for the
nine months ended September 30, 2002 is primarily due to increased
usage on our network related to these agreements through April 30,
2002, when we acquired the remaining outstanding interest in Cook
Inlet/VS GSM IV PCS Holdings, LLC (CIVS IV). For the three months
ended September 30, 2002, affiliate and other revenues decreased $8.2
million (41.2%) to $11.7 million, as Cook Inlet/VS GSM VI PCS Holdings,
LLC (CIVS VI) was the only unconsolidated affiliate with which we
have any such agreements, and it did not generate significant revenues
or expenses under such agreements.

OPERATING EXPENSES

Cost of service expense represents network operating expenses
incurred in operational markets including the cost of interconnection
with local exchange carrier facilities, direct cell site costs (site
leases and utilities, insurance, property taxes, and repair and
maintenance expenses), third party roaming costs and long distance toll
costs. Cost of service expense increased $25.3 million (11.9%) and
$99.3 million (17.4%) to $238.3 million and $669.8 million for the
three and nine months ended September 30, 2002. The increases are due
primarily to the launch of commercial service in the California/Nevada
market in July 2002, which contributed $11.6 million to the increase in
the third quarter of 2002. The remainder of the increases are due
primarily to the geographic expansion of our network, increases in
customer usage and increases in network capacity to service our growing
customer base. Cost of service as a percentage of service revenues
decreased to 21.3% and 22.3% for the three and nine months ended
September 30, 2002 from 27.7% and 27.1% for the same periods in 2001.
Excluding the technical service, system access and reciprocal wholesale
agreements with certain of our unconsolidated affiliates as discussed
above, cost of service as a percentage of service revenues was 21.3%
for the three and nine months ended September 30, 2002, as compared
with 26.3% and 26.0% for the same periods in 2001. These decreases are
due to economies of scale and other efficiencies gained relative to our
growing customer base. While cost of service expenses are expected to
increase due primarily to continuing growth in our customer base, we
expect cost of service as a percentage of service revenues to generally
trend downward as more customers are added in both existing and newly
launched markets and greater economies of scale are realized.

Cost of equipment sales increased $118.0 million (62.6%) and
$175.1 million (33.9%) to $306.4 million and $691.3 million for the
three and nine months ended September 30, 2002. These increases are
primarily due to an increase in the number of handsets and wireless
data devices sold, partially offset by decreases in our average cost
per handset sold. We generally offer equipment to our customers below
our cost as an incentive for new customers and to respond to
competition. While the amount of the subsidies can vary, we expect them
to remain common industry practice for the foreseeable future.

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General and administrative expenses decreased $50.9 million
(16.7%) and $58.9 million (6.8%) to $254.4 million and $807.7 million
for the three and nine months ended September 30, 2002. On an average
per customer basis, monthly general and administrative expenses
decreased to $11.70 and $13.55 for the three and nine months ended
September 30, 2002 from $20.51 and $21.27 for the same periods in 2001.
These decreases reflect efficiency improvements from the integration of
our acquisitions, increased economies of scale realized in our
administrative functions, and reduction in customer bad debt expense
due to improvements in our credit, billing and collections processes.
While general and administrative expenses are generally expected to
increase due to continuing growth in our customer base, we expect the
average cost per customer to continue trending downward as greater
economies of scale are realized.

Sales and marketing costs increased $164.0 million (52.9%) and
$214.1 million (24.4%) to $474.1 million and $1.1 billion for the three
and nine months ended September 30, 2002. These increases include
significant marketing costs related to the July 2002 launch of
commercial service in the California/Nevada market, and a higher volume
of sales commissions and other selling costs associated with our
continued customer growth in other markets. Sales and marketing costs
per new customer added, commonly referred to as Cost per Gross Add
(CPGA), which includes the subsidy loss on equipment sales, totaled
$327 and $316 for the three and nine months ended September 30, 2002,
as compared to $366 and $351 for the same periods in 2001. CPGA has
generally declined in recent years with the current year decline
reflecting the economies of marketing on a national scale and a
decrease in equipment subsidies provided to new customers. CPGA was
higher for the three month period ended September 30, 2002 as compared
to the nine month period ended September 30, 2002, due to advertising
and promotional costs connected with the launch of commercial service
under the T-Mobile brand in the California/Nevada market. Substantially
all of the direct sales and marketing costs related to the rebranding
of the former VoiceStream markets are being reimbursed by Deutsche
Telekom, and are not included in our sales and marketing costs.

Depreciation and amortization expense decreased $375.0 million
(55.5%) and $631.5 million (43.2%) to $300.1 million and $828.9 million
for the three and nine months ended September 30, 2002. These decreases
are primarily due to our having discontinued amortizing goodwill and
spectrum licenses in connection with the adoption of SFAS No. 142 on
January 1, 2002. We also recognized decreases of $18.7 million and
$54.9 million for the three and nine months ended September 30, 2002
related to the network assets in the New York City metropolitan area
that we contributed to GSM Facilities, LLC in connection with a network
infrastructure sharing agreement with Cingular Wireless LLC
(Cingular). Further decreases are due to changing the estimated
useful lives of certain tower and related assets from 10 years to 20
years on January 1, 2002. With the exception of the changes described
above, our depreciation and amortization charges are increasing due to
our larger asset base arising from capital expenditures for the
on-going expansion of our wireless network and acquisitions.

The following table reconciles our reported depreciation and
amortization expense assuming the adoption of SFAS No. 142 and the
change in useful lives of certain non-electronic fixed assets from 10
years to 20 years, as described above, had occurred on January 1 of
each of the years presented (dollars in thousands):

|                                               |                                      |   |                      |   |                     |   |         |          |      |   |         |   |  |   |           |          |  
|---------------------------------------------- | ------------------------------------ | - | -------------------- | - | ------------------- | - | ------- | -------- | ---- | - | ------- | - |  | - | --------- | -------- | -
|                                               |                                      |   | For the three months |   | For the nine months
|                                               |                                      |   | ended September 30,  |   | ended September 30,
|                                               |                                      |   |                      |   |                    
|                                               |                                      |   | 2002                 |   | 2001                |   | 2002    |          | 2001
|                                               |                                      |   |                      |   |                     |   |         |          |     
|Reported depreciation and amortization
expense |                                      | $ | 300,142              |   |                     | $ | 675,184 |          |      | $ | 828,917 |   |  | $ | 1,460,397 |         
|                                               | Effect of the adoption of SFAS 142   |   |                      |  |                     |   |         | (454,200 | )    |   |         |  |  |   |           | (868,400 | )
|                                               | Effect of the change in useful lives |   |                      |  |                     |   |         | (37,200  | )    |   |         |  |  |   |           | (123,600 | )
|                                               |                                      |   |                      |   |                     |   |         |          |      |   |         |   |  |   |           |         
|Adjusted depreciation and amortization
expense |                                      | $ | 300,142              |   |                     | $ | 183,784 |          |      | $ | 828,917 |   |  | $ | 468,397   |         
|                                               |                                      |   |                      |   |                     |   |         |          |      |   |         |   |  |   |           |         

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We completed our annual tests for
impairment of our indefinite life intangible assets based on the
carrying values at September 30, 2002 and recorded
non-cash pretax impairment charges of $6.4 billion and $9.2 billion for
goodwill and spectrum licenses, respectively. We recorded a related
non-cash deferred income tax benefit of $3.7 billion to reduce the
deferred tax liability related to the reduced book/tax differential of our spectrum licenses. The impairment tests were
completed using fair value measurement techniques as required under
SFAS No. 142. In testing goodwill, we utilized a discounted cash flow
approach to determine enterprise fair value. We assessed the
reasonableness of our valuation by considering other information
available such as the market capitalization of other wireless carriers
and associated implied enterprise fair values, projected industry
trends and investment analyst reports on us and other wireless
carriers, and information regarding recent acquisitions in the
industry. The current valuation reflects recent changes in expectations
regarding future industry growth rates, future
funding commitments from Deutsche Telekom and the resulting impact on our future operating results and cash flows.

We also used a discounted cash flow approach to estimate the fair
value of spectrum licenses. The use of this valuation method represents
a change in valuation methodology, as previously we used a market
approach based primarily on the prices for spectrum licenses
established in the Federal Communications Commissions (FCC) Auction
35. However, due to the length of time that has elapsed since Auction
35 and the current status of that auction, along with the general lack
of an active marketplace for spectrum license transactions, there is
insufficient evidence to use a market-based approach at this time.

In the future, we will assess the value of our indefinite life
intangible assets as of the end of the third quarter of each fiscal
year, or when indications of impairment exist. Such indications of
impairment would include the impacts of significant adverse changes in
legal factors, market and economic conditions, the results of our
operational performance and strategic plans; adverse actions by
regulators; unanticipated changes in competition and market share; the
potential for the sale or disposal of all or a significant portion of
our business; and the cost and continued availability of funding from
T-Mobile International, Deutsche Telekom or its affiliates for the
expansion and enhancement of our wireless network and funding of our
operations.

OTHER INCOME (EXPENSE) AND INCOME TAX EXPENSE

Interest and financing expense increased $33.3 million to $128.8
million and decreased $121.4 million to $238.0 million for the three
and nine months ended September 30, 2002, as compared to the same
periods in 2001. Interest and financing expense is net of capitalized
interest of $4.9 million and $113.5 million for the three and nine
months ended September 30, 2002 and $7.1 million and $24.0 million for
the same periods in 2001. The increase in capitalized interest for the
nine month period in 2002 compared to 2001 results from interest
capitalization on our spectrum licenses in the California/Nevada market
prior to the July 2002 launch of commercial service. Our policy is to
capitalize interest on spectrum licenses and other qualifying assets in
individual markets during the period the market is being actively
prepared for launch of commercial service. Our spectrum licenses in
this market were carried at a relatively high value as compared to
other markets which we have launched due to the size of the market and
the purchase price allocation performed on June 1, 2001 in conjunction
with the T-Mobile merger. The lower interest expense before capitalized
interest for the nine months ended September 30, 2002 is primarily due
to a decrease in the average interest rate of our debt. Our weighted
average interest rate has generally declined since the T-Mobile merger
when we began to replace higher interest rate third party debt with
lower interest rate notes payable to Deutsche Telekom. The third
quarter of 2002 reflects a slight increase in interest expense, as
compared to the same period in 2001, as both the interest rate on the
debt owed to Deutsche Telekom increased slightly and the overall debt
level has increased. The weighted average effective interest rate,
before capitalized interest, was 7.2% and 6.8% for the three and nine
months ended September 30, 2002, as compared to 6.5% and 8.7% for the
same periods in 2001.

Equity in net losses of unconsolidated affiliates increased $11.8
million (135.9%) and $66.3 million (86.2%) to $20.5 million and $143.2
million for the three and nine months ended September 30, 2002. The
increase in the third quarter of 2002 is primarily due to our share of
losses from our network infrastructure sharing agreement with Cingular.
The increase for the nine months ended September 30, 2002 is primarily
due to a $65.1 million writedown, in June 2002, of our investment in
Microcell Telecommunications Inc., a Canadian GSM operator.

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During the first and third quarters of 2002, we recorded a large
non-cash income tax expense and a large non-cash income tax benefit
related to our spectrum licenses. In the first quarter of 2002, the
discontinuance of amortization of our spectrum licenses upon adoption
of SFAS No. 142 resulted in a change to the reported deferred taxes
related to the spectrum licenses. The realization of income, as defined
under SFAS No. 109 (Accounting for Income Taxes), from the reversal
of the related deferred tax liabilities is no longer assured within the
carryforward periods of our existing net operating losses (NOLs).
Accordingly, we recorded a $3.3 billion income tax expense in the first
quarter of 2002 to establish a valuation allowance against our deferred
tax assets. The valuation allowance does not affect our NOLs for tax
purposes and does not reflect a change in our expectations regarding
the ability to utilize them in the future. In the third quarter of
2002, in conjunction with the impairment charges discussed above, we
recorded a non-cash deferred income tax benefit of $3.7 billion to
reduce our deferred tax liability associated with spectrum licenses.

NET LOSS

Our net losses increased $11.7 billion and $14.3 billion for the
three and nine months ended September 30, 2002, to $12.4 billion and
$16.3 billion, respectively. Comparability of the net losses in 2001
and 2002 is limited due to the adoption of SFAS No. 142 on January 1,
2002. Upon adoption of the standard, we recorded a tax charge of $3.3
billion and discontinued amortizing goodwill and spectrum licenses.
Subsequently, we recorded goodwill and spectrum license impairment
charges, net of tax, of $12.0 billion. Had SFAS No. 142 been adopted as
of January 1, 2001, such that no amortization charges or tax benefits
were recorded in 2001, and excluding our 2002 SFAS No. 142 related
impairment charges, net of tax, our net loss for the three months and
nine months ended September 30, 2002 would have been $385.2 million and
$982.8 million, respectively, as compared to $468.2 million and $1.5
billion for the same periods in 2001.

ADJUSTED EBITDA AND OPERATING CASH FLOW

Adjusted EBITDA represents operating income (loss) before
depreciation, amortization, impairment charges and non-cash stock-based
compensation. We believe Adjusted EBITDA provides meaningful additional
information regarding our operating results, our ability to service our
long-term debt and other fixed obligations and to fund our continued
growth. Adjusted EBITDA is considered by many financial analysts to be
a meaningful indicator of an entitys ability to meet its future
financial obligations. Growth in Adjusted EBITDA is considered to be an
indicator of future profitability, especially in a capital-intensive
industry such as wireless telecommunications. Adjusted EBITDA should
not be construed as an alternative to operating income (loss) as
determined in accordance with GAAP, as an alternative to cash flows
from operating activities (as determined in accordance with GAAP) or as
a measure of liquidity. Because Adjusted EBITDA is not calculated in
the same manner by all companies, our presentation may not be
comparable to other similarly titled measures reported by other
companies.

Our Adjusted EBITDA was $61.1 million and $230.9 million for the
three and nine months ended September 30, 2002, representing
improvements of $207.1 million and $642.8 million as compared to the
same periods in 2001. Our Adjusted EBITDA as a percentage of total
revenue was 4.6% and 6.6% for the three and nine months ended September
30, 2002, compared to Adjusted EBITDA losses of 16.8% and 17.0% for the
same periods in 2001. Adjusted EBITDA includes $4.4 million and $24.1
million in retention and bonus expenses related to the T-Mobile merger
for the three and nine months ended September 30, 2002, as compared to
$27.6 million and $67.2 million for the same periods in 2001. This
improvement in Adjusted EBITDA is due to several factors including
decreases in CPGA, increased economies of scale, and reduced costs
associated with the integration of acquired companies.

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The following table reconciles Adjusted EBITDA as discussed above
to our net loss as determined in accordance with GAAP (dollars in thousands):

|                       |                               |   |                      |             |                     |   |          |          |      |   |             |             |   |   |            |            |  
|---------------------- | ----------------------------- | - | -------------------- | ----------- | ------------------- | - | -------- | -------- | ---- | - | ----------- | ----------- | - | - | ---------- | ---------- | -
|                       |                               |   | For the three months |             | For the nine months
|                       |                               |   | ended September 30,  |             | ended September 30,
|                       |                               |   |                      |             |                    
|                       |                               |   | 2002                 |             | 2001                |   | 2002     |          | 2001
|                       |                               |   |                      |             |                     |   |          |          |     
|Adjusted EBITDA (loss) |                               | $ | 61,099               |             |                     | $ | (146,009 | )        |      | $ | 230,892     |             |   | $ | (411,954   | )         
|                       | Depreciation and amortization |   |                      | (300,142    | )                   |   |          | (675,184 | )    |   |             | (828,917    | ) |   |            | (1,460,397 | )
|                       | Impairment charges            |   |                      | (15,628,000 | )                   |   |          |         |      |   |             | (15,628,000 | ) |   |            |           |  
|                       | Stock-based compensation      |   |                      | (3,713      | )                   |   |          | (3,956   | )    |   |             | (11,139     | ) |   |            | (8,366     | )
|                       | Other income (expense)        |   |                      | (125,509    | )                   |   |          | (97,259  | )    |   |             | (339,866    | ) |   |            | (515,731   | )
|                       | Income tax benefit            |   |                      | 3,633,081   |                     |   |          | 289,015  |      |   |             | 312,063     |   |   |            | 390,271    |  
|                       |                               |   |                      |             |                     |   |          |          |      |   |             |             |   |   |            |           
|Net loss               |                               | $ | (12,363,184          | )           |                     | $ | (633,393 | )        |      | $ | (16,264,967 | )           |   | $ | (2,006,177 | )         
|                       |                               |   |                      |             |                     |   |          |          |      |   |             |             |   |   |            |           

Net cash provided by operating activities was $183.7 million and
$180.1 million for the three and nine months ended September 30, 2002,
as compared to net cash used in operating activities of $104.3 million
and $620.5 million for the same periods in 2001. This improvement in
operating cash flow is due primarily to higher Adjusted EBITDA,
partially offset by higher working capital requirements. Working
capital has grown at a slower rate than revenues during 2002, primarily
as a result of improvements in our credit, billing and collections
processes.

CAPITAL EXPENDITURES

Capital expenditures increased $68.5 million (21.0%) to $394.3
million for the three months ended September 30, 2002 and decreased
$25.2 million (2.0%) to $1.2 billion for the nine months ended
September 30, 2002, as compared to the same periods in 2001. The
expenditure decrease in the nine month period ended September 30, 2002
is due to reduced new market build-out activity in the first half of
2002 as compared to the first half of 2001 when we were building out
two major markets, Chicago and New Orleans, prior to launching service.
In addition, the July 2002 launch of commercial service in the
California/Nevada market required relatively low build-out expenditures
due to our network infrastructure sharing agreement with Cingular.

The decline in capital expenditures for new market launches has
been largely offset by increased expenditures for network footprint and
capacity expansion, and network performance and technology upgrades in
existing markets. This shift in spending will continue as we have now
completed the initial network build-out in our major markets and are
now focused on improving network coverage, quality and capacity. In
addition, we are deploying enhanced data GSM environment (EDGE)
technology in selected areas to increase data transmission rates beyond
that available through our existing GPRS network.

We expect to continue to incur significant capital expenditures
during the remainder of 2002. The level of our actual capital
expenditures and acquisitions of spectrum licenses and wireless
properties are dependent on opportunities that arise over the course of
the year and on funding availability. We expect to continue to rely on
T-Mobile International, Deutsche Telekom or its affiliates for our
future funding requirements.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 143, Accounting for Asset Retirement Obligations.
This statement requires entities to record the fair value of future
liabilities for asset retirement obligations as an increase to the
carrying amount of the related long-lived asset if a reasonable
estimate of fair value can be made. Over time, the liability is
accreted to its present value, and the capitalized cost is depreciated
over the useful life of the related asset. We are currently assessing
the impact of this statement on our financial position, results of
operations and cash flows. We will adopt this statement effective
January 1, 2003.

On April 30, 2002, we adopted SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13 and
Technical Corrections. SFAS No. 145 eliminates the requirement in SFAS
No. 4 that gains and losses from the extinguishment of debt be
aggregated and classified as extraordinary items, net of the related
income tax effect. Adoption of SFAS No. 145 did not have a material
impact on our financial position, results of operations or cash flows.

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ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

(Omitted under the provisions of General Instruction H.)




ITEM 4  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Within 90 days
prior to the date of this report (the Evaluation
Date), our Principal Executive Officer and Principal Financial Officer
carried out an evaluation of the effectiveness of our disclosure
controls and procedures (as defined in the Securities Exchange Act of
1934 Rules 13(a)-14(c) and 15(d)-14(c)). Based on that evaluation,
these officers have concluded that as of the Evaluation Date, our
disclosure controls and procedures were effective and designed to
ensure that material information relating to T-Mobile and our
consolidated subsidiaries would be made known to them by others within
these entities.

Changes in internal controls

There were no
significant changes in our internal controls, or in other factors
which could significantly affect these controls subsequent to the Evaluation Date.

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##### Table of Contents






PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

Except as referenced in our Form 10-K for the year ended December
31, 2001, there are no material, pending legal proceedings to which we
or our affiliates are a party to or of which any of our or their
property is subject which, if adversely decided, would have a material
adverse effect on our financial position, results of operations or cash
flows.




ITEM 2. CHANGES IN SECURITIES AND
USE OF PROCEEDS

(Omitted under the provisions of General Instruction H.)




ITEM 3. DEFAULTS UPON SENIOR
SECURITIES

(Omitted under the provisions of General Instruction H.)




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

(Omitted under the provisions of General Instruction H.)




ITEM 5. OTHER INFORMATION

None.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

We filed a current report on Form 8-K dated August 14, 2002, in
which we reported under Item 9 that on August 13, 2002, we filed with
the Securities Exchange Commission our Quarterly Report on Form 10-Q
for the quarter ended June 30, 2002 accompanied, as correspondence, by
a transmittal letter and certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

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##### Table of Contents






SIGNATURES

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

|                  |  |                   
|----------------- |  | ------------------
|November 14,
2002 |  | T-MOBILE USA, INC.

|                                                   |  |                                                                                 |  |                  
|-------------------------------------------------- |  | ------------------------------------------------------------------------------- |  | -----------------
|Signatures                                         |  | Title                                                                           |  | Date             
|                                                   |  |                                                                                 |  |                  
|                                                  
|By: /s/ BRIAN W. KIRKPATRICK

Brian W. Kirkpatrick |  | Executive Vice President, Chief Financial Officer
(Principal Financial Officer) |  | November 14, 2002
|
|                                                  

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##### Table of Contents



CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, John W. Stanton, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of T-Mobile USA,
Inc.;                                                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors
and the audit committee of registrants board of directors (or
persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dated: November 14, 2002 | By: /s/ John W. StantonName: John W. Stanton
Title: Chairman
|------------------------ | ------------------------------------------------------------

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##### Table of Contents



CERTIFICATION PURSUANT TOSECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002

I, Brian W. Kirkpatrick, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of T-Mobile USA,
Inc.;                                                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors
and the audit committee of registrants board of directors (or
persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dated: November 14, 2002 | By: /s/ Brian W. KirkpatrickName: Brian W. Kirkpatrick
Title: Executive Vice President and
          Chief Financial Officer
|------------------------ | ----------------------------------------------------------------------------------------------------------------------------

28