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

                                    FORM 10-Q

                                   (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

                        Commission file number: 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)             (Zip Code)

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


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[  ]


As of  July  31,  2002,  there  were  26,646  shares  of  class A  common  stock
outstanding and 58,445,288 shares of class B common stock outstanding.



<PAGE>


                                   HORIZON PCS
                                    FORM 10-Q
                              SECOND QUARTER REPORT

                                TABLE OF CONTENTS


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

       ITEM 1.       Financial Statements......................................................................1

       ITEM 2.       Management's Discussion and Analysis of Financial Condition
                     and Results of Operations................................................................15

       ITEM 3.       Quantitative and Qualitative Disclosures About Market Risk...............................32

PART II OTHER INFORMATION

       ITEM 1.       Legal Proceedings........................................................................33

       ITEM 2.       Changes in Securities and Use of Proceeds................................................33

       ITEM 3.       Defaults Upon Senior Securities..........................................................33

       ITEM 4.       Submission of Matters to a Vote of Security Holders......................................33

       ITEM 5.       Other Information........................................................................34

       ITEM 6.       Exhibits and Reports on Form 8-K.........................................................48
</TABLE>

     Horizon PCS, Inc.  ("Horizon  PCS") is the issuer of 14.00% Senior Discount
Notes  ("discount  notes") due October 1, 2010, and 13.75% Senior Notes ("senior
notes") due June 15, 2011.  The discount notes and senior notes were the subject
of  exchange  offers  that were  registered  with the  Securities  and  Exchange
Commission ("SEC") (Registration No. 333-51238 and 333-85626, respectively). The
Co-Registrants  are Horizon Personal  Communications,  Inc. ("HPC"),  and Bright
Personal  Communications  Services,  LLC  ("Bright  PCS"),   collectively,   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 the Operating Companies.  Pursuant to
Rule  12h-5 of the  Securities  Exchange  Act of  1934,  no  separate  financial
statements and other disclosures  concerning the Operating  Companies other than
narrative   disclosures  set  forth  in  the  Notes  to  the  Interim  Condensed
Consolidated  Financial  Statements have been presented herein.  Concurrent with
the offering of the discount notes discussed  above,  Horizon PCS issued 295,000
warrants  to  purchase  up to  3,805,000  shares of Horizon  PCS' class A common
stock. The warrants were registered with the SEC (Registration  No.  333-51240).
As used herein and except as the context  otherwise may require,  the "Company,"
"we," "us," "our" or "Horizon PCS" means,  collectively,  Horizon PCS, Inc., and
the Operating Companies.

                                       i
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON PCS, INC.

Condensed Consolidated Balance Sheets
As of June 30, 2002 and December 31, 2001
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                            <C>                <C>
                                                                                    June 30,         December 31,
                                                                                      2002               2001
                                                                               ----------------   ----------------
                                                                                  (unaudited)
ASSETS
------
CURRENT ASSETS:
   Cash and cash equivalents (includes $105,000,000 on deposit in
     accordance with covenant. See Note 6).................................... $    131,846,266   $    123,775,562
   Restricted cash............................................................       24,062,500         24,597,222
   Investments, held-to-maturity..............................................        6,525,263                 --
   Accounts receivable-- subscriber, less allowance for
     doubtful accounts of approximately $2,301,000 and $1,804,000 at
     June 30, 2002, and December 31, 2001, respectively.......................       21,014,188         14,293,771
   Receivable from affiliate..................................................          115,796            100,437
   Receivable from Parent.....................................................           50,000            483,785
   Equipment inventory........................................................        1,930,950          3,845,433
   Prepaid expenses and other current assets..................................        2,631,708            840,970
                                                                               ----------------   ----------------
      Total current assets....................................................      188,176,671        167,937,180
                                                                               ----------------   ----------------

OTHER ASSETS:
   Restricted cash............................................................       12,032,009         24,062,500
   Intangible asset-- Sprint PCS licenses, net of amortization................       41,610,868         42,840,534
   Goodwill...................................................................        7,191,180          7,191,180
   Debt issuance costs, net of amortization, and other assets.................       27,006,360         24,438,992
                                                                               ----------------   ----------------
      Total other assets......................................................       87,840,417         98,533,206
                                                                               ----------------   ----------------

PROPERTY AND EQUIPMENT, NET                                                         243,517,548        214,867,858
                                                                               ----------------   ----------------

           Total assets....................................................... $    519,534,636   $    481,338,244
                                                                               ================   ================
</TABLE>


(Continued on next page)


                                       1
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Balance Sheets (continued)
As of June 30,  2002,  and  December  31, 2001
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                            <C>                <C>

                                                                                    June 30,         December 31,
                                                                                      2002               2001
                                                                               ----------------   ----------------
                                                                                  (unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES:
  Accounts payable............................................................ $      6,082,238   $      9,500,931
  Accrued liabilities.........................................................       22,973,931         27,527,462
  Payable to Sprint...........................................................       14,841,718         10,244,529
  Deferred service revenue....................................................        4,675,289          3,712,734
                                                                               ----------------   ----------------
        Total current liabilities.............................................       48,573,176         50,985,656
                                                                               ----------------   ----------------

LONG-TERM LIABILITIES:
  Long-term debt, net of discount.............................................      502,209,607        384,055,643
  Other long-term liabilities.................................................        9,199,897          9,106,625
  Deferred activation revenue.................................................        5,130,237          3,808,618
                                                                               ----------------   ----------------
        Total long-term liabilities...........................................      516,539,741        396,970,886
                                                                               ----------------   ----------------
          Total liabilities...................................................      565,112,917        447,956,542
                                                                               ----------------   ----------------

COMMITMENTS AND CONTINGENCIES (Note 7)

CONVERTIBLE PREFERRED STOCK...................................................      151,061,781        145,349,043

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,
    26,646 issued and outstanding, at $0.0001 par value.......................                3                  3
  Common stock-- class B, 75,000,000 shares authorized,
    58,458,354 issued and 58,445,288 outstanding                                          5,846              5,846
  Treasury stock-- class B, 13,066 shares, at $8.50 per share.................         (111,061)          (111,061)
  Accumulated other comprehensive income (loss)...............................         (717,809)          (837,851)
  Additional paid-in capital..................................................       91,852,117         91,852,117
  Deferred stock option compensation..........................................       (1,226,122)        (1,566,496)
  Retained deficit............................................................     (286,443,036)      (201,309,899)
                                                                               ----------------   ----------------
          Total stockholders' equity (deficit)................................     (196,640,062)      (111,967,341)
                                                                               ----------------   ----------------
            Total liabilities and stockholders' equity (deficit).............. $    519,534,636   $    481,338,244
                                                                               ================   ================
</TABLE>



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


                                       2
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Statements of Operations
For the  Three  and Six  Months  Ended  June  30,  2002  and 2001 (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                     <C>                                <C>
                                                        For the Three Months Ended         For the Six Months Ended
                                                                   June 30,                         June 30,
                                                      ------------------------------   -------------------------------
                                                            2002            2001             2002             2001
                                                      --------------  --------------   ---------------  --------------
OPERATING REVENUES:
   Subscriber revenues...........................     $   37,100,328  $   15,534,748   $    72,115,533  $   27,597,981
   Roaming revenue...............................         13,115,952       7,737,890        23,935,240      13,852,349
   Equipment revenues............................          1,597,639       1,498,772         3,972,928       2,574,737
                                                      --------------  --------------   ---------------  --------------
      Total operating revenues...................         51,813,919      24,771,410       100,023,701      44,025,067
                                                      --------------  --------------   ---------------  --------------

OPERATING EXPENSES:
   Cost of service (exclusive of items shown
     separately below)...........................         41,295,842      21,095,072        77,046,651      39,076,437
   Cost of equipment.............................          3,741,694       2,312,499         8,661,289       4,502,409
   Selling and marketing.........................         11,224,139      10,306,302        25,931,360      17,402,333
   General and administrative (exclusive of
     items shown separately below)...............         10,269,326       7,486,718        19,444,375      12,075,718
   Non-cash compensation ........................            163,137         902,137           340,374       1,079,374
   Depreciation and amortization.................         12,979,776       4,407,543        20,929,407       7,821,586
                                                      --------------  --------------   ---------------  --------------
      Total operating expenses...................         79,673,914      46,510,271       152,353,456      81,957,857
                                                      --------------  --------------   ---------------  --------------

OPERATING LOSS...................................        (27,859,995)    (21,738,861)      (52,329,755)    (37,932,790)

   Loss on sale of property and equipment                   (355,265)             --          (641,003)             --
   Loss on exchange of stock.....................                 --        (399,673)               --        (399,673)
   Interest income and other, net................          1,001,073       1,379,211         1,744,709       4,265,431
   Interest expense, net of amounts capitalized..        (15,455,914)     (6,526,488)      (28,194,322)    (12,677,436)
                                                      --------------  --------------   ---------------  --------------

LOSS ON OPERATIONS BEFORE INCOME TAXES...........        (42,670,101)    (27,285,811)      (79,420,371)    (46,744,468)
                                                      --------------  --------------   ---------------  --------------

INCOME TAX EXPENSE...............................                 --              --                --              --
                                                      --------------  --------------   ---------------  --------------

NET LOSS.........................................        (42,670,101)    (27,285,811)      (79,420,371)    (46,744,468)
                                                      --------------  --------------   ---------------  --------------

PREFERRED STOCK DIVIDEND.........................         (2,856,397)     (2,717,954)       (5,712,766)     (5,353,577)
                                                      --------------  --------------   ---------------  --------------

NET LOSS AVAILABLE TO COMMON STOCKHOLDERS........     $  (45,526,498) $  (30,003,765)  $   (85,133,137) $  (52,098,045)
                                                      ==============  ==============   ===============  ==============

Basic and diluted net loss per share available
   to common stockholders........................     $        (0.78)  $       (0.51)  $         (1.46) $        (0.89)
                                                      ==============  ==============   ===============  ==============
Weighted-average common shares outstanding.......         58,471,934      58,471,934        58,471,934      58,471,934
                                                      ==============  ==============   ===============  ==============
</TABLE>



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


                                       3
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)
For the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                             <C>                <C>                <C>               <C>
                                                    For the Three Months Ended             For the Six Months Ended
                                                            June 30,                               June 30,
                                                -----------------------------------------------------------------------
                                                      2002              2001                    2002           2001
                                                --------------     --------------     ------------------ --------------

NET LOSS......................................  $  (42,670,101)    $  (27,285,811)    $  (79,420,371)    $  (46,744,468)
                                                ==============     ==============     ==============     ==============

OTHER COMPREHENSIVE INCOME (LOSS):
     Net unrealized gain (loss) on hedging
     activities...............................        (269,901)           (54,168)           120,042           (353,073)
                                                --------------     ==============     --------------     --------------

COMPREHENSIVE INCOME (LOSS)...................  $  (42,940,002)    $  (27,339,979)    $  (79,300,329)    $  (47,097,541)
                                                ==============     ==============     ==============     ==============
</TABLE>



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


                                       4
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                         <C>                  <C>
                                                                                    For the Six Months Ended
                                                                                            June 30,
                                                                                   2002                 2001
                                                                            -----------------    ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
     Net Loss.............................................................  $    (79,420,371)    $    (46,744,468)
                                                                            ----------------     ----------------
 Adjustments to reconcile net loss to net cash used in operating
   activities:
     Depreciation and amortization........................................        20,929,407            7,821,586
     Non-cash interest expense............................................        12,985,511            9,340,529
     Non-cash compensation expense........................................           340,374            1,079,374
     Loss on exchange of stock............................................                --              399,673
     Loss on hedging activities...........................................            34,103               76,626
     Loss on disposal of property and equipment...........................           641,003                   --
     Provision for doubtful accounts......................................         7,493,937            2,182,983
     Change in:
       Accounts receivable................................................       (14,214,354)          (7,285,429)
       Equipment inventory................................................         1,914,483            1,572,487
       Prepaid expenses and other.........................................        (1,790,738)           2,618,509
       Accounts payable...................................................        (3,418,693)          (8,475,591)
       Accrued liabilities and deferred service revenue...................         8,974,238           (7,665,058)
       Payable to Sprint..................................................         4,597,189              681,968
       Deferred activation revenue........................................         1,321,619            1,015,906
       Change in receivable/payable from affiliates and Parent............           418,426              953,533
       Change in other assets and liabilities, net........................        (1,179,407)          (1,729,726)
                                                                            ----------------     ----------------
         Total adjustments................................................        39,047,098            2,587,370
                                                                            ----------------     ----------------
         Net cash used in operating activities............................       (40,373,273)         (44,157,098)
                                                                            ----------------     ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures.................................................       (49,113,012)         (66,019,254)
     Dividends received...................................................                --               (4,311)
     Purchase of short-term investments...................................        (6,525,263)         (24,880,965)
     Proceeds from the sale of property and equipment.....................         1,543,482                   --
     Proceeds from redemption of RTFC capital certificates................                --            2,895,646
                                                                            ----------------     ----------------
         Net cash used in investing activities............................       (54,094,793)         (88,008,884)
                                                                            ----------------     ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Deferred financing fees..............................................        (2,461,230)          (1,267,555)
     Borrowings on long-term debt.........................................       105,000,000                   --
                                                                            ----------------     ----------------
         Net cash provided by financing activities........................       102,538,770           (1,267,555)
                                                                            ----------------     ----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS......................         8,070,704         (133,433,537)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................       123,775,562          191,417,394
                                                                            ----------------     ----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD..................................  $    131,846,266     $     57,983,857
                                                                            ================     ================
</TABLE>



                                       5
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 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  periods  presented.  All such
adjustments  are  of  a  normal  recurring  nature.  The  financial  information
presented  herein should be read in conjunction with the Company's Form 10-K for
the year ended December 31, 2001, which includes information and disclosures not
presented herein.

NOTE 2 - ORGANIZATION AND BUSINESS OPERATIONS

     On April 26, 2000,  Horizon Telcom,  Inc.  ("Parent" or "Horizon  Telcom"),
formed  Horizon  PCS,  Inc. The Company  primarily  provides  wireless  personal
communications  services  ("PCS") as an  affiliate  of Sprint  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,  Maryland,  Pennsylvania,  New York, New Jersey, Michigan,
North  Carolina and Indiana under the Sprint PCS brand.  The Company is required
to build the wireless network according to Sprint PCS  specifications.  The term
of the agreements is twenty years with three successive ten-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  the  Company   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.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Note 3 in the Notes to Consolidated  Financial  Statements in the Company's
Annual Report on Form 10-K for the year ended  December 31, 2001,  describes the
Company's  significant  accounting  policies in greater  detail  than  presented
herein.

BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the rules and  regulations of the SEC.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  generally  accepted  accounting  principles in the
United  States  have  been  condensed  or  omitted  pursuant  to such  rules and
regulations.  These  statements  include  the  accounts  of the  Company and its
wholly-owned  subsidiaries,  HPC  and  Bright  PCS.  All  material  intercompany
transactions and balances have been eliminated.

ESTIMATES

     The  preparation  of financial  statements  in  conformity  with  generally
accepted accounting  principles in the United States requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ materially from those
estimates.  See  "Critical  Accounting  Policies"  under  "Item 2.  Management's
Discussion and Analysis of Financial Results and Operations" of this Form 10-Q.


                                       6
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RESTRICTED CASH

     In connection with the Company's  December 2001 offering of $175,000,000 of
senior notes, the first four semi-annual  interest  payments due under the terms
of the notes were placed in escrow.  Amounts to be paid toward interest payments
due in the next twelve  months  have been  classified  as short term.  The first
payment was made in June 2002.

INVESTMENTS

     The  classification  of  investments  in  debt  and  equity  securities  is
determined by management at the date individual  investments  are acquired.  The
classification  of those securities and the related  accounting  policies are as
follows:

     Held-to-maturity  securities are debt  securities for which the Company has
both the intent and ability to hold to maturity, regardless of changes in market
conditions,  liquidity needs or changes in general economic conditions. They are
carried at historical cost.

     Available-for-sale  securities  are debt and  equity  securities  which the
Company intends to hold for an indefinite period of time, but not necessarily to
maturity. Any decision to sell a security classified as available-for-sale would
be based on various factors,  including changes in market conditions,  liquidity
needs and similar  criteria.  Available-for-sale  securities are carried at fair
value as determined by quoted market prices.

     Trading securities are debt and equity securities which the Company intends
to purchase and sell frequently and has the intent to sell in the near future at
the time the security is purchased. Trading securities are carried at fair value
with  unrealized   holding  gains  and  losses  reported  in  the  statement  of
operations.

     Other  investments  in  which  the  Company  does  not  have a  significant
ownership  and  for  which  there  is no  ready  market  are  carried  at  cost.
Information  regarding these and all other investments is reviewed  periodically
for evidence of impairment in value.

PROPERTY AND EQUIPMENT

     Property and equipment,  including  improvements  that extend useful lives,
are stated at  original  cost,  while  maintenance  and  repairs  are charged to
operations as incurred.  Construction work in progress includes expenditures for
the  purchase  of  capital  equipment,  construction  and  items  such as direct
payroll-related  benefits  and interest  capitalized  during  construction.  The
Company  capitalizes  interest  pursuant to Statement  of  Financial  Accounting
Standards ("SFAS") No. 34, "Capitalization of Interest Cost."

     The  Company  accounts  for  long-lived   assets  in  accordance  with  the
provisions  of SFAS No.  144,  "Accounting  for the  Impairment  or  Disposal of
Long-Lived  Assets".  SFAS No. 144 requires that  long-lived  assets and certain
identifiable  intangibles be reviewed for impairment  whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying  amount of an asset to future  undiscounted  net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value, less
costs to sell.

                                       7
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DERIVATIVE 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.  The Company has
adopted  SFAS No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities," as amended by SFAS No. 138, "Accounting for Derivative  Instruments
and Certain Hedging  Activities."  These statements  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.

REVENUE RECOGNITION

     The Company sells handsets and  accessories  which are recorded at the time
of the sale as  equipment  revenue.  After the handset has been  purchased,  the
subscriber purchases a service package which is recognized monthly as service is
provided  and is included as  subscriber  revenue.  The Company  defers  monthly
service  revenue billed in advance.  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 Company's  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
("SAB") No. 101,  "Revenue  Recognition in Financial  Statements."  Accordingly,
activation fee revenue and direct  customer  activation  expense is deferred and
will be recorded as subscriber  revenues and selling and marketing  expense over
the  average  life for those  customers  that are  assessed an  activation  fee,
currently 30 months.

     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,  roaming charges billed to our customers for roaming onto a non-Sprint
PCS network and revenues from sales of equipment. We report the amounts retained
by Sprint PCS as general and administrative expense.

NET LOSS PER SHARE

     The Company  computes net loss per common share in accordance with SFAS No.
128,  "Earnings  per Share" and SAB No. 98. Basic and diluted net loss per share
available to common  stockholders  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  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 is 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  common  stock  options,
stock purchase  warrants and convertible  preferred  stock.  These items will be
included in the diluted earnings per share calculation when dilutive.

                                       8
<PAGE>
HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board ("FASB") 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 were adopted by the Company on January 1, 2002.  Goodwill
amortization  ceased as of  December  31,  2001,  and the Company is required to
complete an impairment test of the remaining  goodwill balance annually (or more
frequently if impairment indicators arise). As of June 30, 2002, the Company has
goodwill of approximately $7,191,000,  net of accumulated amortization,  related
to the acquisition of Bright PCS. See Note 9 herein for additional information.

     In June  2001,  the  FASB  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 adoption is not expected to have a material  effect on the  Company's
financial position, results of operations or cash flows.

     In  August  2001,  the  FASB  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.  The  Company  adopted  SFAS No. 144 on  January  1,  2002.  See Note 5 for
discussion on the impact of the adoption of this statement.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44  and  64,   Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  SFAS No. 145 addresses the  accounting  for gains and losses from
the  extinguishment  of debt,  economic  effects  and  accounting  practices  of
sale-leaseback   transactions  and  makes  technical   corrections  to  existing
pronouncements.  The  Company  will  adopt  SFAS No.  145 on July 1,  2002.  The
adoption is not expected to have a material  effect on the  Company's  financial
position, results of operations or cash flows.

     In June 2002 the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement addresses financial accounting
and  reporting  for  costs  associated  with  exit or  disposal  activities  and
nullifies  Emerging  Issues  Task  Force  (EITF)  Issue  No.  94-3,   "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including  Certain  Costs  Incurred  in  a  Restructuring)."  Charges
relating to the exit of an activity  or  disposal of  long-lived  assets will be
recorded  when they are incurred and  measurable.  Prior to SFAS No. 146,  these
charges  were  accrued  at the  time of  commitment  to exit  or  dispose  of an
activity.  The Company has not yet determined the impact of the adoption of this
statement.

                                       9
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassifications

     Certain prior year amounts have been  reclassified to conform with the 2002
presentation.

NOTE 4 - INVESTMENTS

At June  30,  2002,  the  Company  held  short-term  investments  in  marketable
securities  with  maturities  greater than three  months.  All  held-to-maturity
securities  mature within one year of June 30, 2002.  The  following  summarizes
unrealized gains and losses on investments at June 30, 2002:
<TABLE>
<CAPTION>
<S>                                       <C>            <C>             <C>           <C>
                                                          Unrealized      Unrealized       Fair
                                              Cost          Gain              Loss         Value
                                          -------------  -------------   ------------  -------------
Debt securities held-to-maturity           $  6,525,263   $     20,269            --    $  6,545,532
</TABLE>

NOTE 5 - PROPERTY AND EQUIPMENT

    Property and equipment consists of the following:

<TABLE>
<CAPTION>
<S>                                                                 <C>               <C>
                                                                        June 30,        December 31,
                                                                          2002             2001
                                                                    ---------------   ---------------
Network assets...................................................   $   176,625,688   $   134,257,788
Switching equipment..............................................        62,254,424        35,253,986
Furniture, vehicles and office equipment.........................         9,212,483        10,137,175
Land.............................................................           966,689           966,689
                                                                    ---------------   ---------------
    Property and equipment in service, cost......................       249,059,284       180,615,638
Accumulated depreciation.........................................       (33,916,970)      (22,478,697)
                                                                    ---------------   ---------------
        Property and equipment in service, net...................       215,142,314       158,136,941
Construction work in progress....................................        28,375,234        56,730,917
                                                                    ---------------   ---------------
            Total property and equipment, net....................   $   243,517,548   $   214,867,858
                                                                    ===============   ===============
</TABLE>

     The Company capitalized interest of approximately $3,126,000 and $3,118,000
for the six months ended June 30, 2002 and 2001, respectively.

     During 2002, the Company  launched  switches in Tennessee and  Pennsylvania
and  disconnected  some switching  equipment in Chillicothe,  Ohio. As a result,
approximately  $6.2 million of switching  equipment  is  considered  an impaired
asset as defined by SFAS No.  144.  Accordingly,  depreciation  expense  for the
three and six months ended June 30, 2002, includes approximately $3.5 million of
expense related to accelerated  depreciation on the impaired  assets.  The total
amount of depreciation  recorded to date on this equipment is approximately $5.8
million.  The residual book value of $400,000  approximates fair market value at
June 30,  2002,  based on  quoted  market  prices.  The  switch is in use and is
classified as a component of switching equipment above.

                                       10
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 6 - LONG-TERM DEBT

    The components of long-term debt outstanding are as follows:
<TABLE>
<CAPTION>
<S>                                       <C>                     <C>              <C>
                                              Interest Rate at        June 30,       December 31,
                                                June 30, 2002           2002             2001
                                          ----------------------  ---------------  ---------------
Discount notes............................        14.00%          $   295,000,000  $   295,000,000
Senior notes..............................        13.75%              175,000,000      175,000,000
Secured credit facility - term loan A.....        5.87%               105,000,000               --
Secured credit facility - term loan B.....        6.09%                50,000,000       50,000,000
                                                                  ---------------  ---------------
Long-term debt, face value................                            625,000,000      520,000,000
Less: unaccreted interest portion of
  discount notes..........................                           (122,790,393)    (135,944,357)
                                                                  ---------------  ---------------
    Total long-term debt, net.............                        $   502,209,607  $   384,055,643
                                                                  ===============  ===============
</TABLE>

     As of June 30,  2002,  Horizon PCS had $95.0  million  committed  under the
Company's  secured credit facility in the form of a line of credit at a variable
interest  rate  equal  to the  London  Interbank  Offered  Rate  ("LIBOR")  plus
400-basis points.

     Horizon PCS' secured credit facility includes financial covenants that must
be met each quarter.  The Company did not meet the covenant for earnings  before
interest,  depreciation  and  amortization  ("EBITDA")  for the first quarter of
2002. As a result of higher than expected gross and net additions to Horizon PCS
subscribers for that quarter,  the Company incurred  additional  expenses to add
those  customers.  Although the Company  ultimately  benefits  from the revenues
generated by new subscribers,  the Company incurs one-time  expenses  associated
with new subscribers, including commissions, handset subsidies, set up costs for
the network and marketing  expenses.  As a result,  these new  subscriber  costs
negatively  affect EBITDA in the short-term during the period of the addition of
new subscribers,  which led to  non-compliance  with the EBITDA covenant for the
first quarter of 2002.

     On June 27, 2002, the Company obtained a waiver of the non-compliance  with
the EBITDA  covenant for the first quarter of 2002 and entered into an amendment
of the secured credit facility.  The amended facility  primarily adjusts certain
financial  covenants  and  increases  the margin on the base interest rate by 25
basis points, while also providing for the payment of fees to the banking group,
an increase in post-default  interest rates, a new financial  covenant regarding
minimum available cash, additional prepayment requirements,  restrictions on the
Company's borrowings under the remaining $95.0 million revolving credit facility
and deposit  requirements  on the use of the $105.0  million  borrowed under the
secured  credit  facility in March 2002.  These  requirements  are  described in
detail  in the Form  8-K  filed  by the  Company  on June  27,  2002  (See  also
"Liquidity and Capital  Resources"  under "ITEM 2.  Management's  Discussion and
Analysis of Financial Condition and Results or Operations").

NOTE 7 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

     The  Company  leases  office  space and  various  equipment  under  several
operating  leases.  In addition,  the Company has a tower lease  agreements with
third parties  whereby the Company  leases 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.

                                       11
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     The Company also leases space for its retail stores.  At June 30, 2002, the
Company leased 39 of its 40 retail stores operating throughout its territories.

CONSTRUCTION EXPENDITURES

     Construction  expenditures  for the  year  ended  December  31,  2002,  are
estimated to be between approximately $60,000,000 and $70,000,000.  The majority
of the estimated expenditures are for the build-out and upgrade of the Company's
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.

GUARANTEES

     The discount  notes and the senior notes are  guaranteed  by the  Company's
existing  subsidiaries,  HPC and  Bright  PCS,  and  will be  guaranteed  by the
Company's  future  domestic   restricted   subsidiaries.   The  Company  has  no
independent 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
discount  notes and senior  notes when due. If the  Company  creates or acquires
unrestricted   subsidiaries   and   foreign   restricted   subsidiaries,   these
subsidiaries need not be guarantors.

ALLIANCES NETWORK AGREEMENTS

     The Alliances are two independent PCS providers  offering service under the
NTELOS brand name. In August 1999, the Company  entered into a network  services
agreement  with  the  Alliances  for 13 of its  markets  in  Virginia  and  West
Virginia. 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.


                                       12
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 8 - RELATED PARTIES

     The Company has non-interest-bearing  receivables from affiliated companies
(other  subsidiaries  of the Parent)  related to advances  made to and  services
received from these affiliated companies.  At December 31, 2001, the Company had
a receivable  from the Parent related to Federal income taxes.  The balances due
to and due from related  parties as of June 30, 2002, and December 31, 2001, are
as follows:

                                               June 30,        December 31,
                                                 2002              2001
                                           ---------------   ---------------
Receivable from affiliates..............   $       115,796   $       100,437
Receivable from Parent..................            50,000           483,785

     During the six months  ended June 30, 2002 and 2001,  a  subsidiary  of the
Parent provided the Company with  administrative  services including  financial,
regulatory,  human resource and other administrative and support services. These
agreements have a term of three years, with the right to renew the agreement for
additional  one-year terms each year thereafter.  The cost of the administrative
services  for the six months  ended June 30,  2002 and 2001,  was  approximately
$2,701,000 and $3,242,000, respectively.

NOTE 9 - GOODWILL AND INTANGIBLE ASSETS

     During 1999 the Company entered into a joint venture  agreement through the
purchase of 25.6% of Bright  PCS. On June 27,  2000,  the Company  acquired  the
remaining  74.4% of Bright  PCS.  The  total  purchase  price was  approximately
$49,300,000  and was treated as a purchase  method  acquisition  for  accounting
purposes.  In conjunction with this  transaction,  the Company also acquired the
Bright PCS  management  agreement with Sprint PCS and, with it, the right to use
the Sprint PCS licenses in Bright PCS'  markets.  The Company has  recognized an
intangible asset totaling  approximately  $33,000,000  related to this licensing
agreement  which  will be  amortized  over 20  years,  the  initial  term of the
underlying  management  agreement,  resulting in annual amortization  expense of
$1,707,000 through October 2019. Accumulated  amortization at June 30, 2002, was
approximately $3,428,000.

     The  purchase  price  exceeded  the fair  market  value  of the net  assets
acquired by approximately $7,778,000.  The resulting goodwill was amortized on a
straight-line basis over 20 years until December 31, 2001. At June 30, 2002, the
remaining unamortized balance of goodwill was approximately $7,191,000.

     The Company  adopted  SFAS No. 142 on January 1, 2002 (Note 3). As a result
of the adoption,  goodwill  amortization ceased as of December 31, 2001, and the
Company was required to complete an impairment  test on its  remaining  goodwill
balance  as of the date of  adoption.  The  Company  completed  the  first  step
required by SFAS No. 142 and  determined  the  goodwill  remaining at January 1,
2002,  was not impaired.  The Company will  complete an  impairment  test of the
remaining goodwill balance annually, or more frequently if impairment indicators
arise.

                                       13
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of June 30, 2002, and December 31, 2001,
And for the Three and Six Months Ended June 30, 2002 and 2001 (unaudited)
-------------------------------------------------------------------------

NOTE 9 - GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

     The following pro forma disclosure  reconciles net loss available to common
stockholders, as presented on the accompanying condensed consolidated statements
of operations, excluding the effect of goodwill amortization:

<TABLE>
<CAPTION>
<S>                                 <C>                  <C>                  <C>                  <C>
                                           Three Months Ended June 30,                Six Months Ended June 30,
                                           2002                 2001                 2002                 2001
                                    ------------------   ------------------   ------------------   ------------------
Reported net loss................   $      (42,670,101)  $      (27,285,811)  $      (79,420,371)  $      (46,744,468)
Goodwill amortization............                   --               97,222                   --              194,444
                                    ------------------   ------------------   ------------------   ------------------
   Adjusted net loss.............          (42,670,101)         (27,188,589)         (79,420,371)         (46,550,024)
Preferred stock dividend.........           (2,856,397)          (2,717,954)          (5,712,766)          (5,353,577)
                                    ------------------   ------------------   ------------------   ------------------
   Adjusted net loss available
     to common stockholders......   $      (45,526,498)  $      (29,906,543)  $      (85,133,137)  $      (51,903,601)
                                    ==================   ==================   ==================   ==================

Basic and diluted net loss per
   share available to
   common stockholders...........   $            (0.78)  $            (0.51)  $            (1.46)  $            (0.89)
Goodwill amortization............                   --                   --                   --                   --
                                    ------------------   ------------------   ------------------   ------------------
    Adjusted basic and diluted
      net loss per share
      available to common
      stockholders...............   $            (0.78)  $            (0.51)  $            (1.46)  $            (0.89)
                                    ==================   ==================   ==================   ==================
</TABLE>

     During 2000,  the Company agreed to grant to Sprint PCS warrants to acquire
2,510,460  shares of class A common  stock in exchange  for the right to service
PCS  markets  in  additional  areas.  By  September  30,  2000,  Sprint  PCS had
substantially  completed  its  obligations  under the  agreement and the Company
completed the required purchase of certain Sprint PCS assets.  The warrants will
be granted on the earlier of July 31, 2003, or an initial public offering of the
Company's  common  stock.  The  Company  valued the  warrants  and  recorded  an
intangible  asset of  approximately  $13,356,000.  The intangible asset is being
amortized  over  the  remaining  term of the  Sprint  PCS  management  agreement
resulting in  approximately  $752,000 of  amortization  expense per year through
June  2018.  Accumulated  amortization  at  June  30,  2002,  was  approximately
$1,317,000.

                                       14
<PAGE>

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

     The following  discussion and analysis  should be read in conjunction  with
the consolidated financial statements and the related notes.

                           FORWARD-LOOKING STATEMENTS

     This  quarterly  report on Form 10-Q  includes  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities  Act),  and Section 21E of the  Securities  Exchange Act of 1934,  as
amended  (the   Exchange   Act),   which  can  be   identified  by  the  use  of
forward-looking   terminology  such  as:  "may,"  "might,"   "could,"   "would,"
"believe,"  "expect,"  "intend,"  "plan,"  "seek,"   "anticipate,"   "estimate,"
"project," or "continue," or the negative thereof or other variations thereon or
comparable terminology.  All statements other than statements of historical fact
included in this quarterly report on Form 10-Q,  including  without  limitation,
the statements under "ITEM 2. Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and under "ITEM 5. Other  Information"  and
elsewhere   herein   regarding   our   financial   position  and  liquidity  are
forward-looking  statements.  These forward-looking statements also include, but
are not limited to:

     o    estimates of current and future population for our markets;

     o    forecasts of growth in the number of consumers  and  businesses  using
          personal communication services;

     o    estimates for churn and ARPU (defined below);

     o    statements  regarding  our plans for and costs of the build-out of our
          PCS network;

     o    statements  regarding  our  anticipated   revenues,   expense  levels,
          liquidity and capital resources and projections of when we will launch
          commercial PCS and achieve break-even or positive EBITDA and operating
          cash flow; and

     o    the anticipated impact of recent accounting pronouncements.

     Although  we believe the  expectations  reflected  in such  forward-looking
statements are reasonable, we can give no assurance such expectations will prove
to have been correct. Important factors with respect to any such forward-looking
statements,  including certain risks and  uncertainties  that could cause actual
results to differ materially from our expectations (Cautionary Statements),  are
disclosed in this quarterly report on Form 10-Q, including,  without limitation,
in conjunction with the  forward-looking  statements  included in this quarterly
report on Form 10-Q. Important factors that could cause actual results to differ
materially from those in the forward-looking statements included herein include,
but are not limited to:

     o    our potential need for additional  capital or the need for refinancing
          existing indebtedness;

     o    our dependence on our  affiliation  with Sprint PCS and our dependence
          on Sprint PCS' back office services;

     o    our future compliance with debt covenants;

     o    the need to successfully  complete the build-out of our portion of the
          Sprint PCS network on our anticipated schedule;

     o    changes or advances in technology;

     o    competition  in the  industry  and markets in which we operate and the
          creditworthiness of new customers;

     o    our lack of operating history and anticipation of future losses;

     o    potential fluctuations in our operating results;

                                       15
<PAGE>

     o    our potential inability to expand our services and related products in
          the event of a substantial increase in demand for these  services  and
          related products;

     o    our ability to attract and retain skilled personal;

     o    changes in government regulation; and

     o    general economic and business conditions.

     These   forward-looking   statements   involve  known  and  unknown  risks,
uncertainties and other factors which may cause our actual results,  performance
or achievements to be materially different from any future results,  performance
or achievements  expressed or implied by such  forward-looking  statements.  All
subsequent  written and oral  forward-looking  statements  attributable to us or
persons  acting on our behalf are expressly  qualified in their  entirety by the
Cautionary  Statements.  See "ITEM 5. Other Information" for further information
regarding several of these risks and uncertainties.

HISTORY AND BACKGROUND

     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 June 30, 2002, we had launched service covering  approximately  7.4
million  residents,  or  approximately  73%  of  the  total  population  in  our
territory, serving approximately 235,100 customers.

     Horizon  PCS is a  majority-owned  subsidiary  of Horizon  Telcom.  Horizon
Telcom is a holding  company which, in addition to its common stock ownership of
Horizon PCS, owns 100% of The Chillicothe  Telephone  Company, a local telephone
company;   Horizon  Services,   Inc.   ("Horizon   Services"),   which  provides
administrative services to Horizon PCS and other Horizon Telcom affiliates;  and
100% of  Horizon  Technology,  Inc.  ("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 Federal  Communications
Commissions'  ("FCC")  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  residents.  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  residents.  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,  North Carolina and Ohio with a
total population of  approximately  3.3 million  residents.  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. 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


                                       16
<PAGE>

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 sold its interest in the towers it owned
to SBA  Communications,  Corp.  ("SBA,"  formerly SBA Towers,  Inc.),  for $15.7
million and invested the net proceeds in Horizon PCS.  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.

     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 residents. 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 residents.

     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 14%
discount notes and negotiated a $225.0 million  secured credit  facility  (later
increased to a $250.0 million  facility)  with a bank group.  The discount notes
were subject to an exchange offer filed with the SEC in late 2001.

     In December  2001, we received  $175.0  million from our offering of 13.75%
senior notes.  The senior notes were subject to an exchange offer filed with the
SEC in the second quarter of 2002 and completed in July 2002.

CRITICAL ACCOUNTING POLICIES

     Allowance  for Doubtful  Accounts.  Estimates are used in  determining  our
allowance for doubtful accounts, which are based on a percentage of our accounts
receivables by aging  category.  The  percentage is derived by  considering  our
historical  collections  and  write-off  experience,  current  aging and  credit
quality trends and Sprint's credit policy. However, our historical write-off and
receivables  trends  are  limited  due to our strong  subscriber  growth and the
recent launch of new markets. Under Sprint's service plans, customers who do not
meet certain credit  criteria can select any plan offered  subject to an account
spending  limit,  referred to as ASL, to control credit risk  exposure.  Account
spending  limits range from $125 to $200  depending on the credit quality of the
customer.  Prior to May 2001,  all of these  customers  were  required to make a
deposit  ranging  from  $125 to $200  that  could  be  credited  against  future
billings.  In May 2001, the deposit  requirement was eliminated on certain,  but
not  all,  credit  classes  ("No  Deposit  ASL"  or  "NDASL").  As a  result,  a
significant amount of our new customer additions  (approximately 59% between May
1, 2001, and March 31, 2002) have been under the NDASL program. This increase in
sub-prime credit customers under the NDASL program has led to higher churn rates



                                       17
<PAGE>

(defined below) and an increase in account write-offs. While the average balance
written-off  for an NDASL  customer  is lower  than the  write-off  balances  of
non-account spending limit customers,  the number of NDASL write-offs has caused
an increase in the total amount written-off each quarter,  resulting in a higher
allowance  and  provision for doubtful  accounts.  Beginning in April 2002,  the
NDASL program was replaced by the "Clear Pay  Program,"  which  re-instated  the
deposit  requirement  for most credit classes with account  spending  limits and
featured increased back-office controls with respect to credit qualification and
account  collections.  We anticipate the implementation of the deposit under the
Clear Pay  Program  will  reduce our future bad debt  exposure.  If the  deposit
requirement  is  later  removed  or if these  allowance  for  doubtful  accounts
estimates are  insufficient  for any reason,  our operating  income,  EBITDA and
available  cash would be reduced.  At June 30, 2002,  the allowance for doubtful
accounts was $2,301,000 which represents 10% of accounts receivable. At June 30,
2002,  38% of the  subscribers  in  our  markets  were  account  spending  limit
customers with no deposit paid.

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

     Service revenues consist of PCS subscriber  revenues and roaming  revenues.
PCS  subscriber  revenues  consist  primarily of monthly  service fees and other
charges  billed to  customers  for Sprint PCS service in our  territory  under a
variety of service plans.  Roaming revenues consist of Sprint PCS and non-Sprint
PCS roaming.  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,  roaming charges billed to our customers for roaming onto a Sprint PCS
network and revenues from sales of equipment.  We report the amounts retained by
Sprint PCS as general and administrative expense.

     The Company's  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 SAB No. 101, "Revenue Recognition
in  Financial  Statements."  Accordingly,  activation  fee  revenue  and  direct
customer  activation  expense is deferred and will be recorded  over the average
life for those customers, currently estimated to be 30 months, that are assessed
an activation  fee. Prior to January 1, 2002, we estimated the average life of a
customer to be 36 months. We reduced this estimate to 30 months in consideration
of an  increase  in churn  (defined  below)  resulting  from the  NDASL  program
discussed earlier.



                                       18
<PAGE>


RESULTS OF OPERATIONS  THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THREE MONTHS
ENDED JUNE 30, 2001

KEY METRICS

     Customer Additions. As of June 30, 2002, we provided personal communication
service directly to approximately 235,100 customers.  For the three months ended
June 30,  2002 and 2001,  Horizon PCS  subscribers  increased  by  approximately
12,400 and 21,600 customers,  respectively.  Gross activations during the second
quarter  of 2002  were 31%  higher  than the same  period in 2001.  However,  an
increase  in the  churn of NDASL  subscribers  resulted  in  overall  lower  net
customer  additions  for the three months  ended June 30, 2002,  compared to the
three months ended June 30, 2001.

     Cost Per Gross Addition.  Cost Per Gross Addition  ("CPGA")  summarizes the
average  cost to acquire new  customers  during the period.  CPGA is computed by
adding  the  income  statement  components  of selling  and  marketing,  cost of
equipment  and  activation  costs  (which are included as a component of cost of
service) and reducing that amount by the equipment  revenue  recorded.  That net
amount is then divided by the total new  customers  acquired  during the period.
CPGA was $364 for the three months ended June 30, 2002, compared to $385 for the
three  months  ended June 30, 2001.  This  decrease is  primarily  the result of
higher gross activations in 2002 compared to 2001.

     Churn. Churn is the monthly rate of customer turnover that both voluntarily
and involuntarily  discontinued  service during the month.  Churn is computed by
dividing the number of customers that discontinued service during the month, net
of 30-day returns, by the beginning customer base for the period.  Churn for the
three months ended June 30, 2002, was 3.2% compared to 2.1% for the three months
ended June 30,  2001.  This  increase in churn is a result of an increase in the
amount of sub-prime credit quality customers the Company added whose service was
involuntarily discontinued during the period.

     Average Revenue Per Unit. Average Revenue Per Unit ("ARPU")  summarizes the
average  monthly  service  revenue  per  customer.  ARPU is computed by dividing
service revenue and roaming  revenues for the period by the average  subscribers
for the period.

     The following summarizes APPU for the three months ended June 30:

                                                   2002            2001
                                             -------------   -------------
Service revenues*....................        $          56   $          55
Roaming revenues.....................                   19              27
                                             -------------   -------------
   ARPU..............................        $          75   $          82
                                             =============   =============
_________________
* Excludes impact of a non-recurring adjustment to access revenue

     On April 27, 2001, Sprint PCS and its affiliates  announced an agreement on
a new Sprint PCS roaming rate; the receivable and payable roaming rate decreased
from $0.20 per minute to $0.15 per minute  effective June 1, 2001, and decreased
further to $0.12 per minute  effective  October 1, 2001.  The Sprint PCS roaming
rate changed to $0.10 per minute on January 1, 2002.  After 2002,  the rate will
be changed to "a fair and reasonable  return" which has not yet been determined.
This decrease in the rate will reduce our revenue and expense per minute, but we
anticipate  this rate  reduction  will be offset  by volume  increases  from the
continued  build-out of our network and subscriber growth,  resulting in greater
overall roaming revenue and expense in the future.



                                       19
<PAGE>

RESULTS OF OPERATIONS

Revenues. The following table sets forth a breakdown of our revenues by type for
the three months ended June 30:

        (Dollars in thousands)               2002                 2001
                                     --------------------  -------------------
                                         Amount        %      Amount       %
                                     ------------  ------  ----------  -------
        Subscriber revenues          $     37,100     72%  $   15,534      63%
        Roaming revenues                   13,116     25%       7,738      31%
        Equipment revenues                  1,598      3%       1,499       6%
                                     ------------  ------  ----------  -------
        Total revenues               $     51,814    100%  $   24,771     100%
                                     ============  ======  ==========  =======

     Subscriber  revenues  for the  three  months  ended  June  30,  2002,  were
approximately  $37.1 million,  compared to  approximately  $15.5 million for the
three months ended June 30, 2001, an increase of  approximately  $21.6  million.
The growth in  subscriber  revenues is primarily the result of the growth in our
customer  base.  We managed  approximately  235,100  customers at June 30, 2002,
compared to approximately  106,300 at June 30, 2001. Our customer base has grown
because we have launched additional markets and increased our sales force.

     Sprint PCS assesses  access  charges to long  distance  carriers on Horizon
PCS' behalf for the  termination  of landline  originated  calls in our markets.
Though  regulations  generally  entitle a carrier that  terminates a call on the
behalf  of  another  to  be  compensated  for  providing  that  service,   these
regulations  were  developed  in a period  where  services  of this  nature were
provided exclusively by local exchange carriers. Certain long distance carriers,
including AT&T,  have disputed Sprint PCS's  assessment of these charges as well
as the  corresponding  rate at which the charges were determined.  In July 2002,
the FCC ruled that AT&T was not  required to pay these  charges  unless AT&T had
agreed to do so in its contract  with Sprint PCS and remanded the case to a U.S.
District  Court for further  proceedings.  Because the case is still  pending we
cannot predict,  with certainty,  the final outcome of this action. As a result,
we  recorded  a  reduction  in  revenue  in  the  second   quarter  of  2002  of
approximately $1.3 million representing  previously billed and recognized access
revenue.  The  Company  plans to cease  recognition  of this type of  revenue in
future quarters,  unless there is ultimately a favorable ruling by the courts or
the FCC on this  issue.  Sprint  PCS has  asserted  the right to  recover  these
revenues  from us. We will continue to assess the ability of Sprint PCS or other
carriers  to  recover  these  charges.  We are also  continuing  to  review  the
availability  of defenses we may have against Sprint PCS' claim to recover these
revenues from us.

     Roaming revenues increased from approximately $7.7 million during the three
months ended June 30, 2001, to approximately  $13.1 million for the three months
ended June 30, 2002, an increase of  approximately  $5.4 million.  This increase
resulted from launching additional markets over the past year, including markets
covering major  interstate  highways,  and was offset  somewhat by the change in
rate discussed above.

     Equipment  revenues  for  the  three  months  ended  June  30,  2002,  were
approximately $1.6 million, compared to approximately $1.5 million for the three
months ended June 30, 2001,  representing an increase of approximately $100,000.
The increase in equipment revenues is the result of an increase in the number of
handsets sold, somewhat offset by a lower sales price per unit.

     Cost of service.  Cost of service  includes costs associated with operating
our network,  including site rent,  utilities,  engineering  personnel and other
expenses  related to operations.  Cost of service also includes  interconnection
expenses,  customer care, Sprint charges,  and roaming fees. We pay 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 service  are costs  incurred  under our  network
services agreement with the Alliances. In the third quarter of 2001, Horizon PCS
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 minimum  monthly  fee for a stated  minimum  period.
Horizon PCS expects to incur lower  overall fees under this new  arrangement  at
expected usage levels as compared to the previous  agreement that was based on a
per minute fee. The  Alliances are also  obligated to upgrade their  networks to
provide 3G technology.  In connection  with this  amendment,  the Alliances have


                                       20
<PAGE>

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.

     Sprint provides  back-office  and other services to the Company.  Recently,
Sprint PCS has sought to increase  service fees during the remainder of 2002 and
beyond in connection with its development of 3G-related  back-office systems and
platforms.  If  Sprint  PCS  were to  increase  its  fees  significantly,  these
increased  operating  expenses  would  have an adverse  effect on the  Company's
EBITDA and cash flow.

     Cost of service for the three months ended June 30, 2002, was approximately
$41.3  million,  compared to  approximately  $21.1  million for the three months
ended June 30, 2001, an increase of approximately  $20.2 million.  This increase
reflects  an  increase  in  roaming   expense  and  long  distance   charges  of
approximately  $6.2 million and the increase in costs incurred under our network
services agreement with the Alliances of approximately  $3.2 million,  both as a
result  of our  subscriber  growth  during  2001  and the  first  half of  2002.
Additionally,  at June 30, 2002, our network covered  approximately  7.4 million
people versus approximately 5.7 million residents at June 30, 2001. As a result,
cost of  service  in 2002 was higher  than 2001 due to the  increase  in network
operations  expense,  including  tower lease expense,  circuit costs and payroll
expense, of approximately $6.6 million.  Growth in our customer base resulted in
increased customer care, activations,  and billing expense of approximately $3.6
million and other  variable  expenses,  including  interconnection  and national
platform expenses, of approximately $600,000.

     Cost of  equipment.  Cost of  equipment  includes  the cost of handsets and
accessories sold by our stores and direct sales force to our customers.  Cost of
equipment  for the three  months  ended June 30, 2002,  was  approximately  $3.7
million,  compared to approximately $2.3 million for the three months ended June
30, 2001, an increase of approximately $1.4 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.  Additionally,  we expect to incur  additional  expense  as
existing  customers upgrade their handsets to newer models and to take advantage
of new  services  that  may be  available  with  3G  including  high-speed  data
applications.

     Selling and marketing  expenses.  Selling and marketing expenses consist of
costs  associated  with  operating  our  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  approximately  $11.2
million for the three  months  ended June 30,  2002,  compared to  approximately
$10.3  million  for the  three  months  ended  June 30,  2001,  an  increase  of
approximately  $900,000. This reflects the increase in the costs of operating 40
retail stores in 2002  compared to 21 at the end of the second  quarter of 2001.
The  costs  include  an  increase  in  commissions  paid  to  third  parties  of
approximately  $500,000,  an increase  in  subsidies  on handsets  sold by third
parties of  approximately  $300,000 and an increase in marketing and advertising
in our  sales  territory  of  approximately  $100,000.  We  expect  selling  and
marketing expense to increase in the aggregate as we expand our coverage, launch
additional stores and add customers.

     General  and  administrative  expenses.  General and  administrative  costs
include  the Sprint PCS  management  fee  (which is 8% of  "collected  revenues"
defined above), a provision for doubtful 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  and
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  for the three  months ended June 30,
2002, were approximately $10.3 million compared to approximately $7.5 million in
2001,  an increase of  approximately  $2.8  million.  The  increase  reflects an
increase in the provision for doubtful  accounts of approximately  $2.5 million,
primarily due to NDASL  customers,  and an increase in the Sprint PCS management
fee of approximately $1.6 million,  as a result of higher subscriber revenues in
2002,  offset by a decrease  in other  general  expenses of  approximately  $1.3


                                       21
<PAGE>

million.  During the second  quarter of 2001, we recognized  approximately  $1.3
million of legal and consulting expenses related to the exploration of strategic
business alternatives.

     Non-cash compensation expense. For the three months ended June 30, 2002 and
2001, we recorded stock-based compensation expense of approximately $200,000 and
$900,000,  respectively. The $900,000 includes approximately $700,000 related to
the distribution of 7,249 shares of Horizon Telcom stock to employees of Horizon
PCS. 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  $681,000 in 2002, $622,000 in 2003, $193,000 in 2004, and $71,000
in 2005.  This  expense  may be  greater  in  future  years if the  value of the
Company's common stock increases.

     Depreciation  and  amortization  expense.   Depreciation  and  amortization
expenses  increased by  approximately  $8.6 million to a total of  approximately
$13.0 million during the three months ended June 30, 2002. The increase reflects
the  continuing  construction  of our network as we funded  approximately  $25.7
million of capital expenditures during the three months ended June 30, 2002.

     During 2002, the Company  launched  switches in Tennessee and  Pennsylvania
and  disconnected  some switching  equipment in Chillicothe,  Ohio. As a result,
approximately  $6.2 million of switching  equipment  is  considered  an impaired
asset as defined by SFAS No.  144.  Accordingly,  depreciation  expense  for the
three and six months ended June 30, 2002, includes approximately $3.5 million of
expense related to accelerated depreciation on the impaired assets.

     Since  our  acquisition  of  Bright  PCS was  accounted  for as a  purchase
transaction, we recorded goodwill and intangible assets. Amortization expense of
the intangible  asset was  approximately  $400,000 during the three months ended
June 30, 2002 and 2001. Related goodwill amortization was approximately $100,000
during the three months ended June 30, 2001. Goodwill  amortization ceased as of
December  31, 2001,  with the  adoption of SFAS No. 142. See "Recent  Accounting
Pronouncements" below.

     Amortization  expense also includes  amortization  of an  intangible  asset
recorded in September  2000  related to the new markets  granted to us by Sprint
PCS in September 2000. We agreed to grant warrants to Sprint PCS in exchange for
the right to provide service in additional markets.  The warrants will be issued
to Sprint PCS at the  earlier of an initial  public  offering  of the  Company's
common stock or July 31, 2003. The intangible  asset is being amortized over the
remaining   term  of  the  Sprint  PCS   management   agreement,   resulting  in
approximately   $800,000  of   amortization   expense  per  year.   Accordingly,
amortization expense related to this intangible asset was approximately $200,000
for the three months ended June 30, 2002 and 2001.

     Loss on sale of property and equipment.  During the three months ended June
30, 2002, we incurred a loss of  approximately  $400,000  related to the sale of
network equipment. The sale resulted in proceeds of approximately $300,000.

     Interest  income and other,  net.  Interest income and other income for the
three months ended June 30, 2002,  was  approximately  $1.0 million  compared to
approximately  $1.4 million in 2001 and consisted  primarily of interest income.
This decrease was due primarily to a lower average  balance of cash  investments
during the second quarter of 2002 as compared to the same period in 2001 and due
to a lower short-term interest rate environment in 2002.

     Interest expense, net. Interest expense for the three months ended June 30,
2002, was approximately $15.5 million, compared to approximately $6.5 million in
2001.  The  increase  in  interest  expense  was  a  result  of  our  additional
indebtedness. Interest on the outstanding balance of our secured credit facility
accrues at LIBOR plus a specified margin. On June 29, 2001, we agreed to several
changes in the secured  credit  facility  including a 25 basis point increase in
the margin on the annual  interest  rate. At June 30, 2002, the interest rate on
the $105.0 million term loan A borrowed  under our secured  credit  facility was
5.87%,  while the  interest  rate on the $50.0  million  term loan B was  6.09%.
Interest  expense on the  secured  credit  facility  was $2.7  million  and $1.2
million during the three months ended June 30, 2002 and 2001, respectively.

                                       22
<PAGE>

     We accrue  interest  at a rate of 14.00%  annually  on our  discount  notes
issued in September 2000 and will pay interest  semi-annually  in cash beginning
in  October  2005.  Unaccreted  interest  expense  on  the  discount  notes  was
approximately  $122.8 million at June 30, 2002. Interest expense on the discount
notes was  approximately  $6.8 million and $5.9 million  during the three months
ended June 30, 2002 and 2001, respectively.

     On June 15, 2002,  we began  making  semi-annual  interest  payments on our
senior  notes  issued in December  2001,  at an annual rate of 13.75%.  Interest
expense  accrued on the senior notes was  approximately  $6.0 million during the
three months ended June 30, 2002.  Under the terms of the senior notes,  cash to
cover the first  four  semi-annual  interest  payments  was  placed in an escrow
account.

     Interest expense also includes  approximately  $600,000 and $200,000 during
the three months  ended June 30, 2002 and 2001,  respectively,  of  amortization
from the deferred  financing  fees related to our secured credit  facility,  our
discount  notes and our senior  notes.  Also  contributing  to the  increase  in
interest expense during the three months ended 2002 was  approximately  $400,000
in commitment fees we paid on the unused portion of our secured credit facility.

     Capitalized  interest during the three months ended June 30, 2002 and 2001,
was  approximately  $1.0 million and $1.6 million,  respectively.  We expect our
interest expense to increase in the future as we borrow under our secured credit
facility to fund our network build-out and operating losses.

     Income  taxes.   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 are not able to participate  in the  tax-sharing
agreement.  Additionally,  we are not able to recognize any net  operating  loss
benefits  until we  generate  taxable  income.  We did not record any income tax
benefit  for the  three  months  ended  June 30,  2002 or 2001,  because  of the
uncertainty of generating  future taxable income to be able to recognize current
net operating loss carryforwards.

     Net loss.  Our net loss for the  three  months  ended  June 30,  2002,  was
approximately  $42.7  million  compared to  approximately  $27.3 million for the
three  months  ended  June 30,  2001.  The  increase  in our loss  reflects  the
continued  expenses  related to launching  our markets and building our customer
base.  We  expect  to  incur  significant   operating  losses  and  to  generate
significant  negative cash flow from operating  activities  while we continue to
construct our network and increase our customer base.

     Preferred  stock  dividend.  Our  convertible  preferred stock pays a stock
dividend at the rate of 7.5% per annum, payable semi-annually, commencing May 1,
2001. The dividends are paid with  additional  shares of  convertible  preferred
stock.  Through June 30, 2002, we have issued an additional  3,245,134 shares of
convertible preferred stock in payment of dividends,  including 1,060,201 shares
on May 1, 2002.

     Other  comprehensive  income  (loss).  During  2001,  we  entered  into two
two-year interest rate swaps,  effectively fixing $50.0 million of the term loan
B borrowed  under the secured  credit  facility.  We do not expect the effect of
these swaps to have a material  impact to interest  expense for the remainder of
their lives. We recorded an unrealized  loss of $269,901 in other  comprehensive
income  during the  second  quarter  of 2002.

RESULTS OF  OPERATIONS  SIX MONTHS  ENDED JUNE 30,  2002  COMPARED TO SIX MONTHS
ENDED JUNE 30, 2002

KEY METRICS

     Customer  Additions.  During the six months  ended June 30,  2002 and 2001,
Horizon PCS subscribers  increased by approximately 41,000 and 39,900 customers,
respectively. Gross activations during the first half of 2002 increased 64% over
the first half of 2001.  This  growth was offset by an  increase in the churn of
NDASL  subscribers  during the first six months of 2002  resulting in comparable
net customer  additions for the six months ended June 30, 2002,  compared to the
prior year period.  Our overall customer base has grown because we have launched
additional markets and increased our sales force.

                                       23
<PAGE>

     Cost Per Gross  Addition.  Cost per gross addition for the six months ended
June 30,  2002,  was $351,  compared  to $355 for the six months  ended June 30,
2001.   This  decrease  is  primarily   attributable  to  overall  higher  gross
activations in 2002 compared to the first half of 2001.

     Churn.  Churn for the six months ended June 30, 2002,  was 3.2% compared to
2.2% for the six months ended June 30, 2001. This increase is due to an increase
in the churn of NDASL customers.

     Average Revenue Per Unit. The following  summarizes ARPU for the six months
ended June 30:

                                                   2002            2001
                                             -------------   ----------
Service revenues*.....................       $          56   $          54
Roaming revenues......................                  19              27
                                             -------------   -------------
   ARPU...............................       $          75   $          81
                                             =============   =============
_____________________
* Excludes impact of a non-recurring adjustment to access revenue

     On April 27, 2001, Sprint PCS and its affiliates  announced an agreement on
a new Sprint PCS roaming rate; the receivable and payable roaming rate decreased
from $0.20 per minute to $0.15 per minute  effective June 1, 2001, and decreased
further to $0.12 per minute  effective  October 1, 2001.  The Sprint PCS roaming
rate changed to $0.10 per minute on January 1, 2002.  After 2002,  the rate will
be changed to "a fair and reasonable  return" which has not yet been determined.
This decrease in the rate will reduce our revenue and expense per minute, but we
anticipate  this rate  reduction  will be offset  by volume  increases  from the
continued  build-out of our network and subscriber growth,  resulting in greater
overall roaming revenue and expense in the future.

RESULTS OF OPERATIONS

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

                                               For the Six Months Ended
                                                        June 30,
       (Dollars in thousands)                  2002                2001
                                       -------------------  -----------------
                                          Amount        %      Amount       %
                                       -----------  ------  ----------  -----
       Subscriber revenues             $    72,116     72%  $   27,598    63%
       Roaming revenues                     23,935     24%      13,852    31%
       Equipment revenues                    3,973      4%       2,575     6%
                                       -----------  ------  ----------  -----
       Total revenues                  $   100,024    100%  $   44,025   100%
                                       ===========  ======  ==========  =====

     Subscriber   revenues  for  the  six  months  ended  June  30,  2002,  were
approximately $72.1 million, compared to approximately $27.6 million for the six
months ended June 30, 2001,  an increase of  approximately  $44.5  million.  The
growth in  subscriber  revenues  is  primarily  the  result of the growth in our
customer  base.  We managed  approximately  235,100  customers at June 30, 2002,
compared to approximately  106,300 at June 30, 2001. Our customer base has grown
because we have launched additional markets and increased our sales force.

     Roaming  revenues  increased from  approximately  $13.9 million for the six
months ended June 30, 2001,  to  approximately  $23.9 million for the six months
ended June 30, 2002, an increase of approximately  $10.0 million.  This increase
resulted from launching additional markets over the past year, including markets
covering major interstate highways.

     Equipment   revenues  for  the  six  months  ended  June  30,  2002,   were
approximately  $4.0 million,  compared to approximately $2.6 million for the six
months ended June 30,  2001,  an increase of  approximately  $1.4  million.  The
increase  in  equipment  revenues  is the result of an increase in the number of
handsets sold, somewhat offset by a lower sales price per unit.

                                       24
<PAGE>

     Cost of service.  Cost of service for the six months  ended June 30,  2002,
was approximately $77.0 million, compared to approximately $39.1 million for the
six months ended June 30, 2001, an increase of approximately $37.9 million. This
increase  reflects  the  increase in Sprint PCS  roaming  fees,  including  long
distance charges, of approximately $11.7 million, the increase in costs incurred
under our network services  agreement with the Alliances of  approximately  $6.0
million,  the increase in network  operations,  including  tower lease  expense,
circuit costs and payroll  expense,  of approximately  $11.5 million,  increased
customer care,  activations,  and billing expense of approximately $7.1 million,
and the  increase in other  variable  expenses,  including  interconnection  and
national platform expenses, of approximately $1.6 million.

     Cost of  equipment.  Cost of  equipment  for the six months  ended June 30,
2002, was approximately $8.7 million, compared to approximately $4.5 million for
the six months ended June 30, 2001, an increase of  approximately  $4.2 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
approximately  $25.9 million for the six months ended June 30, 2002, compared to
approximately  $17.4  million  for the same  period  in  2001,  an  increase  of
approximately $8.5 million.  This increase reflects the increase in the costs of
operating our 40 retail stores, including marketing and advertising in our sales
territory,  of approximately $4.8 million, the increase in subsidies on handsets
sold by third  parties  of  approximately  $2.0  million,  and the  increase  in
commissions  paid to third  parties of  approximately  $1.7  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 six months ended June 30, 2002 were approximately $19.4 million compared
to  approximately  $12.1  million in 2001,  an  increase of  approximately  $7.3
million.  The  increase  reflects  an  increase in the  provision  for  doubtful
accounts of approximately $5.3 million, primarily due to NDASL customers, and an
increase in the Sprint PCS management fee of  approximately  $3.3 million,  as a
result of higher  subscriber  revenues  in 2002,  offset by a decrease  in other
general  expenses of  approximately  $1.3 million.  During the second quarter of
2001, we recognized  approximately $1.3 million of legal and consulting expenses
related to the exploration of strategic business alternatives.

     Non-cash  compensation  expense. For the six months ended June 30, 2002 and
2001, we recorded stock-based compensation expense of approximately $300,000 and
$1.1 million  respectively.  The $1.1 million  includes  $700,000 related to the
distribution of 7,249 shares of Horizon Telcom stock to employees of Horizon PCS
and $300,000 for certain stock options granted.

     Depreciation  and  amortization  expense.   Depreciation  and  amortization
expenses  increased by  approximately  $13.1 million to a total of approximately
$20.9 million in 2002. The increase reflects the continuing  construction of our
network as we funded  approximately $49.1 million of capital expenditures during
the six months ended June 30, 2002.

     During 2002, the Company  launched  switches in Tennessee and  Pennsylvania
and  disconnected  some switching  equipment in Chillicothe,  Ohio. As a result,
approximately  $6.2 million of switching  equipment  is  considered  an impaired
asset as defined by SFAS No.  144.  Accordingly,  depreciation  expense  for the
three and six months ended June 30, 2002, includes approximately $3.5 million of
expense related to accelerated depreciation on the impaired assets.

     Since  our  acquisition  of  Bright  PCS was  accounted  for as a  purchase
transaction, we recorded goodwill and intangible assets. Amortization expense of
the intangible asset was approximately $900,000 during the six months ended June
30, 2002 and 2001.  Related  goodwill  amortization was  approximately  $200,000
during the six months ended June 30, 2001.  Goodwill  amortization  ceased as of
December  31, 2001,  with the  adoption of SFAS No. 142. See "Recent  Accounting
Pronouncements" below

     Amortization  expense also includes  amortization  of an  intangible  asset
recorded in September  2000  related to the new markets  granted to us by Sprint
PCS in September 2000. We agreed to grant warrants to Sprint PCS in exchange for
the right to provide service in additional markets.  The warrants will be issued


                                       25
<PAGE>

to Sprint PCS at the  earlier of an initial  public  offering  of the  Company's
common stock or July 31, 2003. The intangible  asset is being amortized over the
remaining   term  of  the  Sprint  PCS   management   agreement,   resulting  in
approximately   $800,000  of   amortization   expense  per  year.   Accordingly,
amortization expense related to this intangible asset was approximately $400,000
for the six months ended June 30, 2002 and 2001.

     Loss on sale of property  and  equipment.  During the six months ended June
30, 2002, we incurred a loss of  approximately  $600,000  related to the sale of
network equipment and corporate-owned vehicles. The sale resulted in proceeds of
approximately $1.5 million.  The vehicles were subsequently leased back from the
purchaser.

     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.  Interest income and other income for the
six months  ended June 30, 2002,  was  approximately  $1.7  million  compared to
approximately  $4.3 million in 2001 and consisted  primarily of interest income.
This decrease was due primarily to a lower average  balance of cash  investments
during the second  quarter of 2002,  as  compared to the same period in 2001 and
due to a lower short-term interest rate environment in 2002.

     Interest  expense,  net. Interest expense for the six months ended June 30,
2002, was approximately  $28.2 million,  compared to approximately $12.7 million
in 2001.  The  increase  in  interest  expense  was a result  of our  additional
indebtedness. Interest on the outstanding balance of our secured credit facility
accrues at LIBOR plus a specified margin. On June 29, 2001, we agreed to several
changes in the secured  credit  facility  including a 25 basis point increase in
the margin on the annual  interest  rate. At June 30, 2002, the interest rate on
the $105.0 million term loan A borrowed  under our secured  credit  facility was
5.87%,  while the  interest  rate on the $50.0 term loan B was  6.09%.  Interest
expense on the secured credit  facility was $3.9 million and $2.5 million during
the six months ended June 30, 2002 and 2001, respectively.

     We accrue  interest  at a rate of 14.00%  annually  on our  discount  notes
issued in September 2000 and will pay interest  semi-annually  in cash beginning
in  October  2005.  Unaccreted  interest  expense  on  the  discount  notes  was
approximately  $122.8 million at June 30, 2002. Interest expense on the discount
notes was  approximately  $13.2 million and $11.5 million  during the six months
ended June 30, 2002 and 2001, respectively.

     On June 15, 2002,  we began  making  semi-annual  interest  payments on our
senior  notes  issued in  December  2001 at an annual  rate of 13.75%.  Interest
expense accrued on the senior notes was  approximately  $12.0 million during the
six months ended June 30,  2002.  Under the terms of the senior  notes,  cash to
cover the first  four  semi-annual  interest  payments  was  placed in an escrow
account.

     Interest  expense  also  includes  approximately  $1.2 million and $400,000
during  the  six  months  ended  June  30,  2002  and  2001,  respectively,   of
amortization  from the deferred  financing  fees  related to our secured  credit
facility,  our discount  notes and our senior notes.  Also  contributing  to the
increase in interest expense during the six months ended 2002 was  approximately
$1.0  million in  commitment  fees we paid on the unused  portion of our secured
credit facility.

     Capitalized  interest during the three months ended June 30, 2002 and 2001,
was approximately $3.1 million in each period.

     Income  taxes.   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


                                       26
<PAGE>

tax benefit for the six months ended June 30, 2002 because of the uncertainty of
generating  future taxable income to be able to recognize  current net operating
losses.

     Net  loss.  Our net loss  for the six  months  ended  June  30,  2002,  was
approximately  $79.4 million compared to approximately $46.7 million for the six
months ended June 30,  2001.  The  increase in our loss  reflects the  continued
expenses  related to launching  our markets and building our customer  base.  We
expect  to  incur  significant  operating  losses  and to  generate  significant
negative cash flow from operating  activities while we continue to construct our
network and increase our customer base.

     Preferred  stock  dividend.  Our  convertible  preferred stock pays a stock
dividend at the rate of 7.5% per annum, payable semi-annually  commencing May 1,
2001. The dividends are paid with  additional  shares of  convertible  preferred
stock.  Through June 30, 2002, we have issued an additional  3,245,134 shares of
convertible preferred stock in payment of dividends,  including 1,060,201 shares
on May 1, 2002.

     Other  comprehensive  income  (loss).  During  2001,  we  entered  into two
two-year interest rate swaps,  effectively fixing $50.0 million of the term loan
B borrowed  under the secured  credit  facility.  We do not expect the effect of
these swaps to have a material  impact to interest  expense for the remainder of
their lives.  We recovered  $120,042 of  previously  unrealized  losses in other
comprehensive income during the first half of 2002.

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 $295.0  million of discount  notes.  The discount
notes accrete in value at a rate of 14%  compounded  semi-annually.  The Company
will begin making semi-annual cash interest payments on October 1, 2005.

     Also on September 26, 2000, we negotiated a $225.0  million  secured credit
facility led by Wachovia (formerly First Union National Bank). The amount of the
secured  credit  facility was increased to $250.0  million in November  2000. We
drew a $50.0 million term loan under the facility on September  26, 2000,  and a
$105.0  million  term loan on March 22,  2002.  A $95.0  million  line of credit
remains committed to us under the facility at June 30, 2002, with restrictions.

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  The Company did not meet the  covenant for EBITDA for the
first  quarter  of 2002.  As a result  of  higher  than  expected  gross and net
additions to Horizon PCS  subscribers  for that  quarter,  the Company  incurred
additional  expenses to add those  customers.  Although  the Company  ultimately
benefits  from the revenues  generated by new  subscribers,  the Company  incurs
one-time  expenses  associated  with  new  subscribers,  including  commissions,
handset  subsidies,  set up costs for the network and marketing  expenses.  As a
result,  these new subscriber costs  negatively  affect EBITDA in the short-term
during  the  period  of  the   addition  of  new   subscribers,   which  led  to
non-compliance with the EBITDA covenant for the first quarter of 2002.



                                       27
<PAGE>

     On June 27,  2002,  the  Company  entered  into a fourth  amendment  to its
secured credit  agreement  with the bank group.  The amendment  adjusts  certain
financial  covenants  and  increases  the margin on the base interest rate by 25
basis points to LIBOR plus 400 to 450-basis points, while also providing for the
payment of fees to the  banking  group,  an increase  in  post-default  interest
rates, a new financial  covenant  regarding minimum  available cash,  additional
prepayment  requirements,  restrictions  on Horizon  PCS'  borrowings  under the
remaining  $95.0 million line of credit and deposit  requirements  on the $105.0
million we  borrowed  under the  secured  credit  facility  in March  2002.  The
amendment, and details on the requirements and restrictions, were filed with the
Company's Form 8-K on June 27, 2002.

     The following table details the minimum balance requirements placed on cash
and cash equivalents on the accompanying  condensed  consolidated balance sheets
under the amended terms of the secured credit facility:

                                                              Deposit balance
                                                                requirement
                                                           --------------------
At June 30, 2002......................................     $       105,000,000
July 1, 2002, through August 15, 2002.................              88,000,000
August 16, 2002, through September 30, 2002...........              71,000,000
October 1, 2002, through November 15, 2002............              63,000,000
November 16, 2002, through December 31, 2002..........              55,000,000
January 1, 2003, through February 15, 2003............              33,000,000
February 16, 2003, through March 31, 2003.............              11,000,000
April 1, 2003, through May 15, 2003...................               5,500,000

     On December 7, 2001, the Company  received $175.0 million from the issuance
of  unsecured  senior  notes.  Interest  payments  on the senior  notes are made
semi-annually at 13.75% annually.  A portion of the offering proceeds was placed
in an escrow account to fund the first four  semi-annual  interest  payments and
are classified as restricted  cash. The first interest  payment was made on June
15, 2002.

     The following  table  summarizes our long-term debt repayment  requirements
for the next five years:
<TABLE>
<CAPTION>
<S>                                <C>          <C>            <C>          <C>           <C>           <C>
(Dollars in millions)                                    Years Ending December 31,
                                   -------------------------------------------------------------------
                                       2002         2003          2004          2005          2006      Thereafter
                                   -----------  ------------  ------------  ------------  ------------  ----------
Secured credit facility,
  due 2008.....................    $    155.0   $    155.0    $    155.0    $    155.0    $    155.0    $    155.0
     Variable interest rate (1)          5.94%        5.94%         5.94%         5.94%         5.94%         5.94%
     Principal payments........    $       --   $       --    $      8.3    $     20.2    $     26.8    $     99.7
Discount notes, due 2010 (2)...    $    186.3   $    217.5    $    253.1    $    283.7    $    286.1    $    295.0
     Fixed interest rate.......         14.00%       14.00%        14.00%        14.00%        14.00%        14.00%
     Principal payments........    $       --   $       --    $       --    $       --    $       --    $    295.0
Senior notes, due 2011.........    $    175.0   $    175.0    $    175.0    $    175.0    $    175.0    $    175.0
     Fixed interest rate.......         13.75%       13.75%        13.75%        13.75%        13.75%        13.75%
     Principal payments........    $       --   $       --    $       --    $       --    $       --    $    175.0
</TABLE>

(1)  Interest  rate on the secured  credit  facility  equals LIBOR plus a margin
     that varies from 400 to 450 basis points.  At June 30, 2002,  $50.0 million
     was  effectively  fixed at 8.53% through an interest rate swap discussed in
     "ITEM 3.  Quantitative and Qualitative  Disclosures About Market Risk". The
     interest rate is assumed to equal 5.94% for all periods  ($50.0  million at
     6.09% and $105.0 million at 5.87%).
(2)  Face value of the discount  notes is $295.0  million.  End of year balances
     presented  herein  are net of the  discount  and  assume  accretion  of the
     discount as interest expense at an annual rate of 14.00%.

     At June 30, 2002, we had cash and cash equivalents of approximately  $131.8
million and working capital of  approximately  $139.6  million.  At December 31,
2001,  we had cash and cash  equivalents  of  approximately  $123.8  million and
working capital of approximately  $117.0 million.  The increase in cash and cash
equivalents  of  approximately  $8.0  million is primarily  attributable  to the
$105.0 million draw on the secured credit facility, offset by the funding of our
loss from  continuing  operations  of  approximately  $79.4  million  (this loss
includes  certain  non-cash  charges)  and funding our capital  expenditures  of
approximately $49.1 million during the first half of 2002.

                                       28
<PAGE>

     Net cash used in  operating  activities  for the six months  ended June 30,
2002, was approximately $40.4 million.  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.  The
net loss of  approximately  $79.4 million was  partially  offset by increases to
depreciation, increases in accrued liabilities, including the payable to Sprint,
offset by increases to accounts receivable.

     Net cash used in  investing  activities  for the six months  ended June 30,
2002, was approximately $54.1 million.  Our capital expenditures for that period
were  approximately  $49.1  million,  reflecting  the  continuing  build-out and
upgrade of our network.  At June 30, 2002,  we operated  approximately  757 cell
sites  in our  network  (an  additional  501 cell  sites  were  operated  by the
Alliances in our territories).  This represents an addition of approximately 153
sites  during the six months ended June 30, 2002,  and  approximately  310 sites
since June 30, 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  38 at the  end of  2001 to 40 at  June  30,  2002.  We will  incur
additional  capital  expenditures  as we complete the  build-out of our network,
including the launch of additional  retail stores,  completing  additional  cell
sites and expanding  capacity at our switches as needed.  We are also  upgrading
our  network  to  provide  3G (third  generation)  wireless  service  which will
increase voice capacity and allow for high-speed data transmission.

     During  the  second  quarter of 2002,  approximately  $6.5  million of cash
equivalents  matured and were reinvested in short-term debt  securities.  All of
the investments mature within one year of June 30, 2002.

     Net cash provided by financing activities for the six months ended June 30,
2002,  was $102.5 million  consisting  mostly of the March 2002 draw on the term
loan A required under our secured credit facility of $105.0 million. We incurred
$2.5  million  of  deferred  financing  fees  related  to the  amendment  of our
covenants under the secured credit facility discussed above.

     At June 30, 2002, we had a $95.0 million line of credit committed under our
secured credit facility.  We believe the available  borrowings under our secured
credit  facility  will be adequate to fund our  network  build-out,  anticipated
operating  losses and working  capital  requirements  until we achieve  positive
EBITDA,  which we now expect to occur in first  quarter of 2004.  We believe the
increase in churn and subsequent  write-offs of involuntary NDASL  deactivations
combined with a slow down in activation growth during the second quarter of 2002
has extended the time it will take to reach positive  EBITDA.  We do not believe
the restrictions on our future borrowings and required cash deposits will result
in  material  restrictions  in our  liquidity  or our  ability  to  meet  future
anticipated working capital requirements.

     Income from  ongoing  operations  and EBITDA are not  measures of financial
performance  under generally  accepted  accounting  principles and should not be
considered  alternatives  to net income (loss) as measures of  performance or to
cash flows as a measure of liquidity.

     For the year ended  December 31, 2002, we anticipate our funding needs will
be between  $150.0  million and $160.0  million,  of which  approximately  $60.0
million  to  $70.0  million  will be used  for  capital  expenditures  with  the
remainder  utilized to fund working  capital and  operating  losses.  The actual
funds  required to  build-out  and  upgrade  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  unforeseen
delays, cost overruns,  unanticipated expenses,  regulatory changes, engineering
design  changes and  required  technological  upgrades  and other  technological
risks.

     Other  future  cash  expenditures  that may require  additional  borrowings
include:

     o    expanding  the  coverage  within  our  existing  operating  markets or
          improving call quality with fill-in coverage;

     o    opening  additional  retail  stores,  beyond  our  current  plan of 50
          stores;

     o    mergers  or  acquisitions  of other PCS  affiliates of Sprint or other
          compatible PCS carriers;

                                       29
<PAGE>

     o    the grant to us by Sprint PCS of  additional  markets under our Sprint
          PCS agreements; and/or

     o    expanding our network, if economically justifiable,  by exercising our
          right to build our own network in our markets which are covered by our
          network services  agreement with the Alliances under the terms of that
          amended agreement.

     If we are unable to obtain any necessary  additional funding or if we incur
further  restrictions  on the  availability  of our  current  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 under terms defined in our  agreements  with Sprint PCS. Also, any
delays in our build-out may result in penalties  under our Sprint PCS agreement,
as amended.

     Other risk factors that may impact liquidity are:

     o    We may not be able to sustain our growth or obtain sufficient  revenue
          to  achieve  and  sustain   positive  cash  flow  from  operations  or
          profitability;

     o    We may  experience  a higher  churn rate,  which could result in lower
          revenue;

     o    New  customers  may be of lower  credit  quality,  which may require a
          higher provision for doubtful accounts;

     o    Increased competition causing declines in ARPU;

     o    Our  failure to comply  with  restrictive  financial  and  operational
          covenants under the secured credit facility; and;

     o    Our upgrade to 3G services,  due to which we have incurred significant
          capital expenditures, may not be successful in the marketplace and may
          not result in incremental revenue.

SEASONALITY

     Our business is subject to  seasonality  because the  wireless  industry is
heavily  dependent on calendar fourth quarter results.  Among other things,  the
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 a material  adverse  effect on our
results of operation.


                                       30
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001,  the FASB 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 were adopted by the Company on January 1, 2002.  Goodwill
amortization  ceased as of  December  31,  2001,  and the Company is required to
complete an impairment test of the remaining  goodwill balance annually (or more
frequently if impairment indicators arise). As of June 30, 2002, the Company has
goodwill of approximately $7,191,000,  net of accumulated amortization,  related
to the acquisition of Bright PCS. See Note 9 in the "Notes to Interim  Condensed
Consolidated Financial Statements."

     In June  2001,  the  FASB  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 adoption is not expected to have a material  effect on the  Company's
financial position, results of operations or cash flows.

     In  August  2001,  the  FASB  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.  The  Company  adopted  SFAS No. 144 on January 1, 2002.  See Note 5 in the
"Notes to Interim Condensed Consolidated Financial Statements."

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44  and  64,   Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  SFAS No. 145 addresses the  accounting  for gains and losses from
the  extinguishment  of debt,  economic  effects  and  accounting  practices  of
sale-leaseback   transactions  and  makes  technical   corrections  to  existing
pronouncements.  The  Company  will adopt SFAS No. 145 on July 1, 2002,  and the
adoption is not expected to have a material  effect on the  Company's  financial
position, results of operations or cash flows.

     In June 2002 the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement addresses financial accounting
and  reporting  for  costs  associated  with  exit or  disposal  activities  and
nullifies  Emerging  Issues  Task  Force  (EITF)  Issue  No.  94-3,   "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including  Certain  Costs  Incurred  in  a  Restructuring)."  Charges
relating to the exit of an activity  or  disposal of  long-lived  assets will be
recorded  when they are incurred and  measurable.  Prior to SFAS No. 146,  these
charges  were  accrued  at the  time of  commitment  to exit  or  dispose  of an
activity.  The Company has not yet determined the impact of the adoption of this
statement.




                                       31
<PAGE>

ITEM 3. 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 speculative trading purposes. We also
do not engage in  transactions  in foreign  currencies  that would  expose us to
additional  market  risk.  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 normal course of business,  our  operations  are exposed to interest
rate  risk.  Our  primary  interest  rate  risk  exposure  relates  to  (i)  the
variable-rate  secured  credit  facility,  (ii) our  ability  to  refinance  our
fixed-rate  discount and senior notes at maturity at market rates, and (iii) the
impact of  interest  rate  movements  on our  ability to meet  interest  expense
requirements and meet financial covenants under our debt instruments.

     In the first  quarter of 2001,  we entered  into a two-year  interest  rate
swap,  effectively  fixing  $25.0  million of the term loan  borrowed  under the
secured credit  facility.  In the third quarter of 2001, we entered into another
two-year  interest rate swap,  effectively  fixing  another $25.0 million of the
term loan borrowed under the secured credit  facility.  The table below compares
current market rates on the balances subject to the swap agreements:

     (Dollars in millions)                       At June 30, 2002
                                     ----------------------------------------
                                          Balance     Market rate   Swap rate
                                          -------     -----------   ---------
     Swap 1.....................           $25.0         6.09%          9.40%
     Swap 2.....................           $25.0         6.09%          7.65%

     Since  our swap  interest  rates  are  currently  greater  than the  market
interest rates on our underlying  debt,  our results from  operations  currently
reflect a higher  interest  expense than had we not hedged our  position.  Since
inception and through June 30, 2002, we have recognized  approximately  $200,000
in  losses  due  to the  ineffectiveness  of  these  swaps  in the  consolidated
statement of operations.  At June 30, 2002, the Company recognized approximately
$700,000 in other comprehensive losses on the balance sheet.

     While we cannot predict our ability to refinance existing debt, we continue
to evaluate our interest rate risk on an ongoing  basis.  If we do not renew our
swaps,  or, if we do not hedge  variable-rate  incremental  borrowings under our
secured credit  facility,  we will increase our interest rate risk,  which could
have  a  material  impact  on  our  future  earnings.   As  of  June  30,  2002,
approximately  83% of our long-term  debt is fixed rate or is variable rate that
has been swapped under fixed-rate hedges, thus reducing our exposure to interest
rate risk.  A 100-basis  point  increase in interest  rates would  increase  our
interest expense approximately $1.1 million.



                                       32
<PAGE>

                           PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     In May 2002, the Company issued 1,060,201  shares of convertible  preferred
stock as a dividend-in-kind to holders of the outstanding  convertible preferred
stock. Exemption from the registration  provisions of the Securities Act of 1933
("Securities Act") for this transaction was claimed:  (i) on the basis that such
transaction  did not  constitute  an "offer to sell,"  "sale," or "offer to buy"
under Section 5 of the Securities Act; (ii) under Section 4(2) of the Securities
Act and the rules and regulations  promulgated thereunder on the basis that such
transaction   did  not  involve  any  public   offering,   the  purchasers  were
sophisticated with access to the kind of information  registration would provide
and that  such  purchasers  acquired  such  securities  without  a view  towards
distribution thereof, and (iii) under Rule 144A of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  We did not meet the  covenant  for  EBITDA  for the first
quarter of 2002. As a result of higher than expected  gross and net additions to
Horizon PCS subscribers for the quarter,  we incurred additional expenses to add
those customers.  Although we ultimately  benefit from the revenues generated by
new  subscribers,  we incur one-time  expenses  associated with new subscribers,
including  commissions,  handset  subsidies,  set up costs for the  network  and
marketing  expenses.  As a result,  these new subscriber costs negatively affect
EBITDA in the  short-term  during the period of the addition of new  subscribers
which led to  non-compliance  with the EBITDA  covenant for the first quarter of
2002.

     On June 27, 2002, Horizon PCS obtained a waiver of the non-compliance  with
the EBITDA  covenant for the first quarter of 2002 and entered into an amendment
of the secured credit facility.  The amended facility  primarily adjusts certain
financial  covenants  and  increases the margin on the base interest by 25-basis
points,  while also providing for the payment of fees to the banking  group,  an
increase in  post-default  interest  rates, a new financial  covenant  regarding
minimum  available cash,  additional  prepayment  requirements,  restrictions on
Horizon PCS'  borrowings  under the  remaining  $95.0 million  revolving  credit
facility  and deposit  requirements  on the $105.0  million  borrowed  under the
secured credit facility in March 2002.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     During the period  covered by this  report,  the Company  delivered  to its
stockholders the Company's Proxy Statement for Annual Meeting of Stockholders to
be held on May 22, 2002 (the "Proxy Statement").

     (a) The Company's Annual Meeting of Stockholders was held on May 22, 2002.

     (b) The  Company's  nominees to the Board of  Directors of the Company were
elected. The election was uncontested. (c)


                                       33
<PAGE>


     (c)  Withrespect  to each  matter  (as more  fully  described  in the Proxy
Statement)  voted upon at the meeting,  the inspector of election  tabulated the
following votes:

          (i) Election of Directors
<TABLE>
<CAPTION>
<S>                                     <C>                       <C>                       <C>
                                                                       Number of Votes       Abstentions and Broker
           Nominee for Office              Number of Votes For            Withheld                  Non-Votes
           -----------------------      -----------------------   -----------------------   ------------------------

           Phoebe H. McKell..........                82,203,708                        --                 5,600,597
           Eric Zinterhofer..........                82,203,708                        --                 5,600,597
</TABLE>

     (d) There was no  solicitation  subject to Rule  14a-11 of  Regulation  14A
under the Securities Exchange Act of 1934.

ITEM 5. OTHER INFORMATION

                                  RISK FACTORS

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 2004 while we continue to
construct our network and grow our customer  base.  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.

IF WE 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 and  operate the portion of the
Sprint PCS  network  located in our  territory  in  accordance  with Sprint PCS'
technical specifications and coverage requirements.  The agreements also require
us to provide  minimum  network  coverage to the  population  within each of the
markets which make up our territory by specified dates.

     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.  Sprint PCS and HPC agreed to an amendment of the build-out  requirements,
which extended the dates 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 extended  contract dates. The amounts of
the penalties  depends on the market and length of delay 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 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 notified Sprint PCS in November 2001 that it
is our  position  that the  reasons  for the delay  constitute  events of "force
majeure" as described in 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.  On January 30, 2002,  Sprint PCS notified us that,  as a result of
these force majeure  events,  it does not consider our  build-out  delay to be a
breach of the Sprint PCS  agreement.  We agreed to use  commercially  reasonable
efforts to complete the build-out by June 30, 2002 for most of these markets. We
have  not  been  able to  complete  some of the  sites  in some  markets  due to
continuing force majeure issues.

                                       34
<PAGE>

     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. A failure to meet our build-out
requirements  for  any  of  our  markets,  or  to  meet  Sprint  PCS'  technical
requirements,  would constitute a breach of the Sprint PCS agreements that could
lead to their  termination  if not cured within the applicable  cure period.  If
Sprint  PCS  terminates  these  agreements,  we will no  longer be able to offer
Sprint PCS products and services.

OUR SUBSTANTIAL  INDEBTEDNESS  COULD ADVERSELY  AFFECT OUR FINANCIAL  HEALTH AND
PREVENT US FROM FULFILLING OUR LONG-TERM DEBT OBLIGATIONS.

     As of June 30,  2002,  our  total  debt  outstanding  was  $625.0  million,
comprised of $155.0 million borrowed under our secured credit  facility,  $175.0
million due under our senior  notes issued in December  2001 and $295.0  million
represented  by our discount  notes (which are reported on our balance  sheet at
June 30, 2002, net of a discount of approximately $122.8 million).

     Our  substantial  debt  will  have  a  number  of  important  consequences,
including the following:

     o    we may not have sufficient funds to pay interest on, and principal of,
          our debt;

     o    we have to dedicate a  substantial  portion of any positive  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 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;

     o    due to the liens on substantially all of our assets and the pledges of
          equity  ownership of our  subsidiaries  that secure our secured credit
          facility, our lenders may control our assets upon a default;

     o    our debt increases our  vulnerability  to general adverse economic and
          industry conditions;

     o    our debt  limits our  flexibility  in planning  for,  or reacting  to,
          changes in our business and the industry in which we operate; and

     o    our debt  places  us at a  competitive  disadvantage  compared  to our
          competitors that have less debt.

TO SERVICE OUR INDEBTEDNESS,  WE WILL REQUIRE A SIGNIFICANT  AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.

     Our ability to make payments on and to refinance our  indebtedness,  and to
fund our network  build-out,  anticipated  operating  losses and working capital
requirements will depend on our ability to generate cash in the future. This, to
a certain  extent,  is  subject  to general  economic,  financial,  competitive,
legislative, regulatory and other factors that are beyond our control.

     We cannot be certain that our business will generate  sufficient  cash flow
from  operations  or that future  borrowings  will be  available to us under our
secured  credit  facility  in an  amount  sufficient  to  enable  us to pay  our
indebtedness or to fund our other liquidity  needs. We may need to refinance all
or a portion of our indebtedness, including the notes, on or before maturity. We
may not be able to refinance any of our indebtedness on commercially  reasonable
terms, or at all.




                                       35
<PAGE>



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  secured  credit
facility,  Sprint  PCS has the right to  purchase  our  obligations  under  that
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"  as  defined  by  the  agreement.  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 and
assumes that we own the FCC licenses in our territory.  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 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 the
Company and may operate to reduce the Entire Business Value of the 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 Sprint PCS owns the FCC licenses which we use in our territory,  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 by us 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  our   wireless   digital
communications business.

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'  networks,  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,  in 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,  which in turn  could  adversely  affect  our  ability  to  generate
revenues.



                                       36
<PAGE>



WE ARE  DEPENDENT  UPON  SPRINT PCS' BACK OFFICE  SERVICES  AND ITS  THIRD-PARTY
VENDORS' BACK OFFICE  SYSTEMS.  PROBLEMS WITH THESE  SYSTEMS,  OR TERMINATION OF
THESE ARRANGEMENTS, COULD DISRUPT OUR BUSINESS AND POSSIBLY INCREASE OUR COSTS.

     Because  Sprint PCS  provides  our back  office  systems  such as  billing,
customer care and  collections,  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 Sprint (long  distance) 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  some  of  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 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 secured  credit  facility  provides for aggregate  borrowings of $250.0
million of which $155.0  million was borrowed as of June 30, 2002.  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  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.

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  We did not meet the  covenant  for  EBITDA  for the first
quarter of 2002. As a result of higher than expected  gross and net additions to
Horizon PCS subscribers for the quarter,  we incurred additional expenses to add
those customers.  Although we ultimately  benefit from the revenues generated by
new  subscribers,  we incur one-time  expenses  associated with new subscribers,
including  commissions,  handset  subsidies,  set up costs for the  network  and
marketing  expenses.  As a result,  these new subscriber costs negatively affect
EBITDA in the  short-term  during the period of the addition of new  subscribers
which led to  non-compliance  with the EBITDA  covenant for the first quarter of
2002.



                                       37
<PAGE>



     On June 27, 2002, Horizon PCS obtained a waiver of the non-compliance  with
the EBITDA  covenant for the first quarter of 2002 and entered into an amendment
of the secured credit facility.  The amended facility  primarily adjusts certain
financial  covenants  and  increases the margin on the base interest by 25 basis
points,  while also providing for the payment of fees to the banking  group,  an
increase in  post-default  interest  rates, a new financial  covenant  regarding
minimum  available cash,  additional  prepayment  requirements,  restrictions on
Horizon PCS'  borrowings  under the  remaining  $95.0 million  revolving  credit
facility  and deposit  requirements  on the $105.0  million  borrowed  under the
secured credit facility in March 2002.

     Although under its most recent forecast,  Horizon PCS currently  expects to
remain in compliance  with the  covenants as amended,  there can be no assurance
that its financial  results will not be lower than expected in future  quarters,
causing another  non-compliance  to occur,  which could have a material  adverse
effect on Horizon PCS' financial condition and results of operations.

MATERIAL  RESTRICTIONS  IN OUR DEBT  INSTRUMENTS MAY MAKE IT DIFFICULT TO OBTAIN
ADDITIONAL  FINANCING OR TAKE OTHER NECESSARY ACTIONS TO REACT TO CHANGES IN OUR
BUSINESS.

     The indenture  governing the senior notes contains  various  covenants that
limit our  ability  to engage in a variety of  transactions.  In  addition,  the
indenture  governing our discount  notes and the secured  credit  agreement both
impose  additional  material  operating and financial  restrictions on us. These
restrictions,  subject to  ordinary  course of  business  exceptions,  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.

     In addition,  our secured credit facility  requires us to maintain  certain
ratios, including:

     o    leverage ratios;

     o    an interest coverage ratio; and

     o    a fixed charges ratio,

     and to satisfy certain tests, including tests relating to:

     o    minimum covered population;

     o    minimum number of PCS subscribers in our territory;

     o    minimum total revenues; and

     o    minimum EBITDA.



                                       38
<PAGE>



     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 secured credit facility may
prevent the  Company and the  guarantors  of the senior  notes and the  discount
notes from paying those notes or the guarantees of those notes.

THE TERMS OF THE CONVERTIBLE PREFERRED STOCK MAY AFFECT OUR FINANCIAL RESULTS.

     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 in 2005.

     If we  become  subject  to  the  repurchase  right  or  change  of  control
redemption  requirements under the convertible preferred stock while our secured
credit facility, our discount notes or the senior notes are outstanding, we will
be  required  to seek the  consent  of the  lenders  under  our  secured  credit
facility,  the holders of the discount notes and the holders of the senior notes
to repurchase or redeem the convertible preferred stock, or attempt to refinance
the secured credit facility, the discount notes and the senior notes. If we fail
to obtain  these  consents,  there will be an event of  default  under the terms
governing our secured credit facility.  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 indentures  governing the
discount notes and the senior notes.

IF WE  BREACH  OUR  AGREEMENT  WITH  SBA  COMMUNICATIONS  CORP.  ("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 OBTAINING  INFRASTRUCTURE  EQUIPMENT AND HANDSETS,  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 or upgrade 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.  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  manufacturers  of specific  types
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.



                                       39
<PAGE>



IF THE WEST  VIRGINIA PCS  ALLIANCE  AND  VIRGINIA PCS ALLIANCE  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.

     West Virginia PCS Alliance and Virginia PCS Alliance,  which we refer to as
the  Alliances,  are two related,  independent  PCS  providers  whose network is
managed by NTELOS.  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
the markets where we 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.

SPRINT PCS' VENDOR  DISCOUNTS  MAY BE  DISCONTINUED,  WHICH COULD  INCREASE  OUR
EQUIPMENT  COSTS AND REQUIRE MORE CAPITAL THAN WE HAD  PROJECTED TO BUILD-OUT OR
UPGRADE 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  network
build-out.

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 AFFECTING 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 may price its  national  plans based on its own  objectives
          and may set price levels and customer  credit policies that may not be
          economically sufficient for our business;

     o    Sprint  PCS  may  increase  the  prices  we pay for  our  back  office
          services; and

     o    Sprint or Sprint PCS may make decisions that adversely  affect our use
          of 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.

     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 at least two cellular
providers that have had their  infrastructure in place and have been operational
for a number  of  years.  They  may have  significantly  greater  financial  and
technical  resources than we do, they could offer attractive pricing options and
they may have a wider variety of handset  options.  We expect existing  cellular
providers  will continue to upgrade their systems and provide  expanded  digital
services to compete with the Sprint PCS products and services 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.

     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


                                       40
<PAGE>

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 anticipate  that market prices for two-way  wireless  voice services and
products   generally   will  continue  to  decline  as  a  result  of  increased
competition.  Consequently we may be forced to increase spending for advertising
and promotions.  Increased  competition also may lead to continued  increases in
customer churn. Those trends could cause further delays in our expected dates to
achieve positive EBITDA.

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 Sprint PCS and its affiliates. Some of our competitors are seeking to
reduce access to their networks through actions pending with the FCC.  Moreover,
the engineering standard for the dominant air interface upon which PCS customers
roam is  currently  being  considered  for  elimination  by the FCC as part of a
streamlining  proceeding.  If the FCC eliminates  this standard,  our 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 (CDMA)  technology,
which is the digital wireless  communications  technology selected by Sprint PCS
for its  network.  CDMA 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 decreased  from $0.20 per minute before
June 1, 2001, to $0.15 per minute effective June 1, 2001, and further  decreased
to $0.12 per minute  effective  October 1, 2001. The Sprint PCS roaming rate was
changed to $0.10 per minute in 2002.  After 2002, the rate will be changed to "a
fair and reasonable return," which has not yet been determined.  As a result, we
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.



                                       41
<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. These roaming issues may cause us to suffer a reduction in our revenues
and number of customers.

PARTS OF OUR TERRITORIES  HAVE LIMITED  LICENSED  SPECTRUM,  WHICH MAY ADVERSELY
AFFECT THE QUALITY OF OUR SERVICE.

     In the majority of our markets,  Sprint PCS has licenses covering 20 MHz 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. 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 the  imposition of
fines on Sprint PCS by the FCC or the revocation or forfeiture of the Sprint PCS
licenses for our territory,  which would  prohibit us from providing  service in
our markets.

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 be  certain  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.



                                       42
<PAGE>



WE MAY NEED MORE CAPITAL THAN WE CURRENTLY  ANTICIPATE TO COMPLETE THE BUILD-OUT
AND UPGRADE OF OUR NETWORK,  AND A DELAY OR FAILURE TO OBTAIN ADDITIONAL CAPITAL
COULD DECREASE 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 or desirable 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 or 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.

BECAUSE  SPRINT PCS HAS  RECENTLY  REQUIRED US TO UPGRADE OUR NETWORK TO PROVIDE
"THIRD GENERATION" TECHNOLOGY, WE WILL FACE ADDITIONAL CAPITAL EXPENSES.

     The wireless  industry is seeking to implement new "third  generations," or
"3G", technology. Sprint PCS has selected a version of 3G technology (1XRTT) for
its own  networks  and  required  us to upgrade  our  network  to provide  those
services.  We  currently  estimate  the  network  upgrade  to  1XRTT  will  cost
approximately $35 million,  but actual costs could exceed this estimate.  Sprint
PCS  launched the new 3G  technology  in August 2002.  We  participated  in that
launch  along  with  other  Sprint  PCS  affiliates.  We still  have  additional
expenditures  pending to complete  the full  implementation  of 3G in all of our
markets.  If other wireless carriers implement their 3G upgrades 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.

     Sprint provides  back-office  and other services to the Company.  Recently,
Sprint PCS has sought to increase  service fees during the remainder of 2002 and
beyond in connection with its development of 3G-related  back-office systems and
platforms.  If  Sprint  PCS  were to  increase  its  fees  significantly,  these
increased  operating  expenses  would  have an adverse  effect on the  Company's
EBITDA and cash flow.

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
to other carriers for unbillable  fraudulent  roaming.  Although we believe that
Sprint has  implemented  appropriate  controls to  minimize  the effect to us of
fraudulent usage, our efforts may not be successful.

EXPANDING OUR TERRITORY MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.

     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;



                                       43
<PAGE>

     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.

THE SPRINT PCS AGREEMENTS AND OUR RESTATED CERTIFICATE OF INCORPORATION  INCLUDE
PROVISIONS  THAT MAY  DISCOURAGE,  DELAY OR RESTRICT  ANY SALE OF OUR  OPERATING
ASSETS OR COMMON STOCK TO THE POSSIBLE DETRIMENT OF OUR NOTEHOLDERS.

     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 restated  certificate of  incorporation  could also
operate to  discourage,  delay or make more difficult a change in control of our
company. For example, our restated 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
restated certificate of incorporation could discourage any sale of our operating
assets or common stock.

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  54.7% of our outstanding
common stock on fully-diluted basis as of June 30, 2002. 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 at June 30,
2002.  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 our 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 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  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;



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     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 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,  Horizon  Services,  a
subsidiary of Horizon Telcom  provides  administrative  services to us including
finance and accounting services,  computer access and human resources.  Although
these  transactions  were on terms that we  believe  are fair,  because  Horizon
Telcom  currently owns 54.7% of our outstanding  common stock on a fully diluted
basis,  third-parties  with  which  we  wish to  enter  into  agreements  or the
marketplace in general may not perceive these  transactions  with Horizon Telcom
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.

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.  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. We have experienced
an increase in churn during 2002, primarily caused by NDASL customers' inability
to pay for services  billed.  Current and future  strategies to reduce  customer
churn may not be successful.

     The rate of customer turnover is affected by the following factors, several
of which are not within our ability to address:

     o    credit worthiness of customers;

     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;



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<PAGE>

     o    a lack of affordability;

     o    price competition;

     o    Sprint PCS' customer credit policies;

     o    customer care concerns; and

     o    other competitive factors.

     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 the
handsets purchased by our customers.

OUR ALLOWANCE FOR DOUBTFUL ACCOUNTS MAY NOT BE SUFFICIENT TO COVER UNCOLLECTIBLE
ACCOUNTS.

     On an ongoing basis, we estimate the amount of customer receivables that we
may not collect to reflect  the  expected  loss on such  accounts in the current
period.  However,  our allowance for doubtful accounts may underestimate  actual
unpaid receivables for various reasons, including:

     o    adverse changes in our churn rate exceeding our estimates;

     o    adverse changes in the economy  generally  exceeding our expectations;
          or

     o    unanticipated changes in Sprint PCS' products and services.

     If our allowance for doubtful  accounts is  insufficient to cover losses on
our receivables, our business, financial position or results of operations could
be materially adversely affected.

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
THE FOURTH 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 generally poor holiday shopping season.



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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 Federal Aviation  Administration  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.

     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



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<PAGE>



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS

Exhibit
Number         Description
------         -----------

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

3.2*           Bylaws of Horizon PCS.

10.3.3**+      Addendum V to Sprint PCS Management Agreement between Horizon PCS
               and Sprint PCS, Inc. as of June 1, 2001.

10.21.1**      Amendment  No.  1 to PCS CDMA  Product  Supply  Contract  between
               Motorola, Inc. and Horizon Personal Communications, inc. dated as
               of September 22, 2000.

10.27.1*       Letter  Agreement  dated April 11, 2002 between SBA Towers,  Inc.
               and Horizon Personal Communications, Inc.

10.40.4        Waiver  Agreement dated May 9, 2002 by and among Horizon Personal
               Communications,    Inc.   (the   "Company"),    Bright   Personal
               Communications  Services,  LLC, an Ohio limited liability company
               ("Bright")  (each  of the  Company  and  Bright,  individually  a
               "Borrower" and collectively, the "Borrowers"), Horizon PCS, Inc.,
               a Delaware corporation (the "Parent"),  those Subsidiaries of the
               Parent listed on the signature  pages hereto  (together  with the
               Parent,   individually  a  "Guarantor"   and   collectively   the
               "Guarantors";  the  Guarantors,   together  with  the  Borrowers,
               individually  a  "Credit  Party"  and  collectively  the  "Credit
               Parties"), the lenders party hereto (the "Lenders"),  First Union
               National  Bank,  as  Administrative  Agent  (the  "Administrative
               Agent"),  Westdeutsche  Landesbank  Girozentrale,  as Syndication
               Agent and Arranger (the "Syndication  Agent"), and Fortis Capital
               Corp.,  as  Documentation  Agent  (the   "Documentation   Agent")
               (incorporated  by reference  Exhibit 10.40.3 to the  Registrant's
               Quarterly  Report on Form 10-Q for the  quarter  ended  March 31,
               2002).

10.40.5        Second  Waiver  Agreement  dated as of June 7, 2002, by and among
               Horizon  Personal  Communications,   Inc.,  and  Bright  Personal
               Communications  Services,  LLC,  Horizon PCS, Inc. (the "Parent")
               and certain  Subsidiaries  of the Parent,  the several  banks and
               other  financial  institutions  as may from  time to time  become
               parties  to  the   Agreement,   First  Union  National  Bank,  as
               Administrative Agent,  Westdeutsche Landesbank  Girozentrale,  as
               Syndication  Agent and  Arranger  and Fortis  Capital  Corp.,  as
               Documentation   Agent.   (incorporated   by   reference   to  the
               Registrant's Current Report on Form 8-K filed on June 10, 2002).

10.40.6        Fourth  Amendment to Credit Agreement and Waiver dated as of June
               27, 2002 by and among Horizon Personal Communications,  Inc., and
               Bright Personal  Communications  Services, LLC, Horizon PCS, Inc.
               (the  "Parent")  and  certain  Subsidiaries  of the  Parent,  the
               several banks and other  financial  institutions as may from time
               to time become parties to the Agreement,  Wachovia Bank, National
               Association   (successor  to  First  Union  National   Bank),  as
               Administrative Agent,  Westdeutsche Landesbank  Girozentrale,  as
               Syndication  Agent and  Arranger  and Fortis  Capital  Corp.,  as
               Documentation   Agent   (incorporated   by   reference   to   the
               Registrant's Current Report on Form 8-K filed on June 27, 2002).

10.47**        Employment Agreement between Horizon PCS, Inc., and Alan G. Morse

99.1**         Certification of Periodic Financial Reports

_______________________

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

**   Filed herewith.

+    The Registrant has requested confidential treatment for certain portions of
     this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1924.



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<PAGE>





(B)  REPORTS ON FORM 8-K

1.   On April 1, 2002,  we filed a Current  Report on Form 8-K with the SEC that
     provided  information  under "ITEM 5 - Other Event" disclosing we initiated
     discussions  with the lead bank in our leading  group  concerning  possible
     non-compliance with covenant.

2.   On April 23, 2002, we filed a Current  Report on Form 8-K with the SEC that
     provided  information under "ITEM 9 - Regulation FD Disclosure"  disclosing
     we made a  presentation  at the Bear Stearns 11th.  Annual Credit  Research
     Conference in New York, New York.

3.   On May 14,  2002,  we filed a Current  Report on Form 8-K with the SEC that
     provided  information  under "ITEM 5 - Other  Event"  disclosing  we made a
     press release announcing our financial results for the first quarter of the
     fiscal year ending December 31, 2002.

4.   On June 10, 2002,  we filed a Current  Report on Form 8-K with the SEC that
     provided  information  under  "ITEM  5 -  Other  Event"  disclosing  wavier
     agreement made with our lending group waving non-compliance with covenant.

5.   On June 27, 2002,  we filed a Current  Report on Form 8-K with the SEC that
     provided  information under "ITEM 5 - Other Event" disclosing we reached an
     amendment agreement with our lending group to waive our non-compliance with
     covenant while the amended facility was being negotiated.

6.   On June 28, 2002,  we filed a Current  Report on Form 8-K with the SEC that
     provided  information  under  "ITEM 4 - Change in  Registrant's  Certifying
     Accountant"  disclosing  that we had  dismissed  Arthur  Andersen  LLP, and
     engaged KPMG LLP, as our independent accountants.




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<PAGE>



                                   SIGNATURES

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

                                             HORIZON PCS, INC.
                                             -----------------------------------
                                             Registrant


    Date: August 14, 2002                    By: /s/  William A. McKell
          -----------------                      -------------------------------
                                             William A. McKell
                                             Chief Executive Officer


    Date: August 14, 2002                    By: /s/  Peter M. Holland
          -----------------                      -------------------------------
                                             Peter M. Holland
                                             Chief Financial Officer
                                             (Principal Financial and Chief
                                             Accounting Officer)





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