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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 MARCH 31, 2003.

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.




(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  S.E. 38TH STREET                                       |  |                                  
|BELLEVUE, WASHINGTON                                           |  | 98006                            
|                                                               |  |                                  
|(Address of principal executive offices)                       |  | (Zip Code)                       

(425) 378-4000






(Registrants telephone number, including area code)


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

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

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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes o No x

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 May 14, 2003
|                                           |  |                                      
|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



|                             |                                                                                                                 |                                                                        |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- |  |  |  |  |  | 
|PART IFINANCIAL INFORMATION
|                             | ITEM 1. FINANCIAL STATEMENTS                                                                                   
|                             |                                                                                                                 | 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                  
|                             | CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE LITIGATION REFORM ACT OF 1995.
|                             | 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 AND USE OF PROCEEDS                                                              
|                             | 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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T-MOBILE USA, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2003

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.)            |    |      | 12 | 
|                                                                        | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Omitted under the provisions of        |                                                                        |    |      |   
|                                                                        |                                                                                                            | General Instruction H.)                                                |    |      | 22 | 
|                                                                        | ITEM 4. CONTROLS AND PROCEDURES                                                                            |                                                                        |    | 22   |   
|PART
II  OTHER INFORMATION                                             |                                                                                                            |                                                                        |    |     
|                                                                        | ITEM 1. LEGAL PROCEEDINGS                                                                                  |                                                                        |    | 23   |   
|                                                                        | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS (Omitted under the provisions of General Instruction H.) |                                                                        |    | 23   |   
|                                                                        | ITEM 3. DEFAULTS UPON SENIOR SECURITIES (Omitted under the provisions of General Instruction H.)           |                                                                        |    | 23   |   
|                                                                        | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (Omitted under the provisions of General       |                                                                        |    |      |   
|                                                                        |                                                                                                            | Instruction H.)                                                        |    |      | 23 | 
|                                                                        | ITEM 5. OTHER INFORMATION                                                                                  |                                                                        |    | 23   |   
|                                                                        | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                                   |                                                                        |    | 23   |   
|SIGNATURES                                                              |                                                                                                            |                                                                        | 24 |     
|CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |                                                                                                            |                                                                        | 25 |     

2



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

|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |             |   |            | 
|---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | - | --------------------------- | ----------- | ----------- | ---------- | ------------ | ----------- | - | ---------- | 
|                                                                                                                 |                                                                                                                                  |   |                             |             | March 31,   |            | December 31,
|                                                                                                                 |                                                                                                                                  |   |                             |             | 2003        |            | 2002        
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  |   |                             |             | (unaudited)
|ASSETS                                                                                                          
|Current assets:                                                                                                  |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 | Cash and cash equivalents                                                                                                        |   | $                           | 93,745      |             |            | $            | 36,510      |  
|                                                                                                                 | Accounts receivable, net of allowance for doubtful accounts
of $113,504 and $125,251, respectively                               |   |                             | 809,458     |             |            |              | 911,726     |  
|                                                                                                                 | Inventory                                                                                                                        |   |                             | 244,563     |             |            |              | 299,237     |  
|                                                                                                                 | Other current assets                                                                                                             |   |                             | 218,446     |             |            |              | 226,070     |  
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  |   | Total current assets        |             |             | 1,366,212  |              |             |   | 1,473,543  | 
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Property and equipment, net of accumulated depreciation of
$1,384,045 and $1,163,547, respectively               |                                                                                                                                  |   | 4,506,250                   |             |             |            | 4,427,115    |            
|Goodwill                                                                                                         |                                                                                                                                  |   | 9,868,082                   |             |             |            | 9,868,082    |            
|Spectrum licenses                                                                                                |                                                                                                                                  |   | 9,968,045                   |             |             |            | 9,951,288    |            
|Other intangible assets, net of accumulated amortization
of $434,886 and $375,583, respectively                  |                                                                                                                                  |   | 320,744                     |             |             |            | 380,047      |            
|Investments in and advances to unconsolidated affiliates                                                         |                                                                                                                                  |   | 956,356                     |             |             |            | 885,470      |            
|Other assets and investments                                                                                     |                                                                                                                                  |   | 148,089                     |             |             |            | 135,666      |            
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  | $ | 27,133,778                  |             |             | $          | 27,121,211   |            
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                            
|Current liabilities:                                                                                             |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 | Accounts payable                                                                                                                 |   | $                           | 240,295     |             |            | $            | 336,440     |  
|                                                                                                                 | Accrued liabilities                                                                                                              |   |                             | 757,612     |             |            |              | 856,281     |  
|                                                                                                                 | Construction accounts payable                                                                                                    |   |                             | 312,003     |             |            |              | 344,953     |  
|                                                                                                                 | Deferred revenue                                                                                                                 |   |                             | 182,261     |             |            |              | 157,190     |  
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  |   | Total current liabilities   |             |             | 1,492,171  |              |             |   | 1,694,864  | 
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Long-term debt                                                                                                   |                                                                                                                                  |   | 1,246,487                   |             |             |            | 1,274,638    |            
|Long-term notes payable to affiliates                                                                            |                                                                                                                                  |   | 7,444,185                   |             |             |            | 7,041,944    |            
|Deferred tax liabilities                                                                                         |                                                                                                                                  |   | 3,282,623                   |             |             |            | 3,259,452    |            
|Other long-term liabilities                                                                                      |                                                                                                                                  |   | 118,288                     |             |             |            | 98,861       |            
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  |   | Total long-term liabilities |             |             | 12,091,583 |              |             |   | 11,674,895 | 
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Minority interest in equity of consolidated subsidiaries                                                         |                                                                                                                                  |   | 773                         |             |             |            | 8,480        |            
|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                                                                                   
|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                                                                                                      |   |                             | (17,326     | )           |            |              | (21,039     | )
|                                                                                                                 | Accumulated other comprehensive loss                                                                                             |   |                             | (212        | )           |            |              | (264        | )
|                                                                                                                 | Accumulated deficit                                                                                                              |   |                             | (18,285,032 | )           |            |              | (18,087,546 | )
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  |   | Total shareholders equity  |             |             | 8,549,251  |              |             |   | 8,742,972  | 
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |             
|                                                                                                                 |                                                                                                                                  | $ | 27,133,778                  |             |             | $          | 27,121,211   |            
|                                                                                                                 |                                                                                                                                  |   |                             |             |             |            |              |            



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)

|                                  |                                                                                             |   |                              |           |                            |           |            |         |   |           |  
|--------------------------------- | ------------------------------------------------------------------------------------------- | - | ---------------------------- | --------- | -------------------------- | --------- | ---------- | ------- | - | --------- | -
|                                  |                                                                                             |   |                              |           | For the three months ended
|                                  |                                                                                             |   |                              |           | March 31,                 
|                                  |                                                                                             |   |                              |           |                           
|                                  |                                                                                             |   |                              |           | 2003                       |           | 2002      
|                                  |                                                                                             |   |                              |           |                            |           |           
|Revenues:                         |                                                                                             |   |                              |           |                            |           |            |        
|                                  | Post pay revenues                                                                           |   | $                            | 1,215,519 |                            |           | $          | 728,993 |  
|                                  | Prepaid revenues                                                                            |   |                              | 101,530   |                            |           |            | 112,217 |  
|                                  | Roaming and other service revenues                                                          |   |                              | 59,346    |                            |           |            | 50,318  |  
|                                  | Equipment sales                                                                             |   |                              | 189,749   |                            |           |            | 100,002 |  
|                                  | Affiliate and other revenues                                                                |   |                              | 16,743    |                            |           |            | 24,037  |  
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|                                  |                                                                                             |   | Total revenues               |           |                            | 1,582,887 |            |         |   | 1,015,567 |  
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|Operating expenses:               |                                                                                             |   |                              |           |                            |           |            |        
|                                  | Network costs (excludes depreciation included below
of $170,730 and $136,569, respectively) |   |                              | 280,101   |                            |           |            | 216,203 |  
|                                  | Cost of equipment sales                                                                     |   |                              | 300,623   |                            |           |            | 184,372 |  
|                                  | General and administrative                                                                  |   |                              | 296,864   |                            |           |            | 275,279 |  
|                                  | Customer acquisition                                                                        |   |                              | 442,281   |                            |           |            | 296,459 |  
|                                  | Depreciation and amortization                                                               |   |                              | 283,326   |                            |           |            | 264,922 |  
|                                  | Stock-based compensation                                                                    |   |                              | 3,713     |                            |           |            | 3,713   |  
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|                                  |                                                                                             |   | Total operating expenses     |           |                            | 1,606,908 |            |         |   | 1,240,948 |  
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|Operating loss                    |                                                                                             |   | (24,021                      | )         |                            |           | (225,381   | )      
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|Other income (expense):           |                                                                                             |   |                              |           |                            |           |            |        
|                                  | Interest expense                                                                            |   |                              | (138,735  | )                          |           |            | (48,782 | )
|                                  | Equity in net losses of unconsolidated affiliates                                           |   |                              | (19,184   | )                          |           |            | (27,673 | )
|                                  | Interest income and other, net                                                              |   |                              | 7,625     |                            |           |            | 428     |  
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|                                  |                                                                                             |   | Total other income (expense) |           |                            | (150,294  | )          |         |   | (76,027   | )
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|Net loss before income taxes      |                                                                                             |   | (174,315                     | )         |                            |           | (301,408   | )      
|Deferred income tax expense       |                                                                                             |   | (23,171                      | )         |                            |           | (3,304,129 | )      
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|Net loss                          |                                                                                             |   | (197,486                     | )         |                            |           | (3,605,537 | )      
|Other comprehensive income (loss) |                                                                                             |   | 52                           |           |                            |           | (3,339     | )      
|                                  |                                                                                             |   |                              |           |                            |           |            |        
|Comprehensive loss                |                                                                                             | $ | (197,434                     | )         |                            | $         | (3,608,876 | )      
|                                  |                                                                                             |   |                              |           |                            |           |            |         |  

See accompanying notes to condensed consolidated financial statements.

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

|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |            |          |           |         |  
|---------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------------------- | -------------------- | -------- | -------------------------- | ------- | ---------- | -------- | --------- | ------- | -
|                                               |                                                                                           |                                                     |                                                   |                      |          | For the three months ended
|                                               |                                                                                           |                                                     |                                                   |                      |          | March 31,                 
|                                               |                                                                                           |                                                     |                                                   |                      |          |                           
|                                               |                                                                                           |                                                     |                                                   |                      |          | 2003                       |         | 2002      
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|Operating activities:                          |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|                                               | Net loss                                                                                  |                                                     | $                                                 | (197,486             | )        |                            | $       | (3,605,537 | )       
|                                               | Adjustments to reconcile net loss to net cash provided by
(used in)
operating activities: |                                                     |                                                   |                      |          |                            |         |            |         
|                                               |                                                                                           |                                                     | Depreciation and amortization                     |                      |          | 283,326                    |         |            |          | 264,922   |        
|                                               |                                                                                           |                                                     | Deferred income tax expense                       |                      |          | 23,171                     |         |            |          | 3,304,129 |        
|                                               |                                                                                           |                                                     | Amortization of debt discount and premium, net    |                      |          | 2,374                      |         |            |          | 4,685     |        
|                                               |                                                                                           |                                                     | Equity in net losses of unconsolidated affiliates |                      |          | 19,184                     |         |            |          | 27,673    |        
|                                               |                                                                                           |                                                     | Stock-based compensation                          |                      |          | 3,713                      |         |            |          | 3,713     |        
|                                               |                                                                                           |                                                     | Allowance for bad debts                           |                      |          | (11,747                    | )       |            |          | (1,298    | )      
|                                               |                                                                                           |                                                     | Other, net                                        |                      |          | 7,602                      |         |            |          | 6,266     |        
|                                               |                                                                                           |                                                     | Changes in operating assets and liabilities:      |                      |          |                            |         |            |          |           |        
|                                               |                                                                                           |                                                     |                                                   | Accounts receivable  |          |                            | 114,015 |            |          |           | 50,802  |  
|                                               |                                                                                           |                                                     |                                                   | Inventory            |          |                            | 54,674  |            |          |           | (24,384 | )
|                                               |                                                                                           |                                                     |                                                   | Other current assets |          |                            | 21,122  |            |          |           | (46,181 | )
|                                               |                                                                                           |                                                     |                                                   | Accounts payable     |          |                            | (95,681 | )          |          |           | (51,936 | )
|                                               |                                                                                           |                                                     |                                                   | Accrued liabilities  |          |                            | 52,617  |            |          |           | (14,706 | )
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|                                               |                                                                                           | Net cash provided by (used in) operating activities |                                                   |                      | 276,884  |                            |         |            | (81,852  | )        
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|Investing activities:                          |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|                                               | Purchases of property and equipment                                                       |                                                     |                                                   | (333,164             | )        |                            |         | (412,606   | )       
|                                               | Investments in and advances to unconsolidated affiliates, net                             |                                                     |                                                   | (104,566             | )        |                            |         | (108,651   | )       
|                                               | Other, net                                                                                |                                                     |                                                   | (6,799               | )        |                            |         | (112       | )       
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|                                               |                                                                                           | Net cash used in investing activities               |                                                   |                      | (444,529 | )                          |         |            | (521,369 | )        
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|Financing activities:                          |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|                                               | Long-term debt repayments                                                                 |                                                     |                                                   | (30,525              | )        |                            |         | (182,904   | )       
|                                               | Long-term debt borrowings from affiliates, net                                            |                                                     |                                                   | 400,727              |          |                            |         | 836,535    |         
|                                               | Book overdraft                                                                            |                                                     |                                                   | (145,322             | )        |                            |         |           |         
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|                                               |                                                                                           | Net cash provided by financing activities           |                                                   |                      | 224,880  |                            |         |            | 653,631  |          
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|Change in cash and cash equivalents            |                                                                                           |                                                     | 57,235                                            |                      |          |                            | 50,410  |           
|Cash and cash equivalents, beginning of period |                                                                                           |                                                     | 36,510                                            |                      |          |                            |        |           
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |           
|Cash and cash equivalents, end of period       |                                                                                           | $                                                   | 93,745                                            |                      |          | $                          | 50,410  |           
|                                               |                                                                                           |                                                     |                                                   |                      |          |                            |         |            |         

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), formerly known as
VoiceStream Wireless Corporation (VoiceStream), provides personal
communications services (PCS) under the T-Mobile brand primarily in
major urban markets in the United States using the Global System for
Mobile Communications, or GSM, technology. T-Mobile is the brand name
under which most of Deutsche Telekom AGs (Deutsche Telekom)
principal wireless subsidiaries operate. In 2001, we were acquired by
Deutsche Telekom, which subsequently transferred its ownership in us to
T-Mobile International AG & Co. K.G. (T-Mobile International), a
wholly-owned subsidiary of Deutsche Telekom and the holding company for
Deutsche Telekoms principal wireless operations in Europe and the
United States. Upon consummation of the merger, our common shares were
deregistered and delisted from NASDAQ, and are no longer publicly
traded. The merger and related transfer are hereafter referred to as
the T-Mobile merger.

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 Powertel 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 6 for a description of certain cost sharing agreements).

We rely on funding from T-Mobile International, Deutsche Telekom
or its affiliates to fund our operating losses and meet our working
capital, capital expenditure, debt service and other obligations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation and basis of presentation

The interim condensed consolidated financial statements (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. Affiliates that are less than 20 percent owned and for which
control does not otherwise exist are generally accounted for under the
cost method.

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. The results for interim periods are not necessarily indicative
of expected operating results for the full fiscal year or any future
periods.

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Asset retirement obligations

On January 1, 2003, we adopted Statement of Financial Accounting
Standards (SFAS) No. 143, Accounting for Asset Retirement
Obligations. This Standard requires entities to record the fair value
of future liabilities for contractual obligations associated with the
retirement of tangible long-lived assets as an increase in the carrying
amount of the related 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 its estimated useful life.

We have certain contractual obligations that fall within the scope
of SFAS No. 143, principally related to network assets located on
leased premises. We currently have approximately 15,000 microwave, cell
and switching equipment sites with leases expiring between 2003 and
2018. These leases generally have terms of five years with renewal
options of up to five additional five-year terms. The majority of these
leases contain contractual obligations that include a responsibility to
remove improvements on the leased sites upon termination of the lease.

We have not recorded these asset retirement obligations because
the fair value of their eventual settlement cannot presently be
reasonably estimated. We, along with the industry in general, have
limited historical experience terminating leases at our sites and
therefore have limited historical information on which to base an
estimate of future retirement costs. Public resistance to building new
sites combined with expectations for continued growth in the total
number of wireless customers in the United States and the expanded
range of wireless services used by these customers has led to
expectations that future new sites will become increasingly scarce.
These factors make it difficult to assess when site leases will be
terminated, if ever, and whether third parties will enforce the
contractual obligations for remediation of our sites when leases are terminated.

Stock-based compensation plans

We account for our stock-based compensation plans under the
intrinsic value provisions of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees and related
interpretations. Under APB No. 25, when stock options are granted with
an exercise price equal to the market value of the underlying common
stock on the date of grant, no compensation expense is recorded.
Stock-based compensation expense for the three months ended March 31,
2003 and 2002 is primarily the result of deferred compensation related
to unvested options that existed at the date of the T-Mobile merger. On
January 1, 2003, we adopted SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment of SFAS No.
123. Adoption of this Standard did not have a material impact on our
interim financial statements.

Recently issued accounting standards

We currently apply the provisions of Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements, to account for
revenue arrangements with multiple deliverables, which we adopted
during the year ended December 31, 2000. These types of arrangements
include such transactions as the sale of wireless service with an
accompanying handset. In November 2002, the Emerging Issues Task Force
(EITF) reached a consensus on Issue No. 00-21, Revenue Arrangements
with Multiple Deliverables, which affects revenue arrangements entered
into by us in fiscal periods beginning after June 15, 2003. The EITF
requires that revenue arrangements with multiple deliverables be
divided into separate units of accounting if the deliverables in the
arrangement meet specific criteria and generally requires that
arrangement consideration be allocated among the separate units of
accounting based on their relative fair values. Revenue recognition is
then considered separately for each unit of accounting. We are
currently assessing the impact of this EITF on our financial position,
results of operations and cash flows.

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In February 2003, we adopted Financial Accounting Standards Board
(FASB) Interpretation Number (FIN) 46, Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires
certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties.
FIN 46 is effective immediately for all new variable interest entities
created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions
of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. Adoption of this Interpretation did not
have a material impact on our interim financial statements.

In April 2003, the FASB issued SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. SFAS
No. 149 amends and clarifies the accounting guidance on derivative
instruments, including certain derivative instruments embedded in other
contracts, and hedging activities that fall within the scope of SFAS
No. 133, Accounting for Derivative Instruments and Hedging
Activities. SFAS No. 149 amends SFAS No. 133 and certain other
existing pronouncements, which will result in more consistent reporting
of contracts that are derivatives in their entirety or that contain
embedded derivatives that warrant separate accounting. SFAS No. 149 is
effective for contracts entered into or modified after June 30, 2003,
with certain exceptions, and for hedging relationships designated after
June 30, 2003. The guidance is to be applied prospectively. We are
currently assessing the impact of this Statement on our financial
position, results of operations and cash flows.

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, revenues and expenses and
the disclosure of contingencies at the date of the interim financial
statements. The more significant estimates include service revenues
earned but not yet billed, the allowance for doubtful accounts, the
estimated useful lives of our wireless communications equipment and
other long-lived assets and fair value measurements related to
goodwill, intangible assets, impairment charges, stock-based
compensation and asset retirement obligations. 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 such estimates if our assumptions prove invalid or
conditions change.

Reclassifications

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

3. INVESTMENTS

Network Infrastructure Venture with Cingular (GSM Facilities)

At March 31, 2003 and December 31, 2002, we held an economic
interest of approximately 25% in a joint venture with Cingular Wireless
LLC (Cingular) to share in the ownership and operation of GSM network
infrastructure in most of California, parts of Nevada and the New York
City market (GSM Facilities). We recorded equity in net losses of
unconsolidated affiliates of $19.1 million and $18.9 million for the
three months ended March 31, 2003 and 2002, respectively, related
principally to our share of the unreimbursed non-cash expenses of GSM
Facilities. T-Mobiles allocation of GSM Facilities capital
expenditures totaled $113.6 million and $40.3 million for the three
months ended March 31, 2003 and 2002, respectively. At March 31, 2003
and December 31, 2002 we had payables to GSM facilities of $69.2
million and $151.9 million, respectively, primarily related to capital
expenditures. Our investment in GSM Facilities is reported net of the
future funding obligation. Each partners future contributions
will be based on incremental network usage, and therefore our economic interest
percentage may vary over time.

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4. OTHER INTANGIBLE ASSETS

Other intangible assets

|                                           |               |              |           |      |   |         |             |   |              |         |          |   | 
|------------------------------------------ | ------------- | ------------ | --------- | ---- | - | ------- | ----------- | - | ------------ | ------- | -------- | - | 
|                                           |               |              |           |      |   |         | March 31,   |   | December 31,
|(dollars in thousands)                     |               | Useful lives |           | 2003 |   | 2002   
|                                           |               |              |           |      |   |        
|                                           |               |              |           |      |   |         | (unaudited) |   |              |         |         
|Intangible assets subject to amortization: |               |              |           |      |   |         |             |   |              |         |          |  
|                                           | Customer list |              | 3 years   |      | $ | 579,630 |             |   | $            | 579,630 |         
|                                           | Tradenames    |              | 1-4 years |      |   | 176,000 |             |   |              | 176,000 |         
|                                           |               |              |           |      |   |         |             |   |              |         |          |  
|                                           |               |              |           |      |   |         | 755,630     |   |              |         | 755,630  |  
|Accumulated amortization                   |               |              |           |      |   |         | (434,886    | ) |              |         | (375,583 | )
|                                           |               |              |           |      |   |         |             |   |              |         |          |  
|                                           |               |              |           |      |   | $       | 320,744     |   |              | $       | 380,047  |  
|                                           |               |              |           |      |   |         |             |   |              |         |          |  

Amortization expense

The following table presents current and expected amortization
expense for other identifiable intangible assets for the three months
ended March 31, 2003, the remainder of the year ending December 31,
2003 and the subsequent four years:

(dollars in thousands)

|                                |                                                        |      |   |         |        
|------------------------------- | ------------------------------------------------------ | ---- | - | ------- | -------
|Aggregate amortization expense: |                                                        |      |   |        
|                                | For the three months ended March 31, 2003              |      | $ | 59,303  |        
|Expected amortization expense:  |                                                        |      |   |        
|                                | For the remainder of the year ending December 31, 2003 |      | $ | 177,907 |        
|                                |                                                        | 2004 |   | $       | 124,504
|                                |                                                        | 2005 |   | $       | 18,333 
|                                |                                                        | 2006 |   | $       |       
|                                |                                                        | 2007 |   | $       |       

5. COMMITMENTS AND CONTINGENCIES

Commitments

We have committed to purchase PCS equipment from various
suppliers. At March 31, 2003, there was approximately $410 million
remaining under these commitments for equipment that has not yet been
delivered. We expect to fulfill these purchase commitments by February
2006.

We have various other purchase commitments for materials, supplies
and other items incidental to the ordinary course of business, which
are neither significant individually nor in the aggregate. Such
commitments are not at prices in excess of current market value.

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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. Subsequent business combinations, including the
T-Mobile merger, have qualified as tax-free reorganizations. Although
it is not assured, we believe that the spin-off, these business
combinations and certain investments by Hutchison Telecommunications
PCS (USA) Limited and Sonera Corporation 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.

6. 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
provide management and other services to Powertel. We are reimbursed by
Powertel for the compensation and benefit costs of our employees
working on Powertel business. We perform centralized services and
functions for Powertel including accounting and other administrative
functions and we are reimbursed for these services in a manner that
intends to reflect the relative time and associated costs devoted to
Powertel activities. Powertel was charged $12.4 million and $14.8
million for the costs of these centralized services and functions for
the three months ended March 31, 2003 and 2002, respectively. At March
31, 2003 and December 31, 2002, we had long-term receivables from
Powertel of $340.4 million and $349.4 million, respectively. The
receivable is a result of the charges, as discussed above, transfers in
the ordinary course of business, including fixed assets and inventory,
and our funding of a credit facility repayment on behalf of Powertel in
the first quarter of 2002. The total receivable from Powertel is
included in investments in and advances to unconsolidated affiliates in
our condensed consolidated balance sheets.

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. We had long-term notes payable to
T-Mobile International and Deutsche Telekom of $7.4 billion and $7.0
billion at March 31, 2003 and December 31, 2002, respectively. We
recorded interest expense of $114.7 million and $57.8 million for the
three months ended March 31, 2003 and 2002, respectively, related to
our long-term notes payable to T-Mobile International and Deutsche
Telekom.

T-Mobile is party to agreements with Cingular and GSM Facilities
related to the sharing of network operations expenses. We were charged
net operating expenses based on our network usage of $40.8 million and
$15.2 million for the three months ended March 31, 2003 and 2002,
respectively, under the terms of these agreements.

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In May 2003, we entered into an agreement with Western Wireless in
which we will receive discounted GSM roaming services through 2013 in
exchange for a nominal amount of cash and certain of our Federal
Communications Commission licenses covering approximately four million
people in rural areas. The exchange of the licenses is subject to FCC
approval. This transaction will not have a material impact on our
financial position, results of operations or cash flows. Western
Wireless is considered a related party since our Chairman of the Board
and Director is also Chairman of the Board, Director and Chief
Executive Officer of Western Wireless.

7. SUBSEQUENT EVENTS

In April 2003, we transferred $90.0 million of our long-term notes
payable to affiliates to Powertel in exchange for the reduction of
$90.0 million of our $340.4 million long-term receivable from Powertel
that is included in investments in and advances to unconsolidated
affiliates in our condensed consolidated balance sheet. In addition,
Powertel paid us $254.6 million in cash, thereby further reducing the
long-term note receivable from Powertel.

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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 all of our
equity securities are owned indirectly by Deutsche Telekom, which 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), its wholly-owned
subsidiary, T-Mobile International AG & Co. K.G. (T-Mobile
International), or their affiliates; 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 maintain and improve our network quality and coverage; ability to
acquire and cost of acquiring additional spectrum licenses; and other
factors referenced in our filings with the Securities and Exchange
Commission (SEC), including, without limitation, those identified
under the caption Risk Factors and elsewhere in our Form 10-K for the
year ended December 31, 2002. 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.

The following discussion and analysis is based upon our interim
condensed consolidated financial statements (interim financial
statements), which have been prepared in accordance with accounting
principles generally accepted in the United States (GAAP). All
comparisons in this discussion are for the three months ended March 31,
2003 and the same period in 2002, unless otherwise noted.

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

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 assets and liabilities, revenues and expenses and the
disclosure of contingencies at the date of the interim financial
statements. 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 if our
assumptions prove invalid or conditions change. 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
or other usage 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 and amortization expense
associated with our wireless communications equipment and other
long-lived assets, we use estimated useful lives. Changes in
technology and industry conditions may cause us to periodically
re-evaluate the useful lives of our wireless communications
equipment, and/or review these assets for impairment in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. These evaluations could result in changes
in estimated useful lives or impairment charges in future
periods.                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  |  | We do not amortize our goodwill and intangible assets
with indefinite lives, but review them for impairment in
accordance with SFAS No. 142 Goodwill and Other Intangible
Assets. This review is performed on an annual basis, or when
an event occurs or circumstances change that could likely
reduce the fair value of a reporting unit below its carrying
value. The determination of fair values, generally based on
either appraised values 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 resulting fair values and thus the assessment of
impairment. Likewise, any decrease in appraised values or
discounted estimated future cash flows resulting from future
events or performance could result in future impairment
charges.
|
| |  |  | We hold non-controlling investments in several entities
for which we apply the equity method or cost method of
accounting. We record impairment charges associated with these
investments if 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 customer acquisition
promotions and incentives. These accruals are based primarily
on historical take-rates of similar promotions or offers. In
the event that actual results differ materially from
managements expectations, payments could materially change,
directly impacting our financial position and results of
operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  |  | Deferred tax assets and liabilities are recognized based
on the temporary differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates
expected to be in effect when they are realized. A valuation
allowance against deferred tax assets is recorded if the
realization of income, as defined under SFAS No. 109
Accounting for Income Taxes, is no longer assured within the
carryforward periods of our existing deferred tax assets. Such
determination includes estimates of expected taxable income and
the timing of the reversal of deferred tax liabilities. In the
event that actual results differ materially from managements
expectations, the valuation allowance could materially change,
directly impacting our financial position and results of
operations.                                                                                                                                                                                                                 
|
| |  |  | We account for acquisitions in accordance with SFAS No.
141, Business Combinations which requires the purchase price
to be allocated to the identifiable net assets based upon their
fair values. The allocation of the purchase price is highly
judgmental and requires extensive use of estimates and fair
value assumptions. Our historical acquisitions have had
substantial intangible assets. The allocation of the purchase
price to intangible assets can have a significant impact on
operating results, as indefinite lived intangible assets are no
longer amortized, but rather subject to periodic future
impairment assessments under SFAS No. 142.                                                                                                                                                                                                                                                                                                                                                                             

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| |  |  | We account for our stock-based compensation plans under
the intrinsic value provisions of Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to
Employees and related interpretations. Under APB No. 25, when
stock options are granted with an exercise price equal to the
market value of the underlying common stock on the date of
grant, no compensation expense is recorded. On January 1, 2003,
we adopted SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment of SFAS
No. 123.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

OVERVIEW

We provide personal communications services (PCS) using the
Global System for Mobile Communications, or GSM, technology primarily in
major urban markets in the United States. 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 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. We launched major markets at various times in 2001,
including Chicago, St. Louis, Cincinnati-Dayton, Milwaukee and New
Orleans. In July 2002, through our network infrastructure venture with
Cingular Wireless LLC (Cingular), (GSM Facilities), we began
marketing our commercial service in California and Nevada 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. With the addition of these markets, including the GSM
Facilities markets, our network footprint in the United States covers
202.0 million people and we provide service in 23 of the top 25 markets
and 41 of the top 50 markets in the United States.

As a result of significant growth in our business, our financial
position, results of operations and cash flows may not be comparable
between periods, and may not be representative of future operations.

On May 31, 2001, we were acquired by Deutsche Telekom, which
subsequently transferred its ownership in us to its wholly-owned
subsidiary T-Mobile International. During the third quarter of 2002, as
part of Deutsche Telekoms plan to develop a global brand for its
wireless operations, all of the VoiceStream Wireless Corporation
(VoiceStream) markets were rebranded to T-Mobile. T-Mobile is the
brand under which most of Deutsche Telekoms principal wireless
subsidiaries operate.

Powertel, also a wholly-owned subsidiary of T-Mobile
International, provides the same services under the T-Mobile brand in
the southeastern United States. While Powertels results are not
consolidated with ours, we provide management and other services to
Powertel. All remaining Powertel employees became employees of T-Mobile
following Powertels acquisition by T-Mobile International and we are
directly reimbursed by Powertel for the compensation and benefit costs
of our employees working on Powertel business. We also perform
centralized services and functions for Powertel including accounting
and other administrative functions and we are reimbursed for these
services in a manner that is intended to reflect the relative time and
associated costs devoted to Powertel activities. Including the Powertel
markets, the national network footprint in the United States for the
T-Mobile brand covers 223.6 million people in 24 of the top 25 markets
and 46 of the top 50 markets.

We rely on funding from T-Mobile International, Deutsche Telekom
or its affiliates to fund our operating losses and meet our working
capital, capital expenditure, debt service and other obligations.

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

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

|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |       |       |      |  
|--------------------------------- | ---------------------------------- | --------------------------------------- | ------------------------ | --------- | ---------------------------- | --------- | ---------- | -------- | ----------- | --------- | ---------- | -------- | ---------- | ------- | ----- | ----- | ----- | ---- | -
|                                  |                                    |                                         |                          |           | Three Months Ended March 31, |           |            |          |             |           |            |          |           
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |           
|                                  |                                    |                                         |                          |           | 2003                         |           | 2002       |          | Change      |           | % Change  
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |           
|Revenues:                         |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|                                  | Post pay revenues                  |                                         | $                        | 1,215,519 |                              |           | $          | 728,993  |             |           | $          | 486,526  |            |         |       | 66.7  | %    
|                                  | Prepaid revenues                   |                                         |                          | 101,530   |                              |           |            | 112,217  |             |           |            | (10,687  | )          |         |       | (9.5  | %)   
|                                  | Roaming and other service revenues |                                         |                          | 59,346    |                              |           |            | 50,318   |             |           |            | 9,028    |            |         |       | 17.9  | %    
|                                  | Equipment sales                    |                                         |                          | 189,749   |                              |           |            | 100,002  |             |           |            | 89,747   |            |         |       | 89.7  | %    
|                                  | Affiliate and other revenues       |                                         |                          | 16,743    |                              |           |            | 24,037   |             |           |            | (7,294   | )          |         |       | (30.3 | %)   
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |       |      
|                                  |                                    |                                         | Total revenues           |           |                              | 1,582,887 |            |          |             | 1,015,567 |            |          |            | 567,320 |       |       |       | 55.9 | %
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|Operating expenses:               |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|                                  | Network costs                      |                                         |                          | 280,101   |                              |           |            | 216,203  |             |           |            | 63,898   |            |         |       | 29.6  | %    
|                                  | Cost of equipment sales            |                                         |                          | 300,623   |                              |           |            | 184,372  |             |           |            | 116,251  |            |         |       | 63.1  | %    
|                                  | General and administrative         |                                         |                          | 296,864   |                              |           |            | 275,279  |             |           |            | 21,585   |            |         |       | 7.8   | %    
|                                  | Customer acquisition               |                                         |                          | 442,281   |                              |           |            | 296,459  |             |           |            | 145,822  |            |         |       | 49.2  | %    
|                                  | Depreciation and amortization      |                                         |                          | 283,326   |                              |           |            | 264,922  |             |           |            | 18,404   |            |         |       | 6.9   | %    
|                                  | Stock-based compensation           |                                         |                          | 3,713     |                              |           |            | 3,713    |             |           |            |         |            |         |       |      |      
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |       |      
|                                  |                                    |                                         | Total operating expenses |           |                              | 1,606,908 |            |          |             | 1,240,948 |            |          |            | 365,960 |       |       |       | 29.5 | %
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|Operating loss                    |                                    |                                         | (24,021                  | )         |                              |           | (225,381   | )        |             |           | 201,360    |          |            |         | 89.3  | %    
|Other expenses, net               |                                    |                                         | (150,294                 | )         |                              |           | (76,027    | )        |             |           | (74,267    | )        |            |         | (97.7 | %)   
|Deferred
income tax expense       |                                    |                                         | (23,171                  | )         |                              |           | (3,304,129 | )        |             |           | 3,280,958  |          |            |         | 99.3  | %    
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |       |      
|Net loss                          |                                    | $                                       | (197,486                 | )         |                              | $         | (3,605,537 | )        |             | $         | (3,408,051 | )        |            |         | 94.5  | %    
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|EBITDA (1)                        |                                    | $                                       | 266,930                  |           |                              | $         | 39,969     |          |             | $         | 226,961    |          |            |         | 567.8 | %    
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|Cash flows provided by (used in): |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|                                  | Operating activities               |                                         | $                        | 276,884   |                              |           | $          | (81,852  | )           |           | $          | 358,736  |            |         |       | N.M.  |      
|                                  | Investing activities               |                                         | $                        | (444,529  | )                            |           | $          | (521,369 | )           |           | $          | 76,840   |            |         |       | 14.7  | %    
|                                  | Financing activities               |                                         | $                        | 224,880   |                              |           | $          | 653,631  |             |           | $          | (428,751 | )          |         |       | (65.6 | %)   
|Other data:                       |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|                                  |                                    | Population covered by spectrum licenses |                          |           | 249,164,000                  |           |            |          | 237,894,000 |           |            |          | 11,270,000 |         |       |       | 4.7   | %   
|                                  |                                    | Population covered by network           |                          |           | 201,974,000                  |           |            |          | 144,776,000 |           |            |          | 57,198,000 |         |       |       | 39.5  | %   
|PCS customers:                    |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|                                  |                                    | Post pay                                |                          |           | 8,514,000                    |           |            |          | 5,078,400   |           |            |          | 3,435,600  |         |       |       | 67.7  | %   
|                                  |                                    | Prepaid                                 |                          |           | 1,032,000                    |           |            |          | 1,237,100   |           |            |          | (205,100   | )       |       |       | (16.6 | %)  
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      
|                                  |                                    |                                         | 9,546,000                |           |                              |           | 6,315,500  |          |             |           | 3,230,500  |          |            |         | 51.2  | %    
|                                  |                                    |                                         |                          |           |                              |           |            |          |             |           |            |          |            |         |       |      



---

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1) |  | EBITDA is a non-GAAP financial
measure, which we define as net loss excluding interest expense,
deferred income tax expense, depreciation, amortization and
equity in net losses of unconsolidated affiliates. EBITDA should not be
construed as an alternative to operating loss or net 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 non-GAAP
financial measures to GAAP financial measures in the
discussion of EBITDA and Net Loss below.

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REVENUES

Our customer base grew 51.2% from 6.3 million at March 31, 2002 to
9.5 million at March 31, 2003. In the same period, and primarily as a
result of this growth, service revenues (post pay, prepaid and roaming
and other service revenues) increased $484.9 million (54.4%) to $1.4
billion for the three months ended March 31, 2003.

Post pay revenues increased $486.5 million (66.7%) to $1.2 billion
for the three months ended March 31, 2003. The increase is primarily
the result of growth in our post pay customer base from 5.1 million at
March 31, 2002 to 8.5 million at March 31, 2003. This net increase of
3.4 million customers is due almost entirely to internal growth. We
launched several new markets during the second half of 2002, most
significantly the California/Nevada market, which included promotional
rate plan offers that contributed to the high number of customers added
since March 31, 2002. The high rate of net post pay customer growth
also reflects higher growth in the number of new customers in existing
markets due primarily to our competitive rate plan offerings, the
success of our advertising campaigns and lower customer churn rates as
compared to 2002.

Historically, our Get More marketing strategy and competitive rate
plans have 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 and we
introduced our new global spokesperson, Catherine Zeta-Jones. We have
continued to experience strong customer growth since our brand
transition to T-Mobile.

Prepaid revenues decreased $10.7 million (9.5%) to $101.5 million
for the three months ended March 31, 2003. Our prepaid customer base
was 1.0 million at March 31, 2003 and 1.2 million at March 31, 2002.
The decrease in our prepaid customer base reflects the impact of
changes in our prepaid business strategy. Our strategy encourages
longer duration customer relationships through a combination of higher
up front costs to acquire service and incentive programs such as our
Gold Rewards program, which offers prepaid customers discounted calling
rates based on a customers previous airtime purchases and their tenure
with T-Mobile. Our prepaid customer base may continue to decline in the
short-term as the composition of our customer base changes in response
to this strategy.

Total service revenue per monthly average total customer (Service
Revenue ARPU), was $50.37 for the three months ended March 31, 2003,
as compared to $49.28 for the same period in 2002. The increase in
Service Revenue ARPU is due to the continued shift in the mix of our
customers towards post pay. Post pay customers represented 89.2% and
80.4% of our customer base at March 31, 2003 and 2002, respectively.
Total post pay revenue per monthly average post pay customer (Post Pay
ARPU), was $50.04 and $50.72 at March 31, 2003 and 2002, respectively.
The decrease in Post Pay ARPU is due primarily to the migration of
customers from older higher priced rate plans to our current offerings
and the continuing popularity of the Family Time pooling plans that
allow multiple users to share minutes under one plan. The Post Pay ARPU
decrease is partially offset by increased data and short message
service revenues. Total prepaid revenue per monthly average prepaid
customer (Prepaid ARPU), was $33.44 and $30.18 at March 31, 2003 and
2002, respectively.

Roaming and other service revenues primarily represent revenues
from third-party customers roaming on our network. Roaming and other
service revenues increased $9.0 million (17.9%) to $59.3 million for
the three months ended March 31, 2003. This increase is due primarily
to the expansion of our network coverage area and an increase in the
number of international roaming partners. As part of a global company
utilizing GSM technology, we offer our affiliates customers the
ability to roam on our network at favorable rates.

Equipment sales increased $89.7 million (89.7%) to $189.7 million
for the three months ended March 31, 2003. This increase is due
primarily to higher unit sales volumes associated with the higher
growth in new customers for the three months ended March 31, 2003 as
compared to the same period in 2002. During the latter part of 2002 and
continuing in the first quarter of 2003, upgrade sales of new devices
to our existing customers increased, and we expect this trend to
continue as we introduce more new devices with new data features and
functionality.

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Affiliate and other revenues decreased $7.3 million (30.3%) to
$16.7 million for the three months ended March 31, 2003. Affiliate
revenues include revenues from technical service, system access and
reciprocal wholesale agreements with certain of our unconsolidated
affiliates. Under these agreements, each party re-sells airtime
purchased from the other, and related fees are charged and paid between
the parties. Affiliate revenues decreased $15.7 million (98.9%) for the
three months ended March 31, 2003 as we acquired the remaining
outstanding interest in Cook Inlet/VS GSM IV PCS Holdings, LLC in April
2002, and we no longer have any unconsolidated affiliates generating
significant revenues under these agreements. Offsetting the decrease in
affiliate revenues is an increase in other revenues of $8.4 million, to
$16.6 million for the three months ended March 31, 2003. Other revenues
include co-location and phone repair revenues.

OPERATING EXPENSES

Network costs represent expenses incurred in operational markets
including the cost of interconnection with local exchange carrier
facilities, direct cell site costs (leases, utilities, property taxes,
and repair and maintenance expenses), third party roaming costs and
long distance toll costs. The increase of $63.9 million (29.6%) to
$280.1 million for the three months ended March 31, 2003 is due
primarily to increased customer usage and an increase in network
capacity to service our growing customer base. Network costs as a
percentage of service revenues decreased to 20.4% at March 31, 2003
compared to 24.2% for the same period in 2002. Excluding technical
service, system access and reciprocal wholesale agreements with certain
of our unconsolidated affiliates, as discussed above, network costs as
a percentage of service revenues were 20.3% and 21.5% for the three
months ended March 31, 2003 and 2002, respectively. The decrease is due
to economies of scale and other efficiencies gained relative to our
growing customer base. While overall network costs are expected to
increase as our customer base continues to grow, we expect network
costs as a percentage of service revenues to generally trend downward
as we leverage our existing infrastructure to yield further economies
of scale.

Cost of equipment sales increased $116.3 million (63.1%) to $300.6
million for the three months ended March 31, 2003. This increase is
primarily due to an increase in the number of handsets and wireless
data devices sold, including upgrades of existing customer devices. We
generally offer equipment to our customers at prices below our cost as
an incentive and to respond to competition. While the level of
subsidization varies, we expect equipment subsidies to remain common
industry practice for the foreseeable future.

General and administrative expenses increased $21.6 million (7.8%)
to $296.9 million for the three months ended March 31, 2003. On a
monthly average cost per customer basis, general and administrative
expenses decreased to $10.86 for the three months ended March 31, 2003
from $15.21 for the same period in 2002. The decrease in 2003 reflects
increased economies of scale realized in our administrative functions
and reductions in customer bad debt expense due to improvements in our
credit, billing and collection processes. While general and
administrative expenses are generally expected to increase due to
continuing growth in our customer base, we expect the monthly average
cost per customer to continue trending downward as additional economies
of scale are realized.

Customer acquisition costs increased $145.8 million (49.2%) to
$442.3 million for the three months ended March 31, 2003. This increase
includes a higher volume of sales commissions and other selling costs
associated with our continued customer growth. The cost of acquiring a
new customer, commonly referred to as cost per gross add (CPGA), was
$313 for the three months ended March 31, 2003 as compared to $298 for
the same period in 2002. CPGA is calculated by dividing the costs of
acquiring a new customer, which includes customer acquisition costs
plus the subsidy loss on customer acquisition related equipment sales,
by gross customers added during the period. The subsidy loss on
customer acquisition related equipment sales for the three months ended
March 31, 2003 and 2002 was $78.2 million and $69.0 million,
respectively. The increase in CPGA for the three months ended
March 31, 2003 as compared to the three months ended
March 31, 2002 reflects higher average
sales commission rates for adding new customers as a result of the
continued shift in the mix of our customers towards post pay.

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Depreciation and amortization expense increased $18.4 million
(6.9%) to $283.3 million for the three months ended March 31, 2003.
Depreciation and amortization charges are generally expected to
increase over time due to the ongoing expansion of our wireless
network.

OTHER EXPENSES, NET AND DEFERRED INCOME TAX EXPENSE

Interest expense, net of capitalized interest of $1.8 million and
$44.6 million for the three months ended March 31, 2003 and 2002,
respectively, increased $90.0 million (184.4%) to $138.7 million for
the three months ended March 31, 2003. Interest expense before
capitalized interest was $140.5 million and $93.4 million
for the three months ended March 31, 2003 and 2002, respectively. The increase
in interest expense before capitalized interest is primarily due to the
increase in total debt at March 31, 2003 as compared to the same period
in 2002. Additionally, the weighted average effective interest rate,
before capitalized interest increased to 6.53% for the three months
ended March 31, 2003 as compared to 5.84% for the same period in 2002.
The decrease in capitalized interest for the three months ended March
31, 2003 is primarily due to interest capitalized during 2002 related
to our spectrum licenses in the California/Nevada market prior to the
July 2002 launch of commercial service.

Equity in net losses of unconsolidated affiliates decreased $8.5
million (30.7%) to $19.2 million for the three months ended March 31,
2003. The decrease is primarily due to our having ceased recording our
share of losses from Microcell Telecommunications Inc. when the
investment balance was reduced to zero in the third quarter of 2002.

Deferred income tax expense decreased $3.3 billion (99.3%) to
$23.2 million for the three months ended March 31, 2003. Deferred
income tax expense of $23.2 million and $16.5 million was recorded for
the three months ended March 31, 2003 and 2002, respectively, to
increase our deferred tax liability related to SFAS No. 142 intangible
assets. This deferred tax liability was created due to spectrum
licenses being amortized for tax purposes and not for book purposes as
a result of the adoption of SFAS No. 142. The first quarter of 2002
included a $3.3 billion non-cash deferred income tax expense as a
result of our adoption of SFAS No. 142. Upon adoption of the Standard,
amortization of our spectrum licenses was discontinued, which required
us to establish a valuation allowance related to our deferred tax
assets. The realization of income, as defined under SFAS No. 109, from
the reversal of deferred tax liabilities associated with the spectrum
licenses is no longer assured within the carryforward periods of our
net operating losses (NOLs). As a result, these deferred tax
liabilities cannot be treated as a realization of income and applied
against the deferred tax assets arising from our NOLs. Accordingly, we
recorded the $3.3 billion non-cash deferred 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.

NET LOSS

Our net loss was $197.5 million and $3.6 billion for the three
months ended March 31, 2003 and 2002, respectively. Comparability of
the net losses for the three months ended March 31, 2003 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. Our
net loss before income taxes was $174.3 million for the three months
ended March 31, 2003 as compared to $301.4 million for the same period
in 2002.

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EBITDA AND NET LOSS

EBITDA
is a non-GAAP financial measure, which we define as net loss
excluding interest expense, deferred
income tax expense, depreciation, amortization and equity in net losses of unconsolidated
affiliates. In a capital-intensive
industry such as wireless telecommunications, we consider growth in
EBITDA as well as improvements in EBITDA margin, EBITDA as a
percentage of service revenues, to be meaningful
indicators of potential future profitability.

EBITDA
and EBITDA margin should
not be construed as alternatives to operating loss, net loss or net
loss margin as determined in
accordance with GAAP, as alternatives to cash flows from operating
activities as determined in accordance with GAAP or as measures of
liquidity. We also use EBITDA as an integral part of our internal
reporting to evaluate the performance of our senior management and to
monitor compliance with certain financial covenants in certain of our
debt instruments. Because all companies do not calculate EBITDA and
EBITDA margin in the same
manner, our presentation may not be comparable to other similarly
titled measures reported by other companies. Beginning in 2003, we
changed our definition of EBITDA as described above from the Adjusted
EBITDA as disclosed in prior periods. The prior period figures have
been revised to conform to the new definition.

EBITDA was $266.9 million for the three months ended March 31,
2003, representing an improvement of $227.0 million as compared to the
same period in 2002. EBITDA margin, also
a non-GAAP financial measure, was 19.4% and 4.5% for the three months
ended March 31, 2003 and 2002, respectively. This improvement in
EBITDA is largely due to increasing economies of scale throughout our
operations due to significant growth as well as other factors,
including decreases in customer bad debt expense. Bad debt expense as a
percentage of total revenues was 2.2% and 4.8% for the three months
ended March 31, 2003 and 2002, respectively.

Reconciliation of non-GAAP financial measures to GAAP financial
measures

We
believe that net loss and net loss margin are the
financial measures calculated and presented in accordance with GAAP that
are most directly comparable to EBITDA and EBITDA margin. The following table reconciles
these non-GAAP financial measures as discussed above, to our net loss
and net loss margin as determined in accordance with GAAP (dollars in thousands):

|         |                                                   |                                      |          |              |   |  |       |              |    |   |            |            |   |  |        |        |   
|-------- | ------------------------------------------------- | ------------------------------------ | -------- | ------------ | - |  | ----- | ------------ | -- | - | ---------- | ---------- | - |  | ------ | ------ | --
|         |                                                   |                                     
|         |                                                   | For the three months ended March 31,
|         |                                                   |                                     
|         |                                                   |                                      |          |             
|         |                                                   | 2003                                 |          | 2002        
|         |                                                   |                                      |          |             
|        
|        
|        
|        
|        
|         |                                                   |                                      |          | % of
service |   |  |       | % of
service
|         |                                                   |                                      |          | revenues     |   |  |       | revenues    
|         |                                                   |                                      |          |              |   |  |       |             
|EBITDA   |                                                   | $                                    | 266,930  |              |   |  | 19.4  | %            |    | $ | 39,969     |            |   |  | 4.5    | %     
|        
|        
|        
|        
|         | Interest expense                                  |                                      |          | (138,735     | ) |  |       | (10.1        | %) |   |            | (48,782    | ) |  |        | (5.5   | %)
|        
|        
|        
|        
|        
|        
|        
|        
|         | Deferred income tax expense                       |                                      |          | (23,171      | ) |  |       | (1.7         | %) |   |            | (3,304,129 | ) |  |        | (370.6 | %)
|         | Depreciation and amortization                     |                                      |          | (283,326     | ) |  |       | (20.6        | %) |   |            | (264,922   | ) |  |        | (29.7  | %)
|        
|        
|        
|        
|         | Equity in net losses of unconsolidated affiliates |                                      |          | (19,184      | ) |  |       | (1.4         | %) |   |            | (27,673    | ) |  |        | (3.1   | %)
|         |                                                   |                                      |          |              |   |  |       |              |    |   |            |            |   |  |        |       
|Net loss |                                                   | $                                    | (197,486 | )            |   |  | (14.3 | %)           |    | $ | (3,605,537 | )          |   |  | (404.4 | %)    
|         |                                                   |                                      |          |              |   |  |       |              |    |   |            |            |   |  |        |       

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CAPITAL EXPENDITURES

Capital expenditures decreased $79.4 million (19.3%) to $333.2
million for the three months ended March 31, 2003. The decrease is
primarily due to the completion of the initial network build-out of the
major population centers in which we hold spectrum licenses during
2002. We expect capital expenditures to focus primarily on improving
network coverage, quality and capacity in existing markets during 2003.
In addition, we are planning to deploy Enhanced Data for GSM Evolution
(EDGE) technology in selected areas to increase data transmission
rates beyond those available through our existing General Packet Radio
Service network.

Our share of capital expenditures related to the markets served by
GSM Facilities in most of California, parts of Nevada and the New York
City market is reported as an increase in our investment in GSM
Facilities. Our share of these capital expenditures totaled $113.6
million and $40.3 million for the three months ended March 31, 2003 and
2002, respectively.

The levels 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

We currently apply the provisions of Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements, to account for
revenue arrangements with multiple deliverables, which we adopted
during the year ended December 31, 2000. These types of arrangements
include such transactions as the sale of wireless service with an
accompanying handset. In November 2002, the Emerging Issues Task Force
(EITF) reached a consensus on Issue No. 00-21, Revenue Arrangements
with Multiple Deliverables, which affects revenue arrangements entered
into by us in fiscal periods beginning after June 15, 2003. The EITF
requires that revenue arrangements with multiple deliverables be
divided into separate units of accounting if the deliverables in the
arrangement meet specific criteria and generally requires that
arrangement consideration be allocated among the separate units of
accounting based on their relative fair values. Revenue recognition is
then considered separately for each unit of accounting. We are
currently assessing the impact of this EITF on our financial position,
results of operations and cash flows.

In February 2003, we adopted Financial Accounting Standards Board
(FASB) Interpretation Number (FIN) 46, Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires
certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties.
FIN 46 is effective immediately for all new variable interest entities
created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions
of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. Adoption of this Interpretation did not
have a material impact on our interim financial statements.

In April 2003, the FASB issued SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. SFAS
No. 149 amends and clarifies the accounting guidance on derivative
instruments, including certain derivative instruments embedded in other
contracts, and hedging activities that fall within the scope of SFAS
No. 133, Accounting for Derivative Instruments and Hedging
Activities. SFAS No. 149 amends SFAS No. 133 and certain other
existing pronouncements, which will result in more consistent reporting
of contracts that are derivatives in their entirety or that contain
embedded derivatives that warrant separate accounting. SFAS No. 149 is
effective for contracts entered into or modified after June 30, 2003,
with certain exceptions, and for hedging relationships designated after
June 30, 2003. The guidance is to be applied prospectively. We are
currently assessing the impact of this Statement on our financial
position, results of operations and cash flows.

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AVAILABLE INFORMATION

T-Mobile is a reporting company under the Securities Exchange Act
of 1934, as amended, and files reports and other information with the
SEC. The public may read and copy any of our filings at the SECs
Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549.
Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330. Because we make filings
to the SEC electronically, access to this information is available at
the SECs Internet website (www.sec.gov). This site contains reports
and other information regarding issuers that file electronically with
the SEC. We make available, free of charge through our website, our
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, and amendments to these reports, as soon as
reasonably practicable after we have electronically filed such material
with, or furnished such material to, the SEC. Our Internet website is
www.t-mobile.com.

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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 the filing 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 13a 14(c) and 15d-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
its consolidated subsidiaries would be made known to them by others
within these entities, particularly during the period in which this
Quarterly Report is being prepared.

Changes in internal controls

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

22



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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,
2002, there are no material, pending legal proceedings to which we are a
party or of which any of our 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 furnished a Current Report on Form 8-K dated March 10, 2003, in
which we reported under Item 9 that on March 10, 2003, we filed with
the SEC our Annual Report on Form 10-K for the year ended December 31,
2002 accompanied, as correspondence, by a transmittal letter and
certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

We filed a Current Report on Form 8-K dated March 21, 2003, in
which we reported under Item 5 that Robert Dotson was appointed Chief
Executive Officer of T-Mobile USA, Inc.

23



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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.

|             |  |                   
|------------ |  | ------------------
|May 14, 2003 |  | T-MOBILE USA, INC.





|           |                          |       |                                                   |      |             
|---------- | ------------------------ | ----- | ------------------------------------------------- | ---- | ------------
|Signatures |                          | Title |                                                   | Date
|           |                          |       |                                                   |      |             
|By:        | /s/ BRIAN W. KIRKPATRICK |       | Executive Vice President, Chief Financial Officer |      | May 14, 2003
|           |                          |       | (Principal Financial Officer)                     |      |             
|           | Brian W. Kirkpatrick     |       |                                                   |      |             
|           |                          |       |                                                   |      |             
|By:        | /s/ ALLYN P. HEBNER      |       | Vice President and Controller                     |      | May 14, 2003
|           |                          |       | (Principal Accounting Officer)                    |      |             
|           | Allyn P. Hebner          |       |                                                   |      |             

24



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##### Table of Contents



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

I, Robert Dotson, 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
functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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: May 14, 2003 |  | By:    | /s/ Robert Dotson                    
|                    |  | Name:  | Robert Dotson                        
|                    |  | Title: | President and Chief Executive Officer

25



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##### Table of Contents



CERTIFICATION PURSUANT TO SECTION
302 OF
THE 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
functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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: May 14, 2003 |  | By:    | /s/ Brian W. Kirkpatrick                            
|                    |  | Name:  | Brian W. Kirkpatrick                                
|                    |  | Title: | Executive Vice President and Chief Financial Officer

26