SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

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


(Mark One)

[x]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended September 30, 2001

                                       or

[ ]  Transition  report  pursuant  to  Section  13 or  13(d)  of the  Securities
     Exchange Act of 1934

                        Commission file number: 333-51240


                                Horizon PCS, Inc.
             (Exact name of Registrant as specified in its charter)


          Delaware                                        31-1707839
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                               68 East Main Street
                          Chillicothe, Ohio 45601-0480
                    (Address of principal executive offices)

                                 (740) 772-8200
                         (Registrant's telephone number,
                             including area code).

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     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____

                         Outstanding common stock, as of
                               November 5, 2001:
                        No shares of class A common stock
                    58,471,934 shares of class B common stock


<PAGE>

                              SECOND QUARTER REPORT

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
<S>                                                                                          <C>
                                                                                             Page
                                                                                             ----
PART I FINANCIAL INFORMATION                                                                    1

Item 1.    Financial Statements
           Condensed Consolidated Balance Sheets as of September 30, 2001 (unaudited)
           and December 31, 2000                                                                1

           Condensed Consolidated Statements of Operations for the three
           and nine months ended September 30, 2001 and September 30, 2000 (unaudited)          3

           Condensed Consolidated Statements of Comprehensive Income for the three
           and nine months ended September 30, 2001 and September 30, 2000 (unaudited)          4

           Condensed Consolidated Statements of Cash Flows for the nine months
           ended September 30, 2001 and September 30, 2000 (unaudited)                          5

           Notes to the Interim Condensed Consolidated Financial Statements (unaudited)         6

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                                           12

Item 3.    Quantitative and Qualitative Disclosures About Market Risk                          21

PART II    OTHER INFORMATION                                                                   22

Item 2.    Changes in Securities and Use of Proceeds                                           22

Item 5.    Other Information                                                                   22

Item 6.    Exhibits and Reports on Form 8-K                                                    34
</TABLE>

Note:

The Condensed  Consolidated  Financial  Statements  included herein are those of
Horizon  PCS,  Inc.  ("Horizon  PCS").  Horizon  PCS is the issuer of 14% Senior
Discount Notes due 2010 (the "Notes"). In March 2001, the Notes were the subject
of an exchange offer which was registered with the SEC (file No. 333-51238). The
Co-Registrants  are Horizon  Personal  Communications,  Inc. and Bright Personal
Communications Services, LLC (the "Operating Companies"), which are wholly-owned
subsidiaries  of Horizon PCS.  Each of the  Operating  Companies  has provided a
full,  unconditional,  joint and several  guaranty of Horizon  PCS'  obligations
under the Notes.  Horizon PCS has no operations  separate from its investment in
Operating  Companies.  Pursuant to Rule 12h-5 of the Securities Exchange Act, no
separate  financial  statements and other  disclosures  concerning the Operating
Companies  other  than  narrative  disclosures  set  forth  in  Note  9  to  the
Consolidated Financial Statements have been presented herein. As used herein and
except as the context otherwise may require, the "Company," "we," "us," "our" or
"Horizon PCS" means, collectively, Horizon PCS and the Operating Companies.

                                      -i-
<PAGE>

                         PART I - FINANCIAL INFORMATION
                         ITEM 1. - FINANCIAL STATEMENTS

HORIZON PCS, INC.

Condensed Consolidated Balance Sheets
As of September 30, 2001 (Unaudited) and December 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                           <C>                   <C>
                                                                               September 30,         December 31,
                                                                                   2001                 2000
                                                                              ---------------       ---------------
                                                                               (unaudited)
ASSETS
------
CURRENT ASSETS:
   Cash and cash equivalents                                                  $   38,205,004        $  191,417,394
   Accounts receivable - subscriber, less allowance for doubtful accounts of
     $943,000 and $901,000 at September 30, 2001 and
     December 31, 2000, respectively                                              10,302,927             3,259,634
   Interest receivable, prepayments and other                                      1,339,551             4,338,578
   Receivable from affiliate                                                               -               741,453
   Equipment inventory                                                             3,569,423             3,850,335
   Short-term investments                                                                  -             2,895,646
                                                                              ---------------       ---------------
              Total current assets                                                53,416,905           206,503,040
                                                                              ---------------       ---------------

INVESTMENTS AND OTHER ASSETS:
   Investment in Parent                                                                    -             1,120,262
   Intangible assets, net                                                         50,743,769            52,879,934
   Unamortized debt expense and other                                             17,438,200            14,855,469
                                                                              ---------------       ---------------
              Total investments and other assets                                  68,181,969            68,855,665
                                                                              ---------------       ---------------

PROPERTY AND EQUIPMENT:
   In service                                                                    154,569,691            72,017,575
   Less - Accumulated depreciation                                               (20,095,260)           (9,259,862)
                                                                              ---------------       ---------------
              Property and equipment in service, net                             134,474,431            62,757,713

   Construction work in progress                                                  58,984,470            46,944,132
                                                                              ---------------       ---------------

              Total property and equipment                                       193,458,901           109,701,845
                                                                              ---------------       ---------------

              Total assets                                                     $ 315,057,775         $ 385,060,550
                                                                              ===============       ===============
</TABLE>


(Continued on next page)


                                       1
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Balance Sheets (continued)
As of September 30, 2001 and December 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                                           <C>                   <C>
                                                                              September 30,          December 31,
                                                                                   2001                  2000
                                                                              ---------------       ---------------
                                                                               (unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES:
   Accounts payable and accrued liabilities                                    $  28,073,645         $  42,762,050
    Payable to Parent                                                                338,142               427,747
    Payable to affiliates                                                            719,477             1,114,727
                                                                              ---------------       ---------------
              Total current liabilities                                           29,131,264            44,304,524
                                                                              ---------------       ---------------

DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
    Long-term debt                                                               202,701,070           185,283,104
    Deferred income and other liabilities                                         11,811,646             8,712,404
                                                                              ---------------       ---------------
              Total deferred credits and other long-term liabilities             214,512,716           193,995,508
                                                                              ---------------       ---------------

              Total liabilities                                                  243,643,980           238,300,032
                                                                              ---------------       ---------------

COMMITMENTS AND CONTINGENCIES

CONVERTIBLE PREFERRED STOCK                                                      142,588,842           134,421,881

STOCKHOLDERS' EQUITY (DEFICIT):
   Preferred stock, 10,000,000 shares authorized, none issued or
     outstanding, at $0.0001 par value                                                     -                     -
   Common stock - class A, 300,000,000 shares authorized, none issued
     or outstanding, at $0.0001 par value                                                  -                     -
   Common stock - class B, 75,000,000 shares authorized,  58,485,000
     issued, 58,471,934 outstanding at September 30, 2001 and December
     31, 2000, at $0.0001 par value                                                    5,849                 5,849
   Treasury stock - class B, 13,066 shares, at $8.50 per share                      (111,061)             (111,061)
   Accumulated other comprehensive income (loss)                                    (679,181)                    -
   Additional paid-in capital                                                     91,852,117            91,617,653
   Deferred stock compensation                                                    (1,743,733)           (2,275,444)
   Retained deficit                                                             (160,499,038)          (76,898,360)
                                                                              ---------------       ---------------
              Total stockholders' equity (deficit)                               (71,175,047)           12,338,637
                                                                              ---------------       ---------------

              Total liabilities and stockholders' equity (deficit)            $  315,057,775        $  385,060,550
                                                                              ===============       ===============
</TABLE>


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

                                       2
<PAGE>
HORIZON PCS, INC.

Condensed Consolidated Statement of Operations
For the Three and Nine Months Ended September 30, 2001 and September 30, 2000
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                 <C>              <C>                 <C>             <C>
                                                       For the Three Months Ended           For the Nine Months Ended
                                                             September 30,                        September 30,
                                                    ---------------------------------    -------------------------------
                                                         2001             2000                2001            2000
                                                    ---------------  ----------------    --------------- ---------------
OPERATING REVENUES:
   Subscriber revenues                              $   21,390,868   $   4,977,081       $  48,988,849   $  10,887,364
   Roaming revenue                                      11,792,956       1,815,699          25,645,305       3,751,911
   Equipment revenues                                    2,020,282         649,630           4,595,019       1,744,875
                                                    ---------------  ----------------    --------------- ---------------
              Total operating revenues                  35,204,106       7,442,410          79,229,173      16,384,150
                                                    ---------------  ----------------    --------------- ---------------

OPERATING EXPENSES:
   Cost of services (exclusive of item shown
     separately below)                                  28,653,596       7,506,243          67,164,170      16,229,777
   Cost of equipment                                     4,125,835       2,118,308           8,628,244       5,138,209
   Selling and Marketing                                13,189,111       4,343,890          31,162,496       8,536,082
   General and Administrative expenses
     (exclusive of item shown separately below)          7,170,322       3,793,284          19,240,851       8,142,731
   Non-cash compensation expense                           177,237         151,427           1,256,611         323,666
   Depreciation and amortization                         5,158,645       1,687,511          12,980,231       3,466,854
                                                    ---------------  ----------------    --------------- ---------------
              Total operating expenses                  58,474,746      19,600,663         140,432,603      41,837,319
                                                    ---------------  ----------------    --------------- ---------------

OPERATING LOSS                                         (23,270,640)    (12,158,253)        (61,203,430)    (25,453,169)

   Gain (Loss) on exchange of stock                              -       1,037,666            (399,673)     11,550,866

   Interest income and other, net                          580,822         443,037           4,846,253         973,554

   Interest expense, net                                (5,996,762)     (1,823,270)        (18,674,198)     (3,561,389)
                                                    ---------------  ----------------    --------------- ---------------

LOSS ON CONTINUING OPERATIONS BEFORE INCOME TAX
   EXPENSE                                             (28,686,580)    (12,500,820)        (75,431,048)    (16,490,138)
                                                    ---------------  ----------------    --------------- ---------------

INCOME TAX EXPENSE                                               -       4,874,910                   -       2,844,275
                                                    ---------------  ----------------    --------------- ---------------

LOSS ON CONTINUING OPERATIONS                          (28,686,580)    (17,375,730)        (75,431,048)    (19,334,413)

DISCONTINUED OPERATIONS
     Income from discontinued operations, net of
       tax expense of $72,763 for the nine months
       ended September 30, 2000                                  -               -                   -         141,245
                                                    ---------------  ----------------    --------------- ---------------

LOSS BEFORE EXTRAORDINARY ITEM                         (28,686,580)    (17,375,730)        (75,431,048)    (19,193,168)

EXTRAORDINARY LOSS, NET OF TAX BENEFIT OF
    $262,000                                                     -        (486,323)                  -        (486,323)
                                                    ---------------  ----------------    --------------- ---------------

NET LOSS                                               (28,686,580)    (17,862,053)        (75,431,048)    (19,679,491)
                                                    ---------------  ----------------    --------------- ---------------

PREFERRED STOCK DIVIDEND                                (2,816,053)              -          (8,169,630)              -
                                                    ---------------  ----------------    --------------- ---------------

NET LOSS AVAILABLE TO COMMON
    STOCKHOLDERS                                    $  (31,502,633)  $ (17,862,053)      $ (83,600,678)  $ (19,679,491)
                                                    ===============  ================    =============== ===============

BASIC AND DILUTED LOSS PER SHARE:

Basic and diluted loss per share from continuing
     operations                                     $        (0.54)  $       (0.30)      $       (1.43)  $       (0.35)
Basic and diluted income per share from
     discontinued operations                                     -               -                   -               -
Basic and diluted loss per share from
     extraordinary item                                          -           (0.01)                  -           (0.01)
                                                    ---------------  ----------------    --------------- ---------------
Net loss                                             $       (0.54)  $       (0.31)      $       (1.43)  $       (0.36)
                                                    ===============  ================    =============== ===============
Weighted average shares outstanding                     58,471,934      58,485,000          58,471,934      55,417,787
                                                    ===============  ================    =============== ===============

</TABLE>


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


                                       3
<PAGE>
HORIZON PCS, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)
For the Three and Nine Months Ended September 30, 2001 and September 30, 2000
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                         <C>                <C>              <C>                <C>
                                                  Three Months Ended                    Nine Months Ended
                                                    September 30,                          September 30,
                                            --------------------------------    ----------------------------------
                                                 2001              2000              2001               2000
                                            ---------------    -------------    ---------------    ---------------

Net loss available to common stockholders   $ (31,502,633)     $(17,862,053)    $ (83,600,678)     $ (19,679,491)

Other Comprehensive Loss:
     Net unrealized loss on derivative
        instruments                              (326,108)                -          (679,181)                 -
                                            ---------------    -------------    ---------------    ---------------
Total Comprehensive Income (Loss)           $ (31,828,741)     $(17,862,053)    $ (84,279,859)     $ (19,679,491)
                                            ===============    =============    ===============    ===============
</TABLE>



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


                                       4
<PAGE>
HORIZON PCS, INC.

Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2001 and 2000
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                             <C>                  <C>
                                                                    Nine Months Ended September 30,
                                                                ----------------------------------------
                                                                       2001                 2000
                                                                -------------------  -------------------

NET CASH FLOWS USED IN OPERATING ACTIVITIES
     Net Loss                                                   $  (75,431,048)      $   (19,679,491)

    Adjustments to reconcile net loss to net cash provided by
         (used in) operating activities, net of effect of
         acquisition:
         Depreciation and amortization                              12,980,231             3,521,469
         Non-cash interest expense                                  13,804,012               775,540
         Non-cash compensation expense                               1,256,611               323,666
         Other non-cash expense                                        234,464               809,566
         (Gain) Loss on exchange of stock                              399,673           (11,550,866)
         Extraordinary Loss                                                  -               486,323
         Loss on disposal of fixed assets                                    -              (268,089)
         Uncollectible receivables                                   3,780,912               793,893
         Change in assets, (increase) decrease:
             Accounts Receivable                                   (10,824,205)           (2,497,782)
             Equipment inventory, at cost                              280,912            (1,173,432)
             Interest, prepayments and other                         2,999,026              (225,953)
         Change in liabilities, increase (decrease):
            Accounts Payable, net                                  (10,370,954)              816,185
            Accrued liabilities                                     (3,964,560)           19,774,939
            Accrued interest                                          (352,891)               72,917
            Postretirement benefit obligation                          156,753               326,275
         Change in intercompany payable (receivable)                   153,869             8,888,182
         Change in other assets and liabilities, net                   411,398               169,210
                                                                -------------------  -------------------
                                  Total adjustments                  10,945,251           21,042,043
                                                                -------------------  -------------------
              Net cash provided by (used in) operating
                activities                                         (64,485,797)            1,362,552
                                                                -------------------  -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures, net                                       (90,350,650)          (49,809,628)
   Investment in Parent                                                      -           (11,835,000)
   Dividend received                                                    (4,311)                    -
   Proceeds from the sale of fixed assets                                    -               702,000
   Notes payable for investment in joint venture - repayments                -            (1,032,000)
   Proceeds from return of investments in RTFC subordinated
    capital certificates                                             2,895,646                     -
   Cash acquired in acquisition of BPCS                                      -             4,926,803
   Equity in investments, net                                                -                28,555
                                                                -------------------  -------------------
              Net cash used in investing activities                (87,459,315)          (57,019,270)
                                                                -------------------  -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Capital contributions                                                     -             1,310,462
   Repurchase of class B common stock                                        -              (111,061)
   Dividends paid                                                            -               (18,309)
   Intercompany advances                                               (89,605)           (4,307,269)
   Convertible preferred stock                                               -           126,500,000
   Stock issuance costs                                                      -            (7,009,822)
   Deferred financing fees and other                                (1,177,673)          (14,630,843)
   Notes payable - borrowings                                                -           189,539,942
                                                                -------------------  -------------------
              Net cash provided by (used in) financing
                activities                                          (1,267,278)          291,273,100
                                                                -------------------  -------------------

NET INCREASE / (DECREASE)  IN CASH AND CASH EQUIVALENTS           (153,212,390)          235,616,382

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                     191,417,394               146,806
                                                                -------------------  -------------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                        $   38,205,004       $   235,763,188
                                                                ===================  ===================

</TABLE>

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

                                       5
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)
--------------------------------------------------------------------------------

(1)  General
     -------

     The results of operations for the interim periods shown are not necessarily
     indicative  of the  results  to be  expected  for the fiscal  year.  In the
     opinion of  management,  the  information  contained  herein  reflects  all
     adjustments necessary to make a fair statement of the results for the three
     and nine months ended September 30, 2001 and 2000. All such adjustments are
     of a normal recurring nature.

(2)  Organization and Business Operations
     ------------------------------------

     On April 26, 2000,  Horizon  Telcom,  Inc. (the Parent) formed Horizon PCS,
     Inc.  (the  Company  or HPCS).  The  Company  primarily  provides  wireless
     personal communications services (PCS). The Company entered into management
     agreements  with Sprint PCS,  the PCS group of Sprint  Corporation,  during
     1998 and 1999. These agreements,  as amended,  provide the Company with the
     exclusive  right to  build,  own,  and  manage a  wireless  voice  and data
     services  network in  markets  located in Ohio,  West  Virginia,  Kentucky,
     Virginia,  Tennessee, Indiana, Maryland,  Pennsylvania,  New York, Ohio and
     New Jersey  under the Sprint PCS brand.  HPCS is  required to build out the
     wireless network  according to Sprint PCS  specifications.  The term of the
     agreements is 20 years with three successive 10-year renewal periods unless
     terminated  by either  party under  provisions  outlined in the  management
     agreements.  The management agreements commenced in June 1998, but payments
     of the  management  fee did not  commence  until HPCS  converted to a fully
     branded  Sprint  PCS  network  partner  in  October  1999.  The  management
     agreements include  indemnification  clauses between the Company and Sprint
     PCS to indemnify each party against claims arising from  violations of laws
     or  the  management  agreements,  other  than  liabilities  resulting  from
     negligence or willful misconduct of the party seeking to be indemnified.

     On June 27, 2000,  Horizon Telcom,  Inc.  transferred its 100% ownership of
     Horizon  Personal  Communications,  Inc.  (HPC)  to  HPCS in  exchange  for
     53,806,200  shares  of stock of HPCS (as  adjusted  for the  1.1697-for-one
     stock  split in the form of a stock  dividend  effective  on  September  8,
     2000).  This transfer was accounted  for as a  reorganization  of companies
     under common control in a manner similar to a  pooling-of-interests  in the
     consolidated financial statements.  Accordingly, the reorganization and the
     adjusted number of shares outstanding have been reflected retroactively and
     the prior financial statements of Horizon Personal Communications, Inc. are
     presented as those of HPCS. Since that date, HPC conducts its business as a
     wholly-owned subsidiary of the Company.

(3)  Summary of Significant Accounting Policies
     ------------------------------------------

     Note 2 to  the  Notes  to  the  Consolidated  Financial  Statements  in the
     Company's December 31, 2000 Financial  Statements  summarizes the Company's
     significant accounting policies.

     Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
     been  prepared  in  accordance  with  the  rules  and  regulations  of  the
     Securities and Exchange Commission (SEC).  Certain information and footnote
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed  or  omitted  pursuant  to  such  rules  and  regulations.  These
     statements  include  the  accounts  of the  Company  and  its  wholly-owned
     subsidiaries,  including HPC and Bright Personal  Communications  Services,
     LLC (Bright),  from the date of its  acquisition in June 2000. All material
     intercompany transactions and balances have been eliminated.

     Revenue Recognition

     The Company sells handsets and  accessories  which are recorded at the time
     of the sale as equipment revenue. At the time the handset is purchased, the
     subscriber  purchases  a service  package  which is  recognized  monthly as
     service is provided and is included as subscriber revenue.  Roaming revenue
     is  recorded  when  Sprint PCS  subscribers,  other  Sprint  PCS  affiliate
     subscribers and non-Sprint PCS subscribers roam onto the Company's network.

     The accounting  policy for the  recognition of activation fee revenue is to
     record the revenue over the periods  such  revenue is earned in  accordance
     with the current  interpretations of SEC Staff Accounting  Bulletin No. 101


                                       6
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)
--------------------------------------------------------------------------------

     (SAB  101),  Revenue  Recognition  in  Financial  Statements.  Accordingly,
     activation  fee revenue  and direct  customer  activation  expense has been
     deferred and will be recorded over the average life for those customers (36
     months) that are assessed an activation fee.

     Net Income (Loss) per Share

     The Company  computes net income (loss) per common share in accordance with
     SFAS No. 128, Earnings per Share and SEC Staff Accounting  Bulletin No. 98.
     Basic and diluted loss per share from continuing  operations is computed by
     dividing loss on continuing operations, less preferred stock dividends (the
     numerator),  for each period, by the  weighted-average  outstanding  common
     shares (the denominator).

     Basic and diluted net loss  available to common  stockholders  per share of
     common  stock  is  computed  by  dividing  net  loss  available  to  common
     stockholders  for each period by the  weighted-average  outstanding  common
     shares. No conversion of common stock  equivalents  (options or convertible
     securities) has been assumed in the calculations  since the effect would be
     antidilutive.  As a  result,  the  number of  weighted-average  outstanding
     common  shares as well as the amount of net loss per share are the same for
     basic  and  diluted  net  loss  per  share  calculations  for  all  periods
     presented.  There are three  items  that  could  potentially  dilute  basic
     earnings  per share in the  future.  These items  include the common  stock
     options,  the stock purchase warrants and the convertible  preferred stock.
     These  items  will be  included  in the fully  diluted  earnings  per share
     calculation when dilutive.

     Financial Instruments

     The  Company's  policies  do not  permit  the use of  derivative  financial
     instruments for speculative purposes.  The Company uses interest rate swaps
     to manage  interest rate risk.  The net amount paid or received on interest
     rate swaps is recognized as an adjustment to interest expense.

     Horizon PCS has adopted FASB  Statement No. 133,  Accounting for Derivative
     Instruments and Hedging  Activities  (SFAS No. 133), as amended by SFAS No.
     138, Accounting for Derivative  Instruments and Certain Hedging Activities.
     The statement established accounting and reporting standards for derivative
     instruments and hedging  activities that require an entity to recognize all
     derivatives as an asset or liability  measured at fair value.  Depending on
     the  intended  use of the  derivative,  changes  in its fair  value will be
     reported  in the period of change as either a  component  of  earnings or a
     component  of  other  comprehensive  income.  Pursuant  to  the  derivative
     criteria  established by SFAS No. 133, an item with exposure to variability
     in expected  future cash flows that is attributable to a particular risk is
     considered  a cash flow  hedge.  The  exposure  may be  associated  with an
     existing  recognized asset or liability such as future interest payments on
     variable-rate debt.

     During the first quarter of 2001, Horizon PCS entered into an interest rate
     swap  on  one  half   ($25,000,000)   of  the  current   outstanding   debt
     ($50,000,000)  borrowed under the senior secured credit facilities.  During
     the third  quarter,  Horizon PCS entered into an interest  rate swap on the
     remaining  $25,000,000.  The  swaps  have been  designated  as a hedge of a
     portion of the future  variable  interest  cash flows  expected  to be paid
     under  these  facilities.  The  Company  recorded  an  unrealized  loss  of
     approximately  $326,000 and $679,000,  in other comprehensive loss, for the
     three and nine months ended September 30, 2001,  respectively.  The Company
     also recognized other expense of  approximately  $7,000 and $84,000 for the
     three and nine months ended  September 30, 2001,  related to the decline in
     effectiveness of the hedge.

     Recent Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
     Business  Combinations  and SFAS No.  142,  Goodwill  and Other  Intangible
     Assets. SFAS No. 141 addresses  financial  accounting and reporting for all
     business  combinations and requires that all business  combinations entered
     into  subsequent to June 2001 be recorded under the purchase  method.  This
     statement  also addresses  financial  accounting and reporting for goodwill
     and  other  intangible  assets  acquired  in  a  business   combination  at
     acquisition.  SFAS No. 142 addresses financial accounting and reporting for
     intangible assets acquired  individually or with a group of other assets at
     acquisition.   This  statement  also  addresses  financial  accounting  and
     reporting  for goodwill and other  intangible  assets  subsequent  to their
     acquisition.

                                       7
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)
--------------------------------------------------------------------------------

     These  statements  will be  adopted  by the  Company  on  January  1, 2002.
     Goodwill  amortization  will cease as of December  31, 2001 and the Company
     will be required to complete an impairment  test of the remaining  goodwill
     balance  annually (more  frequently if impairment  indicators  arise).  The
     Company has not yet determined  the financial  impact the adoption of these
     pronouncements   will  have  on  its  financial   position  or  results  of
     operations.  As  of  September  30,  2001,  Horizon  PCS  has  goodwill  of
     approximately  $7,288,000  related to the acquisition of Bright PCS in June
     2000. The valuation of this goodwill would be subject to an impairment test
     at the date of adoption.

     In June 2001, the Financial Accounting Standards Board issued SFAS No. 143,
     Accounting  for Asset  Retirement  Obligations.  This  statement  addresses
     financial  accounting  and reporting for  obligations  associated  with the
     retirements  of  tangible   long-lived  assets  and  the  associated  asset
     retirement  costs.  It applies  to legal  obligations  associated  with the
     retirement  of  long-lived   assets  that  result  from  the   acquisition,
     construction,  development  and (or) the normal  operation  of a long-lived
     asset. The Company will adopt this statement effective January 1, 2003. The
     Company has not yet determined the financial  impact the adoption will have
     on its financial position or results of operations.

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
     144,  Accounting for the Impairment or Disposal of Long-Lived Assets.  SFAS
     No. 144 addresses financial  accounting and reporting for the impairment of
     long-lived  assets. The statement  supersedes SFAS No. 121,  Accounting for
     the  Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets  to Be
     Disposed Of, and the accounting and reporting provisions of APB Opinion No.
     30. SFAS No. 144 removes  goodwill from its scope, as goodwill is addressed
     in the  impairment  test  described  above under SFAS No. 142. SFAS No. 144
     also  describes  the cash  flow  estimation  approach  used in  determining
     impairment.  The  Company  will adopt SFAS No. 144 on January 1, 2002.  The
     Company has not yet determined the financial  impact the adoption will have
     on its financial position or results of operations.

     Reclassifications

     Certain prior year amounts have been  reclassified to conform with the 2001
     presentation.

(4)  Acquisitions
     ------------

     During 1999 the Company entered into a joint venture  agreement through the
     purchase of 25.6% of Bright Personal  Communications  Services, LLC (BPCS).
     The investment was accounted for under the equity method. The joint venture
     was established in October 1999 to provide personal communications services
     in Ohio, Indiana, and Michigan as a Sprint PCS network partner.

     On June 27,  2000,  the Company  acquired  the  remaining  74.4% of BPCS in
     exchange for 8% of the  Company's  class B common stock  (4,678,800  shares
     valued at approximately  $34,000,000) and  approximately 40% of the Horizon
     Telcom,   Inc.   common  stock  owned  by  HPC  (31,912  shares  valued  at
     $15,300,000).

     This  acquisition  was treated as a purchase for accounting  purposes.  The
     consolidated statement of operations includes the results of BPCS from June
     28, 2000.

     In conjunction  with this  transaction,  the Company also acquired the BPCS
     management  agreement  with  Sprint PCS and,  with it, the right to operate
     using Sprint PCS licenses in BPCS'  markets.  The Company has recognized an
     intangible asset totaling  $33,000,000 related to the management  agreement
     which will be amortized  over 20 years,  the initial term of the underlying
     management  agreement.  Amortization  commenced in June 2000.  Amortization
     expense  for  the  three  and  nine  months  ended  September  30,  2001 is
     approximately  $427,000 and $1,280,000;  amortization expense for the three
     and  nine  months  ended  September  30,  2000 is  $427,000  and  $441,000,
     respectively.

     The  purchase  price  exceeded  the fair  market  value  of the net  assets
     acquired  by  approximately  $7,778,000.  The  resulting  goodwill is being
     amortized on a straight-line basis over 20 years. Amortization commenced in
     June  2000.  Amortization  expense  for the  three  and nine  months  ended
     September 30, 2001 was  approximately  $97,000 and  $292,000;  amortization
     expense for the three and nine months ended  September  30, 2000 is $99,000
     and $100,000 (see Note 3).

                                       8
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)
--------------------------------------------------------------------------------

     The purchase price allocation of the fair value of the BPCS assets acquired
     and liabilities assumed is summarized below:

              Working capital  . . . . . . . . .  . . . . . . $ 2,072,000
              Property and equipment   . . . . .. . . . . . .   6,328,000
              Sprint PCS licenses  . . . . . . .. . . . . . .  33,000,000
              Goodwill . . . . . . . . . . . . .. . . . . . .   7,777,752
              Other assets . . . . . . . . . . .. . . . . . .     122,000

     The following  unaudited pro forma summary  presents the net revenues,  net
     loss and loss per share from the combination of the Company and BPCS, as if
     the  acquisition had occurred at the beginning of the 2000 fiscal year. The
     pro forma  information  is provided for  information  purposes  only. It is
     based on historical information and does not necessarily reflect the actual
     results that would have  occurred nor is it  necessarily  indicative of the
     future results of operations of the combined enterprise:
<TABLE>
<CAPTION>
<S>                                                      <C>                        <C>
                                                         Three Months Ended         Nine Months Ended
                                                         September 30, 2000         September 30, 2000
                                                         ------------------         ------------------
          Net revenue. . . . . . . . . . . . . . . .         $  7,442,410            $    15,877,033
          Net loss . . . . . . . . . . . . . . . . .          (17,862,056)               (20,765,066)
          Basic and diluted loss per share . . . . .                (0.31)                     (0.37)
</TABLE>

     Prior to acquisition,  BPCS had not commenced revenue-generating operations
     and was paying a management  fee to HPCS.  The management fee recognized by
     HPCS in the period prior to the acquisition date is included in net revenue
     in the  accompanying  statement of operations.  In the pro forma disclosure
     above, this management fee revenue is fully eliminated.


(5)  Discontinued Operations
     -----------------------

     Effective  April 1,  2000,  the  Company  transferred  its  Internet,  long
     distance  and other  businesses  unrelated to its  wireless  operations  to
     Horizon Technology,  a wholly-owned subsidiary of the Parent.  Accordingly,
     the results of operations  for these  business  units have been reported as
     discontinued operations in the prior period.

     Operating  results for the nine months ended  September  30, 2000 for these
     businesses are as follows:
<TABLE>
<CAPTION>
<S>                                                                           <C>
                                                                                Nine Months
                                                                                   Ended
                                                                               September 30,
                                                                                    2000
                                                                              -----------------
          Total revenue . . . . . . . . . . . . . . . . . . . . . . . .            $ 1,046,313
          Operating income before income taxes  . . . . . . . . . . . .                214,008
          Earnings before income taxes. . . . . . . . . . . . . . . . .                214,008
          Income tax expense. . . . . . . . . . . . . . . . . . . . . .                (72,763)
                                                                              -----------------
          Net income from discontinued operations . . . . . . . . . . .            $   141,245
                                                                              =================
</TABLE>

                                       9
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)
--------------------------------------------------------------------------------

(6)  Long-term Debt
     --------------

     On June 29, 2001, the Company  amended its senior secured credit  agreement
     with the  bank  group.  This  modification  amended  and  restated  certain
     covenants,  including  EBITDA and revenue  thresholds.  The amendment  also
     increased  the base  interest rate by 25 basis points to LIBOR plus 3.75% -
     4.25%.  The Company paid an amendment  fee of $875,000 to the bank group in
     June 2001,  which is being  amortized over the remaining life of the senior
     secured credit agreement.

(7)  Commitments and Contingencies
     -----------------------------

     Operating Leases

     The  Company  leases  office  space and  various  equipment  under  several
     operating  leases.  In  October  1999,  the  Company  signed a tower  lease
     agreement  with a third party whereby the Company will lease the towers for
     substantially  all of the  Company's  cell  sites.  The  tower  leases  are
     operating  leases  with a term of five to ten years with three  consecutive
     five-year renewal option periods.  In addition,  the Company will receive a
     site  development  fee from the tower lessor for certain  tower sites which
     the lessor constructs on behalf of the Company.  Such fees are deferred and
     amortized over the life of the related lease.

     Construction Expenditures

     Construction  expenditures  in 2001 are estimated to be  $130,000,000.  The
     majority of the  estimated  expenditures  are for the  build-out of the PCS
     Network.

     Legal Matters

     The  Company  is party to legal  claims  arising  in the  normal  course of
     business. Although the ultimate outcome of the claims cannot be ascertained
     at this time, it is the opinion of management  that none of these  matters,
     when resolved, will have a material adverse impact on the Company's results
     of operations, cash flows or financial condition.

     Vendor Agreements

     In August  1999,  the Company  entered  into a wholesale  network  services
     agreement  with a third-party  vendor.  The initial term is through June 8,
     2008 with four automatic ten-year  renewals.  This agreement was amended in
     the third  quarter of 2001.  Under the  amended  agreement,  Horizon PCS is
     obligated to pay fixed  minimum  monthly fees until  December,  2003,  at a
     lower  rate per  minute  than the prior  agreement.  Usage in excess of the
     monthly minute allowance is charged at a set rate per minute. The aggregate
     amount of future minimum payments at September 30, 2001 is as follows:


          2001..........................................        $  5,100,000
          2002..........................................          27,400,000
          2003..........................................          38,600,000
                                                           -----------------
          Total.........................................        $ 71,100,000
                                                           =================

     Under the  amendment,  the vendor is obligated to make certain  upgrades to
     their  network  (3G  technology)  and the vendor  agrees with Sprint PCS to
     modify their network to cause Sprint PCS to be in compliance with the FCC's
     construction requirements for PCS networks.  Horizon PCS is responsible for
     completion of the network modification if the vendor fails to comply.

     Guarantees

     The  senior  discount  notes  are  guaranteed  by  the  Company's  existing
     subsidiaries,  Horizon  Personal  Communications,  Inc. and Bright Personal
     Communications  Services,  LLC,  and will be  guaranteed  by the  Company's
     future  domestic  restricted  subsidiaries.  The Company has no independent


                                       10
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)
--------------------------------------------------------------------------------

     assets or  operations  apart  from its  subsidiaries.  The  guarantees  are
     general unsecured obligations.  Each guarantor unconditionally  guarantees,
     jointly  and  severally,  on a  senior  subordinated  basis,  the  full and
     punctual payment of principal premium and liquidated  damages,  if any, and
     interest on the senior  discount notes when due. If the Company  creates or
     acquires  unrestricted  subsidiaries and foreign  restricted  subsidiaries,
     these  subsidiaries  need not be guarantors.  The ability of holders of the
     senior  discount notes to receive payment on the guarantees is subordinated
     in right of payment to all senior debt, including all obligations under the
     Company's senior secured credit facility.

(8)  Related Parties
     ---------------

     The Company  has  non-interest  bearing  receivables  from and  payables to
     affiliated companies (other subsidiaries of the Parent) related to advances
     made to and received from or for services  received  from these  affiliated
     companies.  At September 30, 2001 and December 31, 2000,  the Company has a
     payable to the Parent for Federal  income  taxes.  The balances due to/from
     related  parties as of  September  30,  2001 and  December  31, 2000 are as
     follows:
<TABLE>
<CAPTION>
<S>                                                                    <C>                <C>
                                                                       September 30,       December 31,
                                                                            2001               2000
                                                                       ---------------    ---------------

           Receivable from affiliate  . . . . . . . . . . . . . .      $            -     $      741,453
           Payable to Parent  . . . . . . . . . . . . . . . . . .             338,142            427,747
           Payable to affiliates  . . . . . . . . . . . . . . . .             719,477          1,307,061

</TABLE>

     During 2001 and 2000 affiliated  companies provided the Company management,
     supervision  and  administrative  services  including  financial  services,
     regulatory  services,  human resource services and other administrative and
     support services.  The cost of these management  services was approximately
     as follows:

<TABLE>
<CAPTION>
<S>                                                                    <C>               <C>
                                                                            2001              2000
                                                                       ---------------   ----------------

           Three months ended September 30 . . . . . . . . . . . .     $    1,493,000     $   1,302,000
           Nine months ended September 30  . . . . . . . . . . . .          4,735,000         3,094,000

</TABLE>





                                       11
<PAGE>

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

     The following  discussion and analysis  should be read in conjunction  with
the  consolidated  financial  statements and the related  notes.  The discussion
contains  forward-looking  statements that involve risks and uncertainties.  Our
actual  results could differ  materially  from the results  anticipated in these
forward-looking statements. See item 5 to this Form 10-Q for further information
regarding several of these risks and uncertainties.

OVERVIEW

     Under our agreements  with Sprint PCS, we manage our network on Sprint PCS'
licensed  spectrum  and have the right to use the  Sprint  and  Sprint PCS brand
names. As of September 30, 2001, we had launched service covering  approximately
6.7 million  residents,  or  approximately  66% of the total  population  in our
territory, and had 146,641 customers.

HISTORY AND BACKGROUND

     Horizon Telcom is a holding  company  which,  in addition to its 92% common
stock ownership of Horizon PCS, owns 100% of The Chillicothe  Telephone Company,
a local  telephone  company in service for 105 years.  Horizon  Telcom also owns
100% of Horizon Services,  which provides administrative services to Horizon PCS
and other Horizon Telcom affiliates,  and 100% of Horizon Technology, a separate
long distance and Internet services business. Prior to providing PCS service, we
were a DirecTV  affiliate.  We sold that  business in 1996.  We also launched an
Internet services  business in 1995, which we transferred to Horizon  Technology
in April 2000.

     The following are key milestones in our business:

     -    In  November  1996,  we  acquired  PCS  licenses  in the FCC's C Block
          auction  giving us the right to  provide  service  to five  markets in
          Ohio,   West  Virginia  and  Kentucky  with  a  total   population  of
          approximately  1.0 million.  In August 1997,  approximately ten months
          after   receiving  our  licenses,   we  launched  PCS  service  as  an
          independent  service  provider  operating  under the Horizon  Personal
          Communications  brand  name.  We were the  third C Block  licensee  to
          launch  PCS  service  in the  United  States and the first to use CDMA
          technology.

     -    In June 1998, we returned all of our FCC licenses except for a portion
          of the license covering our Chillicothe,  Ohio market, in exchange for
          the  forgiveness of our FCC debt. In connection with the return of our
          FCC  licenses,  we agreed to become  one of five  charter  Sprint  PCS
          affiliates.  Our initial grant of markets from Sprint PCS consisted of
          seven  markets  in  Ohio,  West  Virginia  and  Kentucky  with a total
          population of approximately 1.6 million.  This grant included the five
          markets for which we originally  held  licenses.  In November 1998, we
          began  offering  Sprint PCS  service.  However,  we  continued  to use
          Horizon Personal Communications as the primary brand for marketing our
          PCS service.

     -    In August  1999,  Sprint  PCS  granted  us 17  additional  markets  in
          Virginia, West Virginia, Tennessee, Maryland, Kentucky and Ohio with a
          total  population of  approximately  3.3 million.  In conjunction with
          this second grant, we also entered into a network  services  agreement
          with the West Virginia PCS Alliance and Virginia PCS  Alliance,  which
          we  refer  to  as  the  Alliances.   The  Alliances  are  two  related
          independent  PCS providers  offering  services under the NTELOS brand,
          and  whose  network  is  managed  by CFW  Communications.  Under  this
          agreement,  we  obtained  the right to use their  wireless  network to
          provide  Sprint PCS  services  to our  customers  in most of these new
          markets.  Within two months of receiving  our second grant from Sprint
          PCS,  we  were  offering  Sprint  PCS  service  in 16 of  our  markets
          including  eleven markets served under this  agreement.  If we use the
          Alliances'  network to the fullest extent  permitted by our agreement,
          the Alliances'  network would provide  service to markets with a total
          population  of 3.3 million and coverage to 1.8 million  residents,  or
          52% of the total population.

     -    In  September  1999,  Horizon  Telcom,  our parent  company,  sold its
          interest in the towers it owned to SBA Towers,  Inc. for $15.7 million
          and invested  the net  proceeds in us. Prior to the sale,  we had been
          leasing the towers from Horizon Telcom. We now lease those towers from
          SBA. Concurrently with the tower sale, we entered into a build-to-suit
          agreement with SBA for the  construction  of new towers as part of our
          network build-out.  Under the terms of the agreement,  we receive site
          development   fees  and  reduced  lease  rates  for  specified  towers
          constructed by SBA and leased to us as an anchor tenant.

                                       12
<PAGE>

     -    In  September  1999,  we became  one of the  founders  of Bright  PCS,
          receiving a 26% equity interest in exchange for an equity contribution
          of approximately  $3.1 million.  Shortly after our investment,  Bright
          PCS  became  the  exclusive  Sprint  PCS  affiliate  for 13 markets in
          Indiana,  Ohio and Michigan,  with a total population of approximately
          2.4 million. At that time, we also entered into a management agreement
          with  Bright PCS under which we agreed to manage  Bright PCS'  network
          build-out and operations.  We launched service in substantially all of
          the Bright PCS markets in October 2000.

     -    In  December  1999,  we  completed  a  two-month   transition  from  a
          co-branded  marketing  strategy  to  marketing  and selling all of our
          products and services  exclusively  under the "Sprint PCS" brand name,
          which gave us full  access to Sprint  PCS' major  national  retailers.
          Since that transition,  we have  experienced an accelerated  growth in
          our customer base.

     -    In May 2000,  Sprint  PCS  granted  us an  additional  17  markets  in
          Pennsylvania, New York, Ohio and New Jersey with a total population of
          approximately  2.9 million.  In 2000, we  substantially  completed the
          purchase from Sprint PCS of the assets related to our new markets.

     -    In June 2000,  we acquired the remaining 74% of Bright PCS that we did
          not  already  own to become a 100%  owner.  As  consideration  for the
          outstanding  Bright PCS equity, we exchanged 4.7 million shares of our
          class B common  stock  equal to 8% of our  outstanding  shares  of all
          classes  of our  common  stock  prior to the  acquisition,  and 31,912
          shares of Horizon  Telcom common stock equal to 8% of the  outstanding
          shares of Horizon Telcom, which we acquired in February 2000.

     -    On September  26,  2000,  an investor  group led by Apollo  Management
          purchased  $126.5  million  of our  convertible  preferred  stock in a
          private  placement.  Concurrently,  holders of our $14.1 million short
          term  convertible  note (including  accrued  interest of $1.1 million)
          converted it into the same  convertible  preferred  stock purchased by
          the investor group. Concurrently,  the Company received $149.7 million
          from the issuance of $295.0 million of senior  discount notes due 2010
          and $50.0 million of term loans from our $225.0 million senior secured
          credit facility (later increased to a $250.0 million facility).

RESULTS OF OPERATIONS

     Service revenues consist primarily of PCS subscriber  revenues,  Sprint PCS
roaming revenues and non-Sprint PCS roaming  revenues.  PCS subscriber  revenues
consist  primarily  of  monthly  service  fees and other  charges  billed to our
customers  for Sprint PCS  service in our  territory  under a variety of service
plans. Roaming revenues consists of Sprint PCS roaming and travel and non-Sprint
PCS roaming and travel.  We receive Sprint PCS roaming  revenues at a per minute
rate from Sprint PCS or another Sprint PCS affiliate when Sprint PCS subscribers
based  outside of our  territory  use our  portion  of the  Sprint PCS  network.
Non-Sprint  PCS  roaming   revenues   include  payments  from  wireless  service
providers,  other than Sprint PCS, when those providers' subscribers roam on our
network.

     We record 100% of PCS subscriber  revenues from our  customers,  Sprint PCS
roaming  revenues  from  Sprint PCS  subscribers  based  outside our markets and
non-Sprint PCS roaming revenues.  Sprint PCS retains 8% of all collected service
revenue as a management fee.  Collected  service revenues include PCS subscriber
revenues and  non-Sprint  PCS roaming  revenues,  but exclude Sprint PCS roaming
revenues and revenues from sales of equipment. We report the amounts retained by
Sprint PCS as general and administrative expenses.

     Equipment  revenues consist of digital handsets and accessories sold to our
customers through our stores and through our direct sales force.  Certain of our
equipment  sales are made  through  independent  distributors  under  agreements
allowing rights of return on merchandise  unsold by the  distributors.  We defer
recognition of such sales until the merchandise is sold by the distributors.


     The following table sets forth a breakdown of our revenues by type:


<TABLE>
<CAPTION>
<S>                        <C>               <C>                     <C>              <C>
                           THREE MONTHS ENDED SEPTEMBER 30,            NINE MONTHS ENDED SEPTEMBER 30,
                           ---------------------------------         -----------------------------------
                             2001             2000                     2001               2000
                             ----             ----                     ----               ----
                             AMOUNT     %    AMOUNT      %            AMOUNT      %       AMOUNT     %

  Subscriber revenues . .  $  21,391   61%  $  4,977    67%          $ 48,989    62%      $ 10,887   66%
  Roaming revenues. . . .     11,793   33%     1,815    24%            25,645    32%         3,752   23%



                                       13
<PAGE>

  Equipment revenues  . .      2,020    6%       650     9%             4,595     6%         1,745   11%
                           ----------       ---------                ---------        -------------
  Total revenues. . . . .  $  35,204         $ 7,442                 $ 79,229             $ 16,384
                           ==========       =========                =========        =============

  ARPU (including
    roaming)(1) . . . . .  $      88         $   77                  $    84              $     71
  ARPU (excluding
    roaming)(1) . . . . .         57             56                       55                    52
</TABLE>

(1) ARPU,  average revenue per unit, is an industry term that measures total PCS
service revenues per month from our subscribers divided by the average number of
subscribers for that month.  ARPU,  including  roaming,  is ARPU with Sprint PCS
roaming and travel and non-Sprint PCS roaming and travel. ARPU excluding roaming
excludes Sprint PCS roaming and travel and non-Sprint PCS roaming and travel.


THREE MONTHS ENDED  SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 2000

     SUBSCRIBER  REVENUES.  Subscriber  revenues  for  the  three  months  ended
September  30, 2001 were $21.4  million,  compared to $5.0 million for the three
months ended  September  30, 2000, an increase of $16.4  million.  The growth in
subscriber  revenues is primarily the result of the growth in our customer base.
We had 146,641 customers at September 30, 2001,  compared to 36,007 at September
30,  2000.  Our  customer  base has grown  because we have  launched  additional
markets and increased our sales force.  ARPU without  roaming  increased for the
three  months  ended  September  30,  2001  compared to the three  months  ended
September 30, 2000 to $57 from $56 primarily as a result of higher  monthly fees
and increased minutes of use by our customers.

     ROAMING  REVENUES.  Roaming  revenues  increased  from $1.8 million for the
three  months  ended  September  30, 2000 to $11.8  million for the three months
ended September 30, 2001, an increase of $10.0 million.  ARPU including  roaming
increased from $77 for the three months ended  September 30, 2000 to $88 for the
three months ended September 30, 2001. This increase primarily resulted from the
continued build out of our network,  including highways covering northwest Ohio,
northern  Indiana and  Pennsylvania.  We expect  continued  volume  increases in
Sprint  PCS  roaming  revenues  as we  complete  the  remainder  of our  network
build-out.

     On April 27, 2001,  Sprint PCS and its  affiliates  announced a new roaming
rate  structure,  decreasing  the per minute  receivable and payable for roaming
usage from its  previous  amount of $0.20 per minute to $0.15 per minute on June
1,  2001,  $0.12  per  minute  on  October  1,  2001,  and a cost  return  basis
(approximately  $0.10 per minute)  effective as of January 1, 2002,  and for the
remainder of the term of the Sprint PCS agreements. This change has not yet been
documented and may not represent the final  agreements.  We expect this decrease
in the rate to reduce our overall revenue and expense per minute.  We anticipate
that this rate reduction will be offset by volume increases resulting in greater
overall roaming revenue and roaming expense in the future.

     EQUIPMENT REVENUES.  Equipment revenues consist of handsets and accessories
sold to customers.  Equipment  revenues for the three months ended September 30,
2001 were  $2.0  million,  compared  to  $650,000  for the  three  months  ended
September  30,  2000,  an increase of $1.4  million.  The  increase in equipment
revenues is the result of our increase in customers.  We added 40,373  customers
during the three months ended  September 30, 2001 compared to 9,027 added during
the three months ended September 30, 2000.

     COST OF SERVICES. Cost of services includes costs associated with operating
our network,  including site rent, utilities,  engineering personnel,  and other
expenses related to operations.  Cost of services also includes  interconnection
expenses,  customer care, Sprint charges, Sprint PCS roaming fees and non-Sprint
roaming  fees.  We pay Sprint PCS roaming fees to Sprint PCS when our  customers
use Sprint PCS' network outside of our territory.  We pay non-Sprint PCS roaming
fees to other wireless service  providers when our customers use their networks.
Also included in cost of services are costs incurred under our network  services
agreement  with the Alliances.  Horizon PCS recently  negotiated an amendment to
its  agreement  with the  Alliances  and a related  amendment  to its Sprint PCS
agreements.  Under the  Alliances  amendment,  Horizon PCS is obligated to pay a
fixed minimum  monthly fee for a stated minimum  period.  Horizon PCS expects to
incur lower overall fees under this new  arrangement  at expected  usage levels.
The  Alliances  are also  obligated  to  upgrade  their  networks  to provide 3G
technology.  In connection with this  amendment,  the Alliances have agreed with
Sprint PCS to modify their networks to cause Sprint PCS to be in compliance with
the FCC's  construction  requirements  for PCS  networks.  Horizon  PCS would be
responsible for completion of the network modifications if the Alliances fail to
comply.

                                       14
<PAGE>

     Under  our  build-to-suit  agreement  with SBA,  we  receive  certain  site
development  fees  for  towers  SBA  constructs  and  leases  to us.  Each  site
development  fee received is recorded as a deferred credit and is amortized over
the term of the lease, thereby effectively reducing our tower lease expense.

     Cost of services for the three months  ended  September  30, 2001 was $28.7
million, compared to $7.5 million for the three months ended September 30, 2000,
an increase of $21.2 million.  This increase reflects the increase in Sprint PCS
roaming fees,  including long distance charges, of $8.5 million, the increase in
costs incurred under our network  services  agreement with the Alliances of $3.0
million,  the increase in network  operations,  including  tower lease  expense,
circuit costs and payroll expense of $4.7, increased customer care, activations,
and  billing  expenses  of $3.6  million,  and the  increase  in other  variable
expenses of $1.4 million.

     COST OF  EQUIPMENT.  Cost of  equipment  includes the costs of handsets and
accessories sold by us to our customers.  Cost of equipment for the three months
ended  September  30, 2001 was $4.1  million,  compared to $2.1  million for the
three months ended September 30, 2000, an increase of $2.0 million. The increase
in the cost of equipment is the result of the growth in our wireless  customers,
partially  offset by the decreasing  unit cost of the handsets.  We added 40,373
customers in the three months ended  September 30, 2001 compared to 9,027 in the
three months ended September 30, 2000. For competitive and marketing reasons, we
have sold  handsets  to our  customers  below our cost and expect to continue to
sell handsets at a price below our cost for the foreseeable future.

     SELLING AND MARKETING  EXPENSES.  Selling and marketing expenses consist of
costs  associated  with  operating our 30 retail  stores,  including  marketing,
advertising,  payroll, and sales commissions. Selling and marketing expense also
includes  commissions  paid to  national  and  local  third  party  distribution
channels  and  subsidies on handsets  sold by third  parties for which we do not
record  revenue.  Selling and  marketing  expenses rose to $13.2 million for the
three months  ended  September  30, 2001,  compared to $4.3 million for the same
period in 2000, an increase of $8.9 million. This increase reflects the increase
in the costs of operating our 30 retail stores of $3.8 million,  the increase in
subsidies on handsets sold by third parties of $3.8 million, and the increase in
commissions paid to third parties of $1.3 million.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES.  General and  administrative  costs
include the Sprint management fee, a provision for uncollectible  accounts,  and
costs related to corporate support functions,  including,  costs associated with
functions  performed for us by Horizon  Services  under our services  agreement.
These  include  finance  functions,  accounting  services,  computer  access and
administration,  executive,  supervisory,  consulting, customer relations, human
resources and other administrative  services.  Horizon Services' costs for these
functions  are charged to us using a standard FCC cost  allocation  methodology.
Under this methodology,  all costs that can be specifically identified to us are
directly charged to us, and all costs that are specifically  identified to other
subsidiaries  of Horizon  Telcom are charged to them.  Costs incurred by Horizon
Services that cannot be  specifically  identified to a company for which Horizon
Services provides service are apportioned among the Horizon Telcom  subsidiaries
based on appropriate  measures.  Because of the economies of scale inherent in a
centralized  service  company,  we believe we are able to receive these services
less expensively through this arrangement than if we provided them ourselves.

     General  and  administrative  expenses  rose to $7.2  million for the three
months ended September 30, 2001, compared to $3.8 million for the same period in
2000,  an increase of $3.4  million.  The  increase  reflects an increase in the
provision for uncollectible  accounts of $1.2 million, an increase in the Sprint
PCS  management  fee of $1.3 million and an increase in other  general  expenses
including property taxes of $900,000.

     NON-CASH  COMPENSATION  EXPENSE.  For the three months ended  September 30,
2001 and 2000,  we  recorded  non-cash  compensation  expense  of  approximately
$177,000 and $151,000 respectively,  related to certain stock options granted in
November 1999.  Stock-based  compensation expense will continue to be recognized
through the  conclusion  of the vesting  period for these  options in 2005.  The
annual non-cash  compensation  expense expected to be recognized for these stock
options is approximately  $709,000 in 2001,  $681,000 in 2002, $622,000 in 2003,
$193,000 in 2004, and $71,000 in 2005.

     DEPRECIATION  AND  AMORTIZATION  EXPENSE.   Depreciation  and  amortization
expenses  increased  by $3.5  million to a total of $5.2  million  in 2001.  The
increase reflects the continuing construction of our network.

     At September 30, 2000, we recorded an intangible asset of $13.4 million for
the value of  warrants we agreed to grant to Sprint PCS.  The  intangible  asset
will be amortized over the remaining term of the Sprint PCS management agreement
resulting in $752,000 of amortization expense per year. Amortization expense for
the quarter ended September 30, 2001 was approximately $188,000.

                                       15
<PAGE>

     Goodwill  amortization will cease as of December 31, 2001 with the adoption
of SFAS No.  142.  The  Company  has not  determined  the  financial  impact the
adoption  of SFAS No.  142 will have on its  financial  position  or  results of
operations.

     GAIN (LOSS) ON  EXCHANGE OF STOCK.  In  September,  2000,  a portion of the
stock of Horizon Telcom held by us was  distributed to our  shareholders  in the
form of a dividend.  To the extent that the  dividend  was paid to  shareholders
other than Horizon Telcom, a non-cash gain of $1.0 million was recognized.

     INTEREST  INCOME AND OTHER,  NET.  Other  income for the three months ended
September  30,  2001 was  approximately  $581,000  and  consisted  primarily  of
interest income. Interest income was generated from the short term investment of
cash proceeds from our private equity sales,  senior discount notes and drawings
under the senior secured credit  facility,  all completed on September 26, 2000.
As capital  expenditures  are made to complete  the  build-out  of our  network,
decreasing  cash  balances  may  result in lower  daily  interest  income in the
future.

     INTEREST  EXPENSE,  NET.  Interest  expense  for  the  three  months  ended
September  30,  2001 was $6.0  million,  compared to $1.8  million in 2000,  and
consisted of interest on debt.  Interest on our senior secured  credit  facility
accrues at LIBOR plus our specified margin  (approximately 6.9% at September 30,
2001).  We accrue  interest  at a rate of 14% per annum on our  senior  discount
notes  through  October  1,  2005 and will pay  interest  semi-annually  in cash
thereafter.  Interest  expense also  includes the  amortized  amount of deferred
financing  fees  related  to our  senior  secured  credit  facility,  our senior
discount notes, and the amortization of the related warrants.  At June 29, 2001,
we agreed to several  changes in the senior credit  facility,  including a 0.25%
increase in the annual interest rate. We expect our interest expense to increase
in the future as we borrow under our senior credit  facility to fund our network
build out and operating losses.

     INCOME TAX EXPENSE (BENEFIT).  Until September 26, 2000 we were included in
the  consolidated  federal income tax return of Horizon Telcom.  We provided for
federal  income  taxes  on a  pro-rata  basis,  consistent  with a  consolidated
tax-sharing  agreement.  As a result  of the sale of the  convertible  preferred
stock on  September  26,  2000,  we will not be able to  participate  in the tax
sharing  agreement,  nor will we be able to  recognize  any net  operating  loss
benefits until we start to generate taxable income. We did not record any income
tax  benefit  for the three  months  ended  September  30,  2001  because of the
uncertainty of generating  future taxable income to be able to recognize current
net operating losses.

     In 2000,  we  recorded an income tax expense  from  continuing  operations,
resulting  primarily from the recognition by us of an excess loss account on the
deconsolidation from the Horizon Telcom affiliated group, reduced by the benefit
of the  carryback  net  operating  losses  and  an  increase  in  the  valuation
allowance.  In addition,  we generated a tax of $4.3 million on a stock dividend
of 10% of Horizon  Telcom  stock held by us to  Horizon  Telcom.  The tax on the
stock dividend was charged  directly to equity and not recorded as an income tax
expense.

     LOSS FROM CONTINUING  OPERATIONS.  Our loss from continuing  operations for
the three months ended  September 30, 2001 was $28.7  million  compared to $17.4
million for the three months ended  September 30, 2000. The current quarter loss
reflects  increased  expenses relative to launching our markets and building our
customer base.

     EXTRAORDINARY  LOSS. As a result of the September 26, 2000  financings,  we
retired  long term debt payable to  financial  institutions.  As a result of the
debt  extinguishments,  we  expensed  the  unamortized  portion  of the  related
financing costs, as well as fees associated with the debt extinguishments. These
fees and  expenses  amounted  to  approximately  $748,000  and are  shown on the
statement of operation net of a tax benefit of $262,000.

     PREFERRED  STOCK  DIVIDEND.  Our  convertible  preferred stock pays a stock
dividend at the rate of 7.5% per annum, payable  semi-annually  commencing April
30, 2001. On May 1, 2001 we issued an additional  1,163,051  shares of preferred
stock in payment of the stock dividend through April 30, 2001 and on November 1,
2001 we issued  1,021,882  shares of  preferred  stock in  payment  of the stock
dividend  through  October 31, 2001.  For the three months ended  September  30,
2001, we accrued a stock dividend of $2.8 million.

     OTHER COMPREHENSIVE INCOME (LOSS). In the first quarter of 2001, we entered
into a two year interest rate swap effectively  fixing $25.0 million of our term
loan at a rate of 9.4%. In the third quarter of 2001, we entered into a two year
interest rate swap  effectively  fixing the remaining  $25.0 million of our term
loan at 7.65%.  We do not  expect  the  effects  of the swaps to have a material
impact to interest expense for the remainder of 2001. Other comprehensive income
may  fluctuate  based on changes in the fair  value of the swap  instrument.  An
other  comprehensive  loss of  approximately  $326,000  and an other  expense of
$7,000 was recorded for the three months ended September 30, 2001.

                                       16
<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000

     SUBSCRIBER  REVENUES.   Subscriber  revenues  for  the  nine  months  ended
September  30, 2001 were $49.0  million,  compared to $10.9 million for the nine
months ended  September  30, 2000, an increase of $38.1  million.  The growth in
subscriber  revenues is primarily the result of the growth in our customer base.
We had 146,641 customers at September 30, 2001,  compared to 36,007 at September
30,  2000.  Our  customer  base has grown  because we have  launched  additional
markets and increased  our sales force.  ARPU without  travel  increased for the
nine months ended September 30, 2001 compared to the nine months ended September
30,  2000 to $55 from $52  primarily  as a result  of  higher  monthly  fees and
increased minutes of use by our customers.

     ROAMING REVENUES. Roaming revenues increased from $3.8 million for the nine
months  ended  September  30, 2000 to $25.6  million  for the nine months  ended
September  30,  2001,  an  increase of $21.8  million.  ARPU  including  roaming
increased  from $71 to $84 for the nine  months  ended  September  30,  2000 and
September  30, 2001,  respectively.  This increase  primarily  resulted from the
continued build out of our network,  including highways covering northwest Ohio,
northern  Indiana and  Pennsylvania.  We expect  continued  volume  increases in
Sprint  PCS  roaming  revenues  as we  complete  the  remainder  of our  network
build-out.

     On April 27, 2001,  Sprint PCS and its  affiliates  announced a new roaming
rate  structure,  decreasing  the per minute  receivable and payable for roaming
usage from its  previous  amount of $0.20 per minute to $0.15 per minute on June
1,  2001,  $0.12  per  minute  on  October  1,  2001,  and a cost  return  basis
(approximately  $0.10 per minute)  effective as of January 1, 2002,  and for the
remainder of the term of the Sprint PCS agreements. This change has not yet been
documented, and may not represent the final arrangement. We expect this decrease
in the rate to reduce our overall revenue and expense per minute.  We anticipate
this  rate  reduction  to be offset by volume  increases  resulting  in  greater
overall roaming revenue and expense in the future.

     EQUIPMENT REVENUES.  Equipment revenues consist of handsets and accessories
sold to  customers  through  our stores and  through  our  direct  sales  force.
Equipment  revenues  for the nine  months  ended  September  30,  2001 were $4.6
million,  compared to $1.7 million for the nine months ended September 30, 2000,
an increase of $2.9 million. The increase in equipment revenues is the result of
our increase in customers.

     COST OF SERVICES.  Cost of services for the nine months ended September 30,
2001 was $67.2  million,  compared to $16.2  million  for the nine months  ended
September 30, 2000,  an increase of $51.0  million.  This increase  reflects the
increase in Sprint PCS roaming fees,  including long distance charges,  of $20.2
million,  the increase in costs  incurred under our network  services  agreement
with  the  Alliances  of $9.5  million,  the  increase  in  network  operations,
including  tower lease  expense,  circuit  costs and payroll  expense,  of $12.3
million,  increased  customer  care,  activations,  and billing  expense of $7.0
million,  and the increase in other variable expenses,  including  switching and
national platform expenses, of $2.0 million.  Horizon PCS recently negotiated an
amendment to its agreement  with the  Alliances  and a related  amendment to its
Sprint PCS agreements.  Under the Alliances amendment,  Horizon PCS is obligated
to pay a fixed  minimum  monthly fee for a stated  minimum  period.  Horizon PCS
expects to incur lower overall fees under this new arrangement at expected usage
levels. The Alliances are also obligated to upgrade their networks to provide 3G
technology.  In connection with this  amendment,  the Alliances have agreed with
Sprint PCS to modify their networks to cause Sprint PCS to be in compliance with
the FCC's  construction  requirements  for PCS  networks.  Horizon  PCS would be
responsible for completion of the network  modification if the Alliances fail to
comply.

     COST OF EQUIPMENT.  Cost of equipment  for the nine months ended  September
30, 2001 was $8.6  million,  compared to $5.1  million for the nine months ended
September  30, 2000,  an increase of $3.5  million.  The increase in the cost of
equipment  is the  result of the  growth in our  wireless  customers,  partially
offset  by the  decreasing  unit  cost  of the  handsets.  For  competitive  and
marketing  reasons,  we have sold handsets to our  customers  below our cost and
expect  to  continue  to  sell  handsets  at a  price  below  our  cost  for the
foreseeable future.

     SELLING AND  MARKETING  EXPENSES.  Selling and  marketing  expenses rose to
$31.2  million for the nine months ended  September  30, 2001,  compared to $8.5
million for the same period in 2000, an increase of $22.7 million. This increase
reflects the increase in the costs of operating our 30 retail stores,  including
marketing and advertising in our sales territory, of $13.8 million, the increase
in subsidies on handsets sold by third parties of $6.6 million, and the increase
in  commissions  paid to third  parties of $2.3 million.  We expect  selling and
marketing expense to increase in the aggregate as we expand our coverage and add
customers.

     GENERAL AND ADMINISTRATIVE  EXPENSES.  General and administrative  expenses
for the nine months ended September 30, 2001 were $19.2 million compared to $8.1
million in 2000, an increase of $11.1 million. The increase reflects an increase
in the provision for uncollectible  accounts of $3.0 million, an increase in the


                                       17
<PAGE>

Sprint  PCS  management  fee  of  $3.2  million,  increased  professional  fees,
including   non-recurring   costs   related  to  pursuing   strategic   business
alternatives of $1.3 million,  increased headcount and professional  services at
Horizon  Services,  needed to support our  growth,  of $1.6  million,  and other
general expenses, including property and franchise taxes, of $2.0 million.

     NON-CASH COMPENSATION EXPENSE. For the nine months ended September 30, 2001
and 2000, we recorded  stock-based  compensation  expense of approximately  $1.3
million and $324,000 respectively. The $1.3 million includes $725,000 related to
the distribution of 7,249 shares of Horizon Telcom stock to employees of Horizon
PCS and $532,000 for certain stock options granted in November 1999. Stock-based
compensation  expense will continue to be recognized  through the  conclusion of
the vesting period for these options in 2005. The annual  non-cash  compensation
expense  expected  to be  recognized  for these stock  options is  approximately
$709,000 in 2001,  $681,000 in 2002,  $622,000  in 2003,  $193,000 in 2004,  and
$71,000 in 2005.

     DEPRECIATION  AND  AMORTIZATION  EXPENSE.   Depreciation  and  amortization
expenses  increased  by $9.5  million to a total of $13.0  million in 2001.  The
increase  reflects  the  continuing  construction  of our  network.  Because our
acquisition  of  Bright  PCS  was  accounted  for  as  a  purchase  transaction,
amortization has increased as a result of amortizing the intangible assets.

     At September 30, 2000, we recorded an intangible asset of $13.4 million for
the value of  warrants we agreed to grant to Sprint PCS.  The  intangible  asset
will be amortized over the remaining term of the Sprint PCS management agreement
resulting in $752,000 of amortization expense per year. Amortization expense for
the nine months ended September 30, 2001 was approximately $564,000.

     Goodwill  amortization will cease as of December 31, 2001 with the adoption
of SFAS No.  142.  The  Company  has not  determined  the  financial  impact the
adoption  of SFAS No.  142 will have on its  financial  position  or  results of
operations.

     GAIN (LOSS) ON EXCHANGE OF STOCK. On April 2, 2001, the Company distributed
7,249 shares of Horizon Telcom stock to employees of Horizon PCS. In conjunction
with  this  transaction,   the  Company   recognized  a  non-operating  loss  of
approximately  $400,000  representing the reduced fair market value of the stock
at the time of the  transaction  compared to the original  holding  value of the
investment.  In 2000,  the  Company  recognized  a gain of  approximately  $11.6
million on Horizon Telcom stock used in the acquisition of Bright PCS.

     INTEREST  INCOME AND OTHER,  NET.  Other  income for the nine months  ended
September 30, 2001 was $4.8 million and consisted  primarily of interest income.
Interest  income was generated from the  short-term  investment of cash proceeds
from our private  equity sales,  senior  discount  notes and drawings  under the
senior secured credit facility,  all completed on September 26, 2000. As capital
expenditures are made to complete the build-out of our network,  decreasing cash
balances may result in lower daily interest income in the future.

     INTEREST EXPENSE, NET. Interest expense for the nine months ended September
30, 2001 was $18.7  million,  compared to $3.6 million in 2000, and consisted of
interest on debt.  Interest on our senior  secured  credit  facility  accrues at
LIBOR plus our specified margin  (approximately  6.9% at September 30, 2001). We
accrue  interest at a rate of 14% per annum on our senior discount notes through
October 1, 2005 and will pay interest semi-annually in cash thereafter. Interest
expense also includes the amortized amount of deferred financing fees related to
our  senior  secured  credit  facility,  our  senior  discount  notes,  and  the
amortization  of the related  warrants.  At June 29, 2001,  we agreed to several
changes in the senior credit  facility  including a 0.25% increase in the annual
interest  rate.  We expect our interest  expense to increase in the future as we
borrow  under our  senior  credit  facility  to fund our  network  build out and
operating losses.

     INCOME TAX EXPENSE (BENEFIT).  Until September 26, 2000 we were included in
the  consolidated  federal income tax return of Horizon Telcom.  We provided for
federal  income  taxes  on a  pro-rata  basis,  consistent  with a  consolidated
tax-sharing  agreement.  As a result  of the sale of the  convertible  preferred
stock on  September  26,  2000,  we will not be able to  participate  in the tax
sharing  agreement  nor  will we be able to  recognize  any net  operating  loss
benefits until we start to generate taxable income. We did not record any income
tax  benefit  for the nine  months  ended  September  30,  2001  because  of the
uncertainty of generating  future taxable income to be able to recognize current
net operating losses.

     In 2000,  we  recorded an income tax expense  from  continuing  operations,
resulting  primarily from the recognition by us of an excess loss account on the
deconsolidation from the Horizon Telcom affiliated group, reduced by the benefit
of the  carryback  net  operating  losses  and  an  increase  in  the  valuation
allowance.  In addition,  we generated a tax of $4.3 million on a stock dividend
of 10% of Horizon  Telcom  stock held by us to  Horizon  Telcom.  The tax on the
stock dividend was charged  directly to equity and not recorded as an income tax
expense.

                                       18
<PAGE>

     LOSS FROM CONTINUING  OPERATIONS.  Our loss from continuing  operations for
the nine months ended  September  30, 2001 was $75.4  million  compared to $19.3
million for the nine months ended  September 30, 2000.  The increase in our loss
reflects the continued  expenses  relative to launching our markets and building
our customer base.

     DISCONTINUED  OPERATIONS.  In April 2000, we transferred our Internet, long
distance and other  businesses  unrelated to the wireless  operations to Horizon
Technology,  a  separate  subsidiary  of  Horizon  Telcom,  at net  book  value.
Accordingly,  the  results  of  operations  for these  business  units have been
reported as discontinued operations in the prior period.

     EXTRAORDINARY  LOSS. As a result of the September 26, 2000  financings,  we
retired  long term debt payable to  financial  institutions.  As a result of the
debt  extinguishments,  we  expensed  the  unamortized  portion  of the  related
financing costs, as well as fees associated with the debt extinguishments. These
fees and  expenses  amounted  to  approximately  $748,000  and are  shown on the
statement of operation net of a tax benefit of $262,000.

     PREFERRED  STOCK  DIVIDEND.  Our  convertible  preferred stock pays a stock
dividend at the rate of 7.5% per annum, payable  semi-annually  commencing April
30, 2001.  For the nine months  ended  September  30,  2001,  we accrued a stock
dividend  of $8.2  million.  On May 1, 2001 we issued  an  additional  1,163,051
shares of preferred  stock in payment of the stock  dividends  through April 30,
2001 and on  November  1,  2001 we  issued  an  additional  1,021,882  shares of
preferred stock in payment of the stock dividends through October 31, 2001.

     OTHER COMPREHENSIVE INCOME (LOSS). In the first quarter of 2001, we entered
into a two year interest rate swap effectively  fixing $25.0 million of our term
loan at a rate of 9.4%. In the third quarter of 2001, we entered into a two year
interest rate swap  effectively  fixing the remaining  $25.0 million of our term
loan at 7.65%.  We do not expect the  effects of these  swaps to have a material
impact to interest expense for the remainder of 2001. Other comprehensive income
may  fluctuate  based on changes in the fair  value of the swap  instrument.  An
other  comprehensive  loss of  approximately  $679,000  and an other  expense of
approximately  $84,000 were  recorded for the nine months  ended  September  30,
2001.

LIQUIDITY AND CAPITAL RESOURCES

     Through  September  26,  2000 we financed  our  operations  through  equity
contributions  from Horizon  Telcom and through debt  financing  provided by the
Rural Telephone Finance  Cooperative  (RTFC). On September 26, 2000, an investor
group led by Apollo  Management  purchased  $126.5  million  of our  convertible
preferred stock in a private placement.  Concurrent with the closing, holders of
our $14.1 million  short-term  convertible  note (including  accrued interest of
$1.1 million)  converted it into the same convertible  preferred stock purchased
by the investor  group.  On September 26, 2000, the Company also received $149.7
million from the issuance of $295 million of Senior Discount Notes due 2010. The
notes  accrete  in  value  until  October  1,  2005 at a rate of 14%  compounded
semi-annually.  Also on September  26,  2000,  we received an  additional  $50.0
million as part of a $225.0 million senior secured credit  facility led by First
Union  National  Bank.  The amount of the senior  secured  credit  facility  was
increased to $250.0  million in November,  2000.  On June 29, 2001,  the Company
amended  its  senior  secured  credit  agreement  with  the  bank  group.   This
modification amended and restated certain financial covenants,  including EBITDA
and revenue  thresholds.  The amendment also increased the base interest rate by
25 basis points to LIBOR plus 3.75% - 4.25%.

     At September  30, 2001, we had cash and cash  equivalents  of $38.2 million
and working capital of $24.3 million. At December 31, 2000, we had cash and cash
equivalents  of $191.4  million  and  working  capital  of $162.2  million.  The
decrease  in  cash  and  cash   equivalents   of  $153.2  million  is  primarily
attributable  to funding our loss from  continuing  operations  of $75.4 million
(this  loss  includes  certain   non-cash   charges)  and  funding  our  capital
expenditures of $90.4 million for the nine months ended September 30, 2001.

     Net cash used in operating activities was $64.5 million for the nine months
ended  September  30, 2001.  This  reflects the  continuing  use of cash for our
operations  to build our customer  base,  including but not limited to providing
service in our markets and the costs of acquiring  new  customers.  For the nine
months ended  September  30, 2001,  our cost per gross  additional  customer was
approximately  $337 per customer.  Increases to depreciation  and other non-cash
charges  were  offset by an increase in accounts  receivable  and  decreases  in
accounts payable and other accrued liabilities.

     Net cash used in investing activities was $87.5 million for the nine months
ended  September 30, 2001. Our capital  expenditures  were $90.4 million for the
nine months ended September 30, 2001, reflecting the continuing build out of our
network. At September 30, 2001, we operated  approximately 529 cell sites in our
network.  This represents an addition of approximately 226 sites during 2001. In
addition to the sites, we have increased the number of switching stations in our
territory  and have  increased our number of retail stores from 16 at the end of


                                       19
<PAGE>

2000 to 30 at September 30, 2001. We will incur additional capital  expenditures
as we complete the build out of our network,  including adding  approximately 10
more stores,  completing  additional cell sites,  and expanding  capacity at our
switches as needed.

     Net cash used in financing  activities for the nine months ended  September
30, 2001 was $1.3 million consisting  primarily of deferred financing fees. With
the  amendment  to the senior  secured  credit  facility on June 29,  2001,  the
Company paid a fee of  $875,000.  We expect to increase  our  borrowings  in the
future to fund our operating losses and to fund additional capital  expenditures
needed to complete the  build-out of our network.  At September 30, 2001, we had
$200.0  million  available  to be  borrowed  under  our  senior  secured  credit
facility.

     We anticipate that our existing cash and available borrowings under our new
senior secured credit  facility will be adequate to fund our network  build-out,
anticipated  operating losses and working capital  requirements until we achieve
positive earnings before interest, taxes, depreciation and amortization which we
expect to  achieve  in the third  quarter  of 2003.  We expect  that our  future
funding needs,  including our anticipated funding needs over the next 12 months,
will be satisfied  by our  existing  working  capital and  borrowings  under our
senior  secured  credit   facility.   These  funds  will  be  used  for  capital
expenditures and to fund working capital and operating losses.

     From January 1, 2001 to December 31, 2001, we  anticipate  that our funding
needs requirements will be approximately  $210.0 million, of which approximately
$130.0 million will be used for capital  expenditures  and the remainder will be
utilized  primarily to fund working  capital and  operating  losses.  The actual
funds  required to build-out our network and to fund operating  losses,  working
capital needs and other capital needs may vary  materially  from these estimates
and additional  funds may be required  because of an expansion of our territory,
unforeseen delays, cost overruns,  unanticipated  expenses,  regulatory changes,
engineering  design  changes  and  required  technological  upgrades  and  other
technological risks. If we are unable to obtain any necessary additional funding
and we are  unable to  complete  our  network  build-out,  this may  result in a
termination  of our  Sprint  PCS  agreement;  we will no longer be able to offer
Sprint PCS products  and  services.  In this event,  Sprint PCS may purchase our
operating  assets or capital stock for 72% of the entire business  value.  Also,
any  delays in our  buildout  may  result in  penalties  under  our  Sprint  PCS
agreement, as amended.

SEASONALITY

     Our  wireless  telephone  business  is subject to  seasonality  because the
wireless industry is heavily dependent on calendar fourth quarter results. Among
other things,  that industry relies on significantly  higher customer  additions
and handset sales in the calendar  fourth quarter as compared to the other three
calendar quarters. A number of factors contribute to this trend, including:

     o    The  increasing  use of retail  distribution,  which is more dependent
          upon the year-end holiday shopping season;

     o    The timing of new product and service announcements and introductions;

     o    Competitive pricing pressures; and

     o    Aggressive marketing and promotions.

INFLATION

     We believe that inflation has not had, and will not have, a natural adverse
effect on our results of operations.

NEW ACCOUNTING STANDARDS

     In June 1998, the FASB issued Statement of Financial  Accounting  Standards
No.  133  (SFAS  133),   Accounting  for  Derivative   Instruments  and  Hedging
Activities,  as amended in September  2000 by Statement of Financial  Accounting
Standards No. 138 (SFAS 138), Accounting for Certain Derivative  Instruments and
Certain  Hedging   Activities,   which  requires   companies  to  recognize  all
derivatives  as either  assets or  liabilities  in the balance sheet and measure
such instruments at fair value. As amended by Statement of Financial  Accounting
Standards No. 137 (SFAS 137), Accounting for Derivative  Instruments and Hedging
Activities  - Deferral of the  Effective  Date of FASB  Statement  No. 133,  the
provisions  of SFAS 133 required  adoption to all fiscal  quarters of all fiscal
years beginning after June 15, 2000. The adoption did not have a material effect
on Horizon PCS's consolidated results of operations, financial position, or cash
flows.

                                       20
<PAGE>

     On December 3, 1999, the SEC issued Staff Accounting  Bulletin No. 101 (SAB
101), Revenue Recognition in Financial Statements which required adoption during
the first quarter of fiscal 2000. The adoption did not have a material effect on
Horizon PCS's consolidated results of operations.

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business  Combinations and SFAS No. 142,  Goodwill and Other Intangible  Assets.
SFAS No. 141  addresses  financial  accounting  and  reporting  for all business
combinations and requires that all business combinations entered into subsequent
to June  2001 be  recorded  under  the  purchase  method.  This  statement  also
addresses  financial  accounting and reporting for goodwill and other intangible
assets acquired in a business combination at acquisition. SFAS No. 142 addresses
financial  accounting and reporting for intangible assets acquired  individually
or with a group of other assets at  acquisition.  This  statement also addresses
financial  accounting  and  reporting for goodwill and other  intangible  assets
subsequent to their acquisition.

     These  statements  will be  adopted  by the  Company  on  January  1, 2002.
Goodwill amortization will cease as of December 31, 2001 and the Company will be
required  to complete  an  impairment  test of the  remaining  goodwill  balance
annually (more frequently if impairment  indicators  arise). The Company has not
yet determined the financial  impact the adoption of these  pronouncements  will
have on its  financial  position or results of  operations.  As of September 30,
2001,  Horizon PCS has goodwill of  approximately  $7.3  million  related to the
acquisition  of Bright PCS in June 2000. The valuation of this goodwill would be
subject to an impairment test at the date of adoption.

     In June,  2001, the Financial  Accounting  Standards  Board issued SFAS No.
143,  Accounting for Asset  Retirement  Obligations.  This  statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs.  It  applies  to legal  obligations  associated  with the  retirement  of
long-lived  assets that result from the acquisition,  construction,  development
and (or) the normal operation of a long-lived asset. The Company will adopt this
statement  effective  January 1, 2003.  The Company has not yet  determined  the
financial impact the adoption will have on its financial  position or results of
operations.

     In August,  2001, the Financial  Accounting Standards Board issued SFAS No.
144,  Accounting for the Impairment or Disposal of Long-Lived  Assets.  SFAS No.
144  addresses  financial   accounting  and  reporting  for  the  impairment  of
long-lived  assets.  The statement  supersedes SFAS No. 121,  Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and
the  accounting  and  reporting  provisions  of APB Opinion No. 30. SFAS No. 144
removes goodwill from its scope, as goodwill will be addressed in the impairment
test  described  above under SFAS No. 142. SFAS No. 144 also  describes the cash
flow estimation approach used in determining impairment.  The Company will adopt
SFAS No.  144 on  January  1,  2002.  The  Company  has not yet  determined  the
financial impact the adoption will have on its financial  position or results of
operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     For the  three  and  nine  months  ended  September  30,  2001,  we did not
experience  any  material  change in  market  risk  exposures  that  affect  the
quantitative and qualitative  disclosures about market risk. We do not engage in
commodity futures trading activities and do not enter into derivative  financial
instruments  for  trading  purposes.  We also do not engage in  transactions  in
foreign currencies that would expose us to market risk.

     In the normal course of business,  our  operations  are exposed to interest
rate risk on our senior secured credit facility.  Our primary interest rate risk
exposures  relate to 1) the interest  rate on our  financing,  2) our ability to
refinance  our senior  discount  notes at maturity at market  rates,  and 3) the
impact of  interest  rate  movements  on our  ability to meet  interest  expense
requirements and meet financial covenants under our debt instruments.

     We manage the interest rate risk on our outstanding  long-term debt through
the use of fixed and variable  rate debt and interest  rate swaps.  In the first
quarter of 2001, we entered into an interest rate swap effectively  fixing $25.0
million of our term debt at a rate of 9.4%.  In the third  quarter  of 2001,  we
entered into a two year  interest  rate swap  effectively  fixing the  remaining
$25.0 million of our term loan at 7.65%.  While we cannot predict our ability to
refinance  existing debt or the impact  interest rate movements will have on our
existing  debt,  we continue to evaluate  our  interest  rate risk on an ongoing
basis.

     As of September 30, 2001, 100% of our variable rate long term debt has been
swapped for fixed rate debt,  thus  reducing our exposure to interest rate risk.
Therefore,  an increase in the base lending rate would have an immaterial effect
on our annual earnings.  However,  our swap interest rates are currently greater
than the market  interest  rates.  Thus, our results from  operations  currently
reflect a higher interest expense than had we not hedged our position.  If we do
not renew our swaps,  or, if we do not hedge  incremental  borrowings  under our
senior secured  credit  facility,  of which we have $200.0 million  available at
September  30, 2001,  we will increase our interest rate risk which could have a
material impact on our future earnings.

                                       21
<PAGE>

     The carrying value of the financial instruments approximate fair value.

PART II--OTHER INFORMATION

ITEM 2:  CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM 5:  OTHER INFORMATION

     We Have Not Had Any Profitable  Years In The Past Five Years And We May Not
Achieve Or Sustain Operating  Profitability Or Positive Cash Flow From Operating
Activities.

     We expect to incur significant operating losses and to generate significant
negative  cash flow from  operating  activities  until 2003 while we continue to
construct  our network and grow our customer  base.  We have already  incurred a
total of approximately  $160.5 million in net losses through September 30, 2001.
Our operating profitability will depend upon many factors, including our ability
to market our services,  achieve our  projected  market  penetration  and manage
customer   turnover  rates.  If  we  do  not  achieve  and  maintain   operating
profitability  and  positive  cash flow from  operating  activities  on a timely
basis,  we may not be  able  to meet  our  debt  service  requirements,  and our
stockholders could lose all or part of their investment.

     If We Do Not Successfully  Manage our Anticipated Rapid Growth, We May Fail
To Complete The  Build-Out Of Our Network,  Sprint PCS May  Terminate The Sprint
PCS Agreements,  And We Would No Longer Be Able To Offer Sprint PCS Products And
Services From Which We Generate Substantially All Our Revenues.

     Our long-term affiliation  agreements with Sprint PCS, which we refer to as
the Sprint PCS  agreements,  require us to build out and  operate the portion of
the Sprint PCS network  located in our territory in accordance  with Sprint PCS'
technical and coverage requirements. The agreements also require that we provide
minimum network coverage to the population within each of the markets which make
up our territory by specified dates.

     We did not launch  all of our  Bright PCS  markets by the date set forth in
the Sprint PCS agreements.  We were unable to obtain the required  backhaul from
local  exchange  carriers by that date,  despite using  commercially  reasonable
efforts.  Sprint  PCS  agreed  in  writing  that we are in  compliance  with the
build-out  requirements in these markets. We subsequently  obtained the required
backhaul services and launched these markets.

     Under our original Sprint PCS agreements,  we were required to complete the
build-out in several of our markets in Pennsylvania and New York by December 31,
2000.  As of June 1,  2001,  we and Sprint  PCS  agreed to an  amendment  of our
build-out  requirements,  which  extended  the date by  which we were to  launch
coverage in several  markets.  The amended  Sprint PCS  agreement  provides  for
monetary  penalties  to be paid  by us if  coverage  is not  launched  by  these
specified  contract  dates.  The amounts of the penalties  range from $16,500 to
$602,000 for each market where there is a shortfall, depending on the market and
length of delay (up to 180  days) in  launch,  and in some  cases,  whether  the
shortfall  relates  to an  initial  launch in the  market or  completion  of the
remaining build-out.  The penalties must be paid in cash, or if both Horizon PCS
and Sprint PCS agree, in shares of Horizon PCS capital stock.

     Under the amended Sprint PCS agreement,  portions of the New York, Sunbury,
Williamsport,  Oil City, Dubois,  Erie,  Meadville,  Sharon,  Olean,  Jamestown,
Scranton,  State College,  Stroudsburg,  Allentown and  Pottsville  markets were
required to be  completed  and  launched by October 31,  2001.  Although we have
launched service in portions of each of these markets, we have not completed all
of the  build-out  requirements.  We have  notified  Sprint  PCS  that it is our
position that the reasons for the delay constitute  "force majeure" as described
the Sprint PCS agreements and that, consequently, no monetary penalties or other
remedies would be applicable.  The delay has been primarily caused due to delays
in obtaining the required  backhaul  services from local  exchange  carriers and
zoning and other approvals from governmental authorities.

     Under the terms of our Sprint PCS  agreements,  we are  required to provide
additional coverage in specified markets by April 28, 2002.

     We will  require  additional  expenditures  of  significant  funds  for the
continued development,  construction,  testing,  deployment and operation of our
network.  These  activities  are  expected to place  significant  demands on our
managerial, operational and financial resources.

                                       22
<PAGE>

     We Have  Substantial Debt Which We May Not Be Able To Service And Which May
Result In Our Lenders Controlling HPCS' Assets In An Event Of Default.

     As of September 30, 2001, our total debt  outstanding  was $202.7  million,
$50.0  million of which was due under our senior  secured  credit  facility  and
$152.7  million of which was due under our senior  discount  notes  (total  debt
outstanding  of  $171.7  million  less a  $19.0  million  unrecognized  discount
associated with the warrants issued in connection with our senior discount notes
offering).

     Our substantial  debt will have a number of important  consequences for our
operations and our investors, including the following:

     o    we have to  dedicate  a  substantial  portion  of any cash  flow  from
          operations  to the payment of interest on, and principal of, our debt,
          which will reduce funds available for other purposes;
     o    we may not have sufficient funds to pay interest on, and principal of,
          our debt;
     o    we may  not be able  to  obtain  additional  financing  for  currently
          unanticipated  capital  requirements,  capital  expenditures,  working
          capital requirements and other corporate purposes;
     o    some  borrowings  likely will be at variable rates of interest,  which
          will result in higher  interest  expense in the event of  increases in
          market interest rates; and
     o    due to the liens on substantially all of our assets and the pledges of
          equity ownership of our subsidiaries  that secure our senior debt, our
          lenders may control our assets upon a default.

     If We Fail To Pay Our Debt,  Our  Lenders  May Sell Our Loans To Sprint PCS
Giving Sprint PCS The Rights Of A Creditor To Foreclose On Our Assets.

     If the lenders  accelerate  the  amounts  due under our new senior  secured
credit facility, Sprint PCS has the right to purchase our obligations under this
facility and become a senior  lender.  To the extent Sprint PCS purchases  these
obligations,  Sprint PCS'  interests  as a creditor  could  conflict  with ours.
Sprint PCS' rights as a senior  lender would  enable it to exercise  rights with
respect to our assets and Sprint PCS'  continuing  relationship  in a manner not
otherwise permitted under the Sprint PCS agreements.

     If Sprint PCS Terminates The Sprint PCS Agreements,  The Buy-Out Provisions
Of Those Agreements May Diminish The Valuation Of Our Company.

     Provisions  of the Sprint PCS  agreements  could affect our  valuation  and
decrease our ability to raise additional capital. If Sprint PCS terminates these
agreements,  Sprint PCS may purchase our  operating  assets or capital stock for
80% of the entire business value. If the termination is due to our breach of the
Sprint PCS  agreements,  the percent is reduced to 72% instead of 80%. Under our
Sprint PCS  agreements,  the entire  business value is generally the fair market
value of our wireless  business valued on a going concern basis as determined by
an  independent  appraiser.  In addition,  Sprint PCS must approve any change of
control  of our  ownership  and  consent  to any  assignment  of the  Sprint PCS
agreements.  Sprint  PCS also has a right of first  refusal if we decide to sell
our operating assets in our Bright PCS markets.  We are also subject to a number
of  restrictions  on the transfer of our  business  including a  prohibition  on
selling our company or our operating assets to a number of identified and as yet
to  be  identified  competitors  of  Sprint  PCS  or  Sprint.  These  and  other
restrictions  in the Sprint PCS  agreements may limit the  marketability  of and
reduce the price a buyer may be willing to pay for our  company or its  business
and may operate to reduce the entire business value of our company.

     The Termination Of Our Strategic Affiliation With Sprint PCS Or Sprint PCS'
Failure To  Perform  Its  Obligations  Under The  Sprint  PCS  Agreements  Would
Severely Restrict Our Ability To Conduct Our Business.

     Because we own only a single  license to operate a wireless  PCS network of
our own, our ability to offer Sprint PCS products and services on our network is
dependent  on the  Sprint  PCS  agreements  remaining  in  effect  and not being
terminated. Sprint PCS may terminate the Sprint PCS agreements for breach of any
material terms. We also depend on Sprint PCS' ability to perform its obligations
under the Sprint PCS agreements. The termination of the Sprint PCS agreements or
the  failure  of Sprint  PCS to  perform  its  obligations  under the Sprint PCS
agreements  would severely  restrict our ability to conduct the wireless digital
communications business.

                                       23
<PAGE>

     If Sprint PCS Does Not  Complete The  Construction  Of Its  Nationwide  PCS
Network,  We May  Not Be Able To  Attract  And  Retain  Customers,  Which  Would
Adversely Affect Our Revenues.

     Sprint PCS' network may not provide nationwide  coverage to the same extent
as its  competitors,  which  could  adversely  affect our ability to attract and
retain  customers.  Sprint PCS is creating a nationwide PCS network  through its
own construction efforts and those of its affiliates.  Today, neither Sprint PCS
nor any other PCS provider  offers  service in every area of the United  States.
Sprint  PCS has  entered  into  affiliation  agreements  similar  to  ours  with
companies  in  other  territories  pursuant  to  its  nationwide  PCS  build-out
strategy.  Our business and results of operations depend on Sprint PCS' national
network and, to a lesser extent, on the networks of its other affiliates. Sprint
PCS and its affiliate program are subject,  to varying degrees, to the economic,
administrative,  logistical,  regulatory  and  other  risks  described  in  this
document.  Sprint  PCS' and its  other  affiliates'  PCS  operations  may not be
successful.

     We Are  Dependent  Upon Sprint PCS' Back  Office  Services  And Third Party
Vendors' Back Office Systems, and Problems with these Systems, or Termination of
this Arrangement, Could Disrupt Our Business and Possibly Increase Our Costs.

     Because  Sprint PCS now provides our back office  systems,  our  operations
could be  disrupted  if Sprint  PCS is unable to  maintain  and  expand its back
office services,  or to efficiently outsource those services and systems through
third party vendors.  The rapid  expansion of Sprint PCS' business will continue
to pose a significant  challenge to its internal support systems.  Additionally,
Sprint  PCS has  relied  on  third-party  vendors  for a  significant  number of
important  functions  and  components  of its internal  support  systems and may
continue  to rely on these  vendors  in the  future.  We depend  on Sprint  PCS'
willingness  to  continue to offer  these  services  to us and to provide  these
services at competitive costs. The Sprint PCS agreements provide that, upon nine
months'  prior  written  notice,  Sprint PCS may elect to terminate any of these
services.  If Sprint PCS  terminates a service for which we have not developed a
cost-effective  alternative,   our  operating  costs  may  increase  beyond  our
expectations and restrict our ability to operate successfully.

     We Depend On Other Telecommunications Companies For Some Services Which, If
Delayed,  Could  Delay Our  Planned  Network  Build-Out  And Delay Our  Expected
Increases In Customers And Revenues.

     We depend on other  telecommunications  companies to provide facilities and
transport  to  interconnect  portions  of our network and to connect our network
with the landline telephone system.  American Electric Power,  Ameritech,  AT&T,
Verizon and GTE are our primary  suppliers of facilities and transport.  Without
these services,  we could not offer Sprint PCS services to our customers in some
areas. From time to time, we have experienced delays in obtaining facilities and
transport from these companies, and in obtaining local telephone numbers for use
by our  customers,  which are sometimes in short supply,  and we may continue to
experience  delays  and  interruptions  in  the  future.   Delays  in  obtaining
facilities  and transport  could delay our build-out  plans and our business may
suffer.  Delays  could also  result in a breach of our  Sprint  PCS  agreements,
subjecting these agreements to potential termination by Sprint PCS.

     If We Do Not Meet All Of The  Conditions  Under Our Senior  Secured  Credit
Facility,  We May Not Be Able To Draw Down All Of The Funds  Under The  Facility
And, As A Result,  We May Not Be Able To Complete The  Build-Out Of Our Network,
Which May Result In The Termination Of The Sprint PCS Agreements.

     Our senior secured  credit  facility  provides for aggregate  borrowings of
$250.0  million of which $50.0  million was borrowed as of  September  30, 2001.
Availability of future borrowings will be subject to customary credit conditions
at each funding date, including the following:

          o    the absence of any default or event of default;
          o    the continuing  accuracy of all  representations  and warranties;
               and
          o    no material adverse change.

     If we do not meet these conditions at each funding date, our senior secured
lenders may choose not to lend any or all of the remaining amounts, and if other
sources of funds are not available,  we may not be in a position to complete the
build-out of our  network.  If we do not have  sufficient  funds to complete our
network  build-out,  we may be in breach of the  Sprint  PCS  agreements  and in
default under our senior secured credit facility.

     Material  Restrictions  in our Debt  Facilities  May Make it  Difficult  to
Obtain Additional  Financing or Take Other Needed Actions to React to Changes in
Our Business.

                                       24
<PAGE>

     The indenture  governing our senior  discount  notes and the senior secured
credit  agreement both impose material  operating and financial  restrictions on
us. These restrictions,  subject to ordinary course of business exceptions,  may
limit our ability to engage in some transactions, including the following:

          o    designated types of mergers or consolidations;
          o    paying dividends or other distributions to our stockholders;
          o    making investments;
          o    selling assets;
          o    repurchasing our common stock;
          o    changing lines of business;
          o    borrowing additional money; and
          o    transactions with affiliates.

     These  restrictions  could  limit our  ability  to obtain  debt  financing,
repurchase  stock,  refinance or pay  principal  or interest on our  outstanding
debt,  consummate  acquisitions  for  cash or debt or react  to  changes  in our
operating environment.

     An event of default under the senior secured  credit  facility may prohibit
us and the  guarantors  of our  senior  discount  notes  from  paying the senior
discount notes or the guarantees of the senior discount notes.

     The Terms Of The  Convertible  Preferred  Stock May  Affect  Our  Financial
Results.

     If we do not  complete  an initial  public  offering  of common  stock that
yields  gross  proceeds  of at least $65.0  million  with a per share price that
exceeds  $10.29 or  consummate a business  combination  with another  Sprint PCS
affiliate that meets specified  criteria,  our convertible  preferred stock will
not convert into common stock. The terms of the convertible preferred stock give
the holders of the preferred stock the following principal rights:

     o    to initially designate two members of our board of directors,  subject
          to reduction based on future percentage ownership;
     o    to  approve  or   disapprove   fundamental   corporate   actions   and
          transactions;
     o    to  receive  dividends  in  the  form  of  additional  shares  of  our
          convertible  preferred stock, which may increase and accelerate upon a
          change in control; and
     o    to require us to redeem the convertible preferred stock.

     If we  become  subject  to  the  repurchase  right  or  change  of  control
redemption  requirements under the convertible  preferred stock while our senior
debt or senior discount notes are  outstanding,  we will be required to seek the
consent of the holders of our senior debt and the holders of the senior discount
notes to repurchase or redeem the  convertible  preferred  stock,  or attempt to
refinance  the debt and the senior  discount  notes.  If we fail to obtain these
consents, there will be an event of default under the terms governing our senior
debt. In addition,  if we do not repurchase or redeem the convertible  preferred
stock and the  holders  of the  convertible  preferred  stock  obtain a judgment
against us, any judgment in excess of $5.0 million would  constitute an event of
default under the indenture governing the senior discount notes.

     If We  Breach  Our  Agreement  With SBA,  Or It  Otherwise  Terminates  Its
Agreement With Us, Our Right To Provide  Wireless  Service From Most Of Our Cell
Sites Will Be Lost.

     We lease cell sites from SBA. We rely on our  contract  with SBA to provide
us with  access to most of our cell  sites and to the  towers  located  on these
sites. If SBA were to lose its underlying  rights to these sites, our ability to
provide  wireless  service  from these sites would end,  subject to our right to
cure defaults by SBA. If SBA terminates our agreement as a result of our breach,
we will lose our right to provide wireless services from most of our cell sites.

     We May Have Difficulty In Obtaining  Infrastructure Equipment And Handsets,
Which Are At Times In Short Supply,  Which Could Result In Delays In Our Network
Build-Out, Disruption Of Service Or Loss Of Customers.

     If we cannot  acquire  the  equipment  required  to build our  network in a
timely  manner,  we may be unable to provide  wireless  communications  services
comparable to those of our competitors or to meet the requirements of the Sprint
PCS agreements.  The demand for the equipment  required to construct our network
is  considerable,  and  manufacturers  of this equipment could have  substantial
order  backlogs.  Accordingly,  the lead time for the delivery of this equipment
may be longer than  anticipated.  In addition,  the demand for specific types of


                                       25
<PAGE>

handsets  is  strong  and  the  manufacturers  of  those  handsets  may  have to
distribute their limited supply of products among their numerous customers. Some
of our competitors purchase large quantities of communications equipment and may
have  established  relationships  with  the  manufacturers  of  this  equipment.
Consequently, they may receive priority in the delivery of this equipment. If we
do not obtain  equipment or handsets in a timely manner,  we could suffer delays
in the  build-out  of our  network,  disruptions  in service and a reduction  in
customers.

     If The Alliances Fail To Provide Their Network To Us In Their  Markets,  Or
If Our Network Services Agreement With The Alliances Is Otherwise Terminated, We
Will Lose The Ability To Use The Alliances' Networks.

     Under our network services agreement, the Alliances provide us with the use
of and  access to key  components  of their  network  in most of our  markets in
Virginia and West  Virginia.  We directly  compete with the Alliances in some of
our other markets  where we don't use their  network.  If the Alliances  fail to
maintain the standards  for their  network as set forth in our network  services
agreement  with them or otherwise fail to provide their network for our use, our
ability to provide wireless services in these markets may be adversely affected,
and we may not be able to provide  seamless  service  for our  customers.  If we
breach our obligations to the Alliances, or if the Alliances otherwise terminate
the network  services  agreement,  we will lose our right to use the  Alliances'
network to provide service in these markets. In that event, it is likely that we
will be  required  to build  our own  network  in those  markets  and  incur the
substantial  costs  associated  with doing so. This agreement was amended in the
third quarter of 2001 to provide for minimum monthly fees to be paid by us until
December.  The aggregate amount of future minimum payments at September 30, 2001
is as follows:


          2001..........................................       $ 5,100,000
          2002..........................................        27,400,000
          2003..........................................        38,600,000
                                                          -----------------
          Total.........................................      $ 71,100,000
                                                          =================


     Sprint PCS' Vendor Discounts May Be Discontinued,  Which Could Increase Our
Equipment  Costs And  Require  More  Capital  Than We  Project  To Build Out Our
Network.

     We intend to continue to purchase our infrastructure equipment under Sprint
PCS' vendor agreements that include significant volume discounts.  If Sprint PCS
were unable to continue to obtain vendor discounts for its affiliates,  the loss
of vendor discounts could increase our equipment costs for our new markets.

     Conflicts  With  Sprint PCS May Not Be  Resolved  In Our Favor  Which Could
Restrict Our Ability To Manage Our Business And Provide  Sprint PCS Products And
Services,  Adversely Affect Our Relationships  With Our Customers,  Increase Our
Expenses Or Decrease Our Revenues.

     Under the Sprint PCS  agreements,  Sprint PCS has a  substantial  amount of
control over the conduct of our business. Conflicts between us may arise, and as
Sprint PCS owes us no duties  except as set forth in the Sprint PCS  agreements,
these  conflicts  may not be  resolved  in our favor.  The  conflicts  and their
resolution may harm our business. For example:

     o    Sprint PCS could price its national  plans based on its own objectives
          and could set price levels that may not be economically sufficient for
          our business;
     o    Sprint PCS could decide not to renew the Sprint PCS  agreements on the
          following  renewal  dates,  which would not be in our best interest or
          that of our stockholders:
          o    the Sprint PCS  agreements  for Horizon  Personal  Communications
               will come up for renewal on June 8, 2018;
          o    the Sprint PCS agreements for Bright PCS will come up for renewal
               on October 13, 2019;
     o    Sprint  PCS  could  increase  the  prices  we pay for our back  office
          services;
     o    Subject to limitations under the Sprint PCS agreements, Sprint PCS may
          alter its  network  and  technical  requirements  or  request  that we
          build-out  additional areas within our markets,  which could result in
          increased  equipment and build-out costs or in Sprint PCS building out
          that area itself or assigning it to another affiliate; and
     o    Sprint or Sprint PCS could make decisions which could adversely affect
          the Sprint and Sprint PCS brand names, products or services.

     We May  Not Be Able To  Compete  With  Larger,  More  Established  Wireless
Providers Who Have Resources To Competitively Price Their Products And Services,
Which Could Impair Our Ability To Attract And Retain Customers.

                                       26
<PAGE>

     Our ability to compete will depend in part on our ability to anticipate and
respond  to  various  competitive   factors  affecting  the   telecommunications
industry,  including  new services that may be  introduced,  changes in consumer
preferences,  demographic  trends,  economic  conditions  and  discount  pricing
strategies  by  competitors.  In each  market,  we  compete  with  two  cellular
providers which have had their infrastructure in place and have been operational
for a number of years. They have  significantly  greater financial and technical
resources  than we do,  could offer  attractive  pricing  options and may have a
wider variety of handset  options.  We expect that existing  cellular  providers
will continue to upgrade their systems and provide expanded, digital services to
compete with the Sprint PCS products and services  that we offer.  Many of these
wireless  providers  generally  require their  customers to enter into long-term
contracts,  which may make it more  difficult for us to attract  customers  away
from them.  Sprint PCS  generally  does not require its  customers to enter into
long-term  contracts,  which may make it easier for other wireless  providers to
attract  Sprint PCS  customers  away from Sprint PCS. We will also  compete with
several  PCS  providers  and  other  existing  communications  companies  in our
markets,  and expect to compete with new entrants as the FCC licenses additional
spectrum to mobile services providers.  A number of our cellular,  PCS and other
wireless  competitors  have  access to more  licensed  spectrum  than the amount
licensed to Sprint PCS in most of our territory  and  therefore  will be able to
provide greater network call volume capacity than our network to the extent that
network  usage begins to reach or exceed the capacity of our licensed  spectrum.
Our  inability  to  accommodate  increases  in call volume  could result in more
dropped or disconnected  calls. In addition,  any competitive  difficulties that
Sprint PCS may experience could also harm our competitive position and success.

     We May Not Be Able To Offer  Competitive  Roaming  Capability,  Which Could
Impair Our Ability To Attract And Retain Customers.

     We rely  on  agreements  with  competitors  to  provide  automatic  roaming
capability  to our PCS  customers in many of the areas of the United  States not
covered by the Sprint PCS network,  which primarily serves  metropolitan  areas.
Some competitors may be able to offer coverage in areas not served by the Sprint
PCS  network  or may be able to offer  roaming  rates  that are lower than those
offered  by some of our  competitors  are  seeking  to  reduce  access  to their
networks  through  actions pending with the Federal  Communications  Commission.
Moreover,  the standard for the dominant air interface  upon which PCS customers
roam is currently being considered for elimination by the Federal Communications
Commission as part of a streamlining  proceeding.  If the Federal Communications
Commission  eliminates  this standard,  Sprint PCS customers may have difficulty
roaming in some markets.

     There Is No Uniform Signal Transmission  Technology And If We Decide To Use
Other Technologies In The Future, This Decision Could Substantially Increase Our
Equipment Expenditures To Replace The Technology Used On Our Network.

     The wireless  telecommunications industry is experiencing evolving industry
standards.  We have  employed  code  division  multiple  access,  known  as CDMA
technology,  which is the digital wireless communications technology selected by
Sprint PCS for its network.  CDMA is a  relatively  new  technology  and may not
provide  the  advantages  expected by us and by Sprint PCS. In addition to CDMA,
there are two other principal signal  transmission  technologies,  time division
multiple access, or TDMA, and global systems for mobile communications,  or GSM.
These three signal transmission technologies are not compatible with each other.
If one of  these  technologies  or  another  technology  becomes  the  preferred
industry  standard,  we may be at a  competitive  disadvantage  and  competitive
pressures  may require  Sprint PCS to change its digital  technology  which,  in
turn, may require us to make changes at substantially increased costs.

     We May Not Receive As Much Sprint PCS Roaming  Revenue As We Anticipate And
Our Non-Sprint PCS Roaming Revenue Is Likely To Be Low.

     We are paid a fee from  Sprint  PCS or a Sprint  PCS  affiliate  for  every
minute that a Sprint PCS  subscriber  based  outside of our  territory  uses our
network.  Similarly,  we pay a fee to Sprint PCS or a Sprint PCS  affiliate  for
every  minute  that  our  customers  use the  Sprint  PCS  network  outside  our
territory.  Our customers  may use the Sprint PCS network  outside our territory
more frequently than we anticipate, and Sprint PCS subscribers based outside our
territory may use our network less  frequently  than we anticipate.  The fee for
each Sprint PCS roaming  minute used was changed  from $0.20 per minute to $0.15
per  minute as of June 1,  2001,  and  changed to $0.12 per minute on October 1,
2001, and to "a fair and reasonable  return," expected to be approximately $0.10
per minute,  in 2002,  and for the remainder of the term of the PCS  agreements.
This  change  has not yet  been  documented,  and may not  represent  the  final
arrangements.  As a result,  we will receive less Sprint PCS roaming per minute,
and may  receive  less  Sprint PCS  roaming  revenue in the  aggregate,  than we
previously anticipated or we may have to pay more Sprint PCS roaming fees in the
aggregate  than  we  anticipate.  Furthermore,  we  do  not  expect  to  receive
substantial non-Sprint PCS roaming revenue.

                                       27
<PAGE>

     If Sprint PCS Customers Are Not Able To Roam Instantaneously Or Efficiently
Onto Other  Wireless  Networks,  We May Suffer A Reduction  In Our  Revenues And
Number Of Customers.

     The Sprint PCS network  operates at a different  frequency  and uses or may
use a different  signal  transmission  technology  than many analog cellular and
other digital systems. To access another provider's analog cellular, TDMA or GSM
digital  system when outside the territory  served by the Sprint PCS network,  a
Sprint  PCS  customer  is  required  to  utilize a  dual-band/dual-mode  handset
compatible with that provider's system. Generally,  because  dual-band/dual-mode
handsets incorporate two radios rather than one, they are more expensive, larger
and heavier than  single-band/single-mode  handsets. The Sprint PCS network does
not allow for call hand-off  between the Sprint PCS network and another wireless
network, so a customer must end a call in progress on the Sprint PCS network and
initiate a new call when outside the territory served by the Sprint PCS network.
In addition,  the quality of the service provided by a network provider during a
roaming call may not approximate  the quality of the service  provided by Sprint
PCS.  The price of a roaming  call may not be  competitive  with prices of other
wireless  companies for roaming calls,  and Sprint PCS customers may not be able
to use Sprint PCS  advanced  features,  such as  voicemail  notification,  while
roaming.

     Parts Of Our  Territories  Have  Limited  Licensed  Spectrum,  And This May
Affect The Quality Of Our Service,  Which Could Impair Our Ability To Attract Or
Retain Customers.

     In the majority of our markets,  Sprint PCS has licenses  covering 20 or 30
MHz of spectrum.  However, Sprint PCS has licenses covering only 10 MHz in parts
of our territory  covering  approximately  3.8 million  residents out of a total
population  of over 10.2 million  residents,  including our Fort Wayne and South
Bend, Indiana,  markets. In the future, as our customers in those areas increase
in  number,  this  limited  licensed  spectrum  may not be  able to  accommodate
increases in call volume and may lead to increased  dropped  calls and may limit
our ability to offer enhanced services.

     Non-Renewal  Or  Revocation  By The FCC Of The  Sprint PCS  Licenses  Would
Significantly  Harm Our  Business  Because We Would No Longer  Have The Right To
Offer Wireless Service Through Our Network.

     We are dependent on Sprint PCS' licenses,  which are subject to renewal and
revocation  by the FCC.  Sprint PCS'  licenses in many of our  territories  will
expire as early as 2005 but may be renewed for additional ten year terms.  There
may be opposition to renewal of Sprint PCS' licenses upon their  expiration  and
the  Sprint  PCS  licenses  may not be  renewed.  The FCC has  adopted  specific
standards to apply to PCS license renewals.  For example, if Sprint PCS does not
demonstrate  to the FCC  that  Sprint  PCS has  met the  five-year  construction
requirements for each of its PCS licenses,  it can lose those licenses.  Failure
to comply  with these  standards  in our  territory  could cause  revocation  or
forfeiture  of the Sprint PCS licenses for our  territory or the  imposition  of
fines on Sprint PCS by the FCC.

     We May  Need  More  Capital  Than We  Currently  Project  To  Complete  The
Build-Out  Of Our  Network And A Delay Or Failure To Obtain  Additional  Capital
Could Adversely Affect Our Revenues.

     The completion of our network build-out will require  substantial  capital.
Additional funds would be required in the event of:

     o    significant departures from our current business plan;
     o    unforeseen delays, cost overruns, unanticipated expenses; or
     o    regulatory, engineering design and other technological changes.

     For example,  it is possible that we will need substantial funds if we find
it  necessary  to  overbuild  the  territory   currently   served   through  our
arrangements with the Alliances.  Due to our highly leveraged capital structure,
additional financing may not be available or, if available,  may not be obtained
on a timely basis and on terms acceptable to us or within limitations  permitted
under our  existing  debt  covenants.  Failure to obtain  additional  financing,
should the need for it develop,  could result in the delay or abandonment of our
development  and  expansion  plans,  and we may be  unable  to fund our  ongoing
operations.

     Unauthorized  Use Of Our Network And Other Types Of Fraud Could Disrupt Our
Business And Increase Our Costs.

     We will likely  incur costs  associated  with the  unauthorized  use of our
network,  including  administrative and capital costs associated with detecting,
monitoring  and reducing the incidence of fraud.  Fraud impacts  interconnection
costs, capacity costs, administrative costs, fraud prevention costs and payments


                                       28
<PAGE>

to other carriers for unbillable fraudulent roaming. Although we believe that we
have a plan in place to implement appropriate controls to minimize the effect to
us of fraudulent usage, we cannot assure you that we will be successful.

     Expanding Our Territory May Have A Material  Adverse Effect On Our Business
And Reduce The Market Value Of Our Common Stock.

     As part of our business  strategy,  we may expand our territory through the
grant of  additional  markets from Sprint PCS or through  acquisitions  of other
Sprint PCS affiliates.  We will evaluate  strategic  acquisitions  and alliances
principally  relating to our current operations.  These transactions may require
the approval of Sprint PCS and commonly involve a number of risks, including:

     o    difficulty assimilating acquired operations and personnel;
     o    diversion of management attention;
     o    disruption of ongoing business;
     o    inability to retain key personnel;
     o    inability to successfully  incorporate acquired assets and rights into
          our service offerings;
     o    inability to maintain  uniform  standards,  controls,  procedures  and
          policies; and
     o    impairment of relationships with employees, customers or vendors.

     Failure to overcome these risks or any other problems  encountered in these
transactions could have a material adverse effect on our business. In connection
with these transactions,  we may also issue additional equity securities,  incur
additional debt or incur significant  amortization  expenses related to goodwill
and other intangible assets.

     If The Sprint PCS  Agreements Do Not Comply With FCC  Requirements,  Sprint
PCS May Terminate The Sprint PCS Agreements, Which Could Result In Our Inability
To Provide Service.

     The FCC requires that licensees  like Sprint PCS maintain  control of their
licensed spectrum and not delegate control to third-party  operators or managers
like us.  Although the Sprint PCS  agreements  reflect an  arrangement  that the
parties  believe  meets the FCC  requirements  for licensee  control of licensed
spectrum,  we cannot assure you that the FCC will agree with us. If the FCC were
to determine that the Sprint PCS agreements  need to be modified to increase the
level of  licensee  control,  we have  agreed  with  Sprint  PCS to use our best
efforts to modify the Sprint PCS agreements to comply with applicable law. If we
cannot  agree with Sprint PCS to modify the Sprint PCS  agreements,  they may be
terminated. If the Sprint PCS agreements are terminated, we would no longer be a
part  of the  Sprint  PCS  network  and we  would  have  extreme  difficulty  in
conducting our business.

     The Sprint PCS Agreements  And Our  Certificate  Of  Incorporation  Include
Provisions  That May  Discourage,  Delay And Restrict Any Sale Of Our  Operating
Assets Or Common Stock To The Possible Detriment Of Our Stockholders.

     The Sprint PCS agreements restrict our ability to sell our operating assets
and common stock. Generally,  Sprint PCS must approve a change of control of our
ownership and consent to any assignment of the Sprint PCS agreements. The Sprint
PCS  agreements  also give  Sprint PCS a right of first  refusal if we decide to
sell the  operating  assets of our  Bright  PCS  markets  to a third  party.  In
addition,  provisions of our certificate of incorporation  could also operate to
discourage, delay or make more difficult a change in control of our company. For
example, our HPCS certificate of incorporation provides for:

     o    two classes of common stock,  with our class B common stock having ten
          votes per share;
     o    the issuance of preferred stock without stockholder approval; and
     o    a classified board, with each board member serving a three-year term.

     The  restrictions  in the Sprint PCS  agreements  and the provisions of our
certificate of  incorporation  could discourage any sale of our operating assets
or common stock.  This could have a material  adverse effect on the value of our
stock and could reduce the price of the company in the event of a sale.

     We will Not Be Able To Receive  The Tax Benefit Of Future  Losses  Until We
Begin To Generate Taxable Income.

     From  our  inception   until  September  2000,  we  were  included  in  the
consolidated  federal  income tax return of Horizon  Telcom,  Inc.  which owns a
majority of our outstanding common stock.  Under the tax-sharing  agreement with
Horizon  Telcom,  Horizon Telcom filed a consolidated  tax return and paid us an
amount  equal to the tax savings  realized by Horizon  Telcom as a result of our


                                       29
<PAGE>

taxable operating losses being used to offset consolidated  taxable income. As a
result of the sale of convertible  preferred  stock in September 2000, we are no
longer included in Horizon  Telcom's  consolidated  tax return and, as a result,
will no longer be able to recognize any tax benefits  from our operating  losses
until we start to generate  taxable  income.  In  addition,  as a result of this
change in our tax status,  we recognized a tax liability of  approximately  $7.6
million. This liability was paid by Horizon PCS.

     Horizon Telcom Will Be Able To Control The Outcome Of  Significant  Matters
Presented To  Stockholders  As A Result Of Its Ownership  Position,  Which Could
Potentially Impair Our Attractiveness As A Takeover Target.

     Horizon Telcom  beneficially  owns  approximately  55.3% of our outstanding
common stock on fully  diluted  basis.  In addition,  the shares held by Horizon
Telcom are class B shares,  which  have ten votes per share.  The class A shares
have only one vote per share.  As a result,  Horizon Telcom holds  approximately
81.2% of the voting power,  on a fully diluted  basis.  Horizon Telcom will have
the voting power to control the  election of our board of directors  and it will
be able to cause amendments to our restated  certificate of incorporation or our
restated  bylaws.  Horizon  Telcom  also  may be able to  cause  changes  in our
business without seeking the approval of any other party.  These changes may not
be to the  advantage  of  our  company  or in the  best  interest  of our  other
stockholders  or the holders of senior  discount  notes.  For  example,  Horizon
Telcom will have the power to prevent, delay or cause a change in control of our
company and could take other actions that might be favorable to Horizon  Telcom,
but not necessarily to other stockholders.  This may have the effect of delaying
or preventing a change in control. In addition,  Horizon Telcom is controlled by
members of the McKell family,  who collectively own  approximately  60.6% of the
economic and voting interests of Horizon Telcom.  Therefore,  the McKell family,
acting as a group, may be able to exercise indirect control over us.

     We May Face  Potential  Conflicts Of Interest With Horizon Telcom Which May
Harm Our Business.

     Conflicts of interest may arise between us and Horizon Telcom, or its other
affiliates,  in  areas  relating  to past,  ongoing  and  future  relationships,
including:

     o    corporate opportunities;
     o    tax and intellectual property matters;
     o    potential acquisitions;
     o    financing transactions,  sales or other dispositions by Horizon Telcom
          of shares of our common stock held by it; and
     o    the  exercise  by  Horizon  Telcom  of  its  ability  to  control  our
          management and affairs.

     Horizon  Telcom  controls  approximately  81.2% of the voting  power of our
shares on a fully diluted basis. Horizon Telcom is engaged in a diverse range of
telecommunications-related  businesses,  such as a local telephone  services and
Internet  services,  and these  businesses  may have  interests that conflict or
compete in some manner with our business.  Horizon Telcom is under no obligation
to share any  future  business  opportunities  available  to it with us,  unless
Delaware law requires it to do so. Any  conflicts  that may arise between us and
Horizon Telcom or any of its affiliates or any loss of corporate  opportunity to
Horizon  Telcom that may  otherwise be available to us may impact our  financial
condition or results of operations because these conflicts of interest or losses
of corporate  opportunities  could result in a loss of customers and, therefore,
business.  Because  Horizon  Telcom  will be able to control the outcome of most
conflicts upon which stockholders could vote and because it will have the voting
power to control our board of  directors,  conflicts  may not be resolved in our
favor.

     Present And Future  Transactions  With Horizon Telcom May Be On Terms Which
Are Not As Favorable As Could Be Obtained From Third Parties.

     In the  past,  we  have  entered  into  transactions  with  Horizon  Telcom
including  the leasing of towers by Horizon  Telcom to us and the  advancing  of
cash to us to  finance  our  operations.  In  addition,  under  our tax  sharing
agreement with Horizon Telcom,  Horizon Telcom used our net operating  losses to
offset its taxes. Under that agreement, Horizon Telcom paid us the amount of its
tax savings from our net operating losses used for this purpose.

     In addition,  Horizon  Services,  a subsidiary of Horizon  Telcom  provides
administrative   services  to  us  including  finance  functions,   billing  and
collections,  accounting services, computer access, customer relations and human
resources.  Although these  transactions were on terms that we believe are fair,
because Horizon Telcom currently owns 55.3% of our outstanding common stock on a
fully diluted basis,  third-parties  with which we wish to enter into agreements
or the market  place may not  perceive  them to be fair.  In  addition,  because
Horizon  Telcom has the power to control our board of  directors,  we may not be
able to renew these  agreements  on terms  favorable  to us. The  diagram  below
illustrates our relationship with the affiliates described in this paragraph and
the two preceding risk factors.

                                       30
<PAGE>


                                [graph omitted]


     (1)  The  shareholders  of Horizon Telcom include the members of the McKell
          family  (60.6%),  the former  owners of Bright PCS  (8.6%),  and other
          individuals and trusts.

     (2)  The  ownership  percentages  for Horizon PCS exclude  options  granted
          under our 2000 Stock Option Plan,  the warrants  issued to the initial
          purchasers  of the senior  discount  notes and  shares  subject to the
          Sprint PCS warrants.

     (3)  This percentage includes the 48% of Bright PCS which we own indirectly
          through Horizon Personal Communications.

     We May Experience A High Rate Of Customer Turnover Which Would Increase Our
Costs Of Operations And Reduce Our Revenue And Prospects For Growth.

     Our strategy to minimize  customer  turnover,  commonly known as churn, may
not be successful. Our average monthly churn for the nine months ended September
30, 2001, is approximately  2.1%. As a result of customer turnover,  we lose the
revenue  attributable  to these customers and increase the costs of establishing
and growing our customer base. The PCS industry has experienced a higher rate of
customer  turnover  as  compared  to  cellular  industry  averages.  The rate of
customer turnover is affected by the following factors, several of which are not
within our ability to address:

     o    extent of network coverage;
     o    reliability  issues such as blocked  calls,  dropped calls and handset
          problems;
     o    non-use of phones;
     o    change of employment;
     o    the decision not to require our  customers to sign  contracts,  unlike
          most cellular providers that do require contracts;
     o    a lack of affordability;
     o    price competition;
     o    customer care concerns; and
     o    other competitive factors.

                                       31
<PAGE>

     A high rate of customer  turnover could  adversely  affect our  competitive
position,  results  of  operations  and our costs of,  or  losses  incurred  in,
obtaining new  customers,  especially  because we subsidize  some of the cost of
initial purchases of handsets by our customers.

     Because The Wireless Industry Has Experienced Higher Customer Additions And
Handset  Sales In The Fourth  Calendar  Quarter As  Compared  To The Other Three
Calendar  Quarters,  A Failure By Us To Acquire  Significantly More Customers In
This Quarter  Could Have A  Disproportionate  Negative  Effect On Our Results Of
Operations.

     The wireless industry is historically  dependent on fourth calendar quarter
results. Our overall results of operations could be significantly  reduced if we
have a worse than expected fourth calendar quarter for any reason, including the
following:

     o    our inability to match or beat pricing plans offered by competitors;
     o    our failure to adequately  promote Sprint PCS' products,  services and
          pricing plans;
     o    our inability to obtain an adequate supply or selection of handsets;
     o    a  downturn  in the  economy  of  some  or all of the  markets  in our
          territory; or
     o    a poor holiday shopping season.

     Wireless  Providers  Offering  Services  Based On Lower Cost  Structures Or
Alternative  Technologies  And Current  Uncertainties In The Wireless Market May
Reduce Demand For PCS.

     Other  wireless  providers  enjoy  economies  of scale that can result in a
lower cost  structure  for  providing  wireless  services.  Rapid  technological
changes and  improvements  in the  telecommunications  market  could lower other
wireless  providers' cost  structures in the future.  These factors could reduce
demand for PCS because of competitors' ability to provide wireless services at a
lower price.  There is also  uncertainty as to the extent of customer  demand as
well as the extent to which airtime and monthly  recurring  charges may continue
to decline.  As a result, our future prospects,  those of our industry,  and the
success of PCS and other competitive services, remain uncertain.

     Technological advances and industry changes could cause the technology used
on our  network  to  become  obsolete.  We may not be able to  respond  to these
changes and  implement new  technology  on a timely  basis,  or at an acceptable
cost.

     The  wireless   telecommunications  industry  is  experiencing  significant
technological change, as evidenced by the increasing pace of digital upgrades in
existing  analog  wireless  systems,   evolving  industry   standards,   ongoing
improvements  in  the  capacity  and  quality  of  digital  technology,  shorter
development  cycles for new  products and  enhancements  and changes in end-user
requirements and preferences.

     Because  Sprint PCS Has  Recently  Required  Us To Upgrade  Our  Network To
Provide "Third Generation" Technology,  We Will Face Additional Capital Expenses
And Technology Risks.

     The wireless  industry is seeking to implement a new "third  generation" or
"3G" technology. Sprint PCS has recently selected a version of 3G technology for
its own  networks  and  required  us to upgrade  our  network to provide  it. We
currently  estimate that this network upgrade will cost $35 million,  but actual
costs  could  exceed this  estimate.  The  current  requirement  for 3G upgrades
generally is June 30, 2002. If we fail to meet the upgrade deadlines, we will be
in breach of our Sprint PCS  agreements.  If other wireless  carriers  implement
their 3G upgrade on a more rapid  timetable,  or on a more cost efficient basis,
or on a more  advanced  technology  basis,  we will  likely  suffer  competitive
disadvantages  in our  markets.  While there are  potential  advantages  with 3G
technology,  such as increased network capacity and additional  capabilities for
wireless  data  applications,   the  technology  has  not  been  proven  in  the
marketplace and has the risks inherent in other technological innovations.

     Regulation  By  Government  Agencies  May  Increase  Our Costs Of Providing
Service Or Require Us To Change Our  Services,  Which Could Impair Our Financial
Performance.

     The  licensing,  construction,  use,  operation,  sale and  interconnection
arrangements  of wireless  telecommunications  systems are  regulated to varying
degrees by the FCC, the FAA, and, depending on the jurisdiction, state and local
regulatory  agencies and legislative  bodies.  Adverse decisions regarding these
regulatory  requirements  could negatively impact our operations and our cost of
doing business.

     Use Of Hand-Held  Phones May Pose Health Risks,  Real or  Perceived,  Which
Could Result In The Reduced Use Of Our Services Or Liability For Personal Injury
Claims.

                                       32
<PAGE>

     Media reports have suggested that radio  frequency  emissions from wireless
handsets may be linked to various health  problems,  including  cancer,  and may
interfere with various  electronic  medical devices,  including hearing aids and
pacemakers.  Concerns  over radio  frequency  emissions  may  discourage  use of
wireless handsets or expose us to potential  litigation.  Any resulting decrease
in demand for our services,  or costs of  litigation  and damage  awards,  could
impair our ability to profitably operate our business.



                                       33
<PAGE>


ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS

Exhibit No.    Description
-----------    -----------

3.1*           Amended and Restated Certificate of Incorporation of Horizon PCS.

3.2*           Bylaws of Horizon PCS.

10.19.1+       Amendment  to  Network  Services   Agreement  by  and  among  the
               Registrant,  West  Virginia PCS  Alliance,  L.C. and Virginia PCS
               Alliance,   L.C.   (incorporated   herein  by  reference  to  the
               Registrant's  Current  Report  on Form 8-K  filed on  August  24,
               2001).

10.3.2         Addendum  VI to  Sprint  PCS  Management  Agreement  between  the
               Registrant and Sprint PCS, Inc. (incorporated herein by reference
               to the  Registrant's  Current  Report on Form 8-K filed on August
               24, 2001).

10.40.2        Second Amendment to Credit  Agreement and Assignment,  dated June
               29, 2001, by and among Horizon Personal Communications,  Inc. and
               Bright Personal  Communications  Services, LLC, Horizon PCS, Inc.
               (the "Parent") and certain  Subsidiaries of the Parent,  Existing
               Lenders,   New   Lenders,   First   Union   National   Bank,   as
               Administrative Agent,  Westdeutsche Landesbank  Girozentrale,  as
               Syndication  Agent and Arranger,  and Fortis  Capital  Corp.,  as
               Documentation  Agent.  (incorporated  herein by  reference to the
               Registrant's Current Report on Form 8-K filed on July 3, 2001).

*    Incorporated  by reference  to the exhibit with the same number  previously
     filed by the Registrant on Form S-4 (Reg. No. 333-51238).


__________________________

(B)  REPORTS ON FORM 8-K


     1. On July 3, 2001, The Company filed a Current Report on Form 8-K with the
Securities and Exchange Commission relating to an amendment to its senior credit
facility.

     2. On July 16, 2001,  The Company  filed a Current  Report on Form 8-K with
the Securities and Exchange  Commission  that set forth the  registrant's  press
release regarding its second quarter earnings conference call.

     3. On August 14, 2001,  The Company filed a Current Report on Form 8-K with
the Securities and Exchange  Commission  that set forth the  registrant's  press
release regarding its second quarter earnings release.

     4. On August 24, 2001,  The Company filed a Current Report on Form 8-K with
the Securities and Exchange  Commission  that set forth the  registrant's  press
release  regarding the amended  agreement with the Alliances and an amendment to
its Sprint PCS agreements.



                                       34
<PAGE>

     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 officer thereunto duly authorized.

                                        HORIZON PCS, INC.


Date:    November 13, 2001              By:  /s/ William A. McKell
                                             -----------------------------------
                                             William A. McKell
                                             Chief Executive Officer


Date:    November 13, 2001              By:  /s/ Peter M. Holland
                                             -----------------------------------
                                             Peter M. Holland
                                             Chief Financial Officer
                                             (Principal Financial and Chief
                                             Accounting Officer)



                                       35
<PAGE>


                                  EXHIBIT INDEX


Exhibit No.    Description
-----------    -----------

3.1*           Amended and Restated Certificate of Incorporation of Horizon PCS.

3.2*           Bylaws of Horizon PCS.

10.19.1+       Amendment  to  Network  Services   Agreement  by  and  among  the
               Registrant,  West  Virginia PCS  Alliance,  L.C. and Virginia PCS
               Alliance,   L.C.   (incorporated   herein  by  reference  to  the
               Registrant's  Current  Report  on Form 8-K  filed on  August  24,
               2001).

10.3.2         Addendum  VI to  Sprint  PCS  Management  Agreement  between  the
               Registrant and Sprint PCS, Inc. (incorporated herein by reference
               to the  Registrant's  Current  Report on Form 8-K filed on August
               24, 2001).

10.40.2        Second Amendment to Credit  Agreement and Assignment,  dated June
               29, 2001, by and among Horizon Personal Communications,  Inc. and
               Bright Personal  Communications  Services, LLC, Horizon PCS, Inc.
               (the "Parent") and certain  Subsidiaries of the Parent,  Existing
               Lenders,   New   Lenders,   First   Union   National   Bank,   as
               Administrative Agent,  Westdeutsche Landesbank  Girozentrale,  as
               Syndication  Agent and Arranger,  and Fortis  Capital  Corp.,  as
               Documentation  Agent.  (incorporated  herein by  reference to the
               Registrant's Current Report on Form 8-K filed on July 3, 2001).

*    Incorporated  by reference  to the exhibit with the same number  previously
     filed by the Registrant on Form S-4 (Reg. No. 333-51238).




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