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UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Form10-K

(Mark One)

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|   | **ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934** |

For the fiscal year ended December  31, 2004or

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|--------|--------------------------------------------------------------------------------------------|
|   | **TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934** |

For the transition period from                         to                        .

Commission File Number333-39746IWO Holdings, Inc.(Exact name of registrant as specified in itscharter)

|                                                                              |  |                                    |  |  |  |  |
|------------------------------------------------------------------------------|--|------------------------------------|--|--|--|--|
| Delaware                                                                     |  | 14-1818487                         |
| (Stateor other jurisdiction ofincorporation ororganization)                  |  | (I.R.S. EmployerIdentificationNo.) |
| **52 CorporateCircleAlbany, New York**(Address ofprincipal executiveoffices) |  | **12203**(Zipcode)                 |
|                                                                              |

(Registrant'stelephone number, including area code)**(518)862-6000**

Securities Registered Pursuant toSection  12(b) of the Act:None

SecuritiesRegistered Pursuant to Section  12(g) of the Act:None

Indicate by check mark whether the registrant (1)  has filedall reports required to be filed by Section  13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file suchreports), and (2)  has been subject to such filing requirementsfor the past 90 days.

Yes        No *

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item  405 ofRegulation  S-K is not contained herein, and will not becontained, to the best of registrant's knowledge, in definitiveproxy or information statements incorporated by reference inPart  III of this Form  10-K or any amendment to thisForm  10-K. 

Indicate by check mark whether theregistrant is an accelerated filer (as defined in Rule  12b-2 ofthe Act).

Yes        No

As of June  30, 2004, therewas no Common Stock held by non-affiliates of the registrant.

Indicate by check mark whether the registrant has filed alldocuments and reports required to be filed by Section  12, 13 or15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of the securities under a plan confirmed by a court.

Yes         No

Asof March  25, 2005, the registrant had only one outstanding classof common stock, of which there were 5,000,005 shares outstanding.

* The registrant is not subject to the filing requirements ofSection 13 or 15(d) of the Securities Exchange Act of 1934. Theregistrant is a voluntary filer. The registrant has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months as if it were subject tosuch filing requirements.

DOCUMENTS INCORPORATED BYREFERENCE

None.

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IWOHOLDINGS, INC.ANNUAL REPORT ON FORM 10-KTABLE OFCONTENTS

|          |  |                                                                                                            |  |      |  |  |  |  |  |  |
|----------|--|------------------------------------------------------------------------------------------------------------|--|------|--|--|--|--|--|--|
|     |  |                                                                                                       |  | Page |
| PART I   |
| Item1.   |  | Business                                                                                                   |  | 1    |
| Item 1A. |  | Risk Factors                                                                                               |  | 13   |
| Item 2.  |  | Properties                                                                                                 |  | 29   |
| Item3.   |  | Legal Proceedings                                                                                          |  | 29   |
| Item4.   |  | Submission of Matters to a Vote of SecurityHolders                                                         |  | 29   |
| PARTII   |
| Item5.   |  | Market for Registrant's Common Equity, RelatedStockholder Matters and Issuer Purchases of EquitySecurities |  | 30   |
| Item 6.  |  | Selected Financial Data                                                                                    |  | 31   |
| Item 7.  |  | Management'sDiscussion and Analysis of Financial Condition and Results ofOperations                        |  | 32   |
| Item 7A. |  | Quantitative and Qualitative DisclosuresAbout Market Risk                                                  |  | 47   |
| Item8.   |  | Financial Statements and SupplementaryData                                                                 |  | 48   |
| Item9.   |  | Changes in and Disagreements with Accountants on Accountingand FinancialDisclosure                         |  | 48   |
| Item 9A. |  | Controls andProcedures                                                                                     |  | 48   |
| Item 9B. |  | OtherInformation                                                                                           |  | 49   |
| PARTIII  |
| Item 10. |  | Directors and ExecutiveOfficers of the Registrant                                                          |  | 50   |
| Item11.  |  | Executive Compensation                                                                                     |  | 52   |
| Item 12. |  | Security Ownershipof Certain Beneficial Owners and Management and Related StockholderMatters               |  | 56   |
| Item 13. |  | Certain Relationships and RelatedTransactions                                                              |  | 57   |
| Item 14. |  | PrincipalAccountant Fees and Services                                                                      |  | 59   |
| PART IV  |
| Item 15. |  | Exhibits  andFinancial StatementSchedules                                                                  |  | 60   |
|          |

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EXPLANATORYNOTE

As a result of a public letter issued by the United StatesSecurities and Exchange Commission (the"SEC") to the American Institute of CertifiedPublic Accountants on February  7, 2005 stating the SEC'sviews regarding existing accounting literature applicable to leases andleasehold improvements and in consultation with our independentregistered public accounting firm, Ernst & Young LLP, we reviewedcertain non-cash items relating to our lease accounting practices. As aresult of this review, we corrected our method of accounting for leasesto comply with generally accepted accounting principles in the UnitedStates ("GAAP") and determined that thesematters required material adjustments to the 2002 and 2003 financialinformation previously filed on Form  10-K and the financialinformation for the periods ended March  31, June  30, andSeptember  30, 2003 and 2004. The adjustments resulting from ourreview are discussed in greater detail in this report in"Item  7. Management's Discussion and Analysisof Financial Condition and Results of Operations" and inNotes  1 and 12 to our consolidated financial statements locatedelsewhere in this report.

We are restating our financialstatements for the first three fiscal quarters of 2004, the year endedDecember  31, 2003 and the period from April  1, 2002through December  31, 2002. This restatement is reported in thisAnnual Report on Form  10-K for the year ended December31, 2004. Historically, when accounting for operating leases withescalation provisions, we recorded lease expense at the current ratespecified in the lease. We re-evaluated our position and determinedthat our operating lease expense should be recognized on astraight-line basis over the portion of the term of the lease that isconsistent with the depreciable lives of the assets associated with theleased property. This restatement corrects errors in the recognition oflease rent expense to recognize expense on a straight-line basis overthe initial term of the lease plus any future option renewal periodswhere there is reasonable assurance at the inception of the lease thatthe lease will be renewed. The adjustments relate solely to accountingtreatment of these lease payments and do not affect our historical orfuture cash flows or the timing of payments under the relatedleases.

We do not intend to file any amended Annual Reports onForm  10-K or Quarterly Reports on Form  10-Q for periodsaffected by the restatements that ended prior to December  31,2004, and the financial statements and related financial informationcontained in such reports should no longer be relied upon. All of ourfuture Annual Reports on Form  10-K or Quarterly Reports onForm  10-Q will reflect the restated information, whereapplicable.

All referenced amounts in this report for yearsended December  31, 2003 and December  31, 2004 and priorperiod comparisons reflect the balances and amounts on a restatedbasis.

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CAUTIONARY NOTE REGARDINGFORWARD-LOOKING STATEMENTS

This report, and other oralstatements made from time to time by our representatives, containforward-looking statements within the meaning of Section  27A ofthe Securities Act, Section  21E of the Securities Exchange Actof 1934, as amended and the Private Securities Litigation Reform Act of1995 that are subject to risks and uncertainties. You should not placeundue reliance on those statements because they are subject to numerousuncertainties and factors relating to our operations and businessenvironment, all of which are difficult to predict and many of whichare beyond our control. Forward-looking statements include informationconcerning our possible or assumed future results of operations,including descriptions of our business strategy. These statements ofteninclude words such as "may,""believe,""expect,""anticipate,""intend," "plan,""estimate" or similar expressions. Thesestatements are based on assumptions that we have made in light of ourindustry experience as well as our perceptions of historical trends,current conditions, expected future developments and other factors webelieve are appropriate under the circumstances. As you read andconsider this report, you should understand that these statements arenot guarantees of performance or results. They involve risks,uncertainties and assumptions. Although we believe that theseforward-looking statements are based on reasonable assumptions, youshould be aware that many factors could affect our actual financialresults or results of operations and could cause actual results todiffer materially from those in the forward-looking statements. Thesefactors include but are not limitedto:

|              |                                                                                   |
|--------------|-----------------------------------------------------------------------------------|
| •  | limited operating history in thewireless market and anticipation of futurelosses; |

|              |                                                    |
|--------------|----------------------------------------------------|
| •  | our ability to finance futuregrowth opportunities; |

|              |                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------|
| •  | our dependence onthe personal communications services division of Sprint Corporation, orSprint PCS; |

|              |                                                                                                         |
|--------------|---------------------------------------------------------------------------------------------------------|
| •  | the effects of the announcedmerger agreement between Sprint Corporation and Nextel Communications,Inc.; |

|              |                                                                                              |
|--------------|----------------------------------------------------------------------------------------------|
| •  | the effects of industryconsolidation, including the merger of Cingular and AT&TWireless; |

|              |                                                                                                          |
|--------------|----------------------------------------------------------------------------------------------------------|
| •  | our ability to expand ourSprint network or to upgrade the Sprint network to accommodate newtechnologies; |

|              |                                             |
|--------------|---------------------------------------------|
| •  | potential fluctuations inoperating results; |

|              |                                   |
|--------------|-----------------------------------|
| •  | changes or advancesin technology; |

|              |                                         |
|--------------|-----------------------------------------|
| •  | changes in law orgovernment regulation; |

|              |                                                            |
|--------------|------------------------------------------------------------|
| •  | competition inthe industry and markets in which weoperate; |

|              |                     |
|--------------|---------------------|
| •  | futureacquisitions; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | our ability to attract andretain skilled personnel; |

|              |                                                                                                                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | our potentialinability to expand the services and related products we provide in theevent of substantial increases in demand in excess of supply fornetwork and handset equipment and related services andproducts; |

|              |                                                                                        |
|--------------|----------------------------------------------------------------------------------------|
| •  | the availability at acceptableterms of sufficient funds to pay for our business plans; |

|              |                                               |
|--------------|-----------------------------------------------|
| •  | changes in labor, equipment and capitalcosts; |

|              |                                                                                   |
|--------------|-----------------------------------------------------------------------------------|
| •  | any inability to comply with theindentures that govern our long-term obligations; |

|              |                       |
|--------------|-----------------------|
| •  | changes inmanagement; |

|              |                                              |
|--------------|----------------------------------------------|
| •  | general economic andbusiness conditions; and |

|              |                                       |
|--------------|---------------------------------------|
| •  | changes relatedto our reorganization. |

You should keep in mind that anyforward-looking statement made by us in this report, or elsewhere,speaks only as of the date on which we make it. New risks anduncertainties come up from 

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time to time, and it is impossible for us topredict these events or how they may affect us. We have no duty to, anddo not intend to, update or revise the forward-looking statements inthis report after the date of this report. In light of these risks anduncertainties, you should keep in mind that any forward-lookingstatement made in this report or elsewhere might notoccur.

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PARTI

You should read this entire report carefully, including the"Risk Factors" section and the consolidatedfinancial statements. Unless the context indicates or requiresotherwise, the terms "IWO,""we," "us,""our" and "company"refer to IWO Holdings, Inc., and its wholly owned subsidiaries,collectively.

Item 1.    Business

Overview andRecent Developments

IWO Holdings, Inc., a Delaware corporation,was originally formed on August 22, 1997 by a consortium of independentlocal telephone companies to become a provider of wirelesstelecommunications and data services. From 1997 through 1999, ouractivities consisted principally of raising capital, consummating andsupporting our agreements with Sprint PCS, developing the initialdesign of our network and adding to our management team.

Inearly 2000, under an asset purchase agreement and other agreements withSprint PCS, we purchased assets (including office equipment andinterests in 170 cell sites and other network related leases) fromSprint PCS for approximately $116.7 million. Under the agreements, wealso obtained the right to manage approximately 45,000 subscribers inour territory that had previously been managed by Sprint PCS. Beginningin 2000, we significantly expanded our network and operations toincrease our covered population and subscriber base.

In April2002, we were acquired by US Unwired Inc. ("USUnwired"). US Unwired provides PCS services and relatedproducts to customers in the southeastern United States as part ofSprint PCS's network. Upon consummation of our reorganization(discussed below), the shares of common stock held by US Unwired werecancelled and holders of our cancelled notes acquired all of ourshares. See "Item 12. Security Ownership of CertainBeneficial Owners and Management and Related StockholderMatters."

As of December  31, 2004, we werein default of our former senior credit facility. Since March2004, we had failed to make $13.8  million in principal paymentsdue on our former senior credit facility and were not in compliancewith the restrictive covenants under the credit facility. InSeptember  2004, one of the holders of our former senior creditfacility elected to fund $1.8  million, which represented thatholder's remaining obligation of a draw request made in 2002. Theholders of our former senior credit facility denied us access to theremaining $23.4  million in availability.

Additionally, wefailed to make scheduled semi-annual interest payments on our formersenior notes due July  15, 2004 and January  15, 2005, andthe holders of our former senior notes could have placed us in defaultof our former senior notes.

On January  4, 2005, IWO andeach of its subsidiaries (collectively, the"Debtors") filed voluntary petitions in theUnited States Bankruptcy Court for the District of Delaware (the"Bankruptcy Court") seeking relief under theprovisions of chapter  11 of title  11 of the United StatesCode (the "Bankruptcy Code") (the"Chapter  11 Case"). In connection withthe Chapter  11 Case, the Debtors also filed with the BankruptcyCourt on January  4, 2005 a proposed"pre-packaged" plan of reorganization (the"Plan of Reorganization"), which wasconfirmed on February  9, 2005 pursuant to an order entered bythe Bankruptcy Court. Pursuant to the Plan of Reorganization, onFebruary  10, 2005, IWO Escrow Company ("IWOEscrow"), a special-purpose entity formed to obtain newdebt financing and merge with and into IWO upon consummation of thePlan of Reorganization, was merged into IWO, and IWO assumed $150.0million in Senior Secured Floating Rate Notes due 2012 and $140.0million Principal Amount at Maturity 10.75% Senior DiscountNotes due 2015, which had been issued by IWO Escrow, resulting inapproximately $232.7  million in aggregate net proceeds to IWO.IWO repaid in full and terminated its existing $215.0  millionsenior credit facility, and its existing $160.0  million seniornotes were cancelled and exchanged for all of the new common stock ofIWO. In addition, the existing common stock of IWO, all of which wasowned by US Unwired, was cancelled, with no distributions or paymentsthereon. IWO was a wholly owned subsidiary of US 

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Unwired prior to the consummation of the Planof Reorganization. Effective with the cancellation of the existingcommon stock of IWO on February  10, 2005, US Unwired ceased tohave an equity interest in IWO.

On February  10, 2005,pursuant to our Plan of Reorganization described below, US Unwiredceased to have an equity interest in us. For a discussion of recentdevelopments in 2004 including changes to our relationship with USUnwired, operating results, liquidity and relationship with Sprint PCS,please refer to "Item  7.  Management'sDiscussion and Analysis of Financial Condition and Results ofOperations—Recent Developments" and"Item 7. Management's Discussion and Analysis ofFinancial Condition and Results of Operations—Liquidity andCapital Resources."

In connection with theconsummation of the Plan of Reorganization, we terminated ourmanagement agreement with US Unwired, dated April  1, 2004, asamended on January  3, 2005 ("the managementagreement"). The termination of the management agreementis subject to a four-month transition period during which US Unwiredwill continue to provide transitional management and restructuringservices as defined in the management agreement.

OurAffiliation with Sprint

We are a PCS affiliate of the personalcommunications services division of Sprint Corporation. We have theexclusive right to provide digital wireless personal communicationsservices, or PCS, under the Sprint brand name in a territory thatincludes a total population, or POPs, of approximately 6.3million as of December  31, 2004. Our territory covers upstateNew York, including the markets of Albany, Syracuse and Ithaca,substantially all of New Hampshire and Vermont and portions ofMassachusetts and Pennsylvania. Our territory is adjacent to the Sprintmarkets in New York, Boston, Rochester and Hartford. As a PCS Affiliateof Sprint, we offer national and local calling plans designed bySprint. We market Sprint products and services through a number ofdistribution outlets located in our territory, including our own retailoutlets, major national distributors, such as Radio Shack and Best Buy,and our local third-party distributors. At December  31, 2004,our network covered approximately 4.8  million people in ourterritory, which we refer to as covered POPs, and we had approximately237,400 subscribers.

Sprint adopted a strategy to extend its100% digital, nationwide wireless network in the United Statesby entering into agreements with independent wireless companies, suchas us, to construct and manage Sprint markets and market Sprintwireless services. Through these affiliations, Sprint wireless servicesare available in key areas contiguous to Sprint markets, allowing theSprint nationwide PCS network to provide services in an area consistingof more than 280 million residents.

Under our agreement withSprint, we market Sprint wireless products and services in our servicearea using licenses that Sprint acquired from the FCC in 1995. We arecurrently the only provider of Sprint wireless products and services inour service area. Some key points about this agreementare:

|              |                                                                                                                                                                      |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the agreement extends for up to 50years with an initial period of 20 years, which is set to expire onFebruary  9, 2019, and three successive 10-year renewalperiods; |

|              |                                                                                                                                                                                                                                                                                                                                                    |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the agreement requires revenuesharing of 8% to Sprint PCS and 92% to us, except that weretain all of the revenues from merchandise sales and other revenues asdefined in the Sprint PCS management agreement, as well as all of therevenues from Sprint and other Sprint wireless affiliate subscribersusing our network while in our servicearea; |

|              |                                                                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | if we terminate or breach theagreement, we may be required to sell our wireless business and networkto Sprint or to purchase the Sprint PCS licenses from Sprint PCS;and |

|              |                                                                                                                                                                           |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | if Sprint terminates or breaches theagreement, we may be able to sell our wireless business and network toSprint or to purchase the Sprint wireless licenses from Sprint. |

In addition, under our service agreement, we pay Sprint service feesto perform certain administrative and back-office functions for us. Wealso pay Sprint service fees for new subscriber activations andrecurring monthly fees for services performed for existing subscribers,such as billing and customer service.

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We also purchase other goods, such ashandsets, and services from Sprint, where Sprint has contracted withthird-party vendors. Sprint has entered into agreements with nationalretailers that sell handsets and service to new subscribers in ourmarkets. Sprint pays these national retailers a new subscribercommission and provides handsets to them below cost. For newsubscribers added in our markets by these national retailers, Sprintpasses the costs of commissions and handset subsidies to us.

Webelieve that our service area is important to the Sprint network. Todate, Sprint has made considerable investments in the licenses coveringour service area.

We believe that our affiliation with SprintPCS allows us to offer high quality, branded wireless voice and dataservices for a lower cost and lower capital requirements than wouldotherwise be possible and to also benefit from the followingrelationships with SprintPCS:

|              |                                                                                                                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Marketing – Wemarket Sprint PCS products and services through Sprint PCS'sexisting relationships with major national retailers under the highlyrecognizable Sprint and Sprint PCS brandnames. |

|              |                                                                                                                                               |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| •  | National Network –Our subscribers can immediately access Sprint PCS's nationalnetwork, which includes over 300 major metropolitanareas. |

|              |                                                                                                                                                                                                                             |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Advanced Technology– We believe that the CDMA technology used in our network offersadvantages in capacity and voice quality, as well as access to advancedfeatures such as Sprint PCS's suite of "PCSVision"products. |

|              |                                                                                                                                                                                         |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Handset Availability andPricing – Sprint PCS's purchasing leverage allows usto acquire handsets more quickly and at a lower cost than we couldwithout our affiliation withSprint. |

|              |                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | National ResellerAgreements – We receive additional revenue as a result ofSprint PCS's relationships with wireless resellers, includingVirgin Mobile and Qwest Wireless, when customers of those resellers useour portion of the PCS network of Sprint. |

In connection with theconsummation of our Plan of Reorganization, we amended our affiliationagreements with Sprint PCS. The amendments, among other things,implemented a simplified pricing plan for certain services that SprintPCS provides to us through 2006 and increased, through 2006, thecontractual reciprocal roaming rate we receive for providing networkservices to Sprint PCS subscribers while in our territory and that wepay to Sprint PCS when our subscribers roam onto other networks ofSprint PCS. These amendments were retroactively effective to November1, 2004. These amendments provide us with, among other things, areduced fixed fee relative to our previous fees for back–officeand other services that we are required to purchase from Sprint PCS andan increased reciprocal roaming rate relative to our current rate.

The amendments combine a number of the services that we are requiredto purchase from Sprint PCS into two groups,cash cost peruser" or "CCPU" services andcost per grossaddition" or "CPGA" services.CCPU services include billing, customer care, operator services andsimilar back–office services. CPGA services include subscriberactivation, credit verification and handset logistics. As of theeffectiveness of the amendments, (i) the fee for CCPU services persubscriber per month was changed to $7.25 retroactive to November 1,2004 through the end of 2004, $7.00 for 2005 and $6.75 for 2006, and(ii) the fee for CPGA services per month was changed to an amount equalto the gross customer additions in our area multiplied by the lesser of(a) $23.00 or (b) the quotient of (1) the amount that Sprint PCS billedus from January 1, 2004 through September 30, 2004 for ouractivation–related costs, divided by (2) the gross customeradditions in our service area on which the amount billed in clause (1)is based. Beginning in January 2007, the fees for CCPU services andCPGA services will be adjusted based on a methodology set forth in theamendments.

The amendments also established a fixed reciprocalroaming rate, which rate is retroactive to November 1, 2004 and willcontinue through December 31, 2006, of $0.058 per minute for voice and2G data minutes, and $0.0020 per kilobyte for 3G data, in each case,for all Sprint PCS subscribers that travel into and out of our coverageareas. These new fixed reciprocal rates are higher than the ratesSprint PCS has established for 2004 for its PCS affiliates that havenot amended their affiliate 

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agreements with Sprint PCS. Beginning inJanuary 2007, the Sprint PCS reciprocal roaming rate for voice and 2Gand 3G data will change to rates equal to 90% of Sprint'seffective retail yields for voice and data, respectively.

Theamendments also modied our network build–out requirements forcertain locations in Vermont, New  Hampshire and New York thatwere determined to be uneconomical to deploy. This modification reducedthe number of additional cell sites that we are required to deploy froman estimated 174 to approximately 103, including 37 cell sitescompleted in 2004, and lowered our projected capital expenditures tobuild–out and service these areas by approximately $19.0million.

The amendments, subject to certain exceptions andminimum pricing, require us to participate in certain new resaleprograms; however, the amendments provide us with protective rights todecline to implement certain future program requirement changes thatSprint PCS proposes that would adversely affect our business. Theamendments also grant us, through December 2006, the right to amend ouraffiliation agreements with Sprint PCS to obtain the most favorableterms provided under affiliation agreements with any other Sprint PCSaffiliate of similar size so long as we agree to accept all of theterms and conditions set forth in such other agreement. We also have aright of first refusal to build out new coverage within our territory.If we do not exercise this right, including in areas left uncovered asa result of our reduced build-out requirements, then Sprint PCS maybuild-out such new coverage, or may allow a third party to do so.

Our Service Area

At December  31, 2004, our Sprintservice area included all or portions of 20 markets spanning over57,600 square miles with a population of approximately 6.3million people. We have 30Mhz of bandwidth throughout our service area.Our territory extends from suburban New York City (Orange and SullivanCounties), north to the Canadian border and reaches from the easternsuburbs of Rochester to Syracuse, Ithaca, Binghamton and Elmira incentral New York State (and extends into a small portion of northcentral Pennsylvania), east to include substantially all of Vermont andNew Hampshire and a portion of western Massachusetts. The number ofresidents in our service area does not represent the number of SprintPCS subscribers that we expect to have in our service area.

Under the amendments to our affiliation agreement with Sprint thatwere effected with the consummation of our reorganization onFebruary  10, 2005, our licensed territory no longer includescertain portions of New Hampshire and Vermont, which encompassestimated total POPs of approximately 100,000. Under these amendments,the total size of our territory was reduced from over 57,600 squaremiles to over 55,200 square miles.

The following table lists thelocation, basic trading area, or BTA, number and estimated totalresidents for each of the BTAs that comprise our territory under ouraffiliation agreements with Sprint PCS as of December  31,2004.

|                                       |  |               |     |                       |  |                         |       |        |  |        |     |        |  |  |
|---------------------------------------|--|---------------|-----|-----------------------|--|-------------------------|-------|--------|--|--------|-----|--------|--|--|
| Location                              |  | BTANo.(1)     |     | EstimatedTotalPOPs(2) |  | EstimatedCoveredPOPs(3) |
|                                  |  | (Inthousands) |
| Albany—Schenectady,NY           |  |          | 7   |                  |  |                    | 1,050 |   |  |   | 918 |   |
| Syracuse,NY                           |  |          | 438 |                  |  |                    | 779   |   |  |   | 674 |   |
| Manchester—Nashua,NH            |  |          | 274 |                  |  |                    | 485   |   |  |   | 357 |   |
| Poughkeepsie—Kingston,NY        |  |          | 361 |                  |  |                    | 464   |   |  |   | 394 |   |
| Orange—Sullivan,NY              |  |          | 321 |                  |  |                    | 422   |   |  |   | 374 |   |
| Burlington,VT                         |  |          | 63  |                  |  |                    | 415   |   |  |   | 244 |   |
| Rockingham—Strafford,NH         |  |          | 51  |                  |  |                    | 397   |   |  |   | 382 |   |
| Binghamton,NY                         |  |          | 43  |                  |  |                    | 344   |   |  |   | 273 |   |
| Elmira—Corning—Hornell,NY |  |          | 127 |                  |  |                    | 313   |   |  |   | 166 |   |
| Watertown,NY                          |  |          | 463 |                  |  |                    | 303   |   |  |   | 136 |   |
| Utica–Rome,NY                   |  |          | 453 |                  |  |                    | 297   |   |  |   | 240 |   |
|                                       |

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|                               |  |               |        |                       |  |                         |       |        |  |        |       |        |  |  |
|-------------------------------|--|---------------|--------|-----------------------|--|-------------------------|-------|--------|--|--------|-------|--------|--|--|
| Location                      |  | BTANo.(1)     |        | EstimatedTotalPOPs(2) |  | EstimatedCoveredPOPs(3) |
|                          |  | (Inthousands) |
| Lebanon—Claremont,NH    |  |          | 249    |                  |  |                    | 182   |   |  |   | 74    |   |
| Pittsfield,MA                 |  |          | 351    |                  |  |                    | 134   |   |  |   | 112   |   |
| Glen Falls,NY                 |  |          | 164    |                  |  |                    | 125   |   |  |   | 75    |   |
| Keene,NH—Brattleboro,VT |  |          | 227    |                  |  |                    | 119   |   |  |   | 64    |   |
| Plattsburgh,NY                |  |          | 352    |                  |  |                    | 119   |   |  |   | 78    |   |
| Oneonta,NY                    |  |          | 333    |                  |  |                    | 110   |   |  |   | 50    |   |
| Rutland—Bennington,VT   |  |          | 388    |                  |  |                    | 101   |   |  |   | 73    |   |
| Ithaca,NY                     |  |          | 208    |                  |  |                    | 97    |   |  |   | 86    |   |
| Coos,NH                       |  |          | 251    |                  |  |                    | 33    |   |  |   | 0     |   |
| Total                         |  |          |   |                  |  |                    | 6,287 |   |  |   | 4,770 |   |
|                               |

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|--|
|  |  |
|  |

|     |                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | BTANo. refers to the basic trading area number assigned to that market bythe FCC for the purposes of issuing licenses for wirelessservices. |

|     |                                                                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Estimated Total POPs is based onestimates of 2000 population counts compiled by the U.S. Census Bureauadjusted by population growth rates provided to us by Sprint. |

|     |                                                                                                                                                                                                 |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Estimated Covered POPs is based on our networkcoverage using estimates of 2000 population counts compiled by the U.S.Census Bureau adjusted by population growth rates provided to us bySprint. |

Services and Features

We offer Sprintwireless products and services in our service area. Our products andservices are designed to mirror those of Sprint and to be a part of theSprint wireless nationwide network. Sprint wireless subscribers in ourservice area may use Sprint wireless services throughout our contiguousmarkets and seamlessly throughout the Sprint network.

We supportSprint's newest technology, PCS Vision, throughout our servicearea. PCS Vision enables subscribers that purchase handsets with theappropriate features to access the Internet, receive and send email,download pictures and sounds, and take digital pictures either with abuilt-in or attachable camera.

We offer CDMA handsets which canoffer up to seven days of standby time and up to 5.5 hours of talktime. Many of these models are dual-mode handsets that enablesubscribers to make and receive calls on both PCS and cellularfrequency bands. All handsets are equipped with preprogrammed featuresand are sold under the Sprint PCS brand name.

We provide roamingservice to Sprint and certain non-Sprint wireless subscribers who aretraveling through our service area. Sprint and other Sprint affiliatesprovide a similar service to our subscribers traveling outside of ourmarket area. Roaming allows a person to make a phone call outside theservice area where she or he purchased the service.

MarketingStrategy

We benefit from the recognizable Sprint brand namesand logos and from Sprint's technological developments. Weenhance the national effort with local marketing managers andcoordinators who develop strategies specifically tailored to our localmarkets. They assist the sales force in driving traffic to the storesthrough promotions, contests and community relations programs andassist the outside sales force in targeting businesssales.

Pricing

We use theSprint PCS pricing strategy to offer our subscribers a menu of serviceplans typically structured with monthly recurring charges, large localcalling areas, bundles of minutes and options 

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and features, such as voicemail, enhancedcaller identification, call waiting, three-way calling and PCS Vision.In order to meet the competitive needs of our specific local markets,we occasionally modify Sprint PCS's pricing plans.

Advertising

We capitalize on the Sprint PCS name andreputation to attract subscribers. We benefit from Sprint'snational advertising campaign at no additional cost. Sprint also runsnumerous promotional campaigns that provide subscribers with benefits,such as additional features at the same rate or free ancillaryservices. We direct our media and promotional efforts at the communitylevel by advertising Sprint's products and services throughradio, print, outdoor, billing inserts, direct mail and promotionaldisplays in our retail stores.

Sponsorships

Sprintsponsors numerous national and regional events. These sponsorshipsprovide Sprint with brand name and product awareness. Our regionalmarketing teams sponsor local events, teams and projects to increaseconsumer awareness of the Sprint brand in the local community and toprovide occasions to develop positive community relationships in ourmarkets.

Sales and Distribution

We target a broad rangeof consumer and business markets through our sales and distributionplan. We use traditional sales channels, such as our retail stores,mass merchandisers and other national retail outlets, independentagents and an outside sales force. We also use other methods such asdirect marketing and Sprint's corporate website. No singlecustomer has accounted for more than 10% of our sales in thecurrent reporting period or in the past three years.

Retailoutlets

At December  31, 2004, we had 16 retail outlets.Our retail outlets are located in principal retail districts in each ofour markets. Each retail outlet is designed in accordance with Sprintspecifications and branded as Sprint retail outlets. We use our retailoutlets for the distribution and sale of our handsets and services.Sales representatives in these outlets receive in-depth training thatallows them to explain our service in an informed manner. Theselocations are also used to provide customer care to allsubscribers.

Mass merchandisers and outlets

We targetsubscribers through our mass-market retail outlets throughSprint-negotiated distribution agreements with national retailerswhich, at December  31, 2004, included 136 Radio Shack locations,15 Best Buy locations, 15 Wal-Mart locations and 32 other nationalretailer locations in our territory.

Independent agents

We have a contracted network of independent agents that createsadditional opportunities for local distribution. Most of thesebusinesses are family-owned consumer electronics dealers and wirelesstelecommunication retailers. At December  31, 2004, we had over45 independent agents under contract. We intend to add approximately 10to 20 exclusive third-party distributors in 2005.

Other Sprintinitiatives

We participate in Sprint's national accountsprogram, which targets Fortune 1000 companies. This allows us to takeadvantage of Sprint's wireless inbound telemarketing salesprogram and Sprint's wireless internet site that allowssubscribers in our service area who purchase products and services overthe Sprint internet site to become subscribers of our wirelessnetwork.

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Resellers

Effective July2002, we agreed to participate in a reseller program in our servicearea through Sprint as part of the partnership between Sprint andVirgin Mobile USA, LLC, or Virgin Mobile. The agreement allows VirginMobile to sell prepaid wireless services and pay us for use of ournetwork on a per–minute basis. Virgin Mobile targets the 15- to30-year-old consumer market to purchase pay-as-you-go wirelesscommunications services while eliminating the responsibilities ofmonthly bills and credit requirements. At December  31, 2004, weprovided service to 91,135 Virgin Mobile subscribers in our servicearea.

Sprint PCS also has reseller agreements with otherwireless resellers, such as Qwest, ESPN and Earthlink. We receiverevenues when subscribers of these wireless resellers travel in ourservice area and use our network.

Suppliers and EquipmentVendors

We do not manufacture any of the handsets that we usein our operations. We purchase our handsets directly from Sprint andour accessories from certain other third-party vendors. We purchase ourhandsets primarily from the following manufacturers: Audiovox, LG,Nokia, Palm, RIM, Samsung and Sanyo.

Our PCS network equipmentis supplied solely by Lucent Technologies Inc. If additional equipmentis needed for expansion or repair of a network, it must come fromLucent in order to be compatible with our existing network equipment.See "Item 1A. Risk Factors — Risks Related to OurBusiness, Strategy and Operations — We obtain most of our networkequipment from a single supplier. This equipment is not interchangeableand we would be materially adversely affected if we could not obtainthis network equipment timely or at all."

Technology

The predominant wireless technologiesused in the United States are CDMA, Global System MobileCommunications, or GSM, and Time Division Multiple Access, or TDMA.

Sprint PCS has chosen CDMA technology, which we believe offerssignificant advantages in the marketplace.

CDMA offers superiorcall quality and clarity and also offers the highest capacity of thethree standards. Accordingly, more simultaneous calls can be handled ona CDMA network than on equivalent TDMA or GSM networks. CDMA alsooffers a high level of security, giving subscribers confidence thattheir calls remain private and offers many advanced features such asshort text messaging, Internet access, call waiting, call forwardingand three-way calling. Several providers in the United States,including Sprint PCS and Verizon Wireless, use CDMA technology.

GSM is the most widely adopted standard around the world, havingoriginated in Europe, where it continues to be the dominant standard.GSM has been widely deployed for over ten years, which means thateconomies of scale for network and handset equipment have beenachieved, lowering the cost of purchasing the equipment for a GSMsystem. GSM also offers increased call security and advanced featureslike those available on a CDMA network. T-Mobile and Cingular use GSMtechnology.

Competition

We face significantcompetition in our service area from a number of competitors. There arefour other national mobile telephony operators that offer service in atleast some portion of our service area — Verizon, Cingular,Nextel and T-Mobile. In addition, there are many local and regionalcarriers that offer PCS and cellular services in our service area.According to the FCC's Ninth Annual Commercial Mobile RadioServices ("CMRS") Competition Report,released September  28, 2004, "...97% of thetotal U.S. population lives in counties with access to three or moredifferent operators offering mobile telephoneservice."

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Wireless local number portability("WLNP") was introduced in a portion of ourmarkets in November  2003 and the balance of our markets inMay  2004. WLNP allows customers to retain existing telephonenumbers when switching from one carrier to another. We believe that theintroduction of WLNP in all of our markets has resulted in highercustomer turnover and increased operating costs.

In order toattract new subscribers, we have offered discounts on handsets andservice plans that include more minutes and/or more"anytime" minutes and other enhancements suchas complimentary periods of free data usage. Based upon increasedcompetition, we anticipate that market prices for two-way wirelessservices will continue to decline in the future. We compete to attractand retain subscribers principally on the basis of services andfeatures, the size and location of our service areas, network coverageand reliability, customer care and pricing. Our ability to competesuccessfully depends, in part, on our ability to anticipate and respondto various competitive factors affecting the industry, including newservices that may be introduced, changes in consumer preferences,demographic trends, economic conditions and discount pricing strategiesby competitors.

We believe that our ability to competeeffectively with other PCS providers will dependon:

|              |                                                                                                                                    |
|--------------|------------------------------------------------------------------------------------------------------------------------------------|
| •  | the continued expansion andimprovement of the Sprint PCS network, the Sprint PCS customer caresystem and telephone handsetoptions; |

|              |                                                                                                            |
|--------------|------------------------------------------------------------------------------------------------------------|
| •  | the continuedsuccess of CDMA technology in providing better call quality and claritythan other systems;and |

|              |                                                                                          |
|--------------|------------------------------------------------------------------------------------------|
| •  | our competitivepricing with various options suiting individual subscribers callingneeds. |

We do not currently face significant competition fromresellers on our facilities and believe our relationship with VirginMobile complements our other distribution channels. We expect tocontinue to be subject to the FCC rule that requires cellular and PCSlicensees to permit resale of carrier service.

We also competewith existing communications technology, such as paging andconventional landline telephones. Developing wirelesstelecommunications technologies, such as satellite, wireless cable, andwireless voice–over–IP, may provide increased competitionin the future.

Network Operations

The Sprint managementagreement requires us to provide network coverage to 65% of theresident population in our service area. We have completed asubstantial portion of our initial network build-out plan for ourservice area. However, as of December  31, 2004 and prior to ourreorganization, due to liquidity issues, we did not have sufficientfinancial resources to complete our build-out. Included in our assetabandonment charge described below in "Item6—Selected Financial Data," are cell sites that, asof December  31, 2004, we were required to construct to meet thebuild-out requirements under our Sprint management agreement. Failureto complete the build-out of our service area would have placed us inviolation of our Sprint management agreement that was in effect atDecember  31, 2004. As a result, at December  31, 2004,Sprint PCS could have declared us in default and taken action up to andincluding termination of our Sprint management agreement.

Because of this and other issues surrounding our liquidity, ourreorganization included amending our affiliation agreement with Sprint.Under the amendments to our affiliation agreement with Sprint that wereeffected with the consummation of our reorganization on February10, 2005, we are required to complete the build-out of 103 new cellsites, including 37 sites completed in 2004, by 2008. In addition, weare required to make additional capital expenditures to upgrade basestations on a majority of towers in our markets as a result of theexpected obsolescence of the Lucent Technologies Inc. mini-cell andmicro-cell technology we employ on certain towers.

Cellsites

Our preference is to selectively add cell sites throughco-location, which involves leasing or licensing available space on atower or other tall structure (such as a water tank, rooftop or farmsilo) 

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owned by a third-party. When we co-locate, wegenerally have lower construction costs. In 2004, we added 40 cellsites, of which 37 satisfy a portion of our 103 new cell site build-outrequirement. As of December  31, 2004, we had 721 PCS cell sites,of which approximately 96% were co-locations and 4% wereowned, with network coverage of approximately 4.8  millionresidents out of approximately 6.3  million total residents. Thenumber of people in our service area does not represent the number ofSprint PCS subscribers that we expect to have in our service area.

Switching centers

We own or lease property for our threeswitching centers in Albany, New York and Londonderry, NewHampshire. Each switching center serves several purposes, includingsubscriber validation, call routing, managing call hand off andmanaging access to landlines and access to Sprint wireless nationalplatforms.

Interconnection

We connect our digitalwireless network to the landline telephone system throughinterconnection agreements negotiated between Sprint and the localexchange carriers. Through our agreements with Sprint, we benefit fromthese interconnection agreements.

Network monitoringsystems

We use Sprint's Network Operations Control toprovide monitoring and maintenance of our entire network, including theconstant monitoring for blocked or dropped calls, call clarity andsigns of tampering, cloning or fraud; the recording of network trafficstatistics; and the overseeing of customer usage data collected atswitch facilities and billing.

Government Regulation

The FCC and other federal, state and local regulatory agenciesregulate our wireless system and the Sprint-owned PCS licenses in ourterritory.

Licensing of PCS Systems

A broadband PCSsystem operates under a service area license granted by the FCC for aparticular market. These licenses operate on one of six frequencyblocks of varying size allocated by the FCC for broadband PCS service.Narrowband PCS is for non-voice applications such as paging and dataservice and is separately licensed. The FCC awards all PCS licensesinitially by auction, and approves assignments and transfers of controlof PCS licenses by wireless carriers in the aftermarket.

All PCSlicenses have a 10-year license term that is conditioned uponcompliance with various rules and regulations of the FCC, includingtimely compliance with the FCC's system construction and coveragerequirements. For example, all 30 MHz broadband PCS licensees mustconstruct facilities that offer coverage to one-third of the populationwithin their licensed service area within five years and to two-thirdsof the population within ten years. If a licensee fails to meet suchconstruction benchmarks, the FCC may revoke a license. PCS licensesmust be renewed at the end of their ten-year license terms. The FCCgenerally will renew a PCS license if the licensee provided substantialservice during the past license term and substantially complied withapplicable law and FCC rules and policies. Third parties may opposerenewal applications or file competing applications. Incumbentlicensees are afforded "renewal expectancy,"which provides the incumbent priority over new applicants. The FCC mayrevoke a license or impose monetary forfeitures for serious violationsof FCC rules.

The FCC requires PCS licensees to maintain de jureand de facto control over their licenses. Management agreements aregenerally permissible, provided that the PCS licensee stays in ultimatelegal and factual control. A violation of this requirement could resultin a need to modify the management agreement, monetary penalties, or inan extreme case, license revocation. Whether or 

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not a licensee maintains sufficient controlis a fact–specific inquiry that depends on a number of factors,including whether the licensee retains ultimate decision–makingauthority over the use of the licenses. We believe that our managementagreement with Sprint PCS meets the FCC requirements for licenseecontrol of licensed spectrum.

Currently, the spectrum allocatedto PCS licensees may also have been previously allocated to FixedMicrowave Service ("FMS") providers. As aresult, PCS licensees in the affected service areas may either accept asharing arrangement with the FMS provider or negotiate the relocationof the provider to another spectrum band. To operate our PCS systemsefficiently and with adequate population coverage, we must relocatemany of these existing licensees. The FCC has adopted a transition planto relocate microwave operators and a plan for affected PCS licenseesto share the relocation costs. These plans expire on April  4,2005.

From time to time, the FCC conducts auctions of additionalPCS spectrum, or spectrum that can be used for substantially similarwireless service. We have no way of knowing whether any new spectrumauctioned in our service area will be used to compete with our PCSsystems.

Transfers and Assignments of PCS Licenses

TheFCC must approve the assignment or transfer of control of a license fora PCS system. In addition, the FCC requires licensees who transfercontrol of a PCS license within the first three years of their licenseterm to disclose the total consideration received for the transfer. FCCapproval generally is not required for the sale of an interest thatdoes not transfer control of a license (for example, the sale of anon-controlling interest). FCC rules also allow broadband PCS licenseesto partition their market areas and/or to disaggregate their assignedspectrum, and to transfer partial market areas or spectrum assignmentsto eligible third parties, subject to the FCC's approval. Anyacquisition or sale of a PCS interest may also require the priorapproval of the Federal Trade Commission, the Department of Justice andstate or local regulatory authorities.

The FCC requires onlypost-consummation notification of certain pro forma PCS licenseassignments or transfers of control. In October  2003, and againin August  2004, the FCC established new rules designed tofacilitate the transfer and leasing of spectrum. Among other things,those rules allow one company to lease all or part of its spectrumrights to another company, and provide immediate and automatic approvalfor certain types of license transfers. These measures could increasecompetition in our industry by allowing new entrants or incumbentproviders to more easily obtain access to spectrum capacity.

Other Regulatory Requirements

The Communications Act of1934 preempts state and local regulation of the entry of, or the ratescharged by, any provider of private mobile radio service or of CMRS,which includes PCS, cellular service and some specialized mobile radioservice systems. The FCC does not regulate CMRS or private mobile radioservice rates. However, CMRS providers are common carriers and arerequired under the Communications Act to offer their services to thepublic without unreasonable discrimination.

The FCC imposesadditional regulatory requirements on all CMRS operators, which canincrease these operators' costs and/or require upgrades to theirnetworks. Moreover, such requirements may change over time, and couldaffect us positively or adversely. Some of the current requirementsinclude:

|              |                                                                                                                                                                                    |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Roaming.    A CMRScarrier must provide service to all subscribers of a compatible CMRSservice in another geographic region seeking to connect with itsnetwork. |

|              |                                                                                                                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Numberportability.    CMRS carriers are required to allow theirsubscribers to take their phone numbers with them if they switch to acompetitive service and must be able to deliver calls to carriednumbers. |

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|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Enhanced911.    CMRS carriers must transmit 911 calls from any qualifiedhandset without credit check or validation, must provide 911 servicesto individuals with speech or hearing disabilities, and must providethe approximate location of the 911 caller. PCS and cellular providersalso are required to contribute to various state and local funds tosupport enhanced 911 capability through charges on customerinvoices. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Wiretaps and electronicsurveillance.    CMRS carriers must provide law enforcementpersonnel with sufficient capacity and capability to enable wiretapsand other electronic surveillance on the CMRS network. On August9, 2004, the FCC launched a comprehensive review of regulationsrelating to the Communications Assistance for Law Enforcement Act("CALEA"). This review may result inincreased obligations and cost expenditures for CMRScarriers. |

|              |                                                                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Customerinformation.    The FCC has rules that generally protect thecustomer against the disclosure and use of customer proprietaryinformation for marketingpurposes. |

|              |                                                                                                                                                                                                                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Truth-in-billing.    InMarch 2005, the FCC extended the consumer protection measures thatrequire billing descriptions to be non-misleading and in plain languageto CMRS carriers. These requirements may impose a cost in theirimplementation or as a penalty forviolation. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Interconnection andintercarrier compensation.    All telecommunications carriers,including CMRS carriers, must interconnect directly or indirectly withother telecommunications carriers in order to complete a call, andthere are various types of fees charged among carriers to transfer andterminate traffic originating on each others' networks.Interconnection agreements are negotiated among carriers, for example,between a CMRS provider and an incumbent local exchange carrier, andare subject to the approval of state regulators. More generally, theFCC currently is undertaking a review of its entire system ofintercarrier compensation. |

|              |                                                                                                                                                                                                                                                                                      |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Universalservice and other fees.    The FCC imposes universal servicesupport fees on telecommunications carriers, including CMRS carriers.The FCC imposes additional fees for telecommunications relay service,number portability and the cost of FCCregulation. |

|              |                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Tower construction,marking and lighting.    The FCC and the Federal AviationAdministration, or FAA, regulate the location, height, marking,lighting and construction of proposed towers. In addition, the FCC hasimplemented the National Environmental Policy Act by requiring towersand antennas to meet certain land use and radio frequencystandards. |

|              |                                                                                                                                                                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Foreignownership.    The Communications Act of 1934 places certainlimits on the non-U.S. ownership of PCS licensees. If foreign ownershipexceeds the permitted level, the FCC may revoke the PCS licenses orrequire an ownership restructuring. |

State and LocalRegulation

State governments can regulate certain terms andconditions of wireless service, though they are prohibited generallyfrom regulating the rates and entry of CMRS providers into themarketplace. Several states have enacted, or have proposed, legislationthat will impose various consumer protection regulations on thewireless industry (although the FCC's recent order regarding"truth-in-billing" restricts the ability ofstates to pass similar rules). States also may impose their ownuniversal service support fees on wireless carriers, similar to therequirements that have been established by the FCC. At the local level,wireless facilities typically are subject to zoning and land useregulation, although the Communications Act preempts both state andlocal governments from categorically prohibiting the construction ofwireless facilities in any community or unreasonably discriminatingagainst a carrier. Numerous state and local jurisdictions imposeconditions on a driver's use of wireless technology whileoperating a motor vehicle.

Employees

As ofDecember  31, 2004, we had approximately 190 employees. No unionrepresents our employees. We believe that we have good relations withour employees. As a result of our reorganization, we are in the processof hiring additional employees to perform services currently providedby US Unwired.

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Seasonality

Like the wirelesscommunications industry in general, our subscriber growth increases inthe fourth quarter due to the holiday season. A greater number ofphones sold at holiday promotional prices increases our losses onmerchandise sales. Our sales and marketing expenses also increase withholiday promotional activities. We generally have the most usage andrevenue per subscriber in the summer because of an increase in revenuesfrom fees charged to non-IWO, non-Sprint subscribers who use ournetwork while traveling in our service area. We believe that theincreased traffic in our service area comes from people travelingduring summer vacation. We expect these trends to continue based onhistorical operating results.

Available Information

OurCode of Business Conduct and Ethics applicable to our employees andBoard of Directors and our Code of Ethics for the Principal ExecutiveOfficer and Senior Financial Officer are available in print upon anyrequest by a stockholder. To request a copy, please contact the officeof the General Counsel, IWO Holdings, Inc., 52  Corporate Circle,Albany, NY 12203.

Our annual reports on Form 10-K, our quarterlyreports on Form 10-Q, our current reports on Form 8-K and amendments tothose reports can presently be accessed free of charge atwww.usunwired.com or through the SEC. Once our domain name isconfigured, these filings may be accessed at www.iwocorp.com.

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Item 1A.    Risk Factors

Thefollowing risk factors should be read carefully in connection withevaluating our business and the forward-looking statements contained inthis report and other statements we or our representatives may makefrom time to time. Any of the following risks could materially andadversely affect our business, our operating results, our financialcondition and the actual outcome of matters as to whichforward–looking statements are made in this report. See"Cautionary Note Regarding Forward-LookingStatements."

Risks Related to Our Business,Strategy and Operations

Oursubstantial leverage could adversely affect our financial health andmay restrict our ability to repay our obligations under our notes.

We are highly leveraged. As of December  31, 2004, aftergiving pro forma effect to our reorganization, our total outstandingdebt would have been approximately $232.7  million. Theindentures that govern our notes permit us and our subsidiaries toincur additional indebtedness, including up to $30.0  million inadditional indebtedness that would share the senior secured floatingrate notes' first priority lien on substantially all of ourassets, which could further exacerbate the risks associated with ourleverage. If we incur additional indebtedness that ranks equally withour notes, the holders of the new debt will be entitled to shareratably with the holders of our notes in any proceeds distributed inconnection with any insolvency, liquidation, reorganization,dissolution or other winding-up of us.

Our substantialindebtedness could adversely affect our financial health by, amongother things:

|              |                                                            |
|--------------|------------------------------------------------------------|
| •  | increasing ourvulnerability to adverse economicconditions; |

|              |                                                                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | limiting our ability toobtain any additional financing we may need to operate, develop orexpand our business or effectively compete in ourindustry; |

|              |                                                                                                                                       |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------|
| •  | limiting our flexibility inplanning for, or reacting to, changes in the economy, our business andthe industry in which we operate;and |

|              |                                                                                                                                                                            |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | requiring us to dedicate asubstantial portion of any cash flow to service our debt, which wouldreduce the funds available for operations and future businessopportunities. |

We have a history of net losses. Weexpect to incur additional losses in the future, and our operatingresults could fluctuate significantly on a quarterly and annual basis.As a result, we may be unable to pay amounts due under our notes or ourother indebtedness.

We have sustained net losses since ourinception, including net losses of $97.0  million for the yearended December  31, 2003 and $54.8  million for the yearended December  31, 2004. Our ability to achieve operatingprofitability and to generate positive cash flows from operatingactivities will depend upon many factors, including, among others, theeffective marketing of Sprint PCS products and services, and ourability to improve market penetration and manage churn. If we do notachieve and maintain operating profitability and positive cash flowsfrom operating activities, we may be unable to make interest orprincipal payments on our notes or our other indebtedness and the valueof an investment in our company may decline.

In addition, ourfuture operating results and cash flows will be subject to quarterlyand annual fluctuations due to many factors, some of which are outsideour control. These factors include increased costs we may incur inconnection with the further development, expansion and upgrade of ourwireless network, fluctuations in the demands for our services and theseasonality of our industry. In addition, the interest rate on oursenior secured floating rate notes resets quarterly, which couldfurther subject our operating results and cash flows to quarterlyfluctuations. To the extent our quarterly or annual results ofoperations fluctuate significantly and adversely, we may be unable topay amounts due under our notes or our other indebtedness and the valueof an investment in our company may decline.

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The technology that we use may becomeobsolete, which would limit our ability to compete effectively withinthe wireless telecommunications industry.

The wirelesstelecommunications industry is experiencing significant technologicalchange. We currently employ CDMA 1xRTT digital technology, the digitalwireless communications technology selected by Sprint PCS and certainother carriers for their nationwide networks. Other carriers employother technologies, such as TDMA, GSM and iDEN, for their nationwidenetworks. If another technology emerges as the industry standard, wemay be at a competitive disadvantage and competitive pressures mayrequire Sprint PCS to change its digital technology, which in turncould require us to make changes to our network at substantial cost.For example, Sprint and other CDMA carriers like Verizon Wireless areupgrading their metropolitan wireless networks to accommodate Evolution— Data Only technology, the next phase or technological upgradeof CDMA 1xRTT digital technology which we refer to as EV-DO. To theextent these upgrades and competitive pressures translate to changes toour network technology and/or customer base, we may be unable torespond to these pressures and implement new technology on a timelybasis or at an acceptable cost.

In addition, the emergence ofalternative technologies may decrease demand for our services. Forexample, other service providers have announced plans to sell andmarket an IEEE 802.11 standard, which we refer to as Wi-Fi, enabledhandset. Such a handset would permit subscribers to communicate usingvoice and data services with their handset using voice over internetprotocol, or VoIP, technology in any area equipped with a wirelessinternet connection, or hot spot, potentially bypassing our network.The number of hot spots in the United States is growing rapidly, withsome major cities and urban areas being covered entirely. Theavailability of VoIP or another alternative technology to oursubscribers could greatly reduce the usage of our network, which wouldhave an adverse effect on our financial condition and results ofoperations.

Moreover, we will be required to make additionalcapital expenditures over the next four years to upgrade base stationson a majority of towers in our markets as a result of the expectedobsolescence of the Lucent Technologies mini-cell and micro-celltechnology we currently employ. See "Item  7.Management's Discussion and Analysis of Financial Condition andResults of Operation—Liquidity and CapitalResources." Our failure to complete these upgrades mayresult in an inability to maintain cell site operations and may impairservice in the areas served by these sites.

We also facecompetition from other wireless technologies such as satellite-basedcommunications, wireless voice-over-IP and wireless cable. As thesetechnologies become more advanced, we may lose customers to thesealternative providers.

The financial condition and results ofoperations reflected in our historical financial statements are notindicative of future financial conditions and results ofoperations.

As a result of the reorganization, we are subjectto the fresh-start accounting prescribed by generally acceptedaccounting principles. As required by fresh-start accounting, ourassets and liabilities have been recorded at fair value, based on ourenterprise value which was established in the bankruptcy proceeding.Because we completed our reorganization in February 2005, our reportedassets do not yet give effect to the adjustments that may result fromthe adoption of fresh-start accounting and, as a result, could changematerially. Accordingly, our financial condition and results ofoperations from and after the reorganization will not be comparable tothe financial condition and results of operations reflected in ourhistorical consolidated financial statements.

Thereorganization may adversely affect our ability to engage intransactions.

Our past inability to meet our obligationsresulted in our reorganization. The perception that we may not be ableto meet our obligations after the reorganization could adversely affectour relationships with third parties. For example, we may havedifficulty maintaining or entering into leases and other agreementsrelated to our operations because of the reorganization. As a result,our ability to operate our business could be adversely affected, whichwould adversely affect our financial condition and our results ofoperations.

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If we receive lower revenues or incurmore fees than we anticipate under our roaming arrangements with SprintPCS and its PCS Affiliates, our results of operations will benegatively affected.

We are paid a fee from Sprint PCS forevery minute and kilobyte that a Sprint PCS subscriber from outside ourterritory uses our network. Similarly, we pay a fee to Sprint PCS forevery minute and kilobyte that our subscribers use the Sprint PCSnetwork outside our territory. The per-minute and per-kilobyte ratesthat we receive from Sprint PCS and that we pay to Sprint PCS are thesame and are fixed until the end of 2006. Thereafter, the rate willchange, based on 90% of Sprint PCS's effective retailyields for voice and data, respectively, and the change may have anadverse effect on us. In addition, our subscribers may spend more timeoutside our territory than we anticipate, and Sprint PCS subscribersfrom outside our territory may spend less time in our territory or mayuse our services less than we anticipate. As a result, we may receiveless Sprint PCS roaming revenue and/or have to pay more in Sprint PCSroaming fees than we collect in Sprint PCS roaming revenue, which wouldhave an adverse effect on our financial condition and results ofoperations.

Roaming revenue under Sprint PCS'sroaming and reseller arrangements with third parties, including VirginMobile, may decline in the future.

For the year endedDecember  31, 2004, approximately 18.6% of our roamingrevenue (3.8% of our total revenue) was attributable to revenuederived from wireless communications providers other than Sprint,principally Virgin Mobile. We do not have agreements directly withthese providers. Instead, we rely on roaming arrangements that SprintPCS has negotiated. Sprint PCS may negotiate roaming arrangements withother wireless communications providers at rates that are lower thancurrent rates, resulting in a decrease in our roaming revenue. If therates offered by Sprint PCS are not attractive, these other wirelesscommunications providers may decide to compete with us directly orenter into roaming arrangements with our competitors who already havenetworks in our territory. Starting with July  2005, every threeyears we will have the option to renew these Virgin Mobilearrangements. We cannot assure you that we will exercise our option tocontinue providing services to Virgin Mobile subscribers in the future.The loss of all or a significant portion of our roaming revenue fromother providers would have a material adverse effect on our financialcondition and operating results.

Our roaming arrangements forcoverage outside the Sprint PCS network may not be competitive withother wireless communications providers, which may restrict our abilityto attract and retain subscribers and thus may adversely affect ouroperations.

We do not have agreements directly with otherwireless service providers for roaming coverage outside territoriescovered by the Sprint PCS network. Instead, we rely on roamingarrangements that Sprint PCS has negotiated with other wirelesscommunications providers for coverage in these areas. Some risksrelated to these arrangements are asfollows:

|              |                                                                                    |
|--------------|------------------------------------------------------------------------------------|
| •  | the arrangements may notbenefit us in the same manner that they benefit SprintPCS; |

|              |                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the quality of the service providedby another provider during a roaming call may not approximate thequality of the service provided by SprintPCS; |

|              |                                                                                                                                     |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------|
| •  | the price to our customers of aroaming call may not be competitive with prices charged by otherwireless companies for roamingcalls; |

|              |                                                                                                                                       |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------|
| •  | customers must end a call inprogress and initiate a new call when leaving the Sprint PCS networkand entering another wirelessnetwork; |

|              |                                                                                                                |
|--------------|----------------------------------------------------------------------------------------------------------------|
| •  | our subscribers may not be ableto use advanced PCS features from Sprint PCS, such as PCS Vision, whileroaming; |

|              |                                                                                                                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | if our subscribers do not havea similar wireless experience as when they are on the PCS network ofSprint PCS, we may lose current subscribers and Sprint PCS products andservices may be less attractive to potential new subscribers;and |

|              |                                                                                                                                   |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint PCS or the carriers providingthe service may not be able to provide us with accurate billinginformation on a timely basis. |

15

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Unauthorized use of, or interferencewith, our network could disrupt service and increase our costs.

We may incur costs associated with the unauthorized use of ournetwork including administrative and capital costs associated withdetecting, monitoring and reducing the incidence of fraud. Unauthorizeduse of, or interference with our network includes, but is not limitedto, identity theft, piracy, "hacking" andother external factors such as computer viruses. Fraudulent use of ournetwork may impact interconnection costs, capacity costs,administrative costs, fraud prevention costs and payments to othercarriers for fraudulent roaming.

If we lose the rightto install our equipment on wireless towers or are unable to renewexpiring agreements for wireless towers on favorable terms or at all,our business and results of operations could be adverselyimpacted.

As of December  31, 2004, approximately96% of our base stations are installed on leased or licensedfacilities which are typically shared with one or more other wirelesscommunications providers. In addition, a large portion of these towersites are leased or licensed from a small number of tower companieswith whom we have entered into master agreements that govern thegeneral terms of our rights to use each such company's towers. Ifa master agreement with one of these tower companies was to terminate,or if one of these tower companies was unable to support our use of itstower sites, we would have to find new sites or may be required torebuild the affected portion of our network. In addition, theconcentration of our tower leases or licenses with a limited number oftower companies could adversely affect our results of operations andfinancial condition if we are unable to renew our expiring leases withthese tower companies either on terms comparable to those we have todayor at all. If any of the tower leasing companies that we do businesswith were to experience severe financial difficulties, or file forbankruptcy protection, our ability to use towers leased or licensedfrom that company could be adversely affected. That, in turn, couldadversely affect our financial condition and results of operations if amaterial number of towers were involved.

We requiresignificant capital to fund our operations and anticipated capitalexpenditures. If we are unable to generate or raise sufficient capitalin the future, we may be unable to execute our business strategy andmay not be able to fund our operations.

In order to fund theexecution of our business strategy, including the construction of newcell sites that we have agreed to build, the construction of cell siteswe will build to expand our capacity, and the upgrade of existing sitesthat may be required, we will require significant amounts of cash. Wemay also have additional cash needs in the near term that we do notcurrently anticipate. We intend to meet our cash requirements throughavailable cash, cash flow from operations and, to the extent required,future borrowings. We have no committed additional financing available.There can be no assurance that available cash and cash flow fromoperations will be sufficient to meet our cash requirements, or thatany necessary borrowings will be available to us on acceptable terms orat all. If we are unable to raise capital when our needs arise, we maybe unable to pursue our business strategy and may not be able to fundour operations. See "Item  7. Management'sDiscussion and Analysis of Financial Condition and Results ofOperations—Liquidity and Capital Resources."

Our actual operating costs may be higher than we anticipate.

Changes in our operating environment, including changes ingovernment regulations, may require us to spend more than weanticipate. For example, increased competition has led in the past andmay lead in the future to higher promotional costs, increased costassociated with subsidizing sales of handsets and other costs incurredin connection with acquiring subscribers. Further, as described belowunder "—Risks Related to Our Relationship WithSprint," a substantial portion of our costs of service areattributable to fees and charges we pay Sprint PCS for billing andcollections, customer care and other back-office support. As a result,our ability to manage these costs is limited. Further, Sprint may seekto recover costs in addition to our fixed price arrangements for newservices it provides to us in support of new PCS product and serviceofferings. If our costs are more than we anticipate, the actual amountof funds needed to implement our strategy and business plan may exceedour estimates, which could have a material adverse affect on ourliquidity, financial condition and results of operations.

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Our allowance for doubtful accounts maynot be sufficient to cover uncollectible accounts.

On anongoing basis, we estimate the accounts receivable that we will notcollect to reflect the expected loss on such accounts in each period.Our allowance for doubtful accounts receivable may underestimate actualunpaid accounts receivable for various reasons,including:

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | our involuntary churn ratemay exceed our estimates; |

|              |                                                                          |
|--------------|--------------------------------------------------------------------------|
| •  | bad debt as apercentage of service revenues may be higher than weassume; |

|              |                                |
|--------------|--------------------------------|
| •  | adverse changes in theeconomy; |

|              |                                               |
|--------------|-----------------------------------------------|
| •  | changes in Sprint's PCSproducts and services; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | changes in thecomposition of our subscriber base;or |

|              |                               |
|--------------|-------------------------------|
| •  | changes in our credit policy. |

If our allowance for doubtful accounts receivable is insufficient tocover uncollectible receivables, it could have an adverse effect on ourliquidity, financial condition and results of operations.

Wemay incur significantly higher wireless handset subsidy costs than weanticipate for existing subscribers who upgrade to a new handset.

We subsidize a portion of the price of all of the wireless handsetsthat we offer and pay sales commissions, for handset sales andupgrades. As our subscriber base matures, and technological innovationsoccur, more existing subscribers will upgrade to new wireless handsets.Excluding sales commissions and handsets sold in our company-ownedstores, we incurred approximately $5.7  million associated withwireless handset upgrade costs for existing subscribers for the yearended December  31, 2003 and $4.3  million for the yearended December  31, 2004. We have limited historical experienceregarding the adoption rate for wireless handset upgrades. If moresubscribers upgrade to new wireless handsets than we expect, ourresults of operations will be adversely affected.

It isour strategy to increase our subscriber growth, which may negativelyaffect our near term profitability.

To the extent we increaseour subscriber growth, we will incur significant up-front subscriberacquisition expenses, which initially will result in reduced levels ofcash flows from operating activities and EBITDA. In addition, to theextent our subscriber growth includes a higher percentage of post-paysub-prime credit subscribers, our churn and bad debt expense mayincrease, which would adversely affect our results of operations.

Any future consolidation in the industry in which weparticipate may require us to incur substantial additional debt and tointegrate new technologies, operations and services, which may becostly and time consuming.

We may in the future haveopportunities to acquire or otherwise combine our business with otherbusinesses that may complement or extend our existing operations, andother similarly situated PCS Affiliates of Sprint may seekopportunities to benefit from combined operations. If we acquire orcombine our business with other businesses or territories, our abilityto satisfy our obligations with respect to our indebtedness may beadversely affected and we may encounter difficulties that may be costlyand time consuming and slow our growth. For example, we may haveto:

|              |                                                                                                                                     |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------|
| •  | assume and/or incur substantialadditional debt to finance the acquisitions and fund the ongoingoperations of the acquiredcompanies; |

|              |                                                          |
|--------------|----------------------------------------------------------|
| •  | integrate new operations withour existing operations; or |

|              |                                                                     |
|--------------|---------------------------------------------------------------------|
| •  | divert theattention of our management from other business concerns. |

Weare functioning under new management which may disrupt our operationsas we transition to the new management team.

Upon consummationof the reorganization, Bret Cloward became our Chief Executive Officerand Richard Harris became our Chief Financial Officer. See"Item 10. Directors and Executive 

17

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Officers of the Registrant." Asa result, our historical operating and financial results described inthis report do not reflect the leadership or guidance of our new seniormanagement and do not provide a basis on which to assess the managementcapacities of our new senior management. Further, we may experiencedisruptions as we transition to new management. We cannot assure youthat our new management team will be successful.

The loss ofthe officers and skilled employees upon whom we will depend to operateour business or the inability to attract additional personnel couldadversely affect our results of operations.

We believe that ourfuture success will depend in part on our ability to attract and retainhighly qualified technical, management and other personnel. Followingconsummation of the reorganization, we have hired additional employeesto fulfill the services previously provided by US Unwired pursuant tothe management agreement. We may not be successful in retaining keypersonnel or in attracting and retaining other highly qualifiedtechnical, management and other personnel. In addition, our history ofan inability to meet our obligations and the related filing of thebankruptcy petition may limit our ability to attract and retain thequalified technical, management and other personnel that will be neededto successfully operate our business. Any inability to retain orattract qualified management and other personnel could adversely affectour business.

Following the reorganization, we continueto be dependent on US Unwired for a number of important managementfunctions. The inability of US Unwired to provide services under themanagement agreement prior to our own implementation of these functionscould have a material adverse effect on our operations.

Uponconsummation of the reorganization, we terminated our managementagreement with US Unwired, following which we will continue to receiveservices under the management agreement during a four-month transitionperiod, ending on June  9, 2005. Thereafter, we will be requiredto implement systems and support functions to perform these servicesinternally or enter into agreement with others to provide theseservices for us. Some of the services and support functions provided byUS Unwired are critical to our ability to manage our business. Forexample, we rely on US Unwired to perform important accounting andfinancial information services for us. If US Unwired were to fail tocontinue to provide services prior to the completion of this transitionperiod or if we are unable to implement alternative arrangements withinthe four-month transition period, we would lack key management servicesrelated to the operation of our business. This could disrupt ourbusiness and have a material adverse effect on our financial conditionand results of operation.

We have no recent history ofoperating as a separate company, and we may be unable to make, or mayincur significant costs in making, the changes necessary to operate asa separate company.

In order to replace the management servicescurrently provided to us by US Unwired, we have hired new management,and we will need to implement systems and support functions to performthese services internally or enter into agreements with others toprovide these services prior to the expiration of the managementagreement transition period. Our compensation expense and the costs toimplement these systems and support functions or to acquire theseservices from others may be more costly than the fees we currently payfor services provided by US Unwired, including as a result of anyhigher than expected start-up costs associated with the implementationof these systems.  Even if we build the systems and supportfunctions to perform these services internally prior to the expirationof the management agreement transition period, our implementation ofthe new systems and support functions or the transition of data fromthe US Unwired systems to our systems may face disruptions and may notbe effective, which could adversely affect management's abilityto operate our business.

A portion of our new subscriberadditions has been through a pre-pay program, which has been providedand managed by US Unwired. Following consummation of ourreorganization, we no longer offer the US Unwired pre-pay program.

For the twelve-month period ended December  31, 2004,approximately 15% of our gross subscriber additions were addedunder a pre-pay program that has been provided and managed by US

18

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Unwired. This program, known as Chat Pak, isa US Unwired product and not a Sprint PCS product. As a result of ourreorganization, we no longer wish to market this plan in our territory.We are currently working with US Unwired to transition our currentpre-pay subscribers to other Sprint PCS product offerings. We may notbe successful in transitioning these subscribers to other Sprint PCSproduct offerings. Our inability to transition these subscribers, theexpense of developing a new program and/or inability to offer analternative pre-pay program in the markets we serve could result inincreased churn, reduced revenues or reduced profits.

We obtainmost of our network equipment from a single supplier. This equipment isnot interchangeable, and we would be materially adversely affected ifwe could not obtain this network equipment timely or at all.

Our PCS network equipment is supplied solely by Lucent TechnologiesInc. If additional equipment is needed for expansion or repair of anetwork, it must come from Lucent in order to be compatible with ourexisting network equipment. If Lucent were to cease or delay supplyingequipment, we would be prevented or delayed in expanding or repairingour network. Any inability to expand or repair our network could have amaterial adverse effect on us.

Our service area may bethreatened by bad weather and other catastrophic events which couldcause interruptions in service resulting in reduced revenues andincreased expenses.

Our service area is in the Northeast UnitedStates and could be impacted by bad weather, such as severe winterstorms and excessive rain. We may face service interruptions forindefinite periods if severe weather or another catastrophic event suchas a blackout or a terrorist attack strikes one or more of our serviceareas, resulting in reduced revenues and increased expenses.

Risks Related to our Relationship with Sprint PCS

We willnot be able to operate our business if Sprint PCS terminates ouraffiliation agreements.

Our relationship with Sprint PCS isgoverned by our affiliation agreements with it. As we do not own anylicenses to operate a wireless network, our business depends on thecontinued effectiveness of these affiliation agreements. Sprint PCS maybe able to terminate our affiliation agreements with it if wematerially breach the terms of the agreements. These terms includeoperational and network requirements that are extremely technical anddetailed and apply to each retail store, cell site and switch site thatwe operate. Many of these operational and network requirements can bechanged by Sprint PCS, in certain cases with little notice. As aresult, we may not always be in compliance with all requirements of ouraffiliation agreements with Sprint PCS. Sprint PCS conducts periodicaudits of compliance with various aspects of its program guidelines andidentifies issues it believes need to be addressed. There may besubstantial costs associated with remedying any noncompliance, and suchcosts may adversely affect our operating results and cash flows. IfSprint PCS terminates or fails to renew our affiliation agreements orfails to perform its obligations under those agreements, our ability toconduct our business would be severely restricted.

If wematerially breach our affiliation agreements with Sprint PCS, SprintPCS may have the right to purchase our operating assets at a discountto market value.

Our affiliation agreements with Sprint PCSrequire that we provide network coverage to a minimum network coveragearea within specified time frames and that we meet and maintain SprintPCS's technical, customer service and other program requirements.A failure by us to meet Sprint PCS's technical, customer serviceor other program requirements contained in the affiliation agreements,among other things, would constitute a material breach of theagreements, which could lead to their termination by Sprint PCS. Ouraffiliation agreements with Sprint PCS provide that upon the occurrenceof an event of termination caused by our breach of such agreements,Sprint PCS has the right to, among other things, purchase our operatingassets without stockholder approval and for a price equal to 72%of our entire business value, as determined in accordance with theaffiliation agreements.

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Sprint may make businessdecisions that are not in our best interests, which may adverselyaffect our relationships with subscribers in our territory, increaseour expenses or decrease our revenues.

Under our affiliationagreements with Sprint PCS, Sprint PCS has a substantial amount ofcontrol over the conduct of our business. Accordingly, Sprint PCS hasmade and, in the future may make, decisions that adversely affect ourbusiness, such as the following:

|              |                                                                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | SprintPCS, subject to limitations in our agreements with them, could priceits national plans based on its own objectives and could set pricelevels or other terms that may not be economically viable for ourbusiness; |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint PCS, subject tolimitations in our agreements with them, could develop products andservices, such as a one-rate plan where subscribers are not required topay roaming charges on its PCS-to-PCS plan, or establish creditpolicies, such as the no-deposit account spending limit program, whichwe refer to as the NDASL program, in which the deposit requirement iswaived, which could adversely affect our results ofoperations; |

|              |                                                                                                                                                                                                                                                                  |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | we have the exclusive rightto offer Sprint PCS services to our subscribers and other users in ourterritory, and Sprint may develop technology that would permit itssubscribers to access its services on different frequency bands withoututilizing our network; |

|              |                                                                                                                                                                                                                                                                                                                                    |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | onDecember  31, 2006, certain provisions of the amendments to ouragreements with Sprint expire, and Sprint, subject to limitations inour agreements with them, could then raise the costs to perform certainback-office services, reduce levels of services, or otherwise seek toincrease expenses and other amounts charged tous; |

|              |                                                                                                                                                                                                                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint may elect with little or nonotification to change its financial reporting, billing or inventorysoftware systems or change third-party service providers which mayadversely affect our ability to determine or report our operatingresults, adversely affect our ability to obtain handsets or adverselyaffect our subscriberrelationships; |

|              |                                                                                                                                                                               |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint, subject tolimitations in our agreements with them, could limit our ability todevelop local and other promotional plans to enable us to attractsufficient subscribers; |

|              |                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------|
| •  | Sprint, subjectto limitations under our agreements with them, could alter its networkand technicalrequirements; |

|              |                                                                                                                                                                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint'sintroduction of payment methods that do not have adequate controls orlimitations could result in fraudulent payments to subscriber accounts,which could have a material adverse impact on our results of operationsand financial condition; |

|              |                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------|
| •  | Sprint couldmake decisions which could adversely affect the Sprint brand name,products or services; |

|              |                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint coulddecide not to renew the Sprint agreements or to no longer perform itsobligations, which would severely restrict our ability to conductbusiness; |

|              |                                                                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint may unexpectedlyimplement new pass-through fees or other expenses that they deem to bepermitted under the simplified pricing arranged by the amendments toour affiliation agreements with Sprint;and |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | in order to compete with othercellular service providers, such as Verizon, Sprint may decide tocombine billing of landline telecommunications services with PCSservices, under which, pursuant to federal regulations, any paymentsreceived for both landline and PCS services would be credited first tothe landline service provided by Sprint before any amounts could becredited to the PCS services that we provide. |

Recently, Sprinthas changed how it aligns its resources in order to focus on two marketsegments: businesses and consumers. This represents a shift away fromthe current organizational focus on asset groups and products: localtelecommunications, global wireline voice and data services andwireless. This initiative is often referred to as One Sprint-ManySolutions. This realignment was designed to facilitate Sprint'scross-selling and bundling of products across these product lines. Thisshift could:

20

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|              |                                                                                                                                         |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|
| •  | divertmarketing, advertising and internal Sprint resources once dedicated towireless to bundled or non-PCS Sprint products andservices; |

|              |                                                                                                                       |
|--------------|-----------------------------------------------------------------------------------------------------------------------|
| •  | increase the risk that Sprintwill design wireless products and services in a manner that is notprofitable for us; and |

|              |                                                                            |
|--------------|----------------------------------------------------------------------------|
| •  | reduce thesignificance of Sprint's wireless network partners, includingus. |

|              |                                                                                                                                                                                                                                                                   |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | The occurrence of any of theforegoing could adversely affect our relationship with subscribers inour territories, increase our expenses or decrease our revenues andhave a material adverse effect on our liquidity, financial conditionand results of operation. |

Furthermore, Sprint has announced thatit plans to deploy Evolution-Data Only technology, which we refer to asEV-DO, in certain of its markets, and Sprint, subject to limitations inour agreements with them, could require us to implement EV-DO in ournetwork faster than we currently anticipate and at costs higher than wehave currently allocated.

Additionally, Sprint has entered intomobile virtual network operator, or MVNO, arrangements with VirginMobile USA, Qwest Communications and others. In these arrangements,Sprint wholesales airtime to its MVNO partner, which in turn marketsretail service under its own brand and pricing. Under the amendments toour affiliation agreements with Sprint, we are required to participatein resale arrangements entered into by Sprint, subject to certainlimitations. We may enjoy an increase in traffic as a result of theseMVNO relationships, but the rates paid to us, and the margins earned onthis traffic, may not be as favorable to us as would be the case ifSprint were selling on a retail rather than on a wholesale basis.

Certain provisions of our affiliation agreements with Sprint PCSmay diminish our value and restrict the sale of our business.

Under specific circumstances and without stockholder approval,Sprint PCS may purchase our operating assets or capital stock at adiscount. Sprint PCS also has a right of first refusal if we decide tosell our operating assets to a third-party. We are also subject to anumber of restrictions on the transfer of our business, including aprohibition on the sale of our operating assets to competitors ofSprint PCS. These restrictions and the other restrictions contained inour affiliation agreements with Sprint PCS restrict our ability to sellour business, may reduce the value a buyer would be willing to pay forour business, and thus may reduce our entire business value.

The announced merger with Nextel or an alternativetransaction involving Sprint PCS could have an adverse impact on ourrelationship with Sprint PCS and our business.

Our business issubstantially dependent on our ability to provide Sprint PCS productsand services in our service area. On December  15, 2004, Sprintannounced that it had agreed to merge with NextelCommunications,  Inc., subject to obtaining all necessaryapprovals. The announcement and closing of the Sprint/Nextel merger, orthe announcement and closing of any other business combinationinvolving Sprint, may give rise to a negative reaction by ourcustomers, which may have an adverse effect on our revenues. Anydiminution in brand recognition or loyalty as a result of the pendingSprint/Nextel merger, or any other business combination involvingSprint, could also cause a decrease in our revenues and we may incursignificant costs associated with minimizing any such negative reactionor customer confusion. In the event that the Sprint/Nextel merger, orany other business combination involving Sprint, is consummated, we mayalso incur significant costs associated with integrating Sprint'smerger partner onto our network. In addition, the proposedSprint/Nextel merger, or any other such business combination involvingSprint, imposes a degree of uncertainty on the future of our businessand operations insofar as it may lead to a change in Sprint PCS'affiliate strategy. The Sprint/Nextel merger or any other businesscombination involving Sprint may impact our relationship and/ormanagement agreement with Sprint PCS. We are currently reviewing ourmanagement agreement and considering the potential impact(s) of theproposed Sprint/Nextel merger on our agreement and our overallrelationship with Sprint PCS, but we cannot predict the outcome for IWOat this time or the impact of the merger on our business, operations orfinancial condition. Any of these potential risks, individually orcumulatively, may have an adverse effect on us and our business.

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If Sprint PCS does not maintain controlover its licensed spectrum, our affiliation agreements with Sprint PCSmay be terminated.

Sprint PCS, not us, owns the licensesnecessary to provide wireless services in our territory. The FCCrequires that licensees like Sprint PCS maintain control of theirlicensed systems and not delegate control to third-party operators ormanagers without the FCC's consent. Our affiliation agreementswith Sprint PCS reflect an arrangement that the parties believe meetsthe FCC requirements for licensee control of licensed spectrum.However, if the FCC were to determine that any of our affiliationagreements with Sprint PCS need to be modified to increase the level oflicensee control, we have agreed with Sprint PCS to use our bestefforts to modify the agreements to comply with applicable law. If wecannot agree with Sprint PCS to modify the agreements, those agreementsmay be terminated. If the agreements are terminated, we would no longerbe a part of the Sprint PCS network and we would not be able to conductour business.

The FCC may fail to renew the Sprint PCS wirelesslicenses under certain circumstances, which would prevent us fromproviding wireless services.

Sprint PCS's wirelesslicenses are subject to renewal and revocation by the FCC. The SprintPCS wireless licenses in our territory will expire in June  23,2005 but may be renewed for additional ten-year terms.  The FCChas adopted specific standards that apply to wireless personalcommunications services license renewals. Any failure by Sprint PCS orus to comply with these standards could result in the non-renewal ofthe Sprint PCS licenses for our territory. Additionally, if Sprint PCSdoes not demonstrate to the FCC that Sprint PCS has met theconstruction requirements for each of its wireless personalcommunications services licenses, it can lose those licenses. If SprintPCS loses its licenses in our territory for any reason, we and oursubsidiaries would not be able to provide wireless services withoutobtaining rights to other licenses. If Sprint PCS loses its licenses inanother territory, Sprint PCS or the applicable PCS Affiliate of Sprintwould not be able to provide wireless services without obtaining rightsto other licenses and our ability to offer nationwide calling planswould be diminished and potentially more costly.

Our ability tofulfill our obligations under our affiliation agreements with SprintPCS will depend on our ability to timely construct and operate 103additional cell sites.

Our affiliation agreements with SprintPCS require us to construct and operate 103 additional cell sites,including 37 cell sites completed in 2004, in our territory by 2008.The total estimated cost for these 103 cell sites is approximately$25.2 million. Our ability to construct these new cell sites could beaffected by a number of factors beyond our control,including:

|              |                                                                                                                              |
|--------------|------------------------------------------------------------------------------------------------------------------------------|
| •  | zoning and local permittingrequirements and national regulatory approvals, including requirementsof FCC and FAA regulations; |

|              |                                                                              |
|--------------|------------------------------------------------------------------------------|
| •  | availabilityof construction equipment and skilled construction personnel;and |

|              |                             |
|--------------|-----------------------------|
| •  | adverse weather conditions. |

In addition, as the concern over cell tower proliferation has grownin recent years, certain communities have placed restrictions on newtower construction or have delayed granting permits required forconstruction. The barriers to new construction may prevent us fromconstructing the cell sites in the required locations and we may not beable to complete construction of the required number of sites withinthe timetable provided under our affiliation agreements. If we areunable to construct these new cell sites by the deadline, we could bein breach of the affiliation agreements. See "—Wewill not be able to operate our business if Sprint PCS terminates ouraffiliation agreements" and "—If wematerially breach our affiliation agreements with Sprint PCS, SprintPCS may have the right to purchase our operating assets at a discountto market value."

Certain wireless providers areseeking to change the standards controlling the types of wirelesshandsets that operate on their networks which may limit our ability toprovide our subscribers with service in areas not covered bySprint's PCS network.

We rely on Sprint PCS'sroaming agreements with its competitors to provide automatic roamingcapabilities to our subscribers in many of the areas of the UnitedStates not covered by Sprint's PCS 

22

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network. Competitors may be able to offercoverage in areas not served by Sprint's PCS network or may beable to offer roaming rates that are lower than those offered by SprintPCS. Certain competitors have sought to reduce or eliminate the use ofthe Advanced Mobile Phone Service, or AMPS, air interface on theirnetworks. AMPS is an important air interface on which SprintPCS's subscribers roam. Further, on September  24, 2002,the FCC modified its rules to eliminate, after a five–yeartransition period, the requirement that carriers provide analog servicecompatible with AMPS specifications. If AMPS is eliminated and oursubscribers do not have wireless handsets that are compatible with ourcompetitors' air interface, then these subscribers will not beable to roam on our competitors' networks, which could lead tocustomer dissatisfaction and increased churn.

We relyon Sprint PCS for a substantial amount of our financial information. Ifthat information is not accurate, our ability to accurately report ourfinancial data could be adversely affected, and the investmentcommunity could lose confidence in us.

Under our affiliationagreements, Sprint PCS performs our billing, customer care andcollections, national network systems support, inventory logistics,long distance transport and national third-party sales support. Thedata provided by Sprint PCS related to the functions they perform forus is the primary source for our service revenue information and for asignificant portion of our cost of service and roaming, and selling andmarketing expenses information included in our statement of operations.We use this data to record our financial results and prepare ourfinancial statements. If we later find errors in that data provided tous, we may be required to restate our financial statements. If thatoccurs as to us or any other PCS Affiliate of Sprint, investors andsecurities analysts may lose confidence in us which could adverselyaffect the value of an investment in our company.

Problems withSprint PCS's internal support systems could lead to customerdissatisfaction or increase our costs.

We rely on SprintPCS's internal support systems, including customer care, billingand back-office support. Sprint PCS has entered into business processoutsourcing agreements with third parties to provide these services.There can be no assurance that Sprint PCS will be able to successfullyadd system capacity, that its internal support systems will be adequateor that third parties that Sprint PCS has contracted with can performtheir obligations. Problems with Sprint PCS's internal supportsystems could cause:

|              |                                                  |
|--------------|--------------------------------------------------|
| •  | delays or problemsin our operations or services; |

|              |                                                                               |
|--------------|-------------------------------------------------------------------------------|
| •  | delays ordifficulty in gaining access to subscriber and financialinformation; |

|              |                           |
|--------------|---------------------------|
| •  | a loss of subscribers;and |

|              |                                                                             |
|--------------|-----------------------------------------------------------------------------|
| •  | an increase in the costs of customercare, billing and back-office services. |

Should Sprint PCS failto deliver timely and accurate information, this may lead to adverseshort-term decisions and inaccurate assumptions in our business plan.It could also adversely affect our cash flows, because Sprint PCScollects our receivables and remits to us a net amount that is based onthe financial information it produces for us.

Our costs forinternal support systems may increase if Sprint PCS terminates all orpart of our service agreements with it.

We incur costs for theservices provided under our affiliation agreements with Sprint PCSrelating to billing, customer care and other back-office functions.Because we incur the majority of these costs on a per-subscriber basis,we expect the aggregate cost for such services to increase as thenumber of our subscribers increases. Sprint PCS may terminate anyservice provided under such agreements upon nine months' priorwritten notice, but if we desire to continue receiving such service,Sprint PCS has agreed that it will assist us in developing thatfunction internally or locating a third-party vendor that will providethat service. We do not currently have a contingency plan if Sprint PCSterminates a service we currently receive from it. If Sprint PCSterminates a service for which we have not developed or are unable todevelop a cost-effective alternative, our operating costs may increasebeyond our expectations and our operations may be interrupted orrestricted.

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Our dependence on Sprint PCS forservices may limit our ability to reduce costs, which could materiallyadversely affect our financial condition and results of operation.

For the year ended December  31, 2004, approximately65% of cost of services in our financial statements relate tocharges from or through Sprint PCS. As a result, a substantial portionof our cost of services is outside our control. While Sprint PCS hasagreed to charge us certain specified rates for roaming and serviceuntil December  31, 2006, thereafter these costs could increasesignificantly. Furthermore, our ability to replace Sprint with lowercost providers may be limited.

If Sprint's business plandoes not succeed, our business may not succeed.

As a networkpartner of Sprint, we have the right to provide PCS products andservices under the Sprint brand names in our territory. In addition, wefeature exclusively and prominently the nationally recognized Sprintbrand in our marketing effort. Consequently, our business and resultsof operations depend on the continued recognition of the Sprint brandname and success of Sprint's business. If Sprint's businessplan does not succeed, or if Sprint has a significant disruption to itsbusiness plan or network, fails to operate its business in an efficientmanner, or suffers a weakening of its brand name or erosion of itscustomer base, our operations and profitability would likely benegatively impacted.

If Sprint were to file for bankruptcy,Sprint may be able to reject its agreements with us underSection  365 of the Bankruptcy Code. The agreements provide usremedies, including purchase and put rights, though we cannot predictif or to what extent our remedies would be enforceable.

If we lose our right to use the Sprint brand and logo underits trademark and service mark license agreements, we would lose theadvantages associated with marketing efforts conducted by Sprint.

The Sprint brand and logo are highly recognizable. If we lose therights to use this brand and logo or the value of the brand and logodecreases, customers may not recognize our brand readily and we mayhave to spend significantly more money on advertising to create brandrecognition.

We may have difficulty in obtaining an adequatesupply of certain handsets from Sprint PCS, which could adverselyaffect our results of operations.

We depend on our relationshipwith Sprint PCS to obtain handsets and other wireless devices. SprintPCS orders handsets and other wireless devices from variousmanufacturers. We could have difficulty obtaining specific types ofhandsets in a timely manner if:

|              |                                                                                                                                                                                                                                      |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | SprintPCS does not adequately project the need for handsets for itself, itsPCS Affiliates and its other third-party distribution channels,particularly in transition to new technologies, such asthird-generation, or 3G,technology; |

|              |                                                            |
|--------------|------------------------------------------------------------|
| •  | Sprint PCS gives preferenceto other distribution channels; |

|              |                                                                             |
|--------------|-----------------------------------------------------------------------------|
| •  | we donot adequately project our need for handsets or other wirelessdevices; |

|              |                                                                                                                           |
|--------------|---------------------------------------------------------------------------------------------------------------------------|
| •  | Sprint PCS modifies its handsetlogistics and delivery plan in a manner that restricts or delays ouraccess to handsets; or |

|              |                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | there is anadverse development in the relationship between Sprint PCS and itssuppliers or vendors. For example, if other participants in thewireless telecommunications market consolidate, the resulting companymay accumulate sufficient power so as to disturb the balance of poweramong handset purchasers, reducing Sprint PCS's ability to obtaincompetitive agreements with handset manufacturers. |

Theoccurrence of any of these could disrupt our customer service and/orresult in a decrease in our subscribers, which could adversely affectour results of operations.

24

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If Sprint PCS decides toterminate its contracts with national retailers through whom we sellour products, our revenues would be materially and adverselyimpacted.

We rely on Sprint PCS to negotiate contracts withnational retailers such as Radio Shack and Best Buy who market anddistribute our products. Sprint PCS currently does not allow us toenter into contracts with those retailers directly. National retailerswho have contracted with Sprint PCS accounted for 29% of ourtotal gross subscriber additions for the year ended December  31,2004. If Sprint PCS decides to terminate its contracts with suchvendors and refuses to allow us to deal with them directly, or ifSprint changes the terms of those agreements, our revenues could bematerially adversely affected.

Risks Related to the WirelessTelecommunications Industry

We may experience a highrate of subscriber churn, which would adversely affect our financialperformance.

Significant competition in our industry andgeneral economic conditions may cause our future churn rate to behigher than our historical rate. Factors that may contribute to higherchurn include:

|              |                                                                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | inability orunwillingness of subscribers to pay, resulting in involuntarydeactivations, which accounted for approximately 37% of oursubscriber deactivations in the year ended December  31,2004; |

|              |                                                                                                                                                                                                                                                                      |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | subscriber mix and credit class,particularly sub-prime post-pay and pre-pay subscribers, whichaccounted for over 41% of our gross subscriber additions for theyear ended December  31, 2004 and for approximately 26% ofour subscriber base as of December  31,2004; |

|              |                                                                  |
|--------------|------------------------------------------------------------------|
| •  | attractiveness of ourcompetitors' products, services andpricing; |

|              |                                                                                     |
|--------------|-------------------------------------------------------------------------------------|
| •  | network performance andcoverage, or perception thereof, relative to ourcompetitors; |

|              |                  |
|--------------|------------------|
| •  | customerservice; |

|              |                                                                                                         |
|--------------|---------------------------------------------------------------------------------------------------------|
| •  | levels of subsidies relating tohandset upgrades or the array of handset choices relative tocompetitors; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | any increased prices forservices in the future; and |

|              |                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | any futurechanges by us in the products and services we offer or in the termsunder which we offer our products or services, especially to sub-primecredit subscribers. |

A high rate of subscriber churn couldadversely affect our competitive position, liquidity, financialposition, results of operations and our costs of, or losses incurredin, obtaining new subscribers, especially because we subsidize most ofthe costs of initial purchases of handsets by subscribers.

Wireless local number portability requirements may increase churn,lower revenues and result in higher subscriber acquisition andretention costs.

Since November  24, 2003, all CMRSproviders, including us, are required to allow customers in the 100largest metropolitan statistical areas to retain their existingtelephone numbers when switching from one telecommunications carrier toanother. These rules are generally referred to as a wireless localnumber portability, or WLNP. As of May  24, 2004, FCC regulationsrequire that CMRS providers must have implemented WLNP outside the 100largest metropolitan statistical areas in the United States as well. Inthe future, WLNP could lead to increased churn as our customers switchcarriers, which in turn could lead to lower revenues and increasedsubscriber acquisition and retention costs.

The FCC may amendits interconnection compensation regulations in a manner that wouldincrease our expenses and/or reduce our revenues.

On March 3,2005, the FCC released a Further Notice of Proposed Rulemaking in itsefforts to reform the intercarrier compensation regulatory scheme. Theresults of this rulemaking may increase 

25

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the amount we will have to pay IncumbentLocal Exchange Carriers to terminate our customers' wirelesscalls on the carrier's network. The resulting regulations mayalso decrease the amount we receive from Local Exchange Carriers when acall is terminated on our network.

Regulation by government andtaxing agencies may increase our costs of providing service or requireus to change our services, either of which could impair our financialperformance.

Our operations and those of Sprint PCS are subjectto varying degrees of regulation by the FCC, the Federal TradeCommission, the Federal Aviation Administration, the EnvironmentalProtection Agency, the Occupational Safety and Health Administration,state and local regulatory agencies, and legislative bodies. Adverselaws, regulations or decisions by these bodies could negatively impactour operations and our costs of doing business as may the imposition offines or penalties arising from a failure to comply with applicablelaws, regulations or decisions. Furthermore, these laws and regulationsmay change in the future resulting in a greater impact to our costs.For example, regulatory mandates pertaining to the provision ofenhanced emergency 911, or E-911, services by wireless carriers,compliance with the Communications Assistance for Law Enforcement Act,or CALEA, the meeting of telephone number pooling and portingrequirements, compliance with microwave relocation requirements,satisfying universal service standards and contributing to theuniversal service fund, the protection of subscriber privacy, theprovision of services to the hearing impaired, disclosures made tocustomers regarding their billing statements ("truth inbilling") and the satisfaction of environmental and safetystandards, have imposed, and will continue to impose, substantial costson our industry. Because the fixed component of costs incurred to meetsome of these mandates can be relatively high, smaller carriers such asus can be competitively disadvantaged by these mandates.

Moreover, changes in tax laws or the interpretation of existing taxlaws by state and local authorities could subject us to increasedincome, sales, gross receipts or other tax costs or require us to alterthe structure of our current relationship with Sprint.

Concernsover health risks and safety posed by the use of wireless handsets mayreduce consumer demand for our services.

Media reports havesuggested that radio frequency emissions from wireless handsetsmay:

|              |                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------|
| •  | be linked to various healthproblems resulting from continued or excessive use, includingcancer; |

|              |                                                                                             |
|--------------|---------------------------------------------------------------------------------------------|
| •  | interfere with variouselectronic medical devices, including hearing aids and pacemakers;and |

|              |                                                      |
|--------------|------------------------------------------------------|
| •  | cause explosions if used whilefueling an automobile. |

Widespread concerns over radio frequencyemissions may expose us to potential litigation, discourage the use ofwireless handsets or result in additional regulation imposingrestrictions or increasing requirements on the location and operationof cell sites or the use or design of wireless handsets. Any resultingdecrease in demand for these services or increase in the cost ofcomplying with additional regulations could impair our ability toprofitably operate our business.

Due to safety concerns, somestate and local legislatures have passed or are considering legislationrestricting the use of wireless telephones while driving automobiles.Concerns over safety risks and the effect of future legislation, ifadopted in the areas we serve, could limit our ability to market andsell our wireless services. In addition, it may discourage use of ourwireless devices and decrease our revenues from subscribers who now usetheir wireless telephones while driving. Further, litigation relatingto accidents, deaths or serious bodily injuries allegedly incurred as aresult of wireless telephone use while driving could result in damageawards, adverse publicity and further governmental regulation. Any orall of these results could have a material adverse effect on ourresults of operations and financial condition.

26

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Significant competition in the wirelesstelecommunications industry may result in our competitors offering newservices or lower prices, which could prevent us from operatingprofitably and may cause prices for our services to continue to declinein the future.

Competition in the wireless telecommunicationsindustry is intense. Competition has caused, and we anticipate thatcompetition will continue to cause, the market prices for two-waywireless products and services to decline. Our ability to compete willdepend, in part, on our ability to anticipate and respond to variouscompetitive factors affecting the wireless telecommunications industry.While we try to maintain and increase our ARPU, we cannot assure youthat we will be able to do so. If prices for our services continue todecline, it could adversely affect our ability to increase revenue,which would have a material adverse effect on our financial condition,our results of operations and our ability to repay our notes. Inaddition, the viability of our business depends upon, among otherthings, our ability to compete with other wireless providers onreliability, quality of service, availability of voice and datafeatures and customer care. In addition, the pricing of our servicesmay be affected by competition, including the entry of new serviceproviders into our markets. Furthermore, there has been a recent trendin the wireless telecommunications industry toward consolidation ofwireless service providers, which we expect to lead to largercompetitors over time.

Our dependence on Sprint PCS to market ordevelop competitive products and services and the requirement that weobtain Sprint PCS's consent to sell non-Sprint approved equipmentmay limit our ability to keep pace with our competitors on theintroduction of new products, services and equipment. Some of ourcompetitors are larger than us, possess greater resources and moreextensive coverage areas, and may market other services, such aslandline telephone service, cable television and Internet access, alongwith their wireless communications services. In addition, we may be ata competitive disadvantage because we may be more highly leveraged thansome of our competitors.

We also face competition from paging,dispatch and conventional mobile radio operations, enhanced specializedmobile radio, or ESMR, wireless voice-over-IP and mobile satelliteservices. In addition, future FCC regulation or Congressionallegislation may create additional spectrum allocations that would havethe effect of adding new entrants (and thus additional competitors)into the mobile telecommunications market.

If the demand forwireless data services does not grow, or if we or Sprint PCS fail tocapitalize on such demand, it could have an adverse effect on ourgrowth potential.

Sprint PCS and its network partners,including us, have committed significant resources to wireless dataservices and our business plan assumes increasing use of such servicesby our subscribers. That demand may not materialize. Even if suchdemand does develop, our ability to deploy and deliver wireless dataservices depends, in many instances, on new and unproven technology. Wemay not be able to obtain new technology to effectively andeconomically deliver these services.

The success of wirelessdata services is substantially dependent on the ability of Sprint PCSand others to develop applications for wireless data devices and todevelop and manufacture devices that support wireless applications.These applications or devices may not be developed or developed insufficient quantities to support the deployment of wireless dataservices. These services may not be widely introduced and fullyimplemented at all or in a timely fashion. These services may not besuccessful when they are in place, and customers may not purchase theservices offered.

Consumer needs for wireless data and voiceservices may be met by technologies such as Wi-Fi, which does not relyon FCC regulated spectrum. The lack of standardization across wirelessdata handsets may contribute to customer confusion, which could slowacceptance of wireless data services, or increase customer care costs.Either could adversely affect our ability to provide these servicesprofitably. If these services are not successful or costs associatedwith implementation and completion of the rollout of these servicesmaterially exceed our current estimates, our financial condition andprospects could be materially adversely affected.

27

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Market saturation could limit ordecrease our rate of new subscriber additions and increase costs tokeep our current subscribers.

To the extent intense competitionin the wireless telecommunications industry continues to cause pricesfor wireless products and services to decline, our rate of netsubscriber additions will take on greater significance in improving ourfinancial condition and results of operations. However, as our and ourcompetitors' penetration rates in our markets increase over time,our rate of adding net subscribers could decrease further. In addition,we may incur additional costs through equipment upgrades and otherretention costs to keep our current subscribers from switching to ourcompetitors. These events could materially adversely affect ourliquidity, financial condition and results of operations.

OtherRisks

The terms of our indebtedness place restrictions on usand our subsidiaries, which may limit our operating flexibility.

The indentures that govern our notes impose material operating andfinancial restrictions on us and our subsidiaries. These restrictionslimit our ability and the ability of our subsidiaries to, among otherthings:

|              |                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------|
| •  | incur additional debt or, in thecase of our restricted subsidiaries, issue capital stock to athird-party; |

|              |                                                                                     |
|--------------|-------------------------------------------------------------------------------------|
| •  | pay dividends, redeemcapital stock or make other restricted payments orinvestments; |

|              |                        |
|--------------|------------------------|
| •  | create liens onassets; |

|              |                                         |
|--------------|-----------------------------------------|
| •  | merge, consolidate or dispose ofassets; |

|              |                                         |
|--------------|-----------------------------------------|
| •  | enter into transactions withaffiliates; |

|              |                                                                                                                   |
|--------------|-------------------------------------------------------------------------------------------------------------------|
| •  | place restrictions on theability of our restricted subsidiaries to pay dividends or make otherpayments to us; and |

|              |                          |
|--------------|--------------------------|
| •  | change lines ofbusiness. |

These restrictions could limit our ability to obtaindebt financing, repurchase stock, refinance or pay principal orinterest on our outstanding debt, complete acquisitions for cash ordebt or react to changes in our operating environment. Any future debtthat we incur may contain similar or more restrictive covenants.

A single investment advisor has voting power over nearly50% of our common stock. That investment advisor may use itsvoting power to influence our board of directors, management andbusiness plan, and the interests of that investment advisor mayconflict with the interests of our other securityholders. 

Accounts managed by AIG Global Investment Corp.("AIGIC") have voting power over nearly50% of the outstanding shares of our common stock, and Ryan L.Langdon, one of our directors, is an employee of AIGIC. See"Item 12. Security Ownership of Certain Beneficial Ownersand Management and Related Stockholder Matters."Accordingly, AIGIC can use its voting power to influence the outcomesof the elections of members of our board of directors and the outcomeof corporate actions requiring stockholder approval, including mergers,consolidations and the sale of all or substantially all of our assets.AIGIC also may influence our management, policies and financingdecisions. The interests of AIGIC could conflict with those of ourother stockholders. In addition, AIGIC and its affiliates may owninterests in businesses that compete with ours.

We are aholding company and conduct all of our operations through oursubsidiaries.

We are a holding company that derives all of ouroperating income from our subsidiaries. We are dependent on theearnings and cash flows of our subsidiaries to meet our obligationswith respect to our notes. The terms of future indebtedness of oursubsidiaries and the laws of the jurisdictions under which thosesubsidiaries are organized may limit the payment of dividends and otherdistributions to us.

28

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Item 2.    Properties

We ownproperty that houses two of our switching centers in Albany, New York.We lease or license property in a number of locations, primarily foradministrative office space, retail outlets, cell sites and a thirdswitching center. We lease approximately 30,000 square feet for ourheadquarters in Albany, New York. This lease expires on October14, 2006. As of December  31, 2004, we had 721 PCS cell sites, ofwhich approximately 96% were co-locations and 4% wereowned.

Item 3.    Legal Proceedings

For a descriptionof the consummation of our Plan of Reorganization, please see"Item  1.  Business—Plan ofReorganization."

From time to time, we are involvedin various legal proceedings relating to claims arising in the ordinarycourse of business. We are not currently a party to any such legalproceedings, the adverse outcome of which, individually or in theaggregate, is expected to have a material adverse effect on ourbusiness, financial condition or results of operations.

Item4.    Submission of Matters to a Vote of Security Holders

Wesolicited votes for the acceptance or rejection of our Plan ofReorganization under chapter  11 of the Bankruptcy Code duringthe period commencing on or about December  1, 2004, andcontinuing through December  29, 2004. In accordance with theprovisions of the Bankruptcy Code and our Plan of Reorganization, voteswere solicited from beneficial holders of the following classes ofclaims and equity interests in the Company: Class  4—SeniorNote Claims, held by holders of our 14% Senior Notes dueJanuary  15, 2011. Set forth below is a tabulation of thevotes:

|           |  |                                    |             |                                    |  |                                    |           |                                    |  |        |        |          |  |        |        |          |  |  |
|-----------|--|------------------------------------|-------------|------------------------------------|--|------------------------------------|-----------|------------------------------------|--|--------|--------|----------|--|--------|--------|----------|--|--|
|      |  | AmountAccepting(% of Amount Voted) |             | AmountRejecting(% of Amount Voted) |  | NumberAccepting(% of Amount Voted) |           | NumberRejecting(% of Amount Voted) |
| Class4(1) |  | $                                  | 142,319,000 |                               |  | $                                  | 1,150,000 |                               |  |   | 22     |     |  |   | 4      |     |
|      |  |                               | (99.20      | )%                            |  |                               | (0.80     | )%                            |  |   | (84.62 | )%  |  |   | (15.38 | )%  |
|           |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Underthe Plan of Reorganization, Class  1 (Priority Non–TaxClaims), Class  2 (Secured Credit Agreement Claims), Class3 (Other Secured Claims) and Class  5 (General Unsecured Claims)were unimpaired and were conclusively presumed to have accepted thePlan of Reorganization. Class  6 (Old Common Stock Interests),consisting of the equity interest of U.S. Unwired in us, did notreceive any distribution under the Plan of Reorganization on account ofsuch equity interest and were, therefore, conclusively presumed to haverejected the Plan ofReorganization. |

29

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PARTII

|                |                                                                                                            |
|----------------|------------------------------------------------------------------------------------------------------------|
| Item 5.   | Market for Registrant'sCommon Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities |

Market Prices

On February  25,2005, our common stock began trading on the Pink Sheets.

Thefollowing table sets forth on a per share basis the high and low salesfor consolidated trading in our common stock as reported on the PinkSheets, through March  25,2005.

|                                                               |  |             |        |        |  |        |        |        |  |  |
|---------------------------------------------------------------|--|-------------|--------|--------|--|--------|--------|--------|--|--|
|                                                          |  | CommonStock |
|                                                          |  | High        |        | Low    |
| **2005**                                                      |  |        |   |   |  |   |   |   |
| Firstquarter (from February  25, 2005 through March  25,2005) |  | $           | 33.00  |   |  | $      | 28.50  |   |
|                                                               |

As ofMarch  25, 2005, there were approximately 10 holders of record ofour common stock, including record holders on behalf of anindeterminate number of beneficial owners.

Dividend Policy

Since we emerged from bankruptcy on February 10, 2005, we have neverdeclared or paid any cash dividends on our common stock. In theimmediate future, we do not anticipate paying any cash dividends on ourcommon stock. In addition, the indentures governing our outstandingnotes provide certain restrictions on our ability to pay dividends. Anyfuture determination to pay dividends will be at the discretion of ourBoard of Directors and will be dependent upon then existing conditions,including our financial condition and results of operations, capitalrequirements, contractual restrictions, business prospects and otherfactors that our Board of Directors considers relevant. Furthermore, asa holding company, we depend on the cash flow of oursubsidiaries.

30

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|               |                        |
|---------------|------------------------|
| Item 6.  | SelectedFinancial Data |

The following selected financial data arederived from the consolidated financial statements of IWO Holdings,Inc. and subsidiaries. The data should be read in conjunction with theconsolidated financial statements, related notes and other financialinformation includedherein.

|                                     |  |                              |         |                                    |  |                                                              |         |                                                              |  |                              |          |                            |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------|--|------------------------------|---------|------------------------------------|--|--------------------------------------------------------------|---------|--------------------------------------------------------------|--|------------------------------|----------|----------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                |  | YearEnded December  31, 2004 |         | Year endedDecember  31, 2003(1)(3) |  | For the PeriodApril  1, 2002 through December  31,2002(1)(2) |         | For the Period January  1, 2002through March  31, 2002(1)(2) |  | Year endedDecember  31, 2001 |          | Year ended December31,2000 |
|                                |  |                         |         | (Restated)                         |  | (Restated)                                                   |         |                                                         |  |                         |          |                       |
|                                |  | (Inthousands)                |
| **Statement ofOperationData:**      |  |                         |    |                               |  |                                                         |    |                                                         |  |                         |     |                       |  |   |    |    |  |   |    |    |  |   |    |    |
| Revenues                            |  | $                            | 187,253 |                               |  | $                                                            | 171,849 |                                                         |  | $                            | 124,896  |                       |  | $      | 35,536  |    |  | $      | 111,324 |    |  | $      | 59,313  |    |
| Costof services and merchandisesold |  |                         | 116,572 |                               |  |                                                         | 116,757 |                                                         |  |                         | 97,433   |                       |  |   | 22,109  |    |  |   | 79,523  |    |  |   | 43,165  |    |
| Otheroperatingexpenses              |  |                         | 86,184  |                               |  |                                                         | 111,837 |                                                         |  |                         | 83,499   |                       |  |   | 33,615  |    |  |   | 86,766  |    |  |   | 58,196  |    |
| Impairmentof goodwill(4)            |  |                         | — |                               |  |                                                         | — |                                                         |  |                         | 214,191  |                       |  |   | — |    |  |   | — |    |  |   | — |    |
| Impairmentof intangible assets(4)   |  |                         | — |                               |  |                                                         | — |                                                         |  |                         | 188,330  |                       |  |   | — |    |  |   | — |    |  |   | — |    |
| Operatingloss                       |  | $                            | (15,503 | )                             |  | $                                                            | (56,745 | )                                                       |  | $                            | (458,557 | )                     |  | $      | (20,188 | )  |  | $      | (54,965 | )  |  | $      | (42,048 | )  |
| Lossfrom continuingoperations       |  | $                            | (54,814 | )                             |  | $                                                            | (96,957 | )                                                       |  | $                            | (484,708 | )                     |  | $      | (26,836 | )  |  | $      | (76,941 | )  |  | $      | (50,080 | )  |
|                                     |

|                                                           |  |                  |          |            |  |            |          |         |  |        |         |         |  |        |         |        |  |        |         |        |  |  |
|-----------------------------------------------------------|--|------------------|----------|------------|--|------------|----------|---------|--|--------|---------|---------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                                      |  | Asof December31, |
|                                                      |  | 2004             |          | 2003(1)    |  | 2002(1)(2) |          | 2001    |  | 2000   |
|                                                      |  |             |          | (Restated) |  | (Restated) |          |    |  |   |
|                                                      |  | (Inthousands)    |
| Balance SheetData:                                        |  |             |     |       |  |       |     |    |  |   |    |    |  |   |    |   |  |   |    |   |
| Cashand cashequivalents                                   |  | $                | 33,840   |       |  | $          | 32,337   |    |  | $      | 35,008  |    |  | $      | 3,394   |   |  | $      | 36,313  |   |
| Investments securities held to maturity atamortizedcosts  |  |             | —  |       |  |       | —  |    |  |   | — |    |  |   | 73,680  |   |  |   | — |   |
| Restrictedcash and US Treasury securities held tomaturity |  |             | 80       |       |  |       | 19,358   |    |  |   | 41,218  |    |  |   | 61,719  |   |  |   | 8,000   |   |
| Propertyand equipment,net                                 |  |             | 150,796  |       |  |       | 165,511  |    |  |   | 189,649 |    |  |   | 176,226 |   |  |   | 102,564 |   |
| Totalassets                                               |  |             | 236,178  |       |  |       | 276,991  |    |  |   | 360,196 |    |  |   | 412,927 |   |  |   | 232,699 |   |
| Long-termdebt, including currentmaturities                |  |             | 355,275  |       |  |       | 351,697  |    |  |   | 350,207 |    |  |   | 297,407 |   |  |   | 80,000  |   |
| Totalliabilities                                          |  |             | 426,207  |       |  |       | 412,206  |    |  |   | 398,454 |    |  |   | 357,134 |   |  |   | 108,859 |   |
| Redeemablecommonstock                                     |  |             | —  |       |  |       | —  |    |  |   | — |    |  |   | — |   |  |   | 346     |   |
| Stockholders'equity(deficit)                              |  |             | (190,029 | )     |  |       | (135,215 | )  |  |   | (38,258 | )  |  |   | 55,793  |   |  |   | 123,494 |   |
|                                                           |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Asdiscussed in "Item 7—Management's Discussionand Analysis of Financial Condition and Results ofOperations" and in Note 1 to the Consolidated FinancialStatements, certain restatements were made to amounts reported as costof service, sales and marketing and general and administrative in ourhistorical consolidated financial statements from April  1, 2002through September  30, 2004. The restatements increased our totaloperating expenses by approximately $1.4  million and $3.2million for the years ended December  31, 2003 and the nine-monthperiod ended December  31, 2002, respectively. Total liabilitiesand stockholders' equity as of December  31, 2003 and 2002have also been restated to reflect the impact of such adjustments. |

31

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|  |                                                                                                                                                                                                                             |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | Total liabilities increased by approximately$4.2  million and $3.0  million, respectively. Ouraccumulated deficit increased by approximately $4.6  million and$3.2  million as of December  31, 2003 and 2002,respectively. |

|     |                                                                                          |
|-----|------------------------------------------------------------------------------------------|
| (2) | On April  1, 2002 USUnwired acquired 100% of the outstanding common stock of theCompany. |

|     |                                                                                                                                                                 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Other operating expenses includesan asset abandonment charge of $12.1  million for the cell sitesand the related property leases of these abandoned cell sites. |

|     |                                                                                                                                                                                                                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | In 2002, the Company recognized an impairment ofgoodwill and intangible assets as a result of its impairment testing ofIWO in compliance with SFAS No.  142, "Goodwill andOther Intangible Assets" and SFAS No.  144,"Accounting for the Disposal of Long-LivedAssets." For a detailed discussion on this topic, pleasesee Note  3 to our accompanying consolidated financialstatements. |

|               |                                                                                     |
|---------------|-------------------------------------------------------------------------------------|
| Item 7.  | Management'sDiscussion and Analysis of Financial Condition and Results ofOperations |

You should read the following discussion inconjunction with "Selected Financial Data,""Risk Factors" and our consolidated financialstatements included elsewhere in this report. Some of the statements inthe following discussion are forward-looking statements. See"Cautionary Note Regarding Forward-LookingStatements."

Executive Overview

We area PCS affiliate of Sprint PCS, the personal communications servicesdivision of Sprint Corporation. We have the exclusive right to providedigital wireless personal communications services, or PCS, under theSprint PCS brand names in a territory that includes a total population,or POPs, of approximately 6.3 million as of December 31, 2004. Ourterritory covers upstate New York, including the markets of Albany,Syracuse and Ithaca, substantially all of New Hampshire and Vermont andportions of Massachusetts and Pennsylvania. Our territory is adjacentto the Sprint PCS markets in New York, Boston, Rochester and Hartford.As a PCS Affiliate of Sprint, we offer national and local calling plansdesigned by Sprint PCS. We market Sprint PCS products and servicesthrough a number of distribution outlets located in our territory,comprised of our own retail outlets, major national distributors,including Radio Shack and Best Buy, and our local third-partydistributors. At December 31, 2004, our network covered approximately4.8 million people in our territory, which we refer to as covered POPs,and we had approximately 237,400 subscribers.

We own and areresponsible for building, operating and managing the portion of theSprint PCS nationwide wireless network located in our territory. SprintPCS, along with the PCS Affiliates of Sprint, operates the largest100% digital, nationwide PCS wireless network in the UnitedStates. Our portion of the Sprint PCS network is designed to provide aseamless connection with the rest of the nationwide wireless network ofSprint PCS. Like Sprint PCS, we utilize Code Division Multiple Access,or CDMA, technology across our network.

We recognize revenuesfrom our subscribers for the provision of wireless telecommunicationsservices, proceeds from the sales of handsets and accessories throughchannels controlled by us and fees from Sprint and other wirelessservice providers and resellers when their customers roam onto ourportion of the PCS network of Sprint. Sprint retains 8% of allservice revenue collected from our subscribers (not including productssales and roaming charges billed to our subscribers) and all feescollected from other wireless service providers and resellers whentheir customers use our portion of the PCS network of Sprint. We reportthe amount retained by Sprint as an operating expense. In addition,Sprint bills our subscribers for taxes, handset insurance, equipmentand Universal Service Fund charges and other surcharges which we do notrecord. Sprint collects these amounts from the subscribers and remitsthem to the appropriate entity.

As part of our affiliationagreements with Sprint, we have contracted with Sprint to provide backoffice services such as customer activation, handset logistics,billing, customer care and network monitoring services. We initiallyelected to delegate the performance of these services to Sprint to takeadvantage of their economies of scale, to accelerate our build-out andmarket launches and to 

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lower our initial capital requirements Wecontinue to contract with Sprint for these services today and areobligated to continue using Sprint to provide these services throughDecember  31, 2006. The cost for these services is primarily on aper-subscriber or per-transaction basis and is recorded as an operatingexpense.

Restatement of Prior Years

We reviewed ouraccounting practices with respect to lease transactions. As a result ofthis review and in consultation with the audit committee of our boardof directors and our independent registered public accounting firm,Ernst & Young LLP, we determined that it was appropriate to restateour historical consolidated financial statements from April  1,2002 through September  30, 2004 (see Note 12 to the consolidatedfinancial statements for restated quarterly financial results ofoperations). Historically, when accounting for operating leases withescalation provisions, we recorded lease expense at the current ratespecified in the lease. We re-evaluated our position and determinedthat our operating lease expense should be recognized on astraight-line basis over the term of the lease (as defined in Statementof Financial Accounting Standards ("SFAS")No.  13, as amended) that is consistent with the depreciablelives of our assets associated with the leased property. Therestatement corrects errors relating to the recognition of lease rentexpense to recognize expense on a straight-line basis over the initialterm of the lease plus any future option renewal periods where there isreasonable assurance at the inception of the lease that the lease willbe renewed. The adjustments, as discussed below, relate solely toaccounting treatment of these lease payments and do not affect ourhistorical or future cash flows or the timing of payments under therelated leases.

As a result of these restatements, certainpreviously recorded amounts to our historical consolidated statementsof operations have been adjusted as follows (inthousands):

|                              |  |                       |         |             |  |            |         |         |  |        |         |         |  |  |
|------------------------------|--|-----------------------|---------|-------------|--|------------|---------|---------|--|--------|---------|---------|--|--|
| Year EndedDecember  31, 2003 |  | AsOriginally Reported |         | Adjustments |  | AsRestated |
| Cost ofservices              |  | $                     | 102,305 |        |  | $          | 1,091   |    |  | $      | 103,396 |    |
| Generalandadministrative     |  |                  | 12,045  |        |  |       | — |    |  |   | 12,045  |    |
| Salesandmarketing            |  |                  | 32,772  |        |  |       | 174     |    |  |   | 32,946  |    |
| Depreciationandamortization  |  |                  | 54,635  |        |  |       | 132     |    |  |   | 54,767  |    |
| Totaloperatingexpenses       |  |                  | 227,197 |        |  |       | 1,397   |    |  |   | 228,594 |    |
| Operatingloss                |  |                  | (55,348 | )      |  |       | (1,397  | )  |  |   | (56,745 | )  |
| Netloss                      |  |                  | (95,560 | )      |  |       | (1,397  | )  |  |   | (96,957 | )  |
|                              |

|                                                |  |                       |          |             |  |            |        |         |  |        |          |         |  |  |
|------------------------------------------------|--|-----------------------|----------|-------------|--|------------|--------|---------|--|--------|----------|---------|--|--|
| Periodfrom April  1, 2002 to December  31,2002 |  | As OriginallyReported |          | Adjustments |  | AsRestated |
| Cost of services                               |  | $                     | 86,404   |        |  | $          | 2,510  |    |  | $      | 88,914   |    |
| Generalandadministrative                       |  |                  | 7,688    |        |  |       | 59     |    |  |   | 7,747    |    |
| Salesandmarketing                              |  |                  | 30,797   |        |  |       | 412    |    |  |   | 31,209   |    |
| Depreciationandamortization                    |  |                  | 44,313   |        |  |       | 230    |    |  |   | 44,543   |    |
| Totaloperatingexpenses                         |  |                  | 580,242  |        |  |       | 3,211  |    |  |   | 583,453  |    |
| Operatingloss                                  |  |                  | (455,346 | )      |  |       | (3,211 | )  |  |   | (458,557 | )  |
| Netloss                                        |  |                  | (481,497 | )      |  |       | (3,211 | )  |  |   | (484,708 | )  |
|                                                |

CriticalAccounting Policies and Estimates

Our discussion and analysisof our financial condition and results of operations is based upon ourconsolidated financial statements, which have been prepared inaccordance with generally accepted accounting principles in the UnitedStates ("GAAP"). The preparation of thesefinancial statements requires us to make estimates and judgments thataffect the reported amounts of assets, liabilities, revenues andexpenses, and related disclosures of contingent assets and liabilities.On an on-going basis, we evaluate our estimates, including thoserelated to bad debts, activation fee revenues and related expense,determination of fair value of separate units for the application ofEmerging Issues Task Force ("EITF") IssueNo.  00-21, revenue recognition of contract cancellation and latefees, 

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inventory reserves, intangible assets andcontingencies. We base our estimates on our historical experience, thehistorical experience of Sprint and the historical experience of otherSprint affiliates and various other assumptions that we believe to bereasonable under the circumstances, the results of which form the basisfor making judgments about the carrying values of assets andliabilities that are not readily apparent from other sources. Actualresults may vary from these estimates under different assumptions orconditions.

We believe the following critical accountingpolicies affect our significant judgments and estimates used in thepreparation of our consolidated financial statements.

Relianceon Sprint PCS Processing

We rely on Sprint for much of ourfinancial reporting information including: revenues; commissions paidto national retailers; fees paid for customer care and billing; roamingrevenue and roaming expense on the Sprint and Sprint wireless affiliatenetwork; and the maintenance of accounts receivable, including cashcollections and the write off of customer balances that are notcollectible and the accuracy of our accounts receivable balance. Whereuncertainty exists regarding revenues, we do not record these revenuesuntil substantive information has been provided to ensure that suchrevenues have been earned. Based upon the timing of the informationreceived from Sprint PCS, we make certain assumptions that theinformation is accurate and that it is consistent with historicaltrends. We also rely upon the evaluation of internal controls asperformed by auditors engaged by Sprint PCS that were performed inaccordance with AICPA Statement on Auditing Standards (SAS) No.70.

Bad Debt Expense

We maintain allowances fordoubtful accounts for estimated losses resulting from the inability ofsubscribers to make payments. If the financial conditions of oursubscribers deteriorate, resulting in the subscribers' inabilityto make payments, additional allowances will be required.

Weestimate our allowance by examining the components of our revenue. Weestablish a general reserve of all accounts receivable that areestimated to be uncollectible. Our evaluation of the adequacy of theseamounts includes our own historical experience and discussions withSprint and other Sprint wireless affiliates.

RevenueRecognition

We earn revenue by providing access to and usage ofour network and sales of merchandise. Subscriber revenue consistsprimarily of a basic service plan (where the customer purchases apre-allotted number of minutes for voice and/or data transmission);airtime (which consists of billings for minutes that either exceed orare not covered by the basic service plan); long distance; and chargesassociated with travel outside our service area. Travel revenue isgenerated on a per-minute basis when a Sprint PCS subscriber outside ofour markets uses our service when traveling through our markets.Foreign roaming revenue is generated when a non-Sprint wirelesscustomer uses our service when traveling through our markets. We alsorecognize revenues through agreements that allows resellers to sellwireless services in our markets. We recognize revenues when amountsare considered to be earned under the respective service plans andcollection of such amounts is considered probable.

Sprintretains 8% of collected service revenues from subscribers basedin our service area, foreign roaming revenues and for revenue generatedunder our reseller agreements. The amount of affiliation fees retainedby Sprint PCS is recorded as a cost of services expense. Revenuesderived from the sale of handsets and accessories by us and fromcertain roaming services (outbound roaming and roaming revenues fromSprint and its wireless network partner subscribers) are not subject tothe 8% affiliation fee from Sprint.

Revenues from thesales of merchandise, primarily wireless handsets and accessories,represent a separate earnings process and are recognized at the time ofthe customer purchase. These revenues and related costs are included inmerchandise sales and cost of sales, respectively. We reduce recorded

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revenue for rebates and discounts given tosubscribers on wireless handsets sales in accordance with EITF IssueNo.  01-9 "Accounting for Consideration Given by aVendor to a Subscriber (Including a Reseller of the Vendor'sProducts)."

We recognize revenues from activationfees in accordance with EITF Issue No.  00-21. In May2003, the EITF modified its previous consensus to EITF 00-21 to clarifythe scope of Issue 00-21 and its interaction with other authoritativeliterature. As permitted under the modified consensus, we adopted thismodified consensus effective July  1, 2003 for all revenuearrangements entered into subsequent to June  30, 2003. EITF00-21 addresses the determination of whether an arrangement involvingmore than one deliverable contains more than one unit of accounting andhow the related revenues should be measured and allocated to theseparate units of accounting. In applying this guidance, separatecontracts with the same party, entered into at or near the same time,will be presumed to be a package, and the consideration will bemeasured and allocated to the separate units based on their relativefair values. We believe that the sale of handsets and future serviceunder contract should be accounted for as separate units under EITF00-21. As a result, the total consideration under these arrangements,including any related activation fees, is allocated between theseseparate units based on their relative fair values.

We recognizeonly a portion of contract cancellation fees billed to subscribers thatdisconnect service prior to fulfilling the contractual length ofservice, as there is significant uncertainty that all contractcancellation fees that are billed will be collected. We have verylimited information at a detail level sufficient to perform our ownevaluation and rely on Sprint historical trending to make ourestimates. If the collections on contract cancellation fees are lessthan that recognized, additional allowances may be required.

Werecognize only a portion of late fees billed to subscribers that failto pay their bills within the required payment period, as there is noassurance that all late fees that are billed will be collected. We havevery limited information at a detail level sufficient to perform ourown evaluation and rely on Sprint historical trends to make ourestimates. If the collections on late fees are less than thatrecognized, additional allowances may be required.

Inventoryand Inventory Reserves

Inventories consist of wireless handsetsand related accessories and are carried at cost. Cost is determined bythe moving weighted average method, which approximates the first-in,first-out method.

Accrued Commissions

We accruecommissions and other costs related to national retailers based upontheir sales to new subscribers. The national retailers receive both acommission and, because the handset is typically sold below cost, areimbursement for the difference between the sales price and the cost.We base our accruals on information provided by Sprint on subscriberadditions and recognize that there are typically timing differencesbetween the point of subscriber activation and the time that we areinvoiced for commissions by Sprint. We periodically and annuallyevaluate the adequacy of our accruals through analysis of historicalinformation and discussions with Sprint. Depending on the level ofsales and other factors, our estimates of the amounts accrued forcommissions and other costs owed to such retailers may requiremodification of our previous estimates.

Goodwill and IntangibleAssets Impairment Analysis

The excess of the purchase priceover the fair value of net assets acquired in purchase businesscombinations is recorded as goodwill. Goodwill is evaluated forimpairment on an annual basis or as impairment indicators areidentified, in accordance with SFAS No.  142,"Goodwill and Other Intangible Assets." On anongoing basis, we assess the recoverability of goodwill by determiningthe ability of the specific assets acquired to generate future cashflows sufficient to recover the unamortized goodwill over the remaininguseful life. We estimate future cash flows based on the currentperformance of the acquired assets and our business plan for thoseassets. Changes in business conditions, major customers or otherfactors could result in changes in those estimates. Goodwill determinedto be unrecoverable based on future cash flows is written-off in theperiod in which such determination is made.

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Basis of Presentation

Fordiscussion purposes, we have combined the three-month period ofJanuary  1, 2002 to March  31, 2002 (pre-acquisitionperiod) and the nine-month period of April  1, 2002 toDecember  31, 2002 (post-acquisition period) for comparison tothe year ended December  31, 2003. We have made certain operatingexpense reclassifications to the statements of operations for the yearsended December  31, 2003 and the period from April  1, 2002through December  31, 2002 to conform to the presentation of thefinancial statements for year ended December  31, 2004. Thisinformation was not available for our pre-acquisition periods and, assuch, we were unable to perform the reclassifications for thoseperiods. The reclassifications primarily relate to the manner in whichwe present certain Sprint-related transactions in the expensecategories cost of service, general and administrative, and sales andmarketing. The reclassifications did not impact total operatingexpense, operating loss or net loss. As a result of thesereclassifications, all periods presented may not be comparable. Wherethe information is not comparable, we explained the effect of thereclassifications in our discussion of the results of operations. Wequantified the impact of these reclassifications in Note 1 to ouraudited consolidated financial statements.

RecentDevelopments

As of December  31, 2004, we were in defaultof our former senior credit facility. Since March  2004, we hadfailed to make $13.8  million in principal payments due on ourformer senior credit facility and were not in compliance with therestrictive covenants under the credit facility. In September2004, one of the holders of our former senior credit facility electedto fund $1.8  million, which represented that holder'sremaining obligation of a draw request made in 2002. The holders of ourformer senior credit facility denied us access to the remaining$23.4  million in availability.

Additionally, we failed tomake scheduled semi-annual interest payments on our former senior notesdue July  15, 2004 and January  15, 2005, and the holdersof our former senior notes could have placed us in default of ourformer senior notes.

As a result, at December  31, 2004,we classified all outstanding indebtedness of both our former seniorcredit facility and former senior notes as a current liability.

As a result of liquidity challenges, our prior management reducedcapital expenditures for network expansion and abandoned theconstruction of cell sites that did not provide a sufficient level ofenhanced coverage. We recorded an asset abandonment charge of$12.1  million during 2003 for these abandoned cell sites andtheir related property leases. Included in this asset abandonmentcharge were cell sites that we were required to construct to meet thebuild-out requirements under our Sprint PCS management agreement.Failure to complete the build-out of our service area would have placedus in violation of our Sprint PCS management agreement. As a result,Sprint PCS could have declared us in default and taken action up to andincluding termination of our Sprint PCS management agreement. AtDecember  31, 2004, our construction in progress included$6.6  million primarily related to cell sites that we planned tocomplete, and we estimate that completion of these cell sites willrequire approximately $6.0  million in additional costs tocomplete construction and place these sites in operation.

InNovember  2004, IWO Escrow Company ("IWOEscrow") was formed to facilitate a reorganization of ourownership and capital structure. IWO Escrow was a special purposeentity that was neither a subsidiary nor an affiliate of either USUnwired or IWO.

On November  29, 2004, we entered into alock-up agreement with holders of approximately 68% of oursenior notes pursuant to which such holders agreed to vote in favor ofand support our proposed financial restructuring plan including amongother things, the filing by the debtors of a chapter  11 case,subject to the terms and conditions contained in the lock-up agreement.Following a pre-petition solicitation of votes from the holders of oursenior notes, we received the votes of the holders of approximately84.62% of our senior notes, constituting approximately99.2% of our senior notes held by those holders voting, insupport of our Plan of Reorganization.

On November  29,2004, IWO Escrow signed a letter of intent with Sprint PCS, contingenton the consummation of the reorganization, under which the partiesagreed to amend our affiliation 

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agreement with Sprint PCS. The amendmentswere retroactively effective to November  1, 2004 and subject tothe right of Sprint PCS to terminate the amendments in the event areorganization did not occur. The amendments include a provision forthe settlement of all outstanding disputed charges between us andSprint PCS that had been disputed by us prior to November  1,2004; the restructuring of costs that Sprint PCS charges us for certainservices, which would also be adjusted effective November  1,2004; an increase in the fixed reciprocal roaming rate, which rate willbe retroactive back to November  1, 2004; a reduction in ourcoverage area by approximately 100,000 people in certain portions ofNew Hampshire and Vermont; and, a modification to the service areabuild-out requirements.

On December  1, 2004, we commenceda solicitation of consents from our creditors to a pre-packaged plan ofbankruptcy.

On December  14, 2004, IWO Escrow offered$150.0  million in Senior Secured Floating Rate Notes due 2012and $140.0  million Principal Amount at Maturity 10.75%Senior Discount Notes due 2015 ("new notes").The proceeds from the new notes, approximately $232.7  million,were placed in escrow pending the consummation of the reorganizationand the merger of IWO Escrow and IWO.

On January  4, 2005,we filed voluntary petitions in the United States Bankruptcy Court forthe District of Delaware ("Bankruptcy Court")seeking relief under the provision of chapter  11 of title11 of the United States Code ("BankruptcyCode"). Upon filing the petition, we continued to operateour businesses as debtors-in-possession under the jurisdiction of theBankruptcy Court and in accordance with the applicable provision of theBankruptcy Code and the orders of the Bankruptcy Court.

OnFebruary  9, 2005, the Bankruptcy Court entered an orderconfirming our pre-packaged chapter  11 joint plan ofreorganization (the "Plan ofReorganization"). Pursuant to the Plan of Reorganization,on February  10, 2005, IWO Escrow was merged with and into IWO.As a result of the merger, we assumed all obligations of IWO Escrowunder the new notes. We repaid in full and terminated our existing$215.0  million senior credit facility. The $160.0  millionexisting senior notes were cancelled and exchanged for all of the newcommon stock of IWO, and the existing common stock of IWO, all of whichwas owned by US Unwired, was cancelled, with no distributions orpayments thereon.

In connection with the consummation of thePlan of Reorganization, we terminated our management agreement with USUnwired, dated April  1, 2004, as amended on January  3,2005 ("the management agreement"). Thetermination of the management agreement is subject to a four-monthtransition period during which US Unwired will continue to providetransitional management and restructuring services as defined in themanagement agreement.

Due to the uncertainty as ofDecember  31, 2004 of our reorganization being completed, theaccompanying audited consolidated financial statements do not reflectour reorganization.

Implementation of Fresh-StartAccounting

Pursuant to the American Institute of CertifiedPublic Accountants, or the AICPA, Statement of Position 90-7("SOP 90-7"), "FinancialReporting By Entities in Reorganization Under the BankruptcyCode", the accounting for the effects of ourreorganization occurred once the Plan of Reorganization was confirmedby the Bankruptcy Court and there were no remaining contingenciesmaterial to completing the implementation of the Plan ofReorganization. The fresh-start accounting principles of SOP 90-7provide, among other things, for us to determine the value to beassigned to the assets of reorganized IWO as of the confirmationdate.

Under fresh-start accounting, our reorganization valuewill be allocated to our assets based on their respective fair valuesin conformity with the purchase method of accounting for businesscombinations; any portion not attributed to specific tangible oridentified intangible assets will be treated as an indefinite-livedintangible asset referred to as "reorganization value inexcess of value of identifiable assets" and will berecorded on our balance sheet as goodwill. If there is any excess offair value of assets and liabilities over our confirmed enterprisevalue, such excess will be accounted for by reducing the carrying valueof all of our assets (except current assets) on a pro rata basis.

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Certain assets as well as relateddepreciation and amortization expense set forth on our financialstatements do not yet give effect to the adjustments that will resultfrom the adoption of fresh-start accounting and as a result, couldchange materially. Accordingly, our financial condition and results ofoperations from and after the effective date of the Plan ofReorganization will not be comparable to the financial condition orresults of operations reflected in our audited consolidated financialstatements included elsewhere in this report.

Liquidity andCapital Resources

We are a holding company whose onlysignificant assets are the outstanding capital stock of oursubsidiaries. Our only source of cash to pay our obligations aredistributions from our subsidiaries.

Cash Flows

As ofDecember  31, 2004, we had $33.8  million in cash andindebtedness that consisted of $215.0  million related to ourformer senior secured credit facility and $140.3  million relatedto our former senior notes for a total of $355.3million.

|                                                    |  |                       |        |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------------------|--|-----------------------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                               |  | YearEnded December31, |
|                                               |  | 2004                  |        | 2003    |  | 2002   |
|                                               |  | (Inthousands)         |
| Net cash used in operatingactivities               |  | $                     | (7,868 | )  |  | $      | (11,250 | )  |  | $      | (47,568 | )  |
| Netcash provided by investingactivities            |  |                  | 7,555  |    |  |   | 8,579   |    |  |   | 10,978  |    |
| Netcash provided by financingactivities            |  |                  | 1,816  |    |  |   | — |    |  |   | 68,204  |    |
| Netincrease (decrease) in cash and cashequivalents |  | $                     | 1,503  |    |  | $      | (2,671  | )  |  | $      | 31,614  |    |
|                                                    |

Netcash used in operating activities was $7.9  million in 2004. Thisprimarily consisted of our net loss of $54.8  million that waspartially offset by non-cash charges of $38.0  million indepreciation and amortization, a $7.1  million increase inworking capital and $1.8  million in debt discount accretion.Cash used in operations was $11.3  million for 2003 and$47.6  million for 2002.

Net cash provided by investingactivities was $7.6  million for 2004. This primarily consistedof $19.3  million in proceeds from restricted cash and$0.2  million in proceeds from the sale of assets that waspartially offset by $11.9  million in equipment purchases. Cashprovided by investing activities was $8.6  million in 2003 and$11.0  million in 2002.

Net cash provided by financingactivities was $1.8  million in 2004 and consisted primarily offunding to our former senior credit facility. Net cash provided byfinancing activities was $0 in 2003 and $68.2  million in2002.

Financing Transactions

On February  10,2005, in connection with the consummation of our Plan ofReorganization, IWO Escrow was merged with and into us, with us as thesurviving corporation. As a result of the merger, we assumed allobligations of IWO Escrow, including those under the new notesdescribed below.

On January  6, 2005, IWO Escrow issued$150.0  million aggregate principal amount of Senior SecuredFloating Rate Notes due 2012 for proceeds of $145.4  million, netof underwriting and escrow fees. Interest payments for the SeniorSecured Floating Rate Notes are due on each April  15,July  15, October  15 and January  15, commencing onApril  15, 2005. As a result of our assuming the obligationsunder the Senior Secured Floating Rate Notes, we are required to complywith certain covenants that restrict our ability to incur additionalindebtedness, pay dividends, make repayments on indebtedness that issubordinated to the Senior Secured Floating Rate Notes and to makecertain other restricted payments, incur certain liens, use proceedsfrom sales of assets, enter into business combination transactions(including mergers, consolidations and asset sales), enter intotransactions with affiliates and permit restrictions on the payment ofdividends by restricted subsidiaries. The indenture governing theSenior Secured Floating Rate Notes does not contain financialmaintenance 

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covenants. The Senior Secured Floating RateNotes rank equally in right of payment with any of our seniorindebtedness and senior in right of payment to any of our subordinatedindebtedness. All obligations under the Senior Secured Floating RateNotes are guaranteed on a senior, secured basis by us and each of ourexisting subsidiaries, and will be guaranteed by future subsidiariesexcept certain foreign and certain domestic subsidiaries. The SeniorSecured Floating Rate Notes and the guarantees are collateralized by afirst priority security interest in substantially all of ourassets.

On January  6, 2005, IWO Escrow issued$140.0  million aggregate principal amount at maturity of10.75% Senior Discount Notes due 2015 for proceeds of$80.1  million, net of underwriting and escrow fees. Interest onthe 10.75% Senior Discount Notes will accrue semi-annually untilJuly 15, 2010, in the form of an increase in the accreted value of the10.75% Senior Discount Notes. Thereafter, cash interest on the10.75% Senior Discount Notes will accrue and be payablesemi-annually in arrears on each January  15 and July  15.As a result of our assuming the obligations under the 10.75%Senior Discount Notes, we are required to comply with certain covenantsthat restrict our ability to incur additional indebtedness, paydividends, make repayments on indebtedness that is subordinated to theSenior Discount Notes and to make certain other restricted payments,incur certain liens, use proceeds from sales of assets, enter intobusiness combination transactions (including mergers, consolidationsand asset sales), enter into transactions with affiliates and permitrestrictions on the payment of dividends by restricted subsidiaries.The indenture governing the Senior Discount Notes does not containfinancial maintenance covenants. All obligations under the SeniorDiscount Notes are guaranteed on a senior basis by us and each of ourexisting subsidiaries, and will be guaranteed by future subsidiariesexcept certain foreign and certain domestic subsidiaries.

Undera registration rights agreement entered into as part of the offering ofthe new notes, we are required to (i)  file  a registrationstatement with the SEC within 120  days after January  6,2005, the date of the completion of the offering of the new notes,(ii)  use our reasonable best efforts to cause the registrationstatement to become effective within 210  days after January 6,2005, and (iii)  use our reasonable best efforts to complete theexchange offer within 30  business days after the effectivenessof the required registration statement. There are no credit ratingsrelated triggers in the indentures governing new notes that wouldimpact the cost of borrowing, annual amortization of principal orrelated indebtedness maturity. The indentures contain customary eventsof default, which, if triggered, could cause acceleration of the newnotes.

Credit Facility

On December  20, 1999, asenior secured credit facility was entered into by and among ourprincipal operating subsidiary, Independent Wireless One Corporation,as borrower, us, as guarantor, JPMorgan Chase Bank, N.A., asadministrative agent, and each of the other entities from time to timeparty thereto, as lenders. The credit facility was collateralized bysubstantially all of Independent Wireless One Corporation'stangible and intangible assets, including all of its issued andoutstanding shares. In connection with the consummation of our Plan ofReorganization and pursuant to a payoff letter dated February10, 2005, all of the liabilities, obligations and indebtedness owingunder the credit facility, which consisted of $215.0  million inrespect of principal outstanding under the credit facility plus accruedinterest thereon and fees and expenses, were paid in full. Upon paymentin full of the amounts specified in the payoff letter, the creditfacility was terminated, and the assets of IWO and Independent WirelessOne Corporation securing the credit facility were released.

Contractual Obligations

Our future contractual obligationsrelated to long-term debt and non-cancelable operating leases atDecember  31, 2004 were as follows, assuming acceleration of ourobligations in 2004:

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|                                       |  |                      |         |                 |  |          |         |          |  |              |         |        |  |        |         |        |  |        |         |        |  |  |
|---------------------------------------|--|----------------------|---------|-----------------|--|----------|---------|----------|--|--------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                  |  | Paymentsdue byperiod |
|                                  |  | Total                |         | Lessthan 1 Year |  | 1-3Years |         | 4-5Years |  | After 5Years |
|                                  |  | (Inthousands)        |
| Senior subordinated discount notes(1) |  | $                    | 160,000 |            |  | $        | 160,000 |     |  | $            | — |   |  | $      | — |   |  | $      | — |   |
| Seniorbank credit facility(2)         |  |                 | 215,000 |            |  |     | 215,000 |     |  |         | — |   |  |   | — |   |  |   | — |   |
| Totallong-term debt obligations(1)(2) |  |                 | 375,000 |            |  |     | 375,000 |     |  |         | — |   |  |   | — |   |  |   | — |   |
| Operatingleases                       |  |                 | 104,191 |            |  |     | 16,526  |     |  |         | 48,840  |   |  |   | 28,251  |   |  |   | 10,574  |   |
| TOTAL                                 |  | $                    | 479,191 |            |  | $        | 391,526 |     |  | $            | 48,840  |   |  | $      | 28,251  |   |  | $      | 10,574  |   |
|                                       |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Inconnection with our emergence from bankruptcy on February 10, 2005, wecancelled our existing $160.0 million senior notes and exchanged themfor all of the new common stock. All noteholders received their prorata portion of the newly issued 5,000,005 shares of commonstock. |

|     |                                                                                                                                                           |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | In connection with our emergencefrom bankruptcy on February 10, 2005, we repaid in full and terminatedour existing $215.0 million senior credit facility. |

Contractual Obligations Following the Reorganization

Ourcontractual obligations related to long-term debt and non-cancellableoperating leases from January 1, 2005 are as follows after giving proforma effect to ourreorganization:

|                                   |  |                      |         |        |  |           |         |                    |  |        |         |        |  |        |         |        |  |  |
|-----------------------------------|--|----------------------|---------|--------|--|-----------|---------|--------------------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                              |  | PaymentsDue ByPeriod |
|                              |  | Total                |         | 2005   |  | 2006-2008 |         | 2009 andthereafter |
|                              |  | (In thousands)       |
| Senior secured floating ratenotes |  | $                    | 150,000 |   |  | $         | — |               |  | $      | — |   |  | $      | 150,000 |   |
| Seniordiscountnotes               |  |                 | 140,000 |   |  |      | — |               |  |   | — |   |  |   | 140,000 |   |
| Operatingleases                   |  |                 | 104,191 |   |  |      | 16,526  |               |  |   | 48,840  |   |  |   | 38,825  |   |
| Totalcontractualobligations       |  | $                    | 394,191 |   |  | $         | 16,526  |               |  | $      | 48,840  |   |  | $      | 328,825 |   |
|                                   |

LiquidityFollowing Our Reorganization

Following our reorganization, weare dependent on available cash on hand and operating cash flow tooperate our business and fund our capital needs.

Our liquidityneeds include our obligations under our new notes and other long-termobligations. In addition, we expect to have significant capitalexpenditure requirements in future years. Our amended affiliationagreements with Sprint PCS requires us to construct and operate 103additional cell sites, 37 of which were completed in 2004, in ourterritory by 2008. We also expect to construct other sites to expandour capacity. Additionally, during the next four years we are requiredto make capital expenditures to upgrade base stations on a majority oftowers in our markets as a result of the expected obsolescence of theLucent Technologies mini-cell and micro-cell technology we employ onthe towers. Based on current pricing and other assumptions, we estimatethat we will be required to spend an aggregate of approximately $23.0million from 2005 to 2008 to upgrade our base stations. We expect thatduring 2005 our total capital expenditures will be approximately $21.0million, including an estimated $7.0 million for the construction of 29additional expansion sites. Management believes that our cash on handand cash from operations will be sufficient to fund needs for operatingcash and our capital expenditure program for the next 12 months.

Performance Measurements and Metrics

The wirelesstelecommunications industry uses terms such as subscriber additions,average revenue per user, churn and cost per gross addition asperformance measurements or metrics. None of these terms are measuresof financial performance under GAAP. When we use these terms, they maynot be comparable to similar terms used by other wirelesstelecommunications companies.

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|                                               |  |                       |         |         |  |        |         |         |  |        |         |         |  |  |
|-----------------------------------------------|--|-----------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                          |  | Yearended December31, |
|                                          |  | 2004                  |         | 2003    |  | 2002   |
| Subscribers                                   |  |                  |    |    |  |   |    |    |  |   |    |    |
| GrossAdditions                                |  |                  | 108,540 |    |  |   | 96,783  |    |  |   | 128,553 |    |
| NetAdditions                                  |  |                  | 22,400  |    |  |   | 13,915  |    |  |   | 45,868  |    |
| TotalSubscribers                              |  |                  | 237,411 |    |  |   | 215,011 |    |  |   | 201,096 |    |
| Churn(Monthly)                                |  |                  | 2.9     | %  |  |   | 3.0     | %  |  |   | 3.6     | %  |
| VirginMobile Subscribers (in our servicearea) |  |                  | 91,135  |    |  |   | 45,251  |    |  |   | — |    |
| AverageRevenue Per User,Monthly               |  |                  |    |    |  |   |    |    |  |   |    |    |
| IncludingRoaming                              |  | $                     | 65.55   |    |  | $      | 65.61   |    |  | $      | 71.38   |    |
| WithoutRoaming                                |  | $                     | 51.53   |    |  | $      | 51.40   |    |  | $      | 53.06   |    |
| CostPer GrossAddition                         |  | $                     | 381     |    |  | $      | 404     |    |  | $      | 343     |    |
| LicensedPOPs(Millions)                        |  |                  | 6.3     |    |  |   | 6.3     |    |  |   | 6.3     |    |
| CoveredPOPs(Millions)                         |  |                  | 4.8     |    |  |   | 4.7     |    |  |   | 4.6     |    |
| CellSites (Owned, Leased andLicensed)         |  |                  | 721     |    |  |   | 681     |    |  |   | 629     |    |
|                                               |

Subscribers

Gross additions refer to the total number of new subscribers addedduring the period. Net additions refer to the total number of newsubscriber additions during the period reduced by any subscribers thathave cancelled or terminated their service with us during this sameperiod.

The number of gross additions increased for 2004 ascompared to 2003 primarily as a result of our continuing marketingefforts to attract new subscribers and retain existing subscribers. Thenumber of net additions increased for 2004 as compared to 2003primarily as a result of a higher number of gross additions and lowerchurn.

The number of gross additions decreased for 2003 ascompared to 2002 primarily as a result of our marketing efforts totarget customers of good credit quality and the re-institution andincrease of deposits for certain credit challenged subscribers. Thenumber of net additions decreased for 2003 as compared to 2002primarily as a result of fewer gross additions.

Churn

Churn is the monthly rate of customer turnover expressed as apercentage of our overall average customers for the reporting period.Customer turnover includes both customers that elected voluntarily todiscontinue using our service and customers that were involuntarilyterminated from using our service because of non-payment. Churn iscalculated by dividing the sum of (i)  the number of customersthat discontinue service; (ii)  less those customersdiscontinuing their service within 30 days of their original activationdate; and, (iii)  adding back those customers that reactivatetheir service, by our overall average customers for the reportingperiod; and dividing the result by the number of months in the period.Churn decreased for 2004 as compared to 2003 and for 2003 as comparedto 2002 primarily as a result of a continuing improvement in the creditquality of our subscriber base.

Reseller Subscribers

Weparticipate in a reseller program in our service area through SprintPCS as part of the partnership between Sprint PCS and Virgin MobileUSA, LLC ("Virgin Mobile"). The agreementallows Virgin Mobile to sell prepaid wireless services and pay us foruse of our network on a per-minute basis. The number of resellersubscribers increased each year primarily as a result of marketing andsales efforts.

Subscriber and Roaming Revenue

Subscriber revenue consists primarily of a basic service plan (wherethe customer purchases a pre-allotted number of minutes for voiceand/or data transmission); airtime (which consists of billings

41

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for minutes that either exceed or are notcovered by the basic service plan); long distance; and chargesassociated with travel outside our service area.

Roaming revenueconsists primarily of Sprint PCS travel revenue and foreign roamingrevenue. Sprint PCS travel revenue is generated on a per-minute basiswhen a Sprint PCS subscriber outside of our markets uses our servicewhen traveling through our markets. Sprint PCS travel expense isgenerated on a per-minute basis when our subscribers travel outside ourmarket area and use the Sprint PCS network. Historically, our SprintPCS travel revenue exceeded our Sprint PCS travel expense. Foreignroaming revenue is generated when a non-Sprint PCS customer uses ourservice when traveling through our markets.

EffectiveJanuary  1, 2004, Sprint PCS reduced the reciprocal travel ratefor IWO from $0.058 per-minute in 2003 to $0.041 per-minute in 2004.For 2004, the reduction in the travel rate resulted in a decrease toour revenues of approximately $10.5  million, a reduction to ourexpenses of approximately $8.7  million and a reduction to ourcash flow of approximately $1.8  million. EffectiveJanuary  1, 2003, Sprint PCS reduced the reciprocal travel ratefor IWO from $0.10 per-minute in 2002 to $0.058 per-minute in 2003. For2003, the reduction in the travel rate resulted in a decrease to ourrevenues of approximately $18.4  million, a reduction to ourexpenses of approximately $16.2  million and a reduction to ourcash flow of approximately $2.2  million. Under the amendments toour Sprint PCS affiliation agreements, effective November  1,2004, our rate increased from $0.041 per-minute to $0.058 per-minuteuntil the end of 2006. Thereafter, any decrease in the rate would havea negative net effect to the extent our inbound travel continues toexceed our outbound travel.

Average Revenue per User

Average revenue per user ("ARPU") is theaverage monthly service revenue per subscriber and is calculated bydividing total subscriber revenue for the period by the average numberof subscribers during the period. We present ARPU excluding andincluding roaming revenue.

The increase in ARPU, excludingroaming, for 2004 as compared to 2003 was primarily a result of anincrease in data revenues, partially offset by our offering morecompetitive plans with more generous allotments of minutes. Thedecrease in ARPU, including roaming for 2004, as compared to 2003 wasprimarily a result of the reduction in the reciprocal travel rate asdiscussed above that was partially offset by higher data revenues.

The decrease in ARPU, excluding roaming, for 2003 as compared to2002 was primarily a result of our offering more competitive plans withmore generous allotments of minutes, partially offset by an increase indata revenues. The decrease in ARPU, including roaming for 2003, ascompared to 2002 was primarily a result of the reduction in thereciprocal travel rate as discussed above that was partially offset byan increase in data revenues.

Cost per Gross Addition

Cost per gross addition ("CPGA")summarizes the average cost to acquire new customers during thereporting period. CPGA is computed by adding sales and marketingexpenses and merchandise cost of sales and reducing the amount by therevenue from merchandise sales. The net amount is divided by the numberof total new subscriber gross additions for the period. The decrease inCPGA for 2004 as compared to 2003 was primarily as a result of anoverall decrease in selling and marketing expenses. The increase inCPGA for 2003 as compared to 2002 was primarily the result of anincrease in advertising expense and a lower number of gross subscriberadditions.

Resident Population/Service Area

Our servicearea comprises a population ("Licensed POPs")of approximately 6.3  million residents that was reduced byapproximately 0.1  million residents upon consummation of ourreorganization. When we use the term "CoveredPOPs", we refer to that portion of residents in ourservice area that have service available as a result of our networkbuild-out. The number of people in our service area does not representthe number of Sprint PCS subscribers that we expect to have in

42

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our service area. The increase in CoveredPOPs is the result of additional cell site towers("towers") that either we have constructedand own or where we have leased space on towers owned by others.

Results ofOperations

|                                                          |  |                       |         |            |  |            |         |         |  |        |          |         |  |  |
|----------------------------------------------------------|--|-----------------------|---------|------------|--|------------|---------|---------|--|--------|----------|---------|--|--|
|                                                     |  | Yearended December31, |
|                                                     |  | 2004                  |         | 2003       |  | 2002       |
|                                                     |  |                  |         | (Restated) |  | (Restated) |
|                                                     |  | (Inthousands)         |
| Revenues:                                                |  |
| Subscriber                                               |  | $                     | 139,870 |       |  | $          | 128,728 |    |  | $      | 113,086  |    |
| Roaming                                                  |  |                  | 38,062  |       |  |       | 35,574  |    |  |   | 39,044   |    |
| Merchandisesales                                         |  |                  | 8,873   |       |  |       | 7,047   |    |  |   | 8,258    |    |
| Otherrevenue                                             |  |                  | 448     |       |  |       | 500     |    |  |   | 44       |    |
| Totalrevenue                                             |  |                  | 187,253 |       |  |       | 171,849 |    |  |   | 160,432  |    |
| Expense:                                                 |  |                  |    |       |  |       |    |    |  |   |     |    |
| Costofservice                                            |  |                  | 98,541  |       |  |       | 103,396 |    |  |   | 106,446  |    |
| Merchandisecost ofsales                                  |  |                  | 18,031  |       |  |       | 13,361  |    |  |   | 13,096   |    |
| Generalandadministrative                                 |  |                  | 18,494  |       |  |       | 12,045  |    |  |   | 27,129   |    |
| Salesandmarketing                                        |  |                  | 32,341  |       |  |       | 32,946  |    |  |   | 39,728   |    |
| Depreciationandamortization                              |  |                  | 35,349  |       |  |       | 54,767  |    |  |   | 50,257   |    |
| Assetabandonmentcharge                                   |  |                  | — |       |  |       | 12,079  |    |  |   | —  |    |
| Impairmentofgoodwill                                     |  |                  | — |       |  |       | — |    |  |   | 214,191  |    |
| Impairmentof intangibleassets                            |  |                  | — |       |  |       | — |    |  |   | 188,330  |    |
| Totaloperatingexpense                                    |  |                  | 202,756 |       |  |       | 228,594 |    |  |   | 639,177  |    |
| Operatingloss                                            |  |                  | (15,503 | )     |  |       | (56,745 | )  |  |   | (478,745 | )  |
| Otherexpense:                                            |  |                  |    |       |  |       |    |    |  |   |     |    |
| Interestexpense, net of interest income and otherexpense |  |                  | (39,311 | )     |  |       | (40,212 | )  |  |   | (32,799  | )  |
| Netloss                                                  |  | $                     | (54,814 | )     |  | $          | (96,957 | )  |  | $      | (511,544 | )  |
|                                                          |

YearEnded December  31, 2004 compared to Year Ended December31, 2003.

Revenues

|                    |  |                       |         |            |  |        |         |        |  |  |
|--------------------|--|-----------------------|---------|------------|--|--------|---------|--------|--|--|
|               |  | YearEnded December31, |
|               |  | 2004                  |         | 2003       |
|               |  |                  |         | (Restated) |
|               |  | (Inthousands)         |
| Subscriberrevenues |  | $                     | 139,870 |       |  | $      | 128,728 |   |
| Roamingrevenues    |  |                  | 38,062  |       |  |   | 35,574  |   |
| Merchandisesales   |  |                  | 8,873   |       |  |   | 7,047   |   |
| Otherrevenues      |  |                  | 448     |       |  |   | 500     |   |
| Totalrevenues      |  | $                     | 187,253 |       |  | $      | 171,849 |   |
|                    |

Subscriberrevenues.    Total subscriber revenues were $139.9  millionfor 2004 as compared to $128.7  million for 2003, representing anincrease of $11.2  million. This was primarily the result of anincrease in basic service and airtime revenues as a result of ourincrease in the number of our subscribers and an increase in data usageas more subscribers use this service.

Roamingrevenues.    Roaming revenues were $38.1  million 2004 ascompared to $35.6  million for 2003, representing an increase of$2.5  million. This was primarily the result of an increase of$2.8  million in network usage due to non-Sprint PCS volume thatincluded resellers and an increase of $2.0  million in subscriberdata usage that was partially offset by a $2.3  million decreaseprimarily related to the decrease in the reciprocal travel rate asdiscussed above for non-IWO Sprint PCS subscribers using ournetwork.

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Merchandisesales.    Merchandise sales were $8.9  million for 2004 ascompared to $7.0  million for 2003, representing an increase of$1.9  million. This was primarily the result of an increase innew subscriber additions that was partially offset by higher discountsoffered to new subscribers. The cost of handsets typically exceeds theamount received from our subscribers because we subsidize the price ofhandsets to remain competitive in the marketplace.

OperatingExpenses

|                              |  |                       |         |            |  |        |         |        |  |  |
|------------------------------|--|-----------------------|---------|------------|--|--------|---------|--------|--|--|
|                         |  | YearEnded December31, |
|                         |  | 2004                  |         | 2003       |
|                         |  |                  |         | (Restated) |
|                         |  | (Inthousands          |
| Cost ofservice               |  | $                     | 98,541  |       |  | $      | 103,396 |   |
| Merchandisecost of sales     |  |                  | 18,031  |       |  |   | 13,361  |   |
| Generalandadministrative     |  |                  | 18,494  |       |  |   | 12,045  |   |
| Salesandmarketing            |  |                  | 32,341  |       |  |   | 32,946  |   |
| Depreciationand amortization |  |                  | 35,349  |       |  |   | 54,767  |   |
| Assetabandonmentcharge       |  |                  | — |       |  |   | 12,079  |   |
| Totaloperatingexpense        |  | $                     | 202,756 |       |  | $      | 228,594 |   |
|                              |

Costof service.    Cost of service was $98.5  million for 2004as compared to $103.4  million for 2003, representing a decreaseof $4.9  million. This was primarily the result of a $1.5million decrease in circuits expense relating to rate negotiations, a$1.8  million decrease in lease expense and a $1.5  milliondecrease in our outbound travel that was primarily related to theSprint reciprocal rate reduction.

Merchandise cost ofsales.    Merchandise cost of sales was $18.0  million for2004 as compared to $13.4  million for 2003, representing anincrease of $4.6  million that was primarily the result of anincrease in sales to new subscribers. The cost of handsets typicallyexceeds the amount received from our subscribers because we subsidizethe price of handsets to remain competitive in the marketplace.

General and administrative expenses.    General andadministrative expenses were $18.5  million for 2004 as comparedto $12.0  million for 2003, representing an increase of$6.5  million. This was primarily the result of a $1.9million increase in management fees charged by US Unwired that relatedto bonuses for achieving certain operating targets, an increase of$4.1  million in professional services in 2004 related to debtrestructuring, a $0.3  million increase in collection fees thatwas volume related and a $0.2 increase in other services. General andadministrative expenses include $8.2 million and $6.3 million inmanagement fees charged by US Unwired for 2004 and 2003, respectively.These expenses also include $8.2 million and $4.1 million related toprofessional services related to debt restructuring for 2004 and 2003,respectively.

Sales and marketing expenses.    Salesand marketing expenses were $32.3  million for 2004 as comparedto $32.9  million for 2003, representing a slight decrease of$0.6  million.

Depreciation and amortizationexpense.    Depreciation and amortization expense was$35.3  million for 2004 as compared to $54.8  million for2003, representing a decrease of $19.5  million. This wasprimarily a result of fully amortizing our subscriber base establishedas a result of our April  1, 2002 acquisition by US Unwired.

Asset abandonment charge.    As discussed below, in 2003 werecorded a $12.1  million write off of construction in progressand related lease expense due to abandoned cell site construction.

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OtherIncome/(Expense)

|                    |  |                       |         |         |  |        |         |         |  |  |
|--------------------|--|-----------------------|---------|---------|--|--------|---------|---------|--|--|
|               |  | YearEnded December31, |
|               |  | 2004                  |         | 2003    |
|               |  | (Inthousands)         |
| Interestexpense    |  | $                     | (39,722 | )  |  | $      | (41,029 | )  |
| Interestincome     |  |                  | 495     |    |  |   | 848     |    |
| Loss on assetsales |  |                  | (84     | )  |  |   | (31     | )  |
| Totalotherexpense  |  | $                     | (39,311 | )  |  | $      | (40,212 | )  |
|                    |

Interestexpense was $39.7  million for 2004 as compared to $41.0million for 2003, representing a decrease of $1.3  million. OnJuly  1, 2004, we paid all delinquent interest due on our formersenior secured credit facility. At the time of the payment, we and theholders of our former senior secured credit facility reached anagreement on the default interest calculation, and the decrease relatesto the manner in which default interest was calculated.

Interestincome was $0.5  million for 2004 as compared to $0.8million for 2003, representing a decrease of $0.3  million. Thedecrease was primarily due to less cash and cash equivalents availablefor investment.

Year Ended December  31, 2003 compared toYear Ended December  31, 2002.

Revenues

|                    |  |                       |         |            |  |        |         |        |  |  |
|--------------------|--|-----------------------|---------|------------|--|--------|---------|--------|--|--|
|               |  | YearEnded December31, |
|               |  | 2003                  |         | 2002       |
|               |  | (Restated)            |         | (Restated) |
|               |  | (Inthousands)         |
| Subscriberrevenues |  | $                     | 128,728 |       |  | $      | 113,086 |   |
| Roamingrevenues    |  |                  | 35,574  |       |  |   | 39,044  |   |
| Merchandisesales   |  |                  | 7,047   |       |  |   | 8,258   |   |
| Otherrevenues      |  |                  | 500     |       |  |   | 44      |   |
| Totalrevenues      |  | $                     | 171,849 |       |  | $      | 160,432 |   |
|                    |

Subscriberrevenues.    Total subscriber revenues were $128.7  millionfor 2003 as compared to $113.1  million for 2002, representing anincrease of $15.6  million. This was primarily the result of anincrease in subscribers.

Roaming revenues.    Roamingrevenues were $35.6  million 2003 as compared to $39.0million for 2002, representing a decrease of $3.4  million. Thiswas primarily the result of an increase of $14.2  million relatedto a higher volume of Sprint PCS subscribers traveling through ourservice area and $1.2  million generated by Virgin Mobile usage,offset by a decrease of $18.7  million related to a decrease inthe reciprocal travel rate as discussed above.

Merchandisesales.    Merchandise sales were $7.0  million for 2003 ascompared to $8.3  million for 2002, representing a decrease of$1.3  million. This was primarily the result of fewer subscriberadditions and higher discounts offered to new subscribers. The cost ofhandsets typically exceeds the amount received from our subscribersbecause we subsidize the price of handsets to remain competitive in themarketplace.

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OperatingExpenses

|                               |  |                       |         |            |  |        |         |        |  |  |
|-------------------------------|--|-----------------------|---------|------------|--|--------|---------|--------|--|--|
|                          |  | YearEnded December31, |
|                          |  | 2003                  |         | 2002       |
|                          |  | (Restated)            |         | (Restated) |
|                          |  | (Inthousands)         |
| Cost ofservice                |  | $                     | 103,396 |       |  | $      | 106,446 |   |
| Merchandisecost of sales      |  |                  | 13,361  |       |  |   | 13,096  |   |
| Generalandadministrative      |  |                  | 12,045  |       |  |   | 27,129  |   |
| Salesandmarketing             |  |                  | 32,946  |       |  |   | 39,728  |   |
| Depreciationand amortization  |  |                  | 54,767  |       |  |   | 50,257  |   |
| Assetabandonmentcharge        |  |                  | 12,079  |       |  |   | — |   |
| Impairment ofgoodwill         |  |                  | — |       |  |   | 214,191 |   |
| Impairmentof intangibleassets |  |                  | — |       |  |   | 188,330 |   |
| Totaloperatingexpense         |  | $                     | 228,594 |       |  | $      | 639,177 |   |
|                               |

Costof service.    Cost of service was $103.4  million for 2003as compared to $106.4  million for 2002, representing a decreaseof $3.0  million. This was primarily the result of a $3.6million decrease in bad debts, a $1.8  million decrease inproperty taxes, a $1.5  million decrease in labor related expenseand a $3.4  million decrease in roaming expense, offset by a$8.6  million increase in certain Sprint-related service bureauand other fees and expenses as a result of the reclassification asdiscussed above. The overall decrease in roaming expense consisted ofan increase of $12.5  million related to a higher volume of oursubscribers traveling though other Sprint PCS markets offset by adecrease of $16.1  million related to a decrease in thereciprocal travel rate as discussed above.

Merchandise costof sales.    Merchandise cost of sales was $13.4  millionfor 2003 as compared to $13.1  million for 2002, representing anincrease of $0.3  million. This was primarily the result of theadoption of EITF 00-21 partially offset by a lower number of handsetsales due to fewer subscriber additions. The cost of handsets typicallyexceeds the amount received from our subscribers because we subsidizethe price of handsets to remain competitive in the marketplace.

General and administrative expenses.    General andadministrative expenses were $12.0  million for 2003 as comparedto $27.1  million for 2002, representing a decrease of$15.1  million. This was primarily the result of a $5.7million decrease in certain Sprint related service bureau and otherfees and expenses as a result of the reclassification as discussedabove, a $6.6  million decrease in other general andadministrative expenses as a result of our acquisition by US Unwired,and a $2.0  million decrease in bad debts, offset by an increaseof $4.1  million in professional services in 2003 related to debtrestructuring. General and administrative expenses for 2002 alsoincluded $7.7  million of merger-related expenses.

Sales and marketing expenses.    Sales and marketingexpenses were $32.9  million for 2003 as compared to $39.7million for 2002, representing a decrease of $6.8  million. Thiswas primarily the result of a $2.4  million decrease inadvertising expense, a $2.9  million decrease in employeecommissions and independent agent commissions and handset subsidies anda $1.9  million decrease in payroll, offset by an increase of$0.6  million in other selling and marketing expenses.

Depreciation and amortization expense.    Depreciation andamortization expense was $54.8  million for 2003 as compared to$50.3  million for 2002, representing an increase of $4.5million. This was primarily the result of a $0.3  millionincrease in the amortization of intangible assets and a $4.5million increase in depreciation expense. Property and equipmentincreased to $206.2  million at December  31, 2003 from$205.5  million at December  31, 2002. Intangible assetswere unchanged at $77.3  million at December  31, 2003 andDecember  31, 2002.

Asset abandonmentcharge.    As discussed above, in 2003 we recorded a $12.1million write off of construction in progress and related lease expensedue to abandoned cell site construction.

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Impairment of Goodwill and IntangibleAssets.    As a result of the purchase accounting related to ouracquisition by US Unwired, we recorded the following intangibleassets:

|                            |  |               |         |        |  |  |
|----------------------------|--|---------------|---------|--------|--|--|
|                       |  | (Inthousands) |
| Acquired customerbase      |  | $             | 57,500  |   |
| Sprint managementagreement |  |          | 215,000 |   |
| Goodwill                   |  |          | 214,191 |   |
|                            |

Duringthe fourth quarter of 2002, we engaged, a nationally-recognizedvaluation firm to assist us in performing a fair value assessment ofour goodwill and other long-lived assets. Based on the results of theimpairment analysis, in 2002 we recorded impairment charges totaling$402.5  million for the impairment of goodwill and an intangibleasset that resulted from the acquisition by US Unwired.

USUnwired determined that we were to be considered a separate reportingunit under SFAS No.  142 as we constituted a separate businessfor which discrete financial information was available and managementregularly reviewed the operating results of this business. Thisdetermination was further supported as we had a separate senior bankcredit facility and separate senior notes (collectively referred to as"debt instruments"). Under the terms of thesedebt instruments, funds available under the debt instruments could onlybe used to finance our operations, and the funds available under the USUnwired debt instruments could only be used to finance the operationsof US Unwired.

The results of these impairment valuationsindicated that both goodwill and a significant portion of ourintangible assets were impaired. As a result, we recorded a goodwillimpairment of approximately $214.2  million and an impairment ofthe Sprint PCS management agreement intangible asset of $188.3million during the quarter ended December  31, 2002. The Sprintmanagement agreement was originally assigned a value of $215.0million and was being amortized using the straight-line method over 218months. The valuation analysis determined that the carrying amount ofour subscriber base was not impaired.

OtherIncome/(Expense)

|                    |  |                       |         |         |  |        |         |         |  |  |
|--------------------|--|-----------------------|---------|---------|--|--------|---------|---------|--|--|
|               |  | YearEnded December31, |
|               |  | 2003                  |         | 2002    |
|               |  | (Inthousands)         |
| Interestexpense    |  | $                     | (41,029 | )  |  | $      | (36,125 | )  |
| Interestincome     |  |                  | 848     |    |  |   | 3,326   |    |
| Loss on assetsales |  |                  | (31     | )  |  |   | — |    |
| Totalotherexpense  |  | $                     | (40,212 | )  |  | $      | (32,799 | )  |
|                    |

Interestexpense was $41.0  million for 2003 as compared to $36.1million for 2002, representing an increase of $4.9  million. Ouroutstanding debt was $351.7  million at December  31, 2003as compared to $350.2  million at December  31, 2002. Theincrease in interest expense resulted from all loans under the seniorbank credit facility, effective with the date of the defaultthereunder, bearing interest at a rate of 4.25-4.75 percent above theagent bank's prime rate.

Interest income was $0.8million for 2003 as compared to $3.3  million for 2002,representing a decrease of $2.5  million. The decrease wasprimarily due to less cash and cash equivalents available forinvestment.

Inflation

Some of our expenses, such asthose for marketing, wages and benefits, generally increase withinflation. However, we do not believe that our financial results havebeen, or will be, adversely affected by inflation in a materialway.

|                |                                                           |
|----------------|-----------------------------------------------------------|
| Item 7A.  | Quantitative and QualitativeDisclosures About Market Risk |

In the normal course of business,the Company's operations are exposed to interest rate risk on itscredit facility and any future financing requirements.

47

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At December  31, 2004, ouroutstanding debt instruments consisted of $160.0  million insenior notes and a $215.0  million draw against the existing$240  million senior credit facility. Interest on the existingsenior notes was fixed at 14% and was payable semi-annually onJanuary  15 and July  15 of each year. At December31, 2004, the market value of the existing senior notes wasapproximately $103.4  million.

Borrowings under our formersenior credit facility totaled $215.0  million at December31, 2004. These borrowings bear interest at a variable rate. A1% increase in interest rates in 2004 would have resulted in a$2.2  million increase in interest expense for the year endedDecember  31, 2004.

In connection with our emergence frombankruptcy on February 10, 2005, we cancelled our existing $160.0million senior notes and exchanged them for all of the new commonstock. All noteholders received their pro rata portion of the newlyissued 5,000,005 shares of common stock. In addition, we repaid in fulland terminated our existing $215.0 million senior credit facility.

Following our reorganization, our senior secured floating rate notesbear interest at a floating rate, under which a 1% increase ininterest rates for a year would result in a $1.5 million increase ininterest expense for the year. In the future, we may decide to hedgeour interest rate risk.

|               |                                            |
|---------------|--------------------------------------------|
| Item 8.  | FinancialStatements and Supplementary Data |

The financial statements andrelated financial information required by Item  8 are included inthis report beginning on page  F-1.

|              |                                                                                     |
|--------------|-------------------------------------------------------------------------------------|
| Item9.  | Changes in and Disagreements with Accountantson Accounting and Financial Disclosure |

None.

|               |                         |
|---------------|-------------------------|
| Item9A.  | Controls and Procedures |

Evaluation ofDisclosure Controls and Procedures.

We maintain disclosurecontrols and procedures that are designed to ensure that informationrequired to be disclosed by us in the reports filed under theSecurities Exchange Act of 1934, as amended, is recorded, processed,summarized and reported within the time periods specified in theSEC's rules and forms. Our management, including our ChiefExecutive Officer and Chief Financial Officer, conducted an evaluationof the effectiveness of the design and operation of our disclosurecontrols and procedures.

On March 8, 2005, our management and theAudit Committee of our Board of Directors concluded as of December 31,2004 that our financial statements for the fiscal periods endingDecember 31, 2002 and December 31, 2003 and the first three interimperiods of 2004 should be restated to correct certain errors relatingto accounting for operating leases and that such previously filedfinancial statements should no longer be relied upon. Ernst & YoungLLP, our independent registered public accounting firm, has advised usthat it concurs with our conclusion.

Our method of accountingfor operating leases did not comply with the requirements of SFAS No.13, Accounting for Leases and FASB Technical Bulletin No. 85-3,Accounting for Operating Leases with Scheduled Rent Increases.Historically, we have not assumed scheduled rent increases or theexercise of available renewal options in accounting for operatingleases. We reevaluated our accounting for operating leases and therelated useful lives for depreciating leasehold improvements followingpublication of a letter issued by the Office of the Chief Accountant ofthe SEC on February 7, 2005. In light of our investment in each cellsite, we have determined that the exercise of certain renewal optionswas reasonably assured at the inception of the leases. Accordingly, wehave corrected our accounting to recognize rent expense, on astraight-line basis, over the initial lease term and renewal periodsthat are reasonably assured.

Based on the Public CompanyAccounting Oversight Board's Auditing Standard No. 2, An Audit ofInternal Control Over Financial Reporting Performed in Conjunction Withan Audit of Financial 

48

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Statements, restatement of financialstatements in prior filings with the SEC is a strong indicator of theexistence of a "material weakness" in thedesign or operation of internal control over financial reporting.Although we are not an "accelerated filer"within the meaning of the rules implementing Section 404 of theSarbanes-Oxley Act of 2002 and therefore are not required to include inthis report management's assessment of the effectiveness of ourinternal control over financial reporting (as defined in Rules13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, asamended) as of December 31, 2004, management has concluded that,because we were required to restate our financial statements as aresult of the lease accounting error described above, a materialweakness existed in our internal control over financial reporting as ofthe date of this report and, to this extent, our disclosure controlsand procedures were not effective.

In connection with correctingour methodology of accounting for operating leases, we have institutedthe following procedures to remediate this material weakness:

|              |                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------|
| •  | complete an annual review of the leaseterms to verify appropriate number of "reasonablyassured" renewals; |

|              |                                                                                  |
|--------------|----------------------------------------------------------------------------------|
| •  | enhancesystematic controls around the calculation of deferred rent liability;and |

|              |                                                                                           |
|--------------|-------------------------------------------------------------------------------------------|
| •  | review new and/or modified leasearrangements to ensure appropriate accounting under GAAP. |

Changes in Internal Controls.

Except as set forth above,during the evaluation referred to above, we have identified no changein our internal control over financial reporting that occurred duringour last fiscal quarter that has materially affected, or is reasonablylikely to materially affect, our internal control over financialreporting.

|                |                   |
|----------------|-------------------|
| Item 9B.  | Other Information |

None.

49

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PARTIII

|                |                                                   |
|----------------|---------------------------------------------------|
| Item 10.  | Directors and Executive Officersof the Registrant |

The following information regardingDirectors, their occupations, employment history and directorships incertain companies is as reported by the respective directors andreflects the constitution of the Board of Directors post-reorganizationas of February  10, 2005:

Directors

Charles E.Bayless, 62, is the Chairman of the Board. He has been a directorof IWO since February 2005. He served as Chairman, President and ChiefExecutive Officer of Illinova and its wholly owned subsidiary IllinoisPower from July 1998 until his retirement in December 1999. He wasChairman, President and Chief Executive Officer of UniSource EnergyCorporation from 1992 to 1998. Mr.  Bayless served as a Directorof Illinova from 1998 until becoming a director of Dynegy Inc. upon theclosing of the Dynegy-Illinova merger in February 2000. Mr.Bayless also serves on the boards of directors of several energy andenergy-related technology companies, including True Pricing LLC, PatinaOil & Gas Corporation, Predict Power Inc., and ThermonCorporation.

Bret Cloward, 38, is President and ChiefExecutive Officer. He has been a director of IWO since February2005. He has over 10 years of operating experience with Sprint PCS,Sprint Affiliates, AT&T and McCaw Communications includingoperating responsibility for Sprint's market launch in theWashington, Oregon, and Las Vegas markets. Previously, Mr.Cloward served as the Senior Vice President of Sales and Marketing forIWO from July 2000 to December 2002 and President of ChristensenWholesale, from January 2003 to October 2004.

Carolyn F.Katz, 42, has been a director of IWO since February 2005. She hasbeen a consultant providing financial and strategic analysis fortelecommunications companies since December 2001. From May 2000 toOctober 2001, Ms.  Katz served as a principal of ProvidenceEquity Partners Inc., a private investment firm specializing in equityinvestments in telecommunications and media companies. From July 1984to April 2000, Ms.  Katz was employed by Goldman, Sachs &Co., most recently as a Managing Director and co-head of EmergingCommunications. Ms.  Katz currently serves on the board ofdirectors of NII Holdings, Inc. and American Tower Corp.

RyanL. Langdon, 32, has been a director of IWO since February 2005. Heis currently a Managing Director of AIG Global Investment Group'sHigh Yield Group, where he has been since 2002, serving as an analystin the telecommunications sector. Prior to joining AIGGIG, Mr.Langdon worked as a high yield telecommunications and cable analyst forABN AMRO and as an analyst with Pacholder Associates.

LowellW. Robinson, 56, has been a director of IWO since February 2005. Heis currently President of LWR Advisors, providing strategic andfinancial advisory consulting since 2004. Previously, he was SpecialCounsel to the President (interim CFO) of Polytechnic University from2002-2004; Senior Executive Vice President and Chief Financial Officerof HotJobs.com from 2000-2002 which he subsequently sold to YAHOO!. Inaddition, he has held senior financial positions at Kraft, Citigroupand Advo Inc. He also serves on the Board of Directors of InternationalWire Group where he chairs the Audit Committee. From 2002-2003, he wasChairman of both the Audit Committee and Special Independent Committeeof the Board of Edison Schools.

David P. Tomick, 53, hasbeen a director of IWO since February 2005. He was Chief FinancialOfficer of Spectrasite, Inc. from 1997 to 2004. From 1994 to 1997Mr.  Tomick was Chief Financial Officer of Masada Security, Inc.From 1988 to 1994 he was Vice President—Finance of Falcon CableTV where he was responsible for debt management, mergers andacquisitions, equity origination and investor relations. Prior to 1988,he managed a team of corporate finance professionals focusing on thecommunications industry for The First National Bank of Chicago.

Directors' Compensation

For fiscal 2005, directorswho are not employees shall receive an annual fee. The chairman of theBoard shall receive $40,000, the chairman of the Audit Committee shallreceive $35,000 and the 

50

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chairman of the Compensation Committee shallreceive $30,000. The remaining members of the Audit and CompensationCommittees shall receive $30,000 and $27,500, respectively. Inaddition, directors shall receive $1,500 for each Board meeting theyattend, $750 for each Board meeting in which they participatetelephonically, $1,000 for each committee meeting they attend and $500for each committee meeting in which they participate telephonically.Directors shall be reimbursed for reasonable out-of-pocket expensesincurred in connection with attending the meetings of the Board and itscommittees. As compensation for their commencement of providingservices as members of our Board during 2005 and thereafter,non-employee directors received a one-time grant of stock options withan exercise price equal to the fair market value of our common stock onthe date of grant, which vests over a period of three years. Thechairman of the Board received 3,889 stock options, the chairman of theAudit Committee received 3,334 stock options and the chairman of theCompensation Committee received 3,056 stock options. The remainingmembers of the Board received 2,778 stock options each.

BoardStructure and Committee Composition

We emerged from bankruptcyon February 10, 2005, and pursuant to our Plan of Reorganization, thefollowing individuals were elected to our Board of Directors. OnFebruary 11, 2005, we formed an Audit Committee and a CompensationCommittee, composed asfollows:

|                              |  |        |  |              |  |  |  |  |  |  |
|------------------------------|--|--------|--|--------------|--|--|--|--|--|--|
| NameofDirector               |  | Audit  |  | Compensation |
| **IndependentDirectors:**    |  |   |  |         |
| Charles E.Bayless(†)  |  |   |  | *            |
| CarolynF. Katz               |  | *      |  |         |
| Ryan L.Langdon               |  |   |  | *            |
| Lowell W.Robinson            |  |   |  | C            |
| David P.Tomick               |  | C      |  |         |
| **Non-IndependentDirector:** |  |
| BretCloward                  |  |   |  |         |
|                         |  |   |  |         |
|                              |

|  |
|--|
|  |  |
|  |

|   |                         |
|---|-------------------------|
| * | denotescommittee member |

|   |                     |
|---|---------------------|
| C | denotes Chairperson |

|            |                                           |
|------------|-------------------------------------------|
| (†) | denotes Chairman of the Board ofDirectors |

Executive Officers

Information regardingthe executive officers of IWO who are not directors is set forth below.Executive officers of IWO are elected to serve until they resign or areremoved, or are otherwise disqualified to serve, or until theirsuccessors are elected and qualified.

Richard Harris, 57,serves as our Vice President and Chief Financial Officer and has 18years of wireless experience. He has served as a consultant to thewireless industry for the past 10 years (1994-2004) during which heserved as CFO of IWO Holdings from the time of its initial launch ofoperations in January 2000 through May 2000. He has previously held theCFO position at Metrophone (1987-1992) and the CFO and COO positions atHorizon Cellular Telephone Company (1992-1994).

LawrenceDean, 41, serves as our Vice President of Engineering andTechnology. Mr.  Dean has over 20 years of experience leadingtechnical operations in the telecommunications industry with USUnwired, Sprint and NYNEX Mobile Communications and is responsible forthe planning and implementation of the build, capacity, upgrade andoperational requirements of the Sprint PCS network in all or parts ofNew York, Vermont, New Hampshire, Massachusetts and Pennsylvania.

Andrew DiNovo, 40, serves as our Vice President of Sales. Heis responsible for managing and operating the sales distributionnetwork. Mr.  DiNovo has over 17 years of sales and marketingleadership experience, including more than 12 years in wirelesstelecommunications with US Unwired, Sprint, Southwestern Bell andNYNEX.

51

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Bruce W. Sowalski, 53, serves asour Vice President of Marketing and Communications. He is responsiblefor marketing and communications management, public and investorrelations and the Sprint affiliate relationship. Mr. Sowalski has over18 years of marketing and communications experience, including 7 yearsin wireless communications with Sprint PCS (1996-1998), IndependentWireless One and US Unwired (1999-2002), and has served as a marketingand communications consultant for BWS Communications (2003-2004).

Michael E. Cusack, 41, is our Vice President, General Counseland Secretary. Mr.  Cusack has over ten years of legal experiencein the telecommunications industry including approximately five yearswith the Sprint PCS Affiliate program. He joined IWO in 2000 as a VicePresident of Legal and until February 2005, served as Assistant GeneralCounsel for US Unwired. Prior to joining IWO, Mr.   Cusack wasemployed by the law firm of Cooper, Erving, Savage, Nolan & Heller,LLP for seven years where he was managing partner of the firm'smunicipal and telecommunications practice groups.

|               |                        |
|---------------|------------------------|
| Item11.  | Executive Compensation |

ExecutiveCompensation

In connection with our emergence from bankruptcyon February 10, 2005, we hired a new chief executive officer and a newchief financial officer. Prior to this date, when our company was awholly owned subsidiary of US Unwired, we did not have any executivecompensation agreements. Please see "—EmploymentAgreements" for more information on executivecompensation.

Options/SAR Grants in Last Fiscal Year

There were no options to purchase our common stock granted for thefiscal year ended December 31, 2004. However, upon our emergence frombankruptcy on February 10, 2005, we granted options to our chiefexecutive officer, chief financial officer, certain other officers andboard members. Please see "Item 12. Security Ownership ofCertain Beneficial Owners and Management and Related StockholderMatters."

Employment Agreements

Employment Agreements with Bret Cloward and RichardHarris.    On February 10, 2005, in connection with theconsummation of our Plan of Reorganization described in Item 1 above,we appointed Mr. Cloward as our chief executive officer and Mr. Harrisas our chief financial officer. On February 11, 2005, we entered intoemployment agreements with each of Mr. Cloward and Mr. Harris with aninitial term of two years and one year, respectively. Pursuant to theemployment agreements, each of Mr. Cloward and Mr. Harris will:

|              |                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------|
| •  | earn an annual base salary of $250,000 andbe eligible for an annual bonus with a target set at 60% ofannual base salary; |

|              |                                                                                                                              |
|--------------|------------------------------------------------------------------------------------------------------------------------------|
| •  | be eligible toparticipate in the 2005 Equity Award Plan (our "EquityAward Plan"), the terms of which are described below;and |

|              |                                                                                                                   |
|--------------|-------------------------------------------------------------------------------------------------------------------|
| •  | receive an initial grant ofincentive stock options for shares of our new common stock under ourEquity Award Plan. |

Upon a termination of the employment ofeither of the executives by us without cause or by the executive for"good reason" (each as defined in theemployment agreements), each executive will receive a pro rata bonus.Mr. Cloward will receives salary continuation for 12 months and Mr.Harris will receive salary continuation for six months (increased to 24months and 12 months, respectively, if the termination occurs in the 12month period following a "change in control"(as defined in the employment agreements)).

52

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In addition, we will pay each executive a"retention bonus" upon the first to occurof:

|              |                   |
|--------------|-------------------|
| •  | February 11,2008, |

|              |                        |
|--------------|------------------------|
| •  | a change in control,or |

|              |                                                                                                                                                                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the date on which Mr. Cloward or Mr.Harris's employment, as applicable, is terminated due to theexecutive's death, by us due to the executive's disability,without cause or because of our decision to deliver a notice ofnon-renewal of the employment term or by the executive with goodreason. |

The retention bonus will be payable in cash orour common stock in an amount equal to the productof

|              |                                                                                          |
|--------------|------------------------------------------------------------------------------------------|
| •  | in the case of Mr. Cloward, 138,889,and in the case of Mr. Harris, 55,556, multiplied by |

|              |                                                                                                                                                                                                                                                                                                  |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the "vestedpercentage" (the product of 8.33% multiplied by thenumber of three-month anniversaries of February 11, 2005 that haveoccurred as of the date the retention bonus first becomes payable, or100% in the case of a change in control or a termination by uswithout cause), multiplied by |

|              |                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------|
| •  | theexcess of the fair market value of a share of our common stock on thepayment date over $18.56 (up to $5.44). |

The retentionbonus will be forfeited if the executive's employment isterminated by us for cause prior to the payment date.

Each ofMessrs. Cloward and Harris shall be able to participate in our employeebenefit plans and perquisite and fringe benefit programs on a basis noless favorable than the benefits and perquisites we provide to ourother senior executives. We also provide each executive with the use ofan automobile, for which we pay all operating expenses (includingmaintenance, gasoline and insurance) and with the use of an apartmentin Albany, New York, for which we will provide the executives with atax gross-up, if necessary. In addition, Mr. Cloward receivesreimbursement for expenses incurred for the sale of his residence inUtah and other costs of relocating to New York, including salescommissions, points and fees on a mortgage, legal fees, airfare for Mr.Cloward and his family and the movement of his household effects andother personal property, and for travel-related expenses pertaining tocommuting trips between Utah and Albany, New York until August 11,2005, as well as a tax gross-up for the reimbursements described inthis sentence.

The employment agreements contain certain othercustomary terms and conditions, including certain protections for eachof the executives upon a change in control (including, withoutlimitation, a golden parachute excise tax gross-up) and certainrestrictive covenants prohibiting competition with us during, and for aperiod of time after, employment with us.

Agreements withOther Executives.    We intend to enter into agreements with upto seven of our other executives. We expect the other agreements toprovide each executive with a severance payment in the event of atermination of the executive's employment by us without cause orby the executive for good reason (as described in the applicableemployment agreement) during the one-year period following a"change in control" (as defined in the otheremployment agreements). The severance payment should be equal to thesum of the applicable executive's annual base salary plus targetbonus and should be payable over the twelve month period following thetermination of the applicable executive's employment.

Andrew DiNovo.    Mr. DiNovo is our Vice President of Salesin our Albany, New York Headquarters. In addition to the severancepayment described above, the employment agreement for Mr. DiNovoprovides that the executive will receive a retention bonus upon thefirst to occur of:

|              |                   |
|--------------|-------------------|
| •  | February 11,2008, |

|              |                        |
|--------------|------------------------|
| •  | a change in control,or |

|              |                                                                                                                                             |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the date on which Mr. DiNovo'semployment is terminated due to Mr. DiNovo's death or disability(as determined by us) or by us without cause. |

53

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The retention bonus will be payablein cash or our common stock in an amount equal to the productof

|              |                       |
|--------------|-----------------------|
| •  | 27,778, multiplied by |

|              |                                                                                                                                                                                                                                                                                                                   |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the "vestedpercentage" (the product of 8.33% multiplied by thenumber of three-month anniversaries of February 11, 2005 that haveoccurred as of the date the retention bonus first becomes payable, or100% in the case of a change in control or a termination due todeath or permanent disability), multiplied by |

|              |                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------|
| •  | the excess of the fair market value of ashare of our common stock on the payment date over $18.56 (up to$5.44). |

The retention bonus will be forfeited if Mr.DiNovo's employment is terminated by us for cause prior to thepayment date or due to Mr. DiNovo's resignation prior to the datethe retention bonus first becomes payable.

2005 Equity AwardPlan

Pursuant to the Plan of Reorganization, our Equity AwardPlan became effective on February 10, 2005. Our Equity Award Plan wasapproved as part of our Plan of Reorganization by the Bankruptcy Courtand by claim holders who received common stock in connection with thePlan of Reorganization.

Eligibility and Types ofAwards.    Our Equity Award Plan provides for several forms ofincentive stock-based compensation awards to employees, directors andconsultants of IWO and our affiliates, including incentive stockoptions, nonqualified stock options, restricted stock, restricted stockunits, stock appreciation rights, stock bonuses and performancecompensation awards (collectively, the"awards").

PlanAdministration.    Our Equity Award Plan is administered by acommittee (the "committee") designated by ourboard, or if no committee has been designated, by our board. Thecommittee selects eligible executives, directors, employees andconsultants of IWO and our affiliates to participate in our EquityAward Plan. The committee also determines the number of shares of ourcommon stock covered by awards granted under our Equity Award Plan, theterms under which options may be exercised, the applicable vestingperiods, the exercise price of the options and other terms andconditions of the awards in accordance with the provisions of ourEquity Award Plan. Each award granted under our Equity Award Plan mustbe evidenced by an agreement between us and the participant.

Shares Available under Equity Award Plan.    Subject toadjustment for changes in capitalization, the maximum number of sharesof our common stock in respect of which awards may be granted under ourEquity Award Plan is 555,555 shares, and the maximum number of sharesof our common stock covered by options plus the number of stockappreciation rights granted to any one individual may not exceed350,000 shares during any calendar year. In addition, no more than350,000 shares of our common stock may be issued in payment ofperformance awards denominated in shares, or if the award is paid incash, the equivalent cash value thereof, during the applicableperformance period if the awards are intended to qualify as performancebased compensation.

Change in Control.    If weexperience a "change in control" (as definedin our Equity Award Plan), the committee may accelerate theexercisability of all of the outstanding options and stock appreciationrights and/or provide for the immediate expiration of any restrictedperiod relating to restricted stock awards or restricted stock units(which may include a waiver of any applicable performance goals).

Amendment and Termination.    Subject to particularlimitations specified in our Equity Award Plan, our board may amend,suspend or terminate our Equity Award Plan. Our Equity Award Plan willterminate no later than February 9, 2015, but any awards outstandingunder our Equity Award Plan on that date will remain outstanding inaccordance with their terms.

2005 Awards under our EquityAward Plan.    On February 11, 2005, awards of incentive stockoptions under our Equity Award Plan were made to Mr. Cloward and Mr.Harris to purchase 138,889 

54

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shares and 55,556 shares of our common stock,respectively, with a per-share exercise price equal to $24.00 peroption share. We entered into an incentive stock option agreement witheach of Mr. Cloward and Mr. Harris covering the option grant, providingthat each option grant vests as to 8.33% of the granted optionson the first three-month anniversary of February 11, 2005 and as to anadditional 8.33% of the options on each subsequent three-monthanniversary of that date. Therefore, the option grant will be100% vested on February 11, 2008, except that the unvestedoptions will vest on the date of termination of employment Mr. Clowardor Mr. Harris, as applicable, due to the executive's death ordisability or following a change in control. Upon termination of theemployment of Mr. Cloward or Mr. Harris, as applicable, for cause, boththe unvested and vested portions of the options will terminate on thedate of termination. The options expire on February 9, 2015.

Ourother executives received options to purchase an aggregate of82,780  shares of our common stock under nonqualified stockoption agreements entered into as of February 16, 2005, except that theunvested options will vest following a change in control. The optionsgranted to other executives generally vest as to 25% of theaward on each of the first four anniversaries of February 11, 2005. Ourdirectors also received grants of options to purchase our common stock.See "Item 10. Directors and Executive Officers of theRegistrant—Directors'Compensation."

55

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|               |                                                                                               |
|---------------|-----------------------------------------------------------------------------------------------|
| Item12.  | Security Ownership of Certain Beneficial Ownersand Management and Related Stockholder Matters |

The table belowsets forth, as of March  25, 2005, information with respect tothe beneficial ownership of IWO's common stockby:

|              |                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------|
| •  | each of the current directors andexecutive officers included in "Item  10. Directorsand Executive Officers"individually; |

|              |                                                                                                                |
|--------------|----------------------------------------------------------------------------------------------------------------|
| •  | each person who is knownto be the beneficial owner of more than 5% of any class orseries of capital stock; and |

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | alldirectors and executive officers as a group. |

The amounts andpercentages of common stock beneficially owned are reported on thebasis of regulations of the SEC governing the determination ofbeneficial ownership of securities. Under these rules, a person isdeemed to be a beneficial owner of a security if that person has orshares voting power, which includes the power to vote or to direct thevoting of such security, or investment power, which includes the powerto dispose of or to direct the disposition of such security. A personis also deemed to be a beneficial owner of any securities of which thatperson has a right to acquire beneficial ownership within 60days. Under these rules, more than one person may be deemed to be abeneficial owner of the samesecurities.

|                                                                        |  |                 |  |                     |  |  |  |  |  |  |
|------------------------------------------------------------------------|--|-----------------|--|---------------------|--|--|--|--|--|--|
| Nameof Beneficial Owner                                                |  | Number ofShares |  | Percentage of Class |
| Bret Cloward(1)                                                        |  | 11,569          |  | *                   |
| RichardHarris (2)                                                      |  | 4,628           |  | *                   |
| Larry Dean                                                             |  | 0               |  | *                   |
| AndrewDiNovo                                                           |  | 0               |  | *                   |
| Bruce W.Sowalski                                                       |  | 0               |  | *                   |
| Michael E.Cusack                                                       |  | 0               |  | *                   |
| Charles E. Bayless(3)                                                  |  | 58,258          |  | 1.2                 |
| Carolyn F.Katz                                                         |  | 0               |  | *                   |
| Ryan L.Langdon                                                         |  | 0               |  | *                   |
| Lowell W.Robinson                                                      |  | 0               |  | *                   |
| David P.Tomick                                                         |  | 0               |  | *                   |
| Accounts managed by AIGGlobal Investment Corp. (3)(4)                  |  | 2,552,813       |  | 51.1                |
| Funds managed byaffiliates of Ares Management LLC(5)                   |  | 400,001         |  | 8.0                 |
| Funds managed byEaton Vance Management or its affiliates (6)           |  | 468,750         |  | 9.4                 |
| All current directors andexecutive officers as a group (11 persons)(7) |  | 16,197          |  | *                   |
|                                                                        |

|  |
|--|
|  |  |
|  |

|   |              |
|---|--------------|
| * | Lessthan 1%. |

|     |                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------|
| (1) | Consists of shares of commonstock issuable upon the exercise of outstanding options exercisablewithin 60 days. |

|     |                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------|
| (2) | Consists of shares of commonstock issuable upon the exercise of outstanding options exercisablewithin 60 days. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | AIG Annuity InsuranceCompany, SunAmerica Life Insurance Company and The Variable AnnuityLife Insurance Company have irrevocably appointed Charles E. Bayless astheir proxy to represent and vote 58,258 shares of common stock of theCompany beneficially owned by them. The proxy requires Mr. Bayless tovote the subject shares in accordance with the votes of thestockholders of the Company other than controlled affiliates ofAmerican International Group, Inc. Mr. Bayless disclaims beneficialownership of the subject shares. |

|     |                                                                                                                                                                             |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | AmericanInternational Group, Inc. is the ultimate parent of AIG AnnuityInsurance Company, The Variable Annuity Life Insurance Company andSunAmerica Life Insurance Company. |

56

----

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | American International Group, Inc. is alsothe ultimate parent of AIG Global Investment Corp., which acts asinvestment advisor to AIG Annuity Insurance Company, SunAmerica LifeInsurance Company, The Variable Annuity Life Insurance Company, VALICCompany II – Strategic Bond Fund, SunAmerica Income Funds –High Yield Bond Fund, SunAmerica Series Trust – High Yield BondPortfolio, SunAmerica Income Funds – Strategic Bond Fund andVALIC Company II – High Yield Bond Fund (collectively, the"Accounts") in connection with thisinvestment. American International Group, Inc. or AIG Global InvestmentCorp., for the purposes of Rule 13d-3 promulgated under the ExchangeAct of 1934, as amended, may be deemed to own beneficially the sharesheld by the Accounts. The Global Investment Committee of AIG GlobalInvestment Corp., each member of which is described in AIG GlobalInvestment Corp.'s Form ADV last filed with the Securities andExchange Commission as of February 1, 2005, has the power to vote anddispose of the shares on behalf of the Accounts. American InternationalGroup, Inc. is headquartered at 70 Pine Street, New York, New York10038. AIG Global Investment Corp. is headquartered at 175 WaterStreet, New York, New York 10038. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (5) | Includes39,063 shares held directly by Ares Leveraged Investment Fund, L.P.("ALIF") and 360,938 shares held directly byAres Leveraged Investment Fund II, L.P. ("ALIFII"). ALIF, through its manager, Ares Management, L.P.,through Ares Management, L.P.'s general partner, Ares OperatingMember, LLC, has sole power to direct the voting and disposition of the39,063 shares held directly by ALIF. ALIF II, through its manager, AresManagement II, L.P., through Ares Management II, L.P.'s generalpartner, Ares Operating Member II, LLC, has sole power to direct thevoting and disposition of the 360,938 shares held directly by ALIF II.The business address for ALIF, Ares Management, L.P., Ares OperatingMember, LLC, ALIF II, Ares Management II, L.P. and Ares OperatingMember II, LLC, is c/o Ares Management LLC, 1999 Avenue of the Stars,Suite 1900, Los Angeles, CA 90067. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6) | Includes175,000 shares held by Boston Income Portfolio, 234,063 shares held byHigh Income Portfolio, 28,437 shares held by Eaton Vance Emerald HighYield Bond Fund, and 31,250 shares held by Diversified Investors HighYield Bond Fund (the "Funds"). Eaton VanceManagement or one of its investment advisory affiliates("Eaton Vance") acts as investment adviser toeach Fund. Under rules promulgated under the Securities Exchange Act of1934, Eaton Vance, due to certain voting and investment powers withrespect to the shares held by the Funds, may be deemed to beneficiallyown such shares. The principal business address for Eaton Vance is TheEaton Vance Building, 255 State Street, Boston, MA 02109. |

|     |                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------|
| (7) | Consists of shares of common stock issuable upon theexercise of outstanding options exercisable within 60days. |

|                |                                               |
|----------------|-----------------------------------------------|
| Item 13.  | Certain Relationships andRelated Transactions |

On December  20, 1999, the Companyand an affiliate of a former stockholder entered into a five-yearadvisory agreement whereby the Company was to receive consultingservices from the affiliate for a $5,000,000 fee. On March  31,2002 in connection with our acquisition by US Unwired, Inc., theremaining balance of $2.8  million was written-off as anoperating expense. There was no such amount in 2004 or 2003 or the ninemonths ended December  31, 2002.

In connection with theCompany's former senior credit facility, two participatingfinancial institutions were also, at the time, shareholders of theCompany. Interest expense incurred on their portion of debt outstandingfor the years ended December  31, 2004 and December  31,2003, the nine months ended December  31, 2002, and the threemonths ended March  31, 2002 amounted to $0, $1.7  million,$1.4  million and $0.4  million, respectively. Uponconsummation of our reorganization, all of the liabilities, obligationsand indebtedness owing under the former credit facility, whichconsisted of $215.0 million in respect of principal outstanding underthe credit facility plus accrued interest thereon and fees andexpenses, were paid in full.

The Company utilized the servicesof a law firm in which a partner of the law firm was a formerstockholder of IWO. On December  20, 1999, the Company enteredinto a three-year professional services agreement with its outsideGeneral Counsel/stockholder, whereby the General 

57

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Counsel/stockholder was to provide legalservices annually up to $400,000 and participate in the Company'sstock option program. On September  17, 2000 the Companyterminated the professional services agreement and replaced it with aone-year consulting agreement that provided for monthly payments of$10,000 and an annual bonus of up to $250,000. Legal fees incurredunder the professional services agreement/consulting agreement forthree months ended March  31, 2002 were approximately $0.2million. There were no such charges for the years ended December31, 2004 and December  31, 2003 and the nine months endedDecember  31, 2002.

Pursuant to the Plan ofReorganization, we entered into a registration rights agreement withaccounts managed by AIG Global Investment Corp. providing for theregistration of the common stock. The following is a summary of thematerial terms of that registration rights agreement.

Under theregistration rights agreement, the holders of our common stock that areparty to the agreement are entitled, subject to certain limitations anda customary "black-out" period, to certaindemand, incidental or piggyback and shelf registrations under theSecurities Act covering their shares of common stock. A demandregistration made prior to the Exchange Act Registration Date (asdefined in the registration rights agreement) can be made by (x) anyholder or (y) any holder (and any transferee thereof, subject tocertain limitations) who owns more than 50% of the aggregatenumber of the then outstanding Registrable Securities (as defined inthe registration rights agreement). On or after the Exchange ActRegistration Date, any holder (and any transferee thereof, subject tocertain limitations) can trigger a demand registration. In any case, weare not obligated to effect a demand registration if the anticipatedaggregate offering price to the public (net of underwriting commissionsand discounts) is less than $10.0 million.

We will pay all costsand expenses associated with each registration, including thereasonable fees and expenses of one counsel for the holders. Theholders will pay the costs of any underwriting discounts andcommissions, as well as any broker's commissions relating to theregistration. Each holder may assign its rights under the agreement inconnection with a transfer of its common stock provided that theassignee becomes a party to the registration rights agreement.

In connection with the offering of our new notes, accounts managedby AIG Global Investment Corp., funds managed by affiliates of AresManagement LLC and funds managed by Eaton Vance Management or itsaffiliates, agreed to purchase, under certain circumstances if ourSenior Discount Notes could not be otherwise sold in the offering, upto $60.0 million of such notes. Pursuant to such agreement, these threestockholders received an aggregate commitment fee of $1.2 million onFebruary 10, 2005, the date we consummated our Plan ofReorganization.

Prior to the Plan of Reorganization, US Unwiredwas the parent of a U.S. federal consolidated group that included IWOand its subsidiaries. As such, US Unwired and IWO filed consolidatedU.S. federal income tax returns. On February 16, 2005, IWO and itssubsidiaries entered into a tax sharing agreement with US Unwired inorder to equitably allocate the consolidated federal income taxliabilities of the consolidated group and any similar state and localtax liabilities between IWO and its subsidiaries, on the one hand, andthe remainder of the US Unwired group, on the other hand. The taxsharing agreement also addresses certain procedural taxmatters.

58

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|                |                                       |
|----------------|---------------------------------------|
| Item 14.  | PrincipalAccountant Fees and Services |

The following is a summary of thefees billed to IWO by Ernst & Young LLP for professional servicesrendered.

|                   |  |                       |         |        |  |        |         |        |  |  |
|-------------------|--|-----------------------|---------|--------|--|--------|---------|--------|--|--|
|              |  | Yearended December31, |
| FeeCategory       |  | 2004                  |         | 2003   |
| Auditfees         |  | $                     | 602,706 |   |  | $      | 281,794 |   |
| Audit-relatedfees |  |                  | — |   |  |   | 55,950  |   |
| Taxfees           |  |                  | 19,000  |   |  |   | 14,000  |   |
| All otherfees     |  |                  | — |   |  |   | — |   |
| Totalfees         |  | $                     | 621,706 |   |  | $      | 351,744 |   |
|                   |

Feesfor audit services include fees associated with the annual audit andthe reviews of the Company's quarterly reports on Form10-Q, including the required annual audit and reviews of quarterlyreports of Form  10-Q for IWO, and services that are normallyprovided by the independent auditor in connection with statutory andregulatory filings or engagements. Audit-related fees principallyinclude due diligence in connection with acquisitions, restructuringplans, accounting consultations, and employee benefit plan audits. Taxfees include tax compliance, tax advice and tax planning, includingproperty tax compliance services.

59

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PARTIV

|                |                                           |
|----------------|-------------------------------------------|
| Item 15.  | Exhibits and Financial StatementSchedules |

(a)    Documents incorporated by referenceor filed with this report

(1)    The requiredfinancial statements are included in this report beginning on pageF–1.

(2)    The required financial statementschedule is included in this report on page S-1. All other schedulesfor which provision is made in the applicable accounting regulations ofthe Securities and Exchange Commission are not required under therelated instructions or are inapplicable and therefore have beenomitted.

(3)    Listed below are the exhibits that arefiled or incorporated by reference as part of this report (according tothe number assigned to them in Item 601 of RegulationS-K):

|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  |  |
|---------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description ofExhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.1           |  | Orderof the Bankruptcy Court, dated February 9, 2005, confirming theCompany's Joint Plan of Reorganization, together with such JointPlan of Reorganization, as so confirmed (incorporated by reference toExhibit 2.1 to IWO Holdings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                                                                                                |
| 3.1           |  | Amended and Restated Certificateof Incorporation of IWO Holdings, Inc. (incorporated by reference toExhibit 3.1 to IWO Holdings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                                                                                                                                                                                                     |
| 3.2           |  | Amended and Restated By-Laws ofIWO Holdings, Inc. (incorporated by reference to Exhibit 3.2 to IWOHoldings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                                                                                                                                                                                                                          |
| 4.1           |  | Indenture, dated January 6, 2005,by and between IWO Escrow Company and U.S. Bank National Association(incorporated by reference to Exhibit 4.1 to IWO Holdings, Inc.'sForm 8-K dated February 14,2005).                                                                                                                                                                                                                                                                       |
| 4.2           |  | Supplemental Indenture, datedFebruary 10, 2005, by and among IWO Holdings, Inc., IndependentWireless One Corporation, Independent Wireless One Leased RealtyCorporation and U.S. Bank National Association (incorporated byreference to Exhibit 4.2 to IWO Holdings, Inc.'s Form 8-K datedFebruary 14, 2005).                                                                                                                                                                 |
| 4.3           |  | Indenture, datedJanuary 6, 2005, by and between IWO Escrow Company and U.S. BankNational Association (incorporated by reference to Exhibit 4.3 to IWOHoldings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                                                                                                                                                                       |
| 4.4           |  | Supplemental Indenture, datedFebruary 10, 2005, by and among IWO Holdings, Inc., IndependentWireless One Corporation, Independent Wireless One Leased RealtyCorporation and U.S. Bank National Association (incorporated byreference to Exhibit 4.4 to IWO Holdings, Inc.'s Form 8-K datedFebruary 14, 2005).                                                                                                                                                                 |
| 4.5           |  | Registration RightsAgreement, dated January 6, 2005, by and among IWO Escrow Company,Bear, Stearns & Co., Inc., Lehman Brothers Inc. and Merrill Lynch,Pierce, Fenner and Smith Incorporated and Joinder Agreement, datedFebruary 10, 2005, by and among IWO Holdings, Inc., IndependentWireless One Corporation and Independent Wireless One Leased RealtyCorporation (incorporated by reference to Exhibit 4.5 to IWO Holdings,Inc.'s Form 8-K dated February 14,2005). |
| 4.6           |  | Assumption Agreement, datedFebruary 10, 2005, by and among IWO Holdings, Inc., IndependentWireless One Corporation and Independent Wireless One Leased RealtyCorporation (incorporated by reference to Exhibit 4.6 to IWO Holdings,Inc.'s Form 8-K dated February 14, 2005).                                                                                                                                                                                                  |
|               |

60

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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  |  |
|---------------|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description ofExhibit                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.7           |  | Pledge and SecurityAgreement, dated January 6, 2005, by and between IWO Escrow Company andthe Collateral Trustee and Joinder Agreement, dated February 10, 2005,by and among IWO Holdings, Inc., Independent Wireless One Corporationand Independent Wireless One Leased Realty Corporation (incorporated byreference to Exhibit 4.7 to IWO Holdings, Inc.'s Form 8-K datedFebruary 14, 2005).                                                       |
| 4.8           |  | Collateral TrustAgreement, dated January 6, 2005, between IWO Escrow Company, U.S. BankNational Association, as trustee and the Bank of New York, ascollateral trustee and Joinder Agreement, dated February 10, 2005, byand among IWO Holdings, Inc., Independent Wireless One Corporation andIndependent Wireless One Leased Realty Corporation (incorporated byreference to Exhibit 4.8 to IWO Holdings, Inc.'s Form 8-K datedFebruary 14, 2005). |
| 10.1          |  | Sprint PCSManagement Agreement, dated as of February  9, 1999, amongIndependent Wireless One Corporation, Sprint Spectrum L.P. andWirelessCo, L.P., as amended by Addendum I, Addendum  II,Addendum  III, Addendum IV and Addendum V (incorporated byreference to Exhibit  10.3 to Amendment No.  1 to IWOHoldings, Inc.'s Registration Statement on Form S-1, RegistrationNo.  333-39746, filed on August  14,2000).                                |
| 10.2          |  | Sprint PCS Services Agreement,dated as of February  9, 1999, between Independent Wireless OneCorporation and Sprint Spectrum L.P., as amended by Addendum I,Addendum II, Addendum III, Addendum IV and Addendum V (incorporated byreference to Exhibit  10.5 to Amendment No.1 to IWO Holdings,Inc.'s Registration Statement on Form S-1, RegistrationNo.  333-39746, filed on August  14,2000).                                                     |
| 10.3          |  | Sprint Trademark and ServiceMark License Agreement, dated as of February  9, 1999, betweenIndependent Wireless One Corporation and Sprint Communications Company,L.P. (incorporated by reference to Exhibit  10.3 to IWO Holdings,Inc.'s and Independent Wireless One Corporation'sRegistration Statement on Form S-4, Registration No.  333-58902,filed on April  13, 2001).                                                                        |
| 10.4          |  | SprintSpectrum Trademark and Service Mark License Agreement, dated as ofFebruary  9, 1999, between Independent Wireless One Corporationand Sprint Spectrum L.P. (incorporated by reference to Exhibit10.4 to IWO Holdings, Inc.'s and Independent Wireless OneCorporation's Registration Statement on Form S-4, RegistrationNo.  333-58902, filed on April  13,2001).                                                                                |
| 10.5          |  | Consent and Agreement, dated asof December  17, 1999, between Sprint Spectrum L.P., SprintCommunications Company, L.P., WirelessCo, L.P. and The Chase ManhattanBank, as administrative agent (incorporated by reference to Form10-K of IWO Holdings, Inc. filed on March  26,2003).                                                                                                                                                                 |
| 10.6          |  | Management Agreement, dated asof April  1, 2004, by and among US Unwired Inc., IWO Holdings,Inc., Independent Wireless One Corporation and Independent Wireless OneLeased Realty Corporation (incorporated by reference to Exhibit10(i)(d) to IWO  Holdings, Inc.'s Form 10-Q for thequarterly period ended June 30,2004).                                                                                                                           |
| 10.7          |  | First Amendment to ManagementAgreement, dated as of January 3, 2005, by and among IWO Holdings,Inc., Independent Wireless One Corporation, Independent Wireless OneLeased Realty Corporation and US Unwired Inc. (incorporated byreference to Exhibit  10.1 to IWO Holdings, Inc.'s Form 8-Kdated January 5, 2005).                                                                                                                                  |
|               |

61

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|               |  |                                                                                                                                                                                                                                                                                                                               |  |  |  |  |
|---------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description ofExhibit                                                                                                                                                                                                                                                                                                         |
| 10.8          |  | Addendum V to SprintPCS Management Agreement and Sprint PCS Services Agreement, dated as ofDecember 17, 2004, restating certain sections and paragraphs in AddendaI through IV (incorporated by reference to Exhibit 10.1 to IWOHoldings, Inc.'s Form 8-K dated December 22,2004).                                            |
| 10.9          |  | Settlement Agreement and MutualRelease, by and among Sprint Spectrum L.P., Spring CommunicationsCompany L.P., WirelessCo, L.P., Independent Wireless One Corporationand IWO Holdings, Inc., dated as of December 16, 2004 (incorporated byreference to Exhibit 10.2 to IWO Holdings, Inc.'s Form 8-K datedDecember 22, 2004). |
| 10.10+        |  | EmploymentAgreement, dated February 11, 2005, by and between Bret Cloward and IWOHoldings, Inc. (incorporated by reference to Exhibit 10.1 to IWOHoldings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                           |
| 10.11+        |  | Employment Agreement, datedFebruary 11, 2005, by and between Richard Harris and IWO Holdings, Inc.(incorporated by reference to Exhibit 10.2 to IWO Holdings,Inc.'s Form 8-K dated February 14,2005).                                                                                                                         |
| 10.12+        |  | 2005 Equity Award Plan of IWOHoldings, Inc. (incorporated by reference to Exhibit 10.3 to IWOHoldings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                                                                               |
| 10.13+        |  | Form of Non-Qualified StockOption Agreement of IWO Holdings, Inc. (incorporated by reference toExhibit 10.4 to IWO Holdings, Inc.'s Form 8-K dated February 14,2005).                                                                                                                                                         |
| 10.14+        |  | Incentive Stock OptionAgreement, dated as of February 11, 2005, by and between IWO Holdings,Inc. and Bret Cloward (incorporated by reference to Exhibit 10.5 to IWOHoldings, Inc.'s Form 8-K dated February 14,2005).                                                                                                         |
| 10.15+        |  | Incentive Stock OptionAgreement, dated as of February 11, 2005, by and between IWO Holdings,Inc. and Richard Harris (incorporated by reference to Exhibit 10.6 toIWO Holdings, Inc.'s Form 8-K dated February 14,2005).                                                                                                       |
| 10.16+        |  | Registration Rights Agreement,dated February 10, 2005, among IWO Holdings, Inc. and certainaffiliates of AIG Global Investment Corp. (incorporated by reference toExhibit  10.7 to IWO Holdings, Inc.'s Form 8-K datedFebruary 14, 2005).                                                                                     |
| 10.17         |  | PurchaseAgreement, dated December 14, 2004, by and among IWO Escrow Company andBear, Stearns & Co., Inc., Lehman Brothers Inc. and Merrill Lynch,Pierce, Fenner and Smith Incorporated (incorporated by reference toExhibit 10.13 to IWO Holdings, Inc.'s Form 8-K dated February 14,2005).                               |
| 10.18         |  | Tax Sharing Agreement, dated asof February 16, 2005, by and among IWO Holdings, Inc., IndependentWireless One Corporation, Independent Wireless One Leased RealtyCorporation and US Unwired Inc. (incorporated by reference to Exhibit10.1 to IWO Holdings, Inc.'s Form 8-K/A dated February 17,2005).                        |
| 21.1          |  | Subsidiaries of IWO Holdings,Inc. (incorporated by reference to Exhibit  21.1 to IWO Holdings,Inc.'s Registration Statement on Form S-1, RegistrationNo.  333-39746, filed on June  21,2000).                                                                                                                                 |
| 31.1*         |  | Certification of ChiefExecutive Officer pursuant to Rule 13a-14(a)/15d-14(a) of theSecurities and Exchange Act of 1934, as adopted pursuant to Section 302of the Sarbanes-Oxley Act of2002.                                                                                                                                   |
| 31.2*         |  | Certification of Chief FinancialOfficer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities andExchange Act of 1934, as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002.                                                                                                                                  |
|               |

62

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|               |  |                                                                                                                                                 |  |  |  |  |
|---------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description ofExhibit                                                                                                                           |
| 32.1*         |  | Certification of ChiefExecutive Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
| 32.2*         |  | Certification of Chief FinancialOfficer pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of2002. |
|               |

|  |
|--|
|  |  |
|  |

|   |                |
|---|----------------|
| * | Filedherewith. |

|   |                                                                  |
|---|------------------------------------------------------------------|
| + | Indicates managementcontract or compensatory plan orarrangement. |

63

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IWOHOLDINGS, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATEDFINANCIALSTATEMENTS

|                                                                             |  |        |        |        |  |  |
|-----------------------------------------------------------------------------|--|--------|--------|--------|--|--|
|                                                                        |  | Page   |
| Reportof Independent Registered Public AccountingFirm                       |  |   | F-2    |   |
| Consolidated Balance Sheets atDecember  31, 2004 and2003                    |  |   | F-3    |   |
| For each of the threeyears in the period ended December  31,2004:           |  |   |   |   |
| Consolidated Statements ofOperations                                        |  |   | F-4    |   |
| ConsolidatedStatements of Stockholder's Equity(Deficit)                     |  |   | F-5    |   |
| Consolidated Statementsof Cash Flows                                        |  |   | F-6    |   |
| Notes to ConsolidatedFinancialStatements                                    |  |   | F-7    |   |
| Schedule  foreach of the three years in the period ended December  31,2004: |  |   |   |   |
| II – Valuation andQualifying Accounts andReserves                     |  |   | S-1    |   |
|                                                                             |

F-1

----

REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM

Board of DirectorsIWO Holdings Inc.and Subsidiaries

We have audited the accompanying consolidatedbalance sheets of IWO Holdings Inc. and subsidiaries as ofDecember  31, 2004 and 2003, and the related consolidatedstatements of operations, stockholders' equity (deficit), andcash flows for the years ended December  31, 2004 and 2003 andfor the periods from April  1, 2002 through December  31,2002 and January  1, 2002 through March  31, 2002. Ouraudits also included the financial statement schedule listed in theindex at Item 15(b). These financial statements and schedule are theresponsibility of the Company's management. Our responsibility isto express an opinion on these financial statements and schedule basedon our audits.

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (UnitedStates). Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements arefree of material misstatement. We were not engaged to perform an auditon the Company's internal control over financial reporting. Ouraudits included consideration of internal control over financialreporting as a basis for designing audit procedures that areappropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the Company's internal controlover financial reporting. Accordingly, we express no such opinion. Anaudit also includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, assessing theaccounting principles used and significant estimates made bymanagement, and evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis forour opinion.

In our opinion, the financial statements referredto above present fairly, in all material respects, the consolidatedfinancial position of IWO Holdings Inc. and subsidiaries atDecember  31, 2004 and 2003 and the consolidated results of theiroperations and their cash flows for the years ended December  31,2004 and 2003 and for the periods from April  1, 2002 throughDecember  31, 2002 and January  1, 2002 throughMarch  31, 2002, in conformity with U.S. generally acceptedaccounting principles. Also, in our opinion, the related financialstatement schedule, when considered in relation to the basic financialstatements taken as a whole, presents fairly in all material respectsthe information set forth therein.

As discussed in Note 3 to theconsolidated financial statements, effective January  1, 2002,the Company changed its method of accounting for goodwill.

Asdiscussed in Note 1 to the consolidated financial statements, theCompany has restated its financial statements for the year endedDecember  31, 2003 and the period from April  1, 2002through December  31, 2002.

/s/ ERNST & YOUNGLLPHouston, TexasMarch  11, 2005

F-2

----

IWOHOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Inthousands, except per sharedata)

|                                                                                                                     |  |                  |          |            |  |        |          |         |  |  |
|---------------------------------------------------------------------------------------------------------------------|--|------------------|----------|------------|--|--------|----------|---------|--|--|
|                                                                                                                |  | Asof December31, |
|                                                                                                                |  | 2004             |          | 2003       |
|                                                                                                                |  |             |          | (Restated) |
| **ASSETS**                                                                                                          |  |             |     |       |  |   |     |    |
| Currentassets:                                                                                                      |  |             |     |       |  |   |     |    |
| Cash and cashequivalents                                                                                            |  | $                | 33,840   |       |  | $      | 32,337   |    |
| Restrictedcash                                                                                                      |  |             | 80       |       |  |   | 19,358   |    |
| Subscriberreceivables, net of allowance for doubtful accounts of $2,077 and$2,228,respectively                      |  |             | 11,381   |       |  |   | 9,938    |    |
| Inventory                                                                                                           |  |             | 1,386    |       |  |   | 1,619    |    |
| Prepaidexpenses and otherassets                                                                                     |  |             | 7,721    |       |  |   | 5,867    |    |
| Totalcurrentassets                                                                                                  |  |             | 54,408   |       |  |   | 69,119   |    |
| Propertyand equipment,net                                                                                           |  |             | 150,796  |       |  |   | 165,511  |    |
| Intangibleassets, net                                                                                               |  |             | 17,331   |       |  |   | 25,642   |    |
| Notereceivable                                                                                                      |  |             | —  |       |  |   | 179      |    |
| Otherassets                                                                                                         |  |             | 13,643   |       |  |   | 16,540   |    |
| Totalassets                                                                                                         |  | $                | 236,178  |       |  | $      | 276,991  |    |
| **LIABILITIESAND STOCKHOLDER'SDEFICIT**                                                                             |  |             |     |       |  |   |     |    |
| Currentliabilities:                                                                                                 |  |             |     |       |  |   |     |    |
| Accountspayable                                                                                                     |  | $                | 24,277   |       |  | $      | 17,079   |    |
| Accruedexpenses                                                                                                     |  |             | 40,333   |       |  |   | 38,251   |    |
| Payableto relatedparty                                                                                              |  |             | 471      |       |  |   | 39       |    |
| Currentmaturities of long-termobligations                                                                           |  |             | 355,275  |       |  |   | 351,697  |    |
| Totalcurrentliabilities                                                                                             |  |             | 420,356  |       |  |   | 407,066  |    |
| Otherlong-termliabilities                                                                                           |  |             | 5,851    |       |  |   | 5,140    |    |
| Stockholder'sdeficit:                                                                                               |  |             |     |       |  |   |     |    |
| Common stock(nonvoting)—$.01 par value, 100,000 shares authorized, issued andoutstanding at December  31,2004 |  |             | 1        |       |  |   | 1        |    |
| Additional paid incapital                                                                                           |  |             | 446,449  |       |  |   | 446,449  |    |
| Retaineddeficit                                                                                                     |  |             | (636,479 | )     |  |   | (581,665 | )  |
| Totalstockholder'sdeficit                                                                                           |  |             | (190,029 | )     |  |   | (135,215 | )  |
| Totalliabilities and stockholder'sdeficit                                                                           |  | $                | 236,178  |       |  | $      | 276,991  |    |
|                                                                                                                     |

Seeaccompanying notes

F-3

----

IWO HOLDINGS, INC. ANDSUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Inthousands, except sharedata)

|                               |  |                                                                          |         |                                                           |  |                                                         |         |         |  |        |          |         |  |        |         |         |  |  |
|-------------------------------|--|--------------------------------------------------------------------------|---------|-----------------------------------------------------------|--|---------------------------------------------------------|---------|---------|--|--------|----------|---------|--|--------|---------|---------|--|--|
|                          |  |         Yearsended December  31, |         | For the Period fromApril  1, 2002 through December31,2002 |  | For the Period from January1, 2002 through March31,2002 |
|                          |  | 2004                                                                     |         | 2003                                                      |  |
|                          |  |                                                                     |         | (Restated)                                                |  | (Restated)                                              |         |    |
| Revenues:                     |  |                                                                     |    |                                                      |  |                                                    |    |    |  |   |     |    |  |   |    |    |
| Subscriber                    |  | $                                                                        | 139,870 |                                                      |  | $                                                       | 128,728 |    |  | $      | 87,121   |    |  | $      | 25,965  |    |
| Roaming                       |  |                                                                     | 38,062  |                                                      |  |                                                    | 35,574  |    |  |   | 32,030   |    |  |   | 7,014   |    |
| Merchandisesales              |  |                                                                     | 8,873   |                                                      |  |                                                    | 7,047   |    |  |   | 5,704    |    |  |   | 2,554   |    |
| Otherrevenue                  |  |                                                                     | 448     |                                                      |  |                                                    | 500     |    |  |   | 41       |    |  |   | 3       |    |
| Totalrevenue                  |  |                                                                     | 187,253 |                                                      |  |                                                    | 171,849 |    |  |   | 124,896  |    |  |   | 35,536  |    |
| Operatingexpenses:            |  |                                                                     |    |                                                      |  |                                                    |    |    |  |   |     |    |  |   |    |    |
| Costofservices                |  |                                                                     | 98,541  |                                                      |  |                                                    | 103,396 |    |  |   | 88,914   |    |  |   | 17,532  |    |
| Merchandisecost ofsales       |  |                                                                     | 18,031  |                                                      |  |                                                    | 13,361  |    |  |   | 8,519    |    |  |   | 4,577   |    |
| Generalandadministrative      |  |                                                                     | 18,494  |                                                      |  |                                                    | 12,045  |    |  |   | 7,747    |    |  |   | 19,382  |    |
| Salesandmarketing             |  |                                                                     | 32,341  |                                                      |  |                                                    | 32,946  |    |  |   | 31,209   |    |  |   | 8,519   |    |
| Depreciationandamortization   |  |                                                                     | 35,349  |                                                      |  |                                                    | 54,767  |    |  |   | 44,543   |    |  |   | 5,714   |    |
| Assetabandonmentcharge        |  |                                                                     | — |                                                      |  |                                                    | 12,079  |    |  |   | —  |    |  |   | — |    |
| Impairmentofgoodwill          |  |                                                                     | — |                                                      |  |                                                    | — |    |  |   | 214,191  |    |  |   | — |    |
| Impairmentof intangibleassets |  |                                                                     | — |                                                      |  |                                                    | — |    |  |   | 188,330  |    |  |   | — |    |
| Totaloperatingexpenses        |  |                                                                     | 202,756 |                                                      |  |                                                    | 228,594 |    |  |   | 583,453  |    |  |   | 55,724  |    |
| Operatingloss                 |  |                                                                     | (15,503 | )                                                    |  |                                                    | (56,745 | )  |  |   | (458,557 | )  |  |   | (20,188 | )  |
| Other(expense)income:         |  |                                                                     |    |                                                      |  |                                                    |    |    |  |   |     |    |  |   |    |    |
| Interestexpense               |  |                                                                     | (39,722 | )                                                    |  |                                                    | (41,029 | )  |  |   | (28,061  | )  |  |   | (8,064  | )  |
| Interestincome                |  |                                                                     | 495     |                                                      |  |                                                    | 848     |    |  |   | 1,910    |    |  |   | 1,416   |    |
| Losson sale ofassets          |  |                                                                     | (84     | )                                                    |  |                                                    | (31     | )  |  |   | —  |    |  |   | — |    |
| Totalotherexpense             |  |                                                                     | (39,311 | )                                                    |  |                                                    | (40,212 | )  |  |   | (26,151  | )  |  |   | (6,648  | )  |
| Netloss                       |  | $                                                                        | (54,814 | )                                                    |  | $                                                       | (96,957 | )  |  | $      | (484,708 | )  |  | $      | (26,836 | )  |
|                               |

Seeaccompanying notes

F-4

----

IWOHOLDINGS INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OFSTOCKHOLDER'S EQUITY (DEFICIT)(Inthousands)

|                                                                                                                              |  |                                 |         |                           |  |                                             |         |                 |  |                |         |                            |  |        |          |         |  |        |         |         |  |        |         |         |  |        |          |         |  |  |
|------------------------------------------------------------------------------------------------------------------------------|--|---------------------------------|---------|---------------------------|--|---------------------------------------------|---------|-----------------|--|----------------|---------|----------------------------|--|--------|----------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                                                                                                         |  | IWOHoldings, Inc. Capital Stock |         | AdditionalPaid-in Capital |  | Deficit Accumulated DuringDevelopment Stage |         | RetainedDeficit |  | Treasury Stock |         | Promissory NotesReceivable |  | Total  |
| **Balance atDecember  31,2001**                                                                                              |  | $                               | 377     |                      |  | $                                           | 184,305 |            |  | $              | (1,076  | )                     |  | $      | (127,021 | )  |  | $      | (598    | )  |  | $      | (194    | )  |  | $      | 55,793   |    |
| Netloss                                                                                                                      |  |                            | — |                      |  |                                        | — |            |  |           | — |                       |  |   | (26,836  | )  |  |   | — |    |  |   | — |    |  |   | (26,836  | )  |
| **Balanceat March  31,2002**                                                                                                 |  |                            | 377     |                      |  |                                        | 184,305 |            |  |           | (1,076  | )                     |  |   | (153,857 | )  |  |   | (598    | )  |  |   | (194    | )  |  |   | 28,957   |    |
| Adjustmentto the equity balances of IWO Holdings, Inc. as of March  31,2002 resulting from the acquisition by US UnwiredInc. |  |                            | (376    | )                    |  |                                        | 262,144 |            |  |           | 1,076   |                       |  |   | 153,857  |    |  |   | 598     |    |  |   | 194     |    |  |   | 417,493  |    |
| Netloss, asrestated                                                                                                          |  |                            | — |                      |  |                                        | — |            |  |           | — |                       |  |   | (484,708 | )  |  |   | — |    |  |   | — |    |  |   | (484,708 | )  |
| **Balanceat December  31, 2002, asrestated**                                                                                 |  |                            | 1       |                      |  |                                        | 446,449 |            |  |           | — |                       |  |   | (484,708 | )  |  |   | — |    |  |   | — |    |  |   | (38,258  | )  |
| Netloss, asrestated                                                                                                          |  |                            | — |                      |  |                                        | — |            |  |           | — |                       |  |   | (96,957  | )  |  |   | — |    |  |   | — |    |  |   | (96,957  | )  |
| **Balanceat December  31, 2003, asrestated**                                                                                 |  |                            | 1       |                      |  |                                        | 446,449 |            |  |           | — |                       |  |   | (581,665 | )  |  |   | — |    |  |   | — |    |  |   | (135,215 | )  |
| Netloss                                                                                                                      |  |                            | — |                      |  |                                        | — |            |  |           | — |                       |  |   | (54,814  | )  |  |   | — |    |  |   | — |    |  |   | (54,814  | )  |
| **Balanceat December  31,2004**                                                                                              |  | $                               | 1       |                      |  | $                                           | 446,449 |            |  | $              | — |                       |  | $      | (636,479 | )  |  | $      | — |    |  | $      | — |    |  | $      | (190,029 | )  |
|                                                                                                                              |

Seeaccompanying notes

F-5

----

IWO HOLDINGS INC. ANDSUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Inthousands)

|                                                                               |  |                          |         |                                                           |  |                                                          |         |         |  |        |          |         |  |        |         |         |  |  |
|-------------------------------------------------------------------------------|--|--------------------------|---------|-----------------------------------------------------------|--|----------------------------------------------------------|---------|---------|--|--------|----------|---------|--|--------|---------|---------|--|--|
|                                                                          |  | Yearsended December  31, |         | For the Period FromApril  1, 2002 through December31,2002 |  | For the Period FromJanuary  1, 2002 through March31,2002 |
|                                                                          |  | 2004                     |         | 2003                                                      |  |
| **Cashflows from operatingactivities**                                        |  |                     |         | (Restated)                                                |  | (Restated)                                               |         |    |
| Netloss                                                                       |  | $                        | (54,814 | )                                                    |  | $                                                        | (96,957 | )  |  | $      | (484,708 | )  |  | $      | (26,836 | )  |
| Adjustmentsto reconcile net loss to net cash used in operatingactivities:     |  |                     |    |                                                      |  |                                                     |    |    |  |   |     |    |  |   |    |    |
| Depreciationandamortization                                                   |  |                     | 37,975  |                                                      |  |                                                     | 57,392  |    |  |   | 47,688   |    |  |   | 6,732   |    |
| Assetabandonment                                                              |  |                     | — |                                                      |  |                                                     | 12,079  |    |  |   | —  |    |  |   | — |    |
| Impairmentofgoodwill                                                          |  |                     | — |                                                      |  |                                                     | — |    |  |   | 214,191  |    |  |   | — |    |
| Impairmentof intangibleassets                                                 |  |                     | — |                                                      |  |                                                     | — |    |  |   | 188,330  |    |  |   | — |    |
| Accretionof debtdiscount                                                      |  |                     | 1,762   |                                                      |  |                                                     | 1,491   |    |  |   | 1,022    |    |  |   | 106     |    |
| (Gain)Loss on sale of investmentsecurities                                    |  |                     | 84      |                                                      |  |                                                     | 31      |    |  |   | (29      | )  |  |   | — |    |
| Changesin operating assets andliabilities:                                    |  |                     |    |                                                      |  |                                                     |    |    |  |   |     |    |  |   |    |    |
| Subscriberreceivables                                                         |  |                     | (1,443  | )                                                    |  |                                                     | 1,906   |    |  |   | (1,554   | )  |  |   | (1,706  | )  |
| Inventory                                                                     |  |                     | 233     |                                                      |  |                                                     | 960     |    |  |   | 360      |    |  |   | 1,031   |    |
| Receivables/payablesfrom relatedparties                                       |  |                     | 542     |                                                      |  |                                                     | 516     |    |  |   | (320     | )  |  |   | — |    |
| Prepaidexpenses                                                               |  |                     | (2,226  | )                                                    |  |                                                     | (1,138  | )  |  |   | (1,092   | )  |  |   | 3,073   |    |
| Otherassets                                                                   |  |                     | 273     |                                                      |  |                                                     | (325    | )  |  |   | 1,581    |    |  |   | 1,209   |    |
| Accountspayable                                                               |  |                     | 6,733   |                                                      |  |                                                     | 2,502   |    |  |   | (9,044   | )  |  |   | 2,590   |    |
| Accruedexpenses                                                               |  |                     | 3,013   |                                                      |  |                                                     | 10,293  |    |  |   | 10,875   |    |  |   | (1,067  | )  |
| Netcash used in operatingactivities                                           |  |                     | (7,868  | )                                                    |  |                                                     | (11,250 | )  |  |   | (32,700  | )  |  |   | (14,868 | )  |
| **Cashflows from investingactivities**                                        |  |                     |    |                                                      |  |                                                     |    |    |  |   |     |    |  |   |    |    |
| Purchasesof property andequipment                                             |  |                     | (11,883 | )                                                    |  |                                                     | (13,354 | )  |  |   | (53,820  | )  |  |   | (29,144 | )  |
| Acquisitioncosts                                                              |  |                     | — |                                                      |  |                                                     | — |    |  |   | (191     | )  |  |   | — |    |
| Proceedsfrom the sale ofassets                                                |  |                     | 159     |                                                      |  |                                                     | 74      |    |  |   | —  |    |  |   | — |    |
| Proceedsfrom sales and maturities of investmentsecurities                     |  |                     | — |                                                      |  |                                                     | — |    |  |   | 66,967   |    |  |   | 6,000   |    |
| Releaseof restricted cash and U.S. Treasury obligations—held tomaturity |  |                     | 19,279  |                                                      |  |                                                     | 21,859  |    |  |   | 10,449   |    |  |   | 10,717  |    |
| Netcash provided by (used in) investingactivities                             |  |                     | 7,555   |                                                      |  |                                                     | 8,579   |    |  |   | 23,405   |    |  |   | (12,427 | )  |
| **Cashflows from financingactivities**                                        |  |                     |    |                                                      |  |                                                     |    |    |  |   |     |    |  |   |    |    |
| Proceedsfrom long-termdebt                                                    |  |                     | 1,816   |                                                      |  |                                                     | — |    |  |   | 43,184   |    |  |   | 40,000  |    |
| Paymentof long-termdebt                                                       |  |                     | — |                                                      |  |                                                     | — |    |  |   | —  |    |  |   | (15,000 | )  |
| Otherfinancingactivities                                                      |  |                     | — |                                                      |  |                                                     | — |    |  |   | 20       |    |  |   | — |    |
| Netcash provided by financingactivities                                       |  |                     | 1,816   |                                                      |  |                                                     | — |    |  |   | 43,204   |    |  |   | 25,000  |    |
| Netchange in cash and cashequivalents                                         |  |                     | 1,503   |                                                      |  |                                                     | (2,671  | )  |  |   | 33,909   |    |  |   | (2,295  | )  |
| Cashand cash equivalents at beginning ofyear                                  |  |                     | 32,337  |                                                      |  |                                                     | 35,008  |    |  |   | 1,099    |    |  |   | 3,394   |    |
| Cashand cash equivalents at end ofyear                                        |  | $                        | 33,840  |                                                      |  | $                                                        | 32,337  |    |  | $      | 35,008   |    |  | $      | 1,099   |    |
| **SupplementalCash FlowDisclosure:**                                          |  |                     |    |                                                      |  |                                                     |    |    |  |   |     |    |  |   |    |    |
| Cashpaid forinterest                                                          |  | $                        | 22,434  |                                                      |  | $                                                        | 28,052  |    |  | $      | 13,796   |    |  | $      | 13,280  |    |
| **Non-CashActivities**                                                        |  |                     |    |                                                      |  |                                                     |    |    |  |   |     |    |  |   |    |    |
| Propertyand equipment purchases in accountspayable                            |  | $                        | 1,524   |                                                      |  | $                                                        | 990     |    |  | $      | 2,474    |    |  | $      | 9,579   |    |
|                                                                               |

Seeaccompanying notes

F-6

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS December  31, 2004

1.    Description of Business and Summary of SignificantAccounting Policies

IWO Holdings, Inc.("IWO") is a PCS affiliate of Sprint, thepersonal communications services division of Sprint Corporation and hasthe exclusive right to provide digital wireless personal communicationsservices, or PCS, under the Sprint brand names in a territory thatincludes a total population, or POPs, of approximately 6.3million in a service area that covers upstate New York, including themarkets of Albany, Syracuse and Ithaca, substantially all of NewHampshire and Vermont and portions of Massachusetts andPennsylvania.

In April  2002 the Company was acquired byUS Unwired Inc. ("US Unwired"). Due to theevents as discussed in Note 2, on February  10, 2005, US Unwiredceased to have an equity interest in the Company.

The followingis a summary of significant accounting policies:

ConsolidationPolicy

The consolidated financial statements include theaccounts of IWO and its wholly owned subsidiaries. All significantintercompany balances and transactions are eliminated inconsolidation.

Restatement of Prior Years

The Companyreviewed its accounting practices with respect to lease transactions.As a result of this review and in consultation with the audit committeeof its board of directors and its independent registered publicaccounting firm, Ernst & Young LLP, the Company determined that itwas appropriate to restate its historical consolidated financialstatements from April  1, 2002, the date of the acquisition by USUnwired, through September  30, 2004 (see Note 12 to theConsolidated Financial Statements for restated quarterly financialresults of operations). Historically, when accounting for operatingleases with escalation provisions, the Company recorded lease expenseat the current rate specified in the lease. The Company re-evaluatedits position and determined that its operating lease expense should berecognized on a straight-line basis over the term of the lease (asdefined in Statements of Financial Accounting Standards("SFAS") No.  13,"Accounting for Leases," as amended) that isconsistent with the depreciable lives of the assets associated with theleased property. The adjustments, as discussed below, relate solely toaccounting treatment of these lease payments, and do not affect theCompany's historical or future cash flows or the timing ofpayments under the related leases.

As a result of theserestatements, certain previously recorded amounts to theCompany's historical consolidated statements of operations havebeen adjusted as follows (inthousands):

|                             |  |                      |         |             |  |            |         |         |  |        |         |         |  |  |
|-----------------------------|--|----------------------|---------|-------------|--|------------|---------|---------|--|--------|---------|---------|--|--|
| Yearended December 31, 2003 |  | AsOriginallyReported |         | Adjustments |  | AsRestated |
| Cost ofservices             |  | $                    | 102,305 |        |  | $          | 1,091   |    |  | $      | 103,396 |    |
| Generalandadministrative    |  |                 | 12,045  |        |  |       | — |    |  |   | 12,045  |    |
| Salesandmarketing           |  |                 | 32,772  |        |  |       | 174     |    |  |   | 32,946  |    |
| Depreciationandamortization |  |                 | 54,635  |        |  |       | 132     |    |  |   | 54,767  |    |
| Totaloperatingexpenses      |  |                 | 227,197 |        |  |       | 1,397   |    |  |   | 228,594 |    |
| Operatingloss               |  |                 | (55,348 | )      |  |       | (1,397  | )  |  |   | (56,745 | )  |
| Netloss                     |  |                 | (95,560 | )      |  |       | (1,397  | )  |  |   | (96,957 | )  |
|                             |

F-7

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

|                                                 |  |                      |          |             |  |            |        |         |  |        |          |         |  |  |
|-------------------------------------------------|--|----------------------|----------|-------------|--|------------|--------|---------|--|--------|----------|---------|--|--|
| Period from April  1, 2002 toDecember  31, 2002 |  | AsOriginallyReported |          | Adjustments |  | AsRestated |
| Cost ofservices                                 |  | $                    | 86,404   |        |  | $          | 2,510  |    |  | $      | 88,914   |    |
| Generalandadministrative                        |  |                 | 7,688    |        |  |       | 59     |    |  |   | 7,747    |    |
| Salesandmarketing                               |  |                 | 30,797   |        |  |       | 412    |    |  |   | 31,209   |    |
| Depreciationandamortization                     |  |                 | 44,313   |        |  |       | 230    |    |  |   | 44,543   |    |
| Totaloperatingexpenses                          |  |                 | 580,242  |        |  |       | 3,211  |    |  |   | 583,453  |    |
| Operatingloss                                   |  |                 | (455,346 | )      |  |       | (3,211 | )  |  |   | (458,557 | )  |
| Netloss                                         |  |                 | (481,497 | )      |  |       | (3,211 | )  |  |   | (484,708 | )  |
|                                                 |

Reclassifications

Certain reclassifications have been made to the Company'sconsolidated statements of operations as of December  31, 2003and for the period from April  1, 2002 to December  31,2002 from the amounts that had been previously reported. Thereclassifications were made in order to align the classification ofcertain expenses with other publicly traded Sprint affiliates and othercompanies in the PCS telecom industry. These expenses primarily consistof Sprint PCS related fees for back office services, bad debt expense,handset upgrades and certain wages, benefits and taxes. For the yearsended December  31, 2003 and for the period from April  1,2002 to December  31, 2002, this resulted in a decrease togeneral and administrative expense of $34.0  million and$31.0  million, respectively, offset by an increase to cost ofservice of $32.8  million and $30.1, respectively, and anincrease to sales and marketing expense of $1.2  million and$0.9  million, respectively. These reclassifications had noimpact on total operating expenses, operating loss or net loss for anyof the periods.

Cash Equivalents

The Company considersall highly liquid investments with original maturities of three monthsor less when purchased to be cash equivalents.

Inventory

Inventory consists of PCS telephones and related accessories and iscarried at cost. Cost is determined by the moving weighted averagemethod, which approximates the first-in, first-out method.

Property and Equipment

Property and equipment is stated atcost and depreciated on a straight-line basis over the estimated usefullives of the assets as follows:

|                                            |  |         |  |  |  |  |
|--------------------------------------------|--|---------|--|--|--|--|
|                                       |  | Years   |
| Buildings andbuildingimprovements          |  | 39      |
| Leaseholdimprovements                      |  | 10      |
| Facilities andequipment                    |  | 7 to 10 |
| Furniture, fixtures,computers and vehicles |  | 3 to7   |
|                                            |

Depreciation expense was approximately$26.9  million, $24.9  million, $15.9  million and$4.8  million for years ended December  31, 2004,December  31, 2003, the nine-month period ended December31, 2002 and the three-month period ended March  31, 2002.

Long Lived Assets

The Company assesses the impairment oflong-lived assets and goodwill in accordance with the provisions ofStatement of Financial Accounting Standards("SFAS") No.  142,"Goodwill and Other 

F-8

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

Intangible Assets", andNo.  144, "Accounting for the Impairment or Disposalof Long-Lived Assets". SFAS No.  144 requiresthat long-lived assets and certain identifiable intangibles be reviewedfor impairment whenever events or changes in circumstances indicatethat the carrying amount of an asset may not be recoverable.Recoverability of assets to be held and used is measured by acomparison of the carrying amount of an asset to future undiscountednet cash flows expected to be generated by the asset. If such assetsare considered to be impaired, the impairment to be recognized ismeasured by the amount by which the carrying amount of the assetsexceeds the fair value of the assets. Assets to be disposed of arereported at the lower of the carrying amount or fair value less coststo sell. SFAS No.  142 requires annual tests for impairment ofgoodwill and intangible assets that have indefinite useful lives andinterim tests when an event has occurred that more likely than not hasreduced the fair value of such assets.

Deferred FinancingCosts

Deferred financing costs include costs incurred inconnection with the issuance of the Company's long-termobligations. These costs are amortized over the terms of the relateddebt using the interest method. Accumulated amortization expense wasapproximately $7.2  million and $4.6  million atDecember  31, 2004 and 2003, respectively.

RevenueRecognition

The Company earns revenue by providing access toand usage of its network and sales of merchandise. Subscriber revenueconsists primarily of a basic service plan (where the customerpurchases a pre-allotted number of minutes for voice and/or datatransmission); airtime (which consists of billings for minutes thateither exceed or are not covered by the basic service plan); longdistance; and charges associated with travel outside our service area.Travel revenue is generated on a per-minute basis when a Sprintsubscriber outside of our markets uses the Company's service whentraveling through the Company's markets. Foreign roaming revenueis generated when a non-Sprint customer uses the Company'sservice when traveling through the Company's markets. The Companyrecognizes roaming revenue through an agreement that allows a resellerto sell prepaid wireless services in its markets. Revenues arerecognized when amounts are considered to be earned under therespective service plans and collection of such amounts is consideredprobable.

Sprint retains 8% of collected service revenuesfrom subscribers based in the Company's service area, foreignroaming and for revenue generated under its reseller agreement. Theamount of affiliation fees retained by Sprint PCS is recorded as a costof services expense. Revenues derived from the sale of handsets andaccessories by the Company and from certain roaming services (outboundroaming and roaming revenues from Sprint and its PCS network partnersubscribers) are not subject to the 8% affiliation fee fromSprint.

Revenues from the sales of merchandise, primarilywireless handsets and accessories, represent a separate earningsprocess and are recognized at the time of the customer purchase. Theserevenues and related costs are included in merchandise sales and costof sales, respectively. The Company reduces recorded revenue forrebates and discounts given to subscribers on wireless handsets salesin accordance with Emerging Issues Task Force("EITF") Issue No.  01-9"Accounting for Consideration Given by a Vendor to aSubscriber (Including a Reseller of the Vendor'sProducts)."

The Company recognizes revenues fromactivation fees in accordance with Emerging Issues Task Force("EITF") No.  00-21. In May2003, the EITF modified its previous consensus to EITF 00-21 to clarifythe scope of Issue 00-21 and its interaction with other authoritativeliterature. As permitted under the modified consensus, the Companyadopted this modified consensus effective July  1, 2003 for allrevenue arrangements entered into subsequent to June  30, 2003.EITF 00-21 addresses the determination of whether an arrangementinvolving more than one deliverable contains more than 

F-9

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

one unit of accounting and how the relatedrevenues should be measured and allocated to the separate units ofaccounting. In applying this guidance, separate contracts with the sameparty, entered into at or near the same time, will be presumed to be apackage, and the consideration will be measured and allocated to theseparate units based on their relative fair values. The Companybelieves that the sale of handsets and future service under contractshould be accounted for as separate units under EITF 00-21. As aresult, the total consideration under these arrangements, including anyrelated activation fees, is allocated between these separate unitsbased on their relative fair values.

Advertising Costs

Advertising costs are charged to expenses as incurred and wasapproximately $5.6  million, $7.6  million, $8.8million and $1.1  million for years ended December  31,2004, December  31, 2003, the nine-month period endedDecember  31, 2002 and the three-month period ended March31, 2002.

Commissions

Commissions are paid to theCompany's sales staff and local and national retailers for newsubscribers. The Company also reimburses certain retailers for thedifference between the cost of a handset and the sales price when thehandset is sold below cost. Because the new subscriber must meetcertain criteria, such as a minimum time period, commissions andhandset subsidies may be paid in periods subsequent to the actual datethe subscriber is activated. The Company reserves for commissions andhandset subsidies payable in future periods.

Income Taxes

The Company accounts for deferred income taxes using the asset andliability method, under which deferred tax assets and liabilities arerecognized for the differences between the financial statement carryingamounts of assets and liabilities and their respective tax basis.Deferred tax assets and liabilities are measured using enacted taxrates expected to apply to taxable income in the years in which thosetemporary differences are expected to be recovered or settled.

Stock Compensation Arrangements

The Company accounts forits stock compensation arrangements under the provisions of APB 25,"Accounting for Stock Issued to Employees."Had compensation expense for the Company's stock option plan beendetermined in accordance with SFAS No.  123,"Accounting for Stock Options," theCompany's net loss for the years ended December  31, 2004and December  31, 2003, the nine month period endedDecember  31, 2002 and the three month period endedDecember  31, 2002 would have been (in thousands):

|                                                                |  |             |         |         |  |                                             |         |                                             |  |        |          |         |  |        |         |         |  |  |
|----------------------------------------------------------------|--|-------------|---------|---------|--|---------------------------------------------|---------|---------------------------------------------|--|--------|----------|---------|--|--------|---------|---------|--|--|
|                                                           |  | December31, |         |
|                                                           |  | 2004        |         | 2003    |  | For theperiodApril 1, 2002toDecember31,2002 |         | For theperiodJanuary 1,2002toMarch  31,2002 |
| Net loss, asreported                                           |  | $           | (54,814 | )  |  | $                                           | (96,957 | )                                      |  | $      | (484,708 | )  |  | $      | (26,836 | )  |
| Addrecorded non-cash stockcompensation                         |  |        | — |    |  |                                        | — |                                        |  |   | —  |    |  |   | — |    |
| Lessnon-cash stock compensation in accordance with SFAS No.123 |  |        | — |    |  |                                        | — |                                        |  |   | —  |    |  |   | — |    |
| Proforma                                                       |  | $           | (54,814 | )  |  | $                                           | (96,957 | )                                      |  | $      | (484,708 | )  |  | $      | (26,836 | )  |
|                                                                |

F-10

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

Concentrations of Credit Risk

Financial instruments, which potentially expose the Company toconcentrations of credit risk, consist primarily of cash and cashequivalents and accounts receivable. The Company places its cash andtemporary cash investments with high credit quality financial servicescompanies.

Collectibility of subscriber receivables is impactedby economic trends in each of the Company's markets and theCompany has provided an allowance that it believes is adequate toabsorb losses from uncollectible amounts. The Company estimates itsallowance by examining the components of its revenue. The Companyestablishes a general reserve for all accounts recoverable that areestimated to be uncollectible. The evaluation of the adequacy of theseamounts is based on the Company's own historical experience anddiscussions with Sprint and other Sprint affiliates. When it isdetermined that a customer account is uncollectible, the balance iswritten off against the existing allowance.

Segments

The Company and its subsidiaries have been operated and areevaluated by management as a single operating segment in accordancewith the provisions of SFAS No.  131, "Disclosuresabout Segments of an Enterprise and RelatedInformation."

New Accounting Pronouncements

On December  16, 2004, the Financial Accounting StandardsBoard ("FASB") issued FASB StatementNo.  123 (revised 2004), Share-Based Payment, which is arevision of FASB Statement No.  123, "Accounting forStock Options." Statement 123R supersedes AccountingPrinciples Board ("APB") No.  25,"Accounting for Stock Issued to Employees"and amends FASB Statement No.  95, "Statement ofCash Flows." The Company intends to adopt FASB 123R onJuly  1, 2005 and has disclosed its impact to its auditedconsolidated financial statements in Significant Accounting Policies,Stock Compensation Arrangements, above.

In May2003, the FASB issued SFAS  No.  150,"Accounting for Certain Financial Instruments withCharacteristics of Liabilities and Equity," which iseffective at the beginning of the first interim period beginning afterJune  15, 2003. However, certain aspects of SFAS  150 havebeen deferred. SFAS  No.  150 establishes standards for theCompany's classification of liabilities in the financialstatements that have characteristics of both liabilities and equity.The adoption of SFAS 150 did not have a material impact on theCompany's financial position, results of operations, or cashflows.

In January  2003, the FASB issued FASBInterpretation No.  46, "Consolidation of VariableInterest Entities—An Interpretation of Accounting ResearchBulletin (ARB) No.  51" ("FIN46"). This interpretation clarifies how to identifyvariable interest entities and how a company should assess itsinterests in a variable interest entity to decide whether toconsolidate the entity. FIN 46 applies to variable interest entitiescreated after January  31, 2003, in which a company obtains aninterest after that date. Also, FIN 46 applies in the first fiscalquarter or interim period beginning after December  15, 2003, tovariable interest entities in which a company holds a variable interestthat it acquired before February  1, 2003. The adoption of thisinterpretation did not have a material effect on the Company'sfinancial position, results of operations or cash flows.

InNovember  2002, the FASB issued FASB Interpretation No.45, "Guarantor's Accounting and DisclosureRequirements for Guarantees, Including Indirect Guarantees ofIndebtedness of Others." This interpretation expands thedisclosures to be made by a guarantor about its obligations undercertain guarantees and requires that, at the inception of a guarantee,a guarantor recognize a liability for the fair value of the obligationundertaken in issuing the guarantee. The disclosure requirements areeffective immediately. As disclosed in Note 13, Independent WirelessOne Corporation has fully and unconditionally guaranteed theCompany's obligations under the IWO 14% senior notes. The

F-11

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

initial recognition and measurementprovisions of this interpretation are effective for guarantees issuedor modified after December  31, 2002. The adoption of the initialrecognition and measurement provisions of this interpretation did nothave a material effect on the Company's financial position,results of operations or cash flows.

2.    Liquidity andRecent Developments

As of December  31, 2004, the Companywas in default of its senior credit facility. Since March  2004,the Company has failed to make $13.8  million in principalpayments due on its senior credit facility and was not in compliancewith the restrictive covenants under its senior credit facility. InSeptember  2004, one of the holders of the Company's seniorcredit facility elected to fund $1.8  million, which representedthat holder's remaining obligation of a draw request made in2002. The holders of the Company's senior credit facility havedenied the Company access to the remaining $23.4  million inavailability.

Additionally, the Company has failed to makescheduled semi-annual interest payments on its senior notes dueJuly  15, 2004 and January  15, 2005 and the holders of theCompany's senior notes can place the Company in default of itssenior notes.

As a result, at December  31, 2004, theCompany classified all outstanding indebtedness of both its seniorcredit facility and senior notes as a current liability.

As aresult of liquidity challenges, the Company made the decision to reducecapital expenditures for network expansion and abandon the constructionof cell sites that did not provide a sufficient level of enhancedcoverage. The Company recorded an asset abandonment charge of$12.1  million during 2003 for these abandoned cell sites andtheir related property leases. Included in this asset abandonmentcharge were cell sites that it was required to construct to meet thebuild-out requirements under its Sprint PCS management agreement.Failure to complete the build-out of its service area will place theCompany in violation of its Sprint PCS management agreement. As aresult, Sprint PCS could declare the Company in default and take actionup to and including termination of its Sprint management agreement. AtDecember  31, 2004, the Company's construction in progressincluded $6.6  million primarily related to cell sites that theCompany planned to complete, and the Company estimates that completionof these cell sites will require approximately $6.0  million inadditional costs to complete construction and place these sites inoperation.

In November  2004, IWO Escrow Company("IWO Escrow") was formed to facilitate thereorganization of the Company and reorganize the ownership and capitalstructure of the Company. IWO Escrow is a special purpose entity thatis neither a subsidiary nor an affiliate of either US Unwired or theCompany.

On November  29, 2004, the Company entered into alock up agreement with holders of approximately 68% of theCompany's senior notes pursuant to which such holders agreed tovote in favor of and support the Company's proposed financialrestructuring plan including among other things, the filing by thedebtors of a chapter  11 case, subject to the terms andconditions contained in the lock up agreement. Following a pre-petitionsolicitation of votes from the holders of the Company's seniornotes, the Company received the votes of the holders of approximately89.9% of the Company's senior notes, constitutingapproximately 99.2% of the Company's senior notes held bythose holders voting, in support of the Company's Plan ofReorganization.

On November  29, 2004, IWO Escrow signed aletter of intent with Sprint PCS, contingent on the consummation of thereorganization of the Company, under which the parties agreed to amendthe Company's affiliation agreement with Sprint PCS. Theamendments were retroactively effective to November  1, 2004 andsubject to the right of Sprint PCS to terminate the amendments in theevent a reorganization of the Company did not occur. The amendmentsinclude a provision for the settlement 

F-12

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

of all outstanding disputed charges betweenthe Company and Sprint PCS that had been disputed by the Company priorto November  1, 2004; the restructuring of costs that Sprint PCScharges the Company for certain services, which would also be adjustedeffective November  1, 2004; an increase in the fixed reciprocalroaming rate, which rate will be retroactive back to November  1,2004; a reduction in the Company's coverage area by approximately100,000 people in certain portions of New Hampshire and Vermont; and, amodification to the service area build-out requirements.

OnDecember  1, 2004, the Company commenced a solicitation ofconsents from the Company's creditors to a pre-packaged plan ofbankruptcy.

On December  14, 2004, IWO Escrow offered$150  million in Senior Secured Floating Rate Notes due 2012 and$140  million Principal Amount at Maturity 10.75% SeniorDiscount Notes due 2015 ("new notes"). Theproceeds from the new notes, approximately $232.7  million, wereplaced in escrow pending the consummation of the reorganization of theCompany and the merger of IWO Escrow and the Company.

OnJanuary  4, 2005, the Company filed voluntary petitions in theUnited States Bankruptcy Court for the District of Delaware("Bankruptcy Court") seeking relief under theprovision of chapter  11 of title  11 of the United StatesCode ("Bankruptcy Code"). Upon filing thepetition, the Company's continued to operate its businesses asdebtors–in–possession under the jurisdiction of theBankruptcy Court and in accordance with the applicable provision of theBankruptcy Code and the orders of the Bankruptcy Court.

OnFebruary  9, 2005, the Bankruptcy Court entered an orderconfirming the Company's pre–packaged chapter  11joint plan of reorganization (the "Plan ofReorganization"). Pursuant to the Plan of Reorganization,on February  10, 2005, IWO Escrow was merged into the Company andthe Company issued approximately $232.7  million in aggregateproceeds of new notes. The Company repaid in full and terminated itsexisting $215.0  million senior credit facility. The$160.0  million senior notes were cancelled and exchanged for allof the new common stock of the Company and the existing common stock ofthe Company, all of which was owned by US Unwired, was cancelled, withno distributions or payments thereon.

In connection with theconsummation of the Plan of Reorganization, the Company terminated itsmanagement agreement with US Unwired, dated April  1, 2004, asamended on January  3, 2005 ("the managementagreement"). The termination of the management agreementis subject to a four–month transition period during which USUnwired will continue to provide transitional management andrestructuring services to the Company as defined in the managementagreement.

Due to the uncertainty as of December  31, 2004of this transaction being completed, the accompanying auditedconsolidated financial statements do not reflect the effects of theCompany's reorganization.

Implementation ofFresh–Start Accounting

Pursuant to the American Instituteof Certified Public Accountants, or the AICPA, Statement ofPosition  90–7 ("SOP 90-7"),"Financial Reporting By Entities in Reorganization Underthe Bankruptcy Code", the accounting for the effects ofthe reorganization will occur once the Plan of Reorganization isconfirmed by the Bankruptcy Court and there are no remainingcontingencies material to completing the implementation of the Plan ofReorganization. The fresh-start accounting principles of SOP 90-7provide, among other things, for the Company to determine the value tobe assigned to the assets of reorganized IWO Holdings as of theconfirmation date.

Under fresh-start accounting, theCompany's reorganization value will be allocated to its assetsbased on their respective fair values in conformity with the purchasemethod of accounting for business combinations; any portion notattributed to specific tangible or identified intangible assets will

F-13

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

be treated as an indefinite-lived intangibleasset referred to as "reorganization value in excess ofvalue of identifiable assets" and will be recorded on theCompany's balance sheet as goodwill. If there is any excess offair value of assets and liabilities over our confirmed enterprisevalue, such excess will be accounted for by reducing the carrying valueof all of the Company's assets (except current assets) on a prorata basis.

Certain assets as well as related depreciation andamortization expense set forth on the Company's financialstatements do not yet give effect to the adjustments that will resultfrom the adoption of fresh-start accounting and as a result, couldchange materially. Accordingly, the Company's financial conditionand results of operations from and after the effective date of the Planof Reorganization will not be comparable to the financial condition orresults of operations reflected in the Company's auditedconsolidated financial statements.

3.    Goodwill andIntangible Assets

The Company adopted SFAS No.  142,"Goodwill and Other Intangible Assets," andNo.  144, "Accounting for the Impairment or Disposalof Long-Lived Assets", on January  1, 2002.

The Company completed the first of the required impairment tests ofgoodwill and indefinite lived assets as of January  1, 2002 anddetermined that the adoption of this provision of the new rules had noimpact on the Company's financial statements at that time. As aresult of the impairment indicators discussed in Note 2 above, theCompany performed an impairment test of goodwill in the fourth quarterof 2002 and in the fourth quarter of 2003. In connection with thisimpairment tests, the Company also reviewed its long-lived assets forimpairment under SFAS No.  144.

The Company determinedthat US Unwired and IWO are considered to be separate reporting unitsas each constitutes a separate business for which discrete financialinformation is available and management regularly reviews the operatingresults of each of these businesses. This determination is furthersupported as each has separate debt instruments, which under the termsof these, funds available under the US Unwired debt instruments canonly be used by US Unwired to finance the operations of US Unwired, andthe funds available under the IWO debt instruments can only be used tofinance the operations of IWO Unwired.

The Company engaged anindependent national valuation firm to assist with the impairmentvaluation. As a result of the impairment valuation as of October31, 2002, management believed that both goodwill and a significantportion of IWO's intangible assets were impaired. As a result,IWO recorded a goodwill impairment of approximately $214.2million and an intangible asset impairment of $188.3  millionassociated with IWO's right to provide service under the SprintPCS management agreement in the quarter ended December  31, 2002.The Sprint PCS management agreement was originally assigned a value of$215.0  million and was being amortized using the straight-linemethod over 218 months. A similar valuation by the independent nationalvaluation firm as of October  31,  2004 and as ofOctober  31, 2003 indicated no additional impairment of goodwillor any of the Company's long-lived assets.

F-14

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

4.    Details of Certain Balance SheetAccounts

Additional information regarding certain balance sheetaccounts is presented below.

|                                      |  |               |         |        |  |        |         |        |  |  |
|--------------------------------------|--|---------------|---------|--------|--|--------|---------|--------|--|--|
|                                 |  | December31,   |
|                                 |  | 2004          |         | 2003   |
|                                 |  | (Inthousands) |
| Property andequipment                |  |          |    |   |  |   |    |   |
| Land                                 |  | $             | 168     |   |  | $      | 168     |   |
| Buildings                            |  |          | 5,842   |   |  |   | 5,842   |   |
| Leaseholdimprovements                |  |          | 3,548   |   |  |   | 3,519   |   |
| Facilitiesandequipment               |  |          | 196,124 |   |  |   | 184,981 |   |
| Furniture,fixtures, andvehicles      |  |          | 5,642   |   |  |   | 5,684   |   |
| Assetretirementobligation            |  |          | 313     |   |  |   | — |   |
| Constructioninprogress               |  |          | 6,626   |   |  |   | 6,026   |   |
|                                 |  |          | 218,263 |   |  |   | 206,220 |   |
| Lessaccumulateddepreciation          |  |          | 67,467  |   |  |   | 40,709  |   |
|                                 |  | $             | 150,796 |   |  | $      | 165,511 |   |
| Intangibleassets                     |  |          |    |   |  |   |    |   |
| Sprint PCSaffiliationagreement       |  | $             | 19,766  |   |  | $      | 19,766  |   |
| Subscriberbase                       |  |          | — |   |  |   | 57,500  |   |
|                                 |  |          | 19,766  |   |  |   | 77,266  |   |
| Lessaccumulatedamortization          |  |          | 2,435   |   |  |   | 51,624  |   |
|                                 |  | $             | 17,331  |   |  | $      | 25,642  |   |
| Otherassets                          |  |          |    |   |  |   |    |   |
| Deferred financingcosts              |  | $             | 18,582  |   |  | $      | 18,582  |   |
| Other                                |  |          | 2,281   |   |  |   | 2,553   |   |
|                                 |  |          | 20,863  |   |  |   | 21,135  |   |
| Lessaccumulatedamortization          |  |          | 7,220   |   |  |   | 4,595   |   |
|                                 |  | $             | 13,643  |   |  | $      | 16,540  |   |
| Accruedexpenses                      |  |          |    |   |  |   |    |   |
| Unearned revenueand customerdeposits |  | $             | 6,445   |   |  | $      | 6,115   |   |
| Accruedinterest                      |  |          | 21,468  |   |  |   | 19,766  |   |
| AccruedSprint PCSsettlements         |  |          | 5,384   |   |  |   | 4,155   |   |
| Other                                |  |          | 7,036   |   |  |   | 8,215   |   |
|                                 |  | $             | 40,333  |   |  | $      | 38,251  |   |
|                                      |

5.    AssetRetirement Obligations

The Company's network is primarilylocated on leased property, and, in certain cases, the Company hascertain contractual obligations, principally related to its lease ofspace on towers, that fall within the scope of SFAS No.  143,"Accounting for Asset RetirementObligations". These obligations upon lease terminationprimarily include certain remediation of leased tower space and land onwhich the Company's network equipment is located and may includethe repair of the towers, the removal of fencing that protects the basestation and the concrete pad on which the base station is mounted,testing soil for remediation and the removal of cables and otherequipment. In addition, the Company has leases related to switch sites,retail and administrative locations subject to the provisions

F-15

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

of SFAS No.  143. Remediation upontermination may include the removal of fixtures and equipment anddelivering the premises in good condition except for normal wear andtear.

In 2004, the Company recorded a total initial assetretirement obligation of approximately $0.2  million. As ofDecember  31, 2004, the Company had limited experience related tovacated leased properties having vacated only a few leased propertiesduring the past several years and has incurred only nominal costsassociated with the termination of the tower leases and retail outlets.As such, the Company made certain assumptions in determining itsinitial asset retirement obligation under SFAS No. 143 related to theprobability of remediation, the estimated terms of the leases, interestrates and inflationary factors. The Company concluded an averageestimated cost of $5,200 to remediate each of its 721 leased towersites and concluded that it would have only a nominal financialobligation to remediate its leased retail outlets.

6.    Long-Term Debt

For a detailed discussion oflong-term debt, refer to Note 2, IWO Liquidity and RecentDevelopments.

Long-term debt consisted of the following:

|                           |  |               |         |        |  |        |         |        |  |  |
|---------------------------|--|---------------|---------|--------|--|--------|---------|--------|--|--|
|                      |  | December31,   |         |   |
|                      |  | 2004          |         | 2003   |
|                      |  | (Inthousands) |         |   |
| Seniornotes               |  | $             | 140,275 |   |  | $      | 138,513 |   |
| Senior BankCreditFacility |  |          | 215,000 |   |  |   | 213,184 |   |
| Totallong-termdebt        |  | $             | 355,275 |   |  | $      | 351,697 |   |
|                           |

IWOis an unrestricted subsidiary of US Unwired. As a result, fundsavailable under the IWO senior bank credit facilities can only be usedby IWO to finance operations of IWO.

As of December  31,2004, the Company was in default of its senior bank credit facility.Since March  2004, the Company has failed to make $13.8million in principal payments due on the senior secured credit facilityand was not in compliance with the restrictive covenants under itssenior secured credit facility. The holders of the senior creditfacility have denied the Company access to the remaining $23.4million in availability. Additionally, the Company has failed to makescheduled semi-annual interest payments on its senior notes dueJuly  15, 2004 and January  15, 2005 and the holders of thesenior notes can place the Company in default of its senior notes. Fora detailed discussion of Liquidity and Recent Developments, refer toNote 2.

Senior Notes – 14%

InFebruary  2001, the Company issued 160,000 units, each consistingof $1,000 principal amount of 14% Senior Notes("the senior notes") due January  15,2011 and one warrant to purchase 12.50025 shares of the Company'sclass C common stock at an exercise price of $7.00 per share. As aresult of US Unwired's acquisition of the Company in April2002, this warrant was converted to a US Unwired warrant to purchase12.96401 shares of US Unwired's common stock at $6.75 per share.Interest is payable semi-annually on January  15 and July15 of each year. Independent Wireless One Corporation, a wholly ownedsubsidiary of IWO, is the sole guarantor of the senior notes. All ofthe Company's restricted subsidiaries formed or acquired afterthe issuance of the senior notes that guarantee the senior creditfacility will also be required to guarantee the senior notes. Thesenior notes are not guaranteed by Independent Wireless One RealtyCorporation, a wholly owned subsidiary of IWO, or US Unwired and itssubsidiaries.

F-16

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

A portion of the original proceeds of thesenior notes were used to purchase a portfolio of U.S. governmentsecurities that generated sufficient proceeds to make the first sixscheduled interest payments on the senior notes through January2004. The account holding theses funds has been pledged to the trusteefor the benefit of the holders of the IWO senior notes.

OnFebruary  10, 2005, the $160.0  million senior notes werecancelled and exchanged for all of the new common stock of the Companyand the existing common stock of the Company, all of which was owned byUS Unwired, was cancelled, with no distributions or paymentsthereon.

Senior Credit Facility

EffectiveDecember  2000, Independent Wireless One Corporation entered intoan amended and restated senior credit facility ("seniorcredit facility") under which it could borrow up to$240  million in the aggregate consisting of up to $70million in revolving loans and $170  million in term loans. Thesenior credit facility was to mature in 2008. The term loans were dueto be repaid in quarterly installments beginning in March  2004and the reducing revolver was to mature in March  2008. All loansunder the senior credit facility, effective with the date of thedefault, bore interest at a rate of 4.25-4.75 percent above the agentbank's prime rate. The senior credit facility was secured by allof the assets of the Company and its subsidiaries. The credit facilitywas available for use only by the Company and its subsidiaries. Asdiscussed in Note 2, on February  10, 2005, the Company repaid infull and terminated its $215.0  million senior creditfacility

Maturities of contractual obligations are as followsassuming acceleration of the Company's obligations in 2005 (inthousands):

|            |  |               |         |        |  |  |
|------------|--|---------------|---------|--------|--|--|
|       |  | Long-TermDebt |
| 2005       |  | $             | 375,000 |   |
| 2006       |  |          | — |   |
| 2007       |  |          | — |   |
| 2008       |  |          | — |   |
| 2009       |  |          | — |   |
| Thereafter |  |          | — |   |
| Total      |  | $             | 375,000 |   |
|            |

7.    IncomeTaxes

Deferred tax assets and liabilities are determined basedon the temporary differences between the financial statements and thetax bases of assets and liabilities as measured by the enacted taxrates.

Income tax expense differs from the amounts computed byapplying applicable U.S. federal income tax rate to loss before incometaxes, minority interest and equity in losses of affiliates as a resultof the following:

F-17

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

    

|                                               |  |                        |         |         |  |                                                      |         |                                                      |  |        |          |         |  |        |         |         |  |  |
|-----------------------------------------------|--|------------------------|---------|---------|--|------------------------------------------------------|---------|------------------------------------------------------|--|--------|----------|---------|--|--------|---------|---------|--|--|
|                                          |  | YearsEnded December31, |         |
|                                          |  | 2004                   |         | 2003    |  | ForthePeriod fromApril 1, 2002throughDecember31,2002 |         | For thePeriod fromJanuary 1,2002throughMarch 31,2002 |
|                                          |  | (Inthousands)          |
| Computed"expected" taxbenefit                 |  | $                      | (19,185 | )  |  | $                                                    | (33,935 | )                                               |  | $      | (169,648 | )  |  | $      | (9,392  | )  |
| Other                                         |  |                   | 13      |    |  |                                                 | 11      |                                                 |  |   | 21       |    |  |   | 2,692   |    |
| Stateincome taxes, net of federal incometaxes |  |                   | (2,740  | )  |  |                                                 | (4,848  | )                                               |  |   | (14,750  | )  |  |   | — |    |
| Goodwillimpairment                            |  |                   | — |    |  |                                                 | — |                                                 |  |   | 74,900   |    |  |   | — |    |
| Increasein valuationallowance                 |  |                   | 21,912  |    |  |                                                 | 39,894  |                                                 |  |   | 109,477  |    |  |   | 6,700   |    |
| Prioryear return to provisiondifferences      |  |                   | — |    |  |                                                 | (1,122  | )                                               |  |   | —  |    |  |   | — |    |
| Totalincome taxexpense/(benefit)              |  | $                      | — |    |  | $                                                    | — |                                                 |  | $      | —  |    |  | $      | — |    |
|                                               |

Thetax effects of temporary differences that give rise to the significantcomponents of deferred tax assets and deferred tax liabilities arepresentedbelow:

|                                   |  |                 |         |                  |  |                 |         |         |  |        |         |         |  |  |
|-----------------------------------|--|-----------------|---------|------------------|--|-----------------|---------|---------|--|--------|---------|---------|--|--|
|                              |  | December31,2004 |         | December 31,2003 |  | December31,2002 |
|                              |  | (Inthousands)   |         |             |  |            |
| Deferred taxassets/(liabilities): |  |            |    |             |  |            |    |    |  |   |    |    |
| Federalnet operatinglosses        |  | $               | 130,454 |             |  | $               | 135,565 |    |  | $      | 98,818  |    |
| Start-upcosts                     |  |            | — |             |  |            | — |    |  |   | 1,053   |    |
| Stockcompensation                 |  |            | 2,021   |             |  |            | 2,021   |    |  |   | 2,021   |    |
| Intangibleassets                  |  |            | 33,310  |             |  |            | 31,708  |    |  |   | 19,085  |    |
| Accruedexpenses                   |  |            | 2,087   |             |  |            | 2,612   |    |  |   | 1,971   |    |
| Allowancefor baddebt              |  |            | 831     |             |  |            | 891     |    |  |   | 1,137   |    |
| Unearnedrevenues                  |  |            | 2,821   |             |  |            | 1,840   |    |  |   | 2,057   |    |
| UnrealizedGain-Sale ofSecurities  |  |            | 266     |             |  |            | 266     |    |  |   | — |    |
| Intereston DebtOffering           |  |            | 597     |             |  |            | 597     |    |  |   | — |    |
| Depreciationon fixedassets        |  |            | (17,356 | )           |  |            | (17,609 | )  |  |   | (8,145  | )  |
|                              |  |            | 155,031 |             |  |            | 157,891 |    |  |   | 117,997 |    |
| Lessvaluationallowance            |  |            | 155,031 |             |  |            | 157,891 |    |  |   | 117,997 |    |
| Netdeferred taxliability          |  | $               | — |             |  | $               | — |    |  | $      | — |    |
|                                   |

AtDecember  31, 2004, the Company had available approximately$371  million of net operating loss carry forwards for federalincome tax purposes. This carry forward, which may provide future taxbenefits, begins to expire in 2019. Under the provisions of theInternal Revenue Code, certain substantial changes in theCompany's ownership may limit the amount of federal net operatingloss carry forwards that could be used in future years to offsettaxable income and taxes payable.

In assessing the possibilityof realization of deferred tax assets at December  31, 2004, theCompany considered whether it was more likely than not that someportion or all of the deferred tax assets would not be realized. Theultimate realization of deferred tax assets is dependent upon thegeneration of future taxable income during the periods in which thosetemporary differences become deductible. The Company considers thescheduled reversal of deferred tax liabilities, projected futuretaxable income and tax planning strategies in making this assessment.Based upon these considerations, the Company provided a valuationallowance to reduce the carrying value of certain of its deferred taxassets.

F-18

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

Tax impact of the reorganization

For federal income tax purposes as of December  31, 2004, IWOis currently a member of an affiliated group of which US Unwired is thecommon parent (the "US Unwired Group"), andjoin in the filing of a consolidated federal income tax return. As ofFebruary  10, 2005 and effective with the reorganization, this isno longer the case. The US Unwired Group has reported substantialconsolidated net operating loss carry forwards for federal income taxpurposes as of December  31,  2004, of which approximately$371  million are allocable to IWO (a portion of which is subjectto certain existing limitations).

After the reorganizationdescribed in Note 1, IWO expects to realize a significant amount ofcancellation of debt ("COD"), for federalincome tax purposes. Because IWO will be a debtor in a bankruptcy caseand the COD will be incurred pursuant to a pre-packaged plan ofbankruptcy, IWO will not be required to include such COD in our taxableincome for federal income tax purposes, but will be required to reducecertain of our tax attributes (including a portion of our allocable netoperating loss carry forwards and possibly the tax basis of certainassets by the amount of such COD).

Moreover, following thereorganization, IWO's ability to utilize any remaining netoperating losses that are allocable to it to offset future taxableincome may be limited under Section  382 of the Internal RevenueCode.

8.    Commitments and Contingencies

A portionof the Company's gross subscriber additions has been through itspre-pay program, which has been provided and managed by US Unwiredpursuant to an agreement that US Unwired entered into with athird-party service provider. For the year ended December  31,2004, 14.7% of the Company's gross subscriber additionswere added under the pre-pay program, and at December  31,2004, 5.6% of the Company's subscribers participated inthe pre-pay program. Pre-pay subscribers accounted for approximately$4.1  million, or 2.9% of the Company's subscriberrevenues in 2004. Following consummation of the reorganization and thetermination of the Company's management agreement with USUnwired, the Company will no longer market that plan in its territory,in which case the Company will seek to transition its current pre-paysubscribers to other product offerings. The inability to continue tooffer a pre-pay program or the failure to successfully transitionsubscribers could result in reduced revenues and earnings. If theCompany decides to continue to offer a similar program, the Companywill have to negotiate a new agreement with a third-party serviceprovider, which could result in increased expenses.

The Companyuses Sprint to process all post-pay PCS subscriber billings includingmonthly recurring charges, airtime and other charges such asinterconnect fees. The Company pays various fees to Sprint for newsubscribers as well as recurring monthly fees for services performedfor existing customers including billing and management of customeraccounts. Sprint's billing for these services is based upon anestimate of the actual costs incurred by Sprint to provide suchservices. At the end of each calendar year, Sprint PCS compares itsactual costs to provide such services to remittances by the Company forestimated billings and either refunds overpayments or bills for costsin excess of the payments made. Based upon information as provided bySprint, the Company believes it has adequately provided for theabove-mentioned costs in the accompanying consolidated financialstatements.

Effective April  1, 2000, the Companyestablished a 401(k) defined contribution plan (the"Plan") in which all full time employees (asdefined) are eligible to participate in the Plan. Under the Plan,participants may elect to withhold up to 15% of their annualcompensation, subject to IRS limitation. The Company is required tomake matching contributions based on a percentage of theparticipant's contributions. Participants vest in the Companymatching contributions ratably over a four-year vesting period(25% per year). Contribution expense for the years endedDecember  31, 2004 and 

F-19

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

December  31, 2003, the nine monthsended, December  31, 2002 and the three months ended March31, 2002 were approximately $0.2  million, $0.3  million,$0.1  million and $0.3  million, respectively.

TheCompany is a party to various non-cancelable operating leases forfacilities and equipment. The Company recognizes rent expense on astraight-line basis over the life of the lease, which establishesdeferred rent on the balance sheet. The Company considers the leaseterm to include the renewal periods of any lease that could cause asignificant economic detriment to the Company if such lease renewaloption is not exercised. Future minimum lease payments due undernon-cancelable operating leases with terms in excess of one year are asfollows (in thousands):

|                         |  |        |         |        |  |  |
|-------------------------|--|--------|---------|--------|--|--|
| Year ending December31, |  |   |
| 2005                    |  | $      | 16,526  |   |
| 2006                    |  |   | 16,770  |   |
| 2007                    |  |   | 16,184  |   |
| 2008                    |  |   | 15,886  |   |
| 2009                    |  |   | 15,311  |   |
| Thereafter              |  |   | 23,514  |   |
|                    |  | $      | 104,191 |   |
|                         |

Thetable excludes renewal options related to certain cell and switch siteleases. These renewal options generally have five-year terms and can beexercised from time to time.

Including the restatementadjustments described in Note 2, rental expense was $16.2million, $15.9  million, $13.6  million and $3.1million for the years ended December  31, 2004, December31,  2003, the nine months ended December  31, 2002 and thethree months ended March  31, 2002.

9.    Stock Optionand Performance Award and Warrant Programs

On April  1,2002, 100% of IWO's outstanding stock was acquired by USUnwired. Each share of IWO stock was converted to 1.0371 shares of USUnwired common stock. As a result, approximately 37.6  millionoutstanding shares of IWO stock were converted to approximately39.0  million shares of US Unwired common stock. In addition,6.9  million shares of US Unwired common stock were reserved forissuance upon exercise of IWO options, IWO Founders and ManagementWarrants and IWO High Yield Warrants were based upon the sameconversion ratio.

Stock options and warrants outstanding were asfollows:

|                                |  |                    |         |                              |  |                |         |                              |  |        |         |         |  |        |         |        |  |  |
|--------------------------------|--|--------------------|---------|------------------------------|--|----------------|---------|------------------------------|--|--------|---------|---------|--|--------|---------|--------|--|--|
|                           |  | OutstandingOptions |         | Warrants                     |
|                           |  | (Inthousands)      |
|                           |  | NumberofShares     |         | WeightedAverageExercisePrice |  | NumberofShares |         | WeightedAverageExercisePrice |
| Balance,December  31,2001      |  |               | 4,109   |                         |  |           | 6       |                         |  |   | 2,977   |    |  |   | 6       |   |
| Conversionto US Unwiredoptions |  |               | (4,109  | )                       |  |           | 6       |                         |  |   | (2,977  | )  |  |   | 6       |   |
| Balance,December  31,2002      |  |               | — |                         |  |           | — |                         |  |   | — |    |  |   | — |   |
| 2003Activity                   |  |               | — |                         |  |           | — |                         |  |   | — |    |  |   | — |   |
| Balance,December  31,2003      |  |               | — |                         |  |           | — |                         |  |   | — |    |  |   | — |   |
| 2004Activity                   |  |               | — |                         |  |           | — |                         |  |   | — |    |  |   | — |   |
| Balance,December  31,2004      |  |               | — |                         |  | $              | — |                         |  |   | — |    |  | $      | — |   |
|                                |

F-20

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS  — (Continued) December  31, 2004

There were no options grantedunder the plans during the years ended December  31, 2004 andDecember  31, 2003, the nine months ended December  31,2002 or during the three months ended March  31, 2002.

10.    Related Party Transactions

On December  20,1999, the Company and an affiliate of a stockholder entered into afive-year advisory agreement whereby the Company was to receiveconsulting services from the affiliate for a $5,000,000 fee. OnMarch  31, 2002 in connection with the acquisition by US Unwired,Inc., the remaining balance of $2.8  million was written-off asan operating expense. There was no such amount in 2004 or 2003 or thenine months ended December  31, 2002.

In connection withthe Company's senior credit facility, two participating financialinstitutions were also, at the time, shareholders of the Company.Interest expense incurred on their portion of debt outstanding for theyears ended December  31, 2004 and December  31, 2003, thenine months ended December  31, 2002, the three months endedMarch  31, 2002 amounted to $0, $1.7  million, $1.4million and $0.4  million, respectively.

The Companyutilized the services of a law firm in which a partner of the law firmis a stockholder of IWO. On December  20, 1999, the Companyentered into a three-year professional services agreement with itsoutside General Counsel/stockholder, whereby the GeneralCounsel/stockholder will provide legal services annually up to $400,000and participate in the Company's stock option program. OnSeptember  17, 2000 the Company terminated the professionalservices agreement and replaced it with a one-year consulting agreementthat provided for monthly payments of $10,000 and a bonus up to$250,000. Legal fees incurred under the professional servicesagreement/consulting agreement for three months ended March  31,2002 were approximately $0.2  million. There were no such chargesfor the years ended December  31, 2004 and December31,  2003 and the nine months ended December  31,2002.

F-21

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS — (Continued)December 31,2004

11.    Fair Value of FinancialInstruments

The carrying amounts of cash and cash equivalents,subscriber receivables, accrued interest and other receivables, andaccounts payable and accrued expenses approximate fair value because ofthe short-term nature of these items. The estimated fair value andcarrying values of the Company's senior notes at December31, 2004 and 2003was:

|             |  |                  |         |            |  |                |         |           |  |   |         |        |  |   |        |        |  |  |
|-------------|--|------------------|---------|------------|--|----------------|---------|-----------|--|---|---------|--------|--|---|--------|--------|--|--|
|        |  | Asof December31, |
|        |  | 2004             |         | 2003       |
|        |  | (Inthousands)    |
|        |  | CarryingValue    |         | Fair Value |  | Carrying Value |         | FairValue |
| Seniornotes |  | $                | 140,275 |       |  | $              | 103,360 |      |  | $ | 138,513 |   |  | $ | 24,800 |   |
|             |

Thefair value of these notes is based on the most recently availabletrading prices. The carrying amount of substantially all of theremainder of the Company's long-term debt approximates fair valuedue to the borrowings variable interest rates.

Fair valueestimates are subject to inherent limitations. Estimates of fair valueare made at a specific point in time, based on relevant marketinformation and information about the financial instrument. Theestimated fair values of financial instruments presented above are notnecessarily indicative of amounts the Company might realize in actualmarket transactions. Estimates of fair value are subjective in natureand involve uncertainties and matters of significant judgment andtherefore cannot be determined with precision. Changes in assumptionscould significantly affect the estimates.

12.    SelectedQuarterly Financial Data (Unaudited)

The following tablesummarizes the Company's quarterly financial data for the yearsended December  31, 2004 and December  31, 2003,respectively. For the quarters ended September  30, 2004,June  30, 2004 and March  31, 2004 and the year endedDecember  31, 2003, the data includes originally and restatedamounts (see Note  1 forrestatements):

|                              |  |                       |          |               |  |                       |          |                |  |                       |          |               |  |               |          |         |  |        |          |         |  |        |          |         |  |        |          |         |  |  |
|------------------------------|--|-----------------------|----------|---------------|--|-----------------------|----------|----------------|--|-----------------------|----------|---------------|--|---------------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                         |  | FirstQuarter          |          | First Quarter |  | SecondQuarter         |          | Second Quarter |  | ThirdQuarter          |          | Third Quarter |  | FourthQuarter |
|                         |  | As OriginallyReported |          | As Restated   |  | As OriginallyReported |          | As Restated    |  | As OriginallyReported |          | AsRestated    |  |          |
| 2004                         |  | (Inthousands)         |
| Revenues                     |  | $                     | 43,937   |          |  | $                     | 43,937   |           |  | $                     | 46,524   |          |  | $             | 46,524   |    |  | $      | 49,484   |    |  | $      | 49,484   |    |  | $      | 47,308   |    |
| Operatingincome(loss)        |  |                  | (7,087   | )        |  |                  | (7,393   | )         |  |                  | (1,428   | )        |  |          | (1,719   | )  |  |   | 1,029    |    |  |   | 755      |    |  |   | (7,146   | )  |
| Netloss                      |  |                  | (18,426  | )        |  |                  | (18,732  | )         |  |                  | (8,566   | )        |  |          | (8,857   | )  |  |   | (9,256   | )  |  |   | (9,530   | )  |  |   | (17,695  | )  |
| Totalliabilities             |  |                  | 406,326  |          |  |                  | 410,847  |           |  |                  | 415,406  |          |  |          | 421,184  |    |  |   | 413,776  |    |  |   | 418,795  |    |  |   | 426,207  |    |
| Accumulateddeficit           |  |                  | (595,483 | )        |  |                  | (600,398 | )         |  |                  | (604,050 | )        |  |          | (609,255 | )  |  |   | (613,305 | )  |  |   | (618,785 | )  |  |   | (636,479 | )  |
| Stockholders'equity(deficit) |  |                  | (149,033 | )        |  |                  | (153,948 | )         |  |                  | (157,600 | )        |  |          | (162,805 | )  |  |   | (166,855 | )  |  |   | (172,334 | )  |  |   | (190,029 | )  |
|                              |

F-22

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IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS — (Continued)December 31,2004

|                              |  |                       |          |               |  |                       |          |                |  |                       |          |               |  |                       |          |                |  |        |          |         |  |        |          |         |  |        |          |         |  |        |          |         |  |  |
|------------------------------|--|-----------------------|----------|---------------|--|-----------------------|----------|----------------|--|-----------------------|----------|---------------|--|-----------------------|----------|----------------|--|--------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                         |  | FirstQuarter          |          | First Quarter |  | SecondQuarter         |          | Second Quarter |  | ThirdQuarter          |          | Third Quarter |  | FourthQuarter         |          | Fourth Quarter |
|                         |  | AsOriginally Reported |          | As Restated   |  | AsOriginally Reported |          | As Restated    |  | AsOriginally Reported |          | As Restated   |  | AsOriginally Reported |          | AsRestated     |
| 2003                         |  | (Inthousands)         |
| Revenues                     |  | $                     | 39,020   |          |  | $                     | 39,020   |           |  | $                     | 42,613   |          |  | $                     | 42,613   |           |  | $      | 46,169   |    |  | $      | 46,169   |    |  | $      | 44,047   |    |  | $      | 44,047   |    |
| Operatingincome(loss)        |  |                  | (28,256  | )        |  |                  | (28,625  | )         |  |                  | (8,443   | )        |  |                  | (8,801   | )         |  |   | (6,798   | )  |  |   | (7,141   | )  |  |   | (11,851  | )  |  |   | (12,178  | )  |
| Netloss                      |  |                  | (37,127  | )        |  |                  | (37,496  | )         |  |                  | (17,443  | )        |  |                  | (17,801  | )         |  |   | (17,618  | )  |  |   | (17,961  | )  |  |   | (23,372  | )  |  |   | (23,699  | )  |
| Totalliabilities             |  |                  | 391,575  |          |  |                  | 394,893  |           |  |                  | 394,007  |          |  |                  | 397,651  |           |  |   | 395,188  |    |  |   | 399,143  |    |  |   | 407,920  |    |  |   | 412,206  |    |
| Accumulateddeficit           |  |                  | (518,624 | )        |  |                  | (522,205 | )         |  |                  | (536,067 | )        |  |                  | (540,006 | )         |  |   | (553,684 | )  |  |   | (557,967 | )  |  |   | (577,057 | )  |  |   | (581,665 | )  |
| Stockholders'equity(deficit) |  |                  | (72,174  | )        |  |                  | (75,755  | )         |  |                  | (89,617  | )        |  |                  | (93,556  | )         |  |   | (107,234 | )  |  |   | (111,517 | )  |  |   | (130,607 | )  |  |   | (135,215 | )  |
|                              |

13.    CondensedConsolidating Financial Information

Independent Wireless OneLeased Realty Corporation (the"Non-Guarantor"), a 100% wholly ownedsubsidiary of Independent Wireless One Corporation, is precluded fromguaranteeing the debt of IWO Holdings, Inc. based on current agreementsin effect. Independent Wireless One Corporation is not restricted fromserving as a guarantor of the IWO Holdings, Inc. debt.

Independent Wireless One Leased Realty Corporation holds all of thecell site leases and certain leases related to the retail stores andtower site leases. Operating expenses are comprised of rent expensefrom these leases. Independent Wireless One Leased Realty Corporationhas charged Independent Wireless One Corporation a fee equal to itsrent expense for use of its leased cell sites, office and retailspace.

The information which follows presents the condensedconsolidating balance sheet as of December  31, 2004 andDecember  31, 2003 and the condensed consolidating results ofoperations and cash flows for the years ended December  31, 2004and December  31, 2003, for the nine-month period endedDecember  31, 2002 and for the three month period endedMarch  31, 2002 of (a)  the Parent Company, IWO Holdings,Inc., (b)  the "Guarantor", IndependentWireless One Corporation, and (c)  the"Non-Guarantor", Independent Wireless OneLeased Realty Corporation, and includes consolidating entries and theCompany on a consolidated basis.

F-23

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS — (Continued)December 31,2004

Condensed Consolidating BalanceSheetDecember  31,2004

|                                           |  |                            |          |                                           |  |                                                            |          |                      |  |              |         |        |  |        |          |         |  |        |          |         |  |  |
|-------------------------------------------|--|----------------------------|----------|-------------------------------------------|--|------------------------------------------------------------|----------|----------------------|--|--------------|---------|--------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                                      |  | IWOHoldings, Inc. (Parent) |          | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp.(Non-guarantor) |          | ConsolidatingEntries |  | Consolidated |
|                                      |  | (Inthousands)              |
| **ASSETS:**                               |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Currentassets:                            |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Cashand cashequivalents                   |  | $                          | —  |                                      |  | $                                                          | 33,840   |                 |  | $            | — |   |  | $      | —  |    |  | $      | 33,840   |    |
| Restrictedcash                            |  |                       | 80       |                                      |  |                                                       | —  |                 |  |         | — |   |  |   | —  |    |  |   | 80       |    |
| Subscriberreceivables,net                 |  |                       | —  |                                      |  |                                                       | 11,381   |                 |  |         | — |   |  |   | —  |    |  |   | 11,381   |    |
| Inventory                                 |  |                       | —  |                                      |  |                                                       | 1,386    |                 |  |         | — |   |  |   | —  |    |  |   | 1,386    |    |
| Prepaidexpenses and otherassets           |  |                       | —  |                                      |  |                                                       | 4,654    |                 |  |         | 3,067   |   |  |   | —  |    |  |   | 7,721    |    |
| Totalcurrentassets                        |  |                       | 80       |                                      |  |                                                       | 51,261   |                 |  |         | 3,067   |   |  |   | —  |    |  |   | 54,408   |    |
| Investmentinsubsidiary                    |  |                       | (188,366 | )                                    |  |                                                       | —  |                 |  |         | — |   |  |   | 188,366  |    |  |   | —  |    |
| Propertyand equipment,net                 |  |                       | —  |                                      |  |                                                       | 150,796  |                 |  |         | — |   |  |   | —  |    |  |   | 150,796  |    |
| Intangibleassets,net                      |  |                       | —  |                                      |  |                                                       | 17,331   |                 |  |         | — |   |  |   | —  |    |  |   | 17,331   |    |
| Otherassets                               |  |                       | —  |                                      |  |                                                       | 13,643   |                 |  |         | — |   |  |   | —  |    |  |   | 13,643   |    |
| Totalassets                               |  | $                          | (188,286 | )                                    |  | $                                                          | 233,031  |                 |  | $            | 3,067   |   |  | $      | 188,366  |    |  | $      | 236,178  |    |
| **LIABILITIESAND STOCKHOLDER'SDEFICIT**   |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Currentliabilities:                       |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Accountspayable                           |  | $                          | —  |                                      |  | $                                                          | 24,277   |                 |  | $            | — |   |  | $      | —  |    |  | $      | 24,277   |    |
| Accruedexpenses                           |  |                       | 21,468   |                                      |  |                                                       | 18,865   |                 |  |         | — |   |  |   | —  |    |  |   | 40,333   |    |
| Payableto (receivable from) relatedparty  |  |                       | (160,000 | )                                    |  |                                                       | 157,404  |                 |  |         | 3,067   |   |  |   | —  |    |  |   | 471      |    |
| Currentmaturities of long-termobligations |  |                       | 140,275  |                                      |  |                                                       | 215,000  |                 |  |         | — |   |  |   | —  |    |  |   | 355,275  |    |
| Totalcurrentliabilities                   |  |                       | 1,743    |                                      |  |                                                       | 415,546  |                 |  |         | 3,067   |   |  |   | —  |    |  |   | 420,356  |    |
| Long-termdebt                             |  |                       | —  |                                      |  |                                                       | —  |                 |  |         | — |   |  |   | —  |    |  |   | —  |    |
| Other                                     |  |                       | —  |                                      |  |                                                       | 5,851    |                 |  |         | — |   |  |   | —  |    |  |   | 5,851    |    |
| Stockholder'sdeficit:                     |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Commonstock                               |  |                       | 1        |                                      |  |                                                       | —  |                 |  |         | — |   |  |   | —  |    |  |   | 1        |    |
| Additionalpaid-incapital                  |  |                       | 446,449  |                                      |  |                                                       | 383,444  |                 |  |         | — |   |  |   | (383,444 | )  |  |   | 446,449  |    |
| Retaineddeficit                           |  |                       | (636,479 | )                                    |  |                                                       | (571,810 | )               |  |         | — |   |  |   | 571,810  |    |  |   | (636,479 | )  |
| Totalstockholder'sdeficit                 |  |                       | (190,029 | )                                    |  |                                                       | (188,366 | )               |  |         | — |   |  |   | 188,366  |    |  |   | (190,029 | )  |
| Totalliabilities and stockholder'sdeficit |  | $                          | (188,286 | )                                    |  | $                                                          | 233,031  |                 |  | $            | 3,067   |   |  | $      | 188,366  |    |  | $      | 236,178  |    |
|                                           |

F-24

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS — (Continued)December 31,2004

Condensed Consolidating BalanceSheet December  31,2003

|                                                                                     |  |                            |          |                                           |  |                                                            |          |                      |  |              |         |        |  |        |          |         |  |        |          |         |  |  |
|-------------------------------------------------------------------------------------|--|----------------------------|----------|-------------------------------------------|--|------------------------------------------------------------|----------|----------------------|--|--------------|---------|--------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                                                                                |  | IWOHoldings, Inc. (Parent) |          | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp.(Non-guarantor) |          | ConsolidatingEntries |  | Consolidated |
|                                                                                |  | (Inthousands)              |
| **ASSETS:**                                                                         |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Currentassets:                                                                      |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Cashand cashequivalents                                                             |  | $                          | —  |                                      |  | $                                                          | 32,337   |                 |  | $            | — |   |  | $      | —  |    |  | $      | 32,337   |    |
| Restrictedcash and US Treasury securities at amortized cost – held tomaturity |  |                       | 11,278   |                                      |  |                                                       | 8,080    |                 |  |         | — |   |  |   | —  |    |  |   | 19,358   |    |
| Subscriberreceivables,net                                                           |  |                       | —  |                                      |  |                                                       | 9,938    |                 |  |         | — |   |  |   | —  |    |  |   | 9,938    |    |
| Inventory                                                                           |  |                       | —  |                                      |  |                                                       | 1,619    |                 |  |         | — |   |  |   | —  |    |  |   | 1,619    |    |
| Prepaidexpenses and otherassets                                                     |  |                       | —  |                                      |  |                                                       | 2,798    |                 |  |         | 3,069   |   |  |   | —  |    |  |   | 5,867    |    |
| Totalcurrentassets                                                                  |  |                       | 11,278   |                                      |  |                                                       | 54,772   |                 |  |         | 3,069   |   |  |   | —  |    |  |   | 69,119   |    |
| Investmentinsubsidiary                                                              |  |                       | (157,713 | )                                    |  |                                                       | —  |                 |  |         | — |   |  |   | 157,713  |    |  |   | —  |    |
| Propertyand equipment, net                                                          |  |                       | —  |                                      |  |                                                       | 165,511  |                 |  |         | — |   |  |   | —  |    |  |   | 165,511  |    |
| Intangibleassets,net                                                                |  |                       | —  |                                      |  |                                                       | 25,642   |                 |  |         | — |   |  |   | —  |    |  |   | 25,642   |    |
| Notereceivable                                                                      |  |                       | —  |                                      |  |                                                       | 179      |                 |  |         | — |   |  |   | —  |    |  |   | 179      |    |
| Otherassets                                                                         |  |                       | —  |                                      |  |                                                       | 16,540   |                 |  |         | — |   |  |   | —  |    |  |   | 16,540   |    |
| Totalassets                                                                         |  | $                          | (146,435 | )                                    |  | $                                                          | 262,644  |                 |  | $            | 3,069   |   |  | $      | 157,713  |    |  | $      | 276,991  |    |
| **LIABILITIESAND STOCKHOLDER'SDEFICIT**                                             |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Currentliabilities:                                                                 |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Accountspayable                                                                     |  | $                          | —  |                                      |  | $                                                          | 17,079   |                 |  | $            | — |   |  | $      | —  |    |  | $      | 17,079   |    |
| Accruedexpenses                                                                     |  |                       | 10,267   |                                      |  |                                                       | 27,984   |                 |  |         | — |   |  |   | —  |    |  |   | 38,251   |    |
| Payableto (receivable from) relatedparty                                            |  |                       | (160,000 | )                                    |  |                                                       | 156,970  |                 |  |         | 3,069   |   |  |   | —  |    |  |   | 39       |    |
| Currentmaturities of long-termobligations                                           |  |                       | 138,513  |                                      |  |                                                       | 213,184  |                 |  |         | — |   |  |   | —  |    |  |   | 351,697  |    |
| Totalcurrentliabilities                                                             |  |                       | (11,220  | )                                    |  |                                                       | 415,217  |                 |  |         | 3,069   |   |  |   | —  |    |  |   | 407,066  |    |
| Long-termdebt                                                                       |  |                       | —  |                                      |  |                                                       | —  |                 |  |         | — |   |  |   | —  |    |  |   | —  |    |
| Other                                                                               |  |                       | —  |                                      |  |                                                       | 5,140    |                 |  |         | — |   |  |   | —  |    |  |   | 5,140    |    |
| Stockholder'sdeficit:                                                               |  |                       |     |                                      |  |                                                       |     |                 |  |         |    |   |  |   |     |    |  |   |     |    |
| Commonstock                                                                         |  |                       | 1        |                                      |  |                                                       | —  |                 |  |         | — |   |  |   | —  |    |  |   | 1        |    |
| Additionalpaid-incapital                                                            |  |                       | 446,449  |                                      |  |                                                       | 383,444  |                 |  |         | — |   |  |   | (383,444 | )  |  |   | 446,449  |    |
| Retaineddeficit                                                                     |  |                       | (581,665 | )                                    |  |                                                       | (541,157 | )               |  |         | — |   |  |   | 541,157  |    |  |   | (581,665 | )  |
| Totalstockholder'sdeficit                                                           |  |                       | (135,215 | )                                    |  |                                                       | (157,713 | )               |  |         | — |   |  |   | 157,713  |    |  |   | (135,215 | )  |
| Totalliabilities and stockholder'sdeficit                                           |  | $                          | (146,435 | )                                    |  | $                                                          | 262,644  |                 |  | $            | 3,069   |   |  | $      | 157,713  |    |  | $      | 276,991  |    |
|                                                                                     |

F-25

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS—(Continued)December 31,2004

Condensed Consolidating Statement ofOperationsYear ended December  31,2004

|                                                      |  |                            |         |                                           |  |                                                             |         |                      |  |              |         |        |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|-------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                 |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp. (Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                 |  | (Inthousands)              |
| Revenues                                             |  | $                          | — |                                      |  | $                                                           | 187,253 |                 |  | $            | 15,253  |   |  | $      | (15,253 | )  |  | $      | 187,253 |    |
| Operatingexpenses                                    |  |                       | — |                                      |  |                                                        | 202,756 |                 |  |         | 15,253  |   |  |   | (15,253 | )  |  |   | 202,756 |    |
| Operatingincome(loss)                                |  |                       | — |                                      |  |                                                        | (15,503 | )               |  |         | — |   |  |   | — |    |  |   | (15,503 | )  |
| Otherincome (expense),net                            |  |                       | (24,160 | )                                    |  |                                                        | (15,151 | )               |  |         | — |   |  |   | — |    |  |   | (39,311 | )  |
| Equityin income (losses) of wholly-ownedsubsidiaries |  |                       | (30,654 | )                                    |  |                                                        | — |                 |  |         | — |   |  |   | 30,654  |    |  |   | — |    |
| Netincome(loss)                                      |  | $                          | (54,814 | )                                    |  | $                                                           | (30,654 | )               |  | $            | — |   |  | $      | 30,654  |    |  | $      | (54,814 | )  |
|                                                      |

CondensedConsolidating Statement of OperationsYear ended December31,2003

|                                                      |  |                            |         |                                           |  |                                                             |         |                      |  |              |         |        |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|-------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                 |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp. (Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                 |  | (Inthousands)              |
| Revenues                                             |  | $                          | — |                                      |  | $                                                           | 171,849 |                 |  | $            | 14,674  |   |  | $      | (14,674 | )  |  | $      | 171,849 |    |
| Operatingexpenses                                    |  |                       | — |                                      |  |                                                        | 228,594 |                 |  |         | 14,674  |   |  |   | (14,674 | )  |  |   | 228,594 |    |
| Operatingincome(loss)                                |  |                       | — |                                      |  |                                                        | (56,745 | )               |  |         | — |   |  |   | — |    |  |   | (56,745 | )  |
| Otherincome (expense),net                            |  |                       | (23,431 | )                                    |  |                                                        | (16,781 | )               |  |         | — |   |  |   | — |    |  |   | (40,212 | )  |
| Equityin income (losses) of wholly-ownedsubsidiaries |  |                       | (73,526 | )                                    |  |                                                        | — |                 |  |         | — |   |  |   | 73,526  |    |  |   | — |    |
| Netincome(loss)                                      |  | $                          | (96,957 | )                                    |  | $                                                           | (73,526 | )               |  | $            | — |   |  | $      | 73,526  |    |  | $      | (96,957 | )  |
|                                                      |

ConsolidatingStatement of OperationsNine months ended December  31,2002

|                                                      |  |                            |          |                                           |  |                                                             |          |                      |  |              |         |        |  |        |         |         |  |        |          |         |  |  |
|------------------------------------------------------|--|----------------------------|----------|-------------------------------------------|--|-------------------------------------------------------------|----------|----------------------|--|--------------|---------|--------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                                 |  | IWOHoldings, Inc. (Parent) |          | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp. (Non-guarantor) |          | ConsolidatingEntries |  | Consolidated |
|                                                 |  | (Inthousands)              |
| Revenues                                             |  | $                          | —  |                                      |  | $                                                           | 124,896  |                 |  | $            | 10,370  |   |  | $      | (10,370 | )  |  | $      | 124,896  |    |
| Operatingexpenses                                    |  |                       | —  |                                      |  |                                                        | 583,453  |                 |  |         | 10,370  |   |  |   | (10,370 | )  |  |   | 583,453  |    |
| Operatingincome(loss)                                |  |                       | —  |                                      |  |                                                        | (458,557 | )               |  |         | — |   |  |   | — |    |  |   | (458,557 | )  |
| Otherincome (expense),net                            |  |                       | (17,078  | )                                    |  |                                                        | (9,073   | )               |  |         | — |   |  |   | — |    |  |   | (26,151  | )  |
| Equityin income (losses) of wholly-ownedsubsidiaries |  |                       | (467,630 | )                                    |  |                                                        | —  |                 |  |         | — |   |  |   | 467,630 |    |  |   | —  |    |
| Netincome(loss)                                      |  | $                          | (484,708 | )                                    |  | $                                                           | (467,630 | )               |  | $            | — |   |  | $      | 467,630 |    |  | $      | (484,708 | )  |
|                                                      |

F-26

----

IWOHOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS—(Continued)December 31,2004

Condensed Consolidating Statement ofOperationsThree months ended March  31,2002

|                                                      |  |                            |         |                                           |  |                                                             |         |                      |  |              |         |        |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|-------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                 |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp. (Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                 |  | (Inthousands)              |
| Revenues                                             |  | $                          | — |                                      |  | $                                                           | 35,536  |                 |  | $            | 3,092   |   |  | $      | (3,092  | )  |  | $      | 35,536  |    |
| Operatingexpenses                                    |  |                       | — |                                      |  |                                                        | 55,724  |                 |  |         | 3,092   |   |  |   | (3,092  | )  |  |   | 55,724  |    |
| Operatingincome(loss)                                |  |                       | — |                                      |  |                                                        | (20,188 | )               |  |         | — |   |  |   | — |    |  |   | (20,188 | )  |
| Otherincome (expense),net                            |  |                       | (4,613  | )                                    |  |                                                        | (2,035  | )               |  |         | — |   |  |   | — |    |  |   | (6,648  | )  |
| Equityin income (losses) of wholly-ownedsubsidiaries |  |                       | (22,223 | )                                    |  |                                                        | — |                 |  |         | — |   |  |   | 22,223  |    |  |   | — |    |
| Netincome(loss)                                      |  | $                          | (26,836 | )                                    |  | $                                                           | (22,223 | )               |  | $            | — |   |  | $      | 22,223  |    |  | $      | (26,836 | )  |
|                                                      |

CondensedConsolidating Statement of Cash FlowsYear ended December31,2004

|                                                       |  |                            |         |                                           |  |                                                             |         |                      |  |              |         |        |  |        |         |        |  |        |         |         |  |  |
|-------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|-------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                                  |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp. (Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                  |  | (Inthousands)              |
| **Cash flows from operatingactivities:**              |  |                       |    |                                      |  |                                                        |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Netcash provided by (used in) operatingactivities     |  | $                          | (11,160 | )                                    |  | $                                                           | 3,292   |                 |  | $            | — |   |  | $      | — |   |  | $      | (7,868  | )  |
| **Cashflows from investingactivities:**               |  |                       |    |                                      |  |                                                        |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Releaseof restricted cash and U.S. Treasurysecurities |  |                       | 11,160  |                                      |  |                                                        | 8,119   |                 |  |         | — |   |  |   | — |   |  |   | 19,279  |    |
| Paymentsfor the purchase ofequipment                  |  |                       | — |                                      |  |                                                        | (11,883 | )               |  |         | — |   |  |   | — |   |  |   | (11,883 | )  |
| Proceedsfrom sale ofassets                            |  |                       | — |                                      |  |                                                        | 159     |                 |  |         | — |   |  |   | — |   |  |   | 159     |    |
| Netcash provided by (used in) investingactivities     |  |                       | 11,160  |                                      |  |                                                        | (3,605  | )               |  |         | — |   |  |   | — |   |  |   | 7,555   |    |
| **Cashflows from financingactivities:**               |  |                       |    |                                      |  |                                                        |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Proceedsfrom long-termdebt                            |  |                       | — |                                      |  |                                                        | 1,816   |                 |  |         | — |   |  |   | — |   |  |   | 1,816   |    |
| Otherfinancingactivities                              |  |                       | — |                                      |  |                                                        | — |                 |  |         | — |   |  |   | — |   |  |   | — |    |
| Netcash provided by (used in) financingactivities     |  |                       | — |                                      |  |                                                        | 1,816   |                 |  |         | — |   |  |   | — |   |  |   | 1,816   |    |
| Netincrease in cash and cashequivalents               |  |                       | — |                                      |  |                                                        | 1,503   |                 |  |         | — |   |  |   | — |   |  |   | 1,503   |    |
| Cashand cash equivalents at beginning ofperiod        |  |                       | — |                                      |  |                                                        | 32,337  |                 |  |         | — |   |  |   | — |   |  |   | 32,337  |    |
| Cashand cash equivalents at end ofperiod              |  | $                          | — |                                      |  | $                                                           | 33,840  |                 |  | $            | — |   |  | $      | — |   |  | $      | 33,840  |    |
|                                                       |

F-27

----

IWOHOLDINGS INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS — (Continued)December 31,2004

Condensed Consolidating Statement of CashFlowsYear ended December  31,2003

|                                                       |  |                            |         |                                           |  |                                                            |         |                      |  |              |         |        |  |        |         |        |  |        |         |         |  |  |
|-------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                                  |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp.(Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                  |  | (Inthousands)              |
| **Cash flows from operatingactivities:**              |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Netcash provided by (used in) operatingactivities     |  | $                          | (21,859 | )                                    |  | $                                                          | 10,609  |                 |  | $            | — |   |  | $      | — |   |  | $      | (11,250 | )  |
| **Cashflows from investingactivities:**               |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Releaseof restricted cash and U.S. Treasurysecurities |  |                       | 21,859  |                                      |  |                                                       | — |                 |  |         | — |   |  |   | — |   |  |   | 21,859  |    |
| Paymentsfor the purchase ofequipment                  |  |                       | — |                                      |  |                                                       | (13,354 | )               |  |         | — |   |  |   | — |   |  |   | (13,354 | )  |
| Proceedsfrom sale ofassets                            |  |                       | — |                                      |  |                                                       | 74      |                 |  |         | — |   |  |   | — |   |  |   | 74      |    |
| Netcash provided by (used in) investingactivities     |  |                       | 21,859  |                                      |  |                                                       | (13,280 | )               |  |         | — |   |  |   | — |   |  |   | 8,579   |    |
| **Cashflows from financingactivities:**               |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Proceedsfrom long-termdebt                            |  |                       | — |                                      |  |                                                       | — |                 |  |         | — |   |  |   | — |   |  |   | — |    |
| Otherfinancingactivities                              |  |                       | — |                                      |  |                                                       | — |                 |  |         | — |   |  |   | — |   |  |   | — |    |
| Netcash provided by (used in) financingactivities     |  |                       | — |                                      |  |                                                       | — |                 |  |         | — |   |  |   | — |   |  |   | — |    |
| Netincrease in cash and cashequivalents               |  |                       | — |                                      |  |                                                       | (2,671  | )               |  |         | — |   |  |   | — |   |  |   | (2,671  | )  |
| Cashand cash equivalents at beginning ofperiod        |  |                       | — |                                      |  |                                                       | 35,008  |                 |  |         | — |   |  |   | — |   |  |   | 35,008  |    |
| Cashand cash equivalents at end ofperiod              |  | $                          | — |                                      |  | $                                                          | 32,337  |                 |  | $            | — |   |  | $      | — |   |  | $      | 32,337  |    |
|                                                       |

F-28

----

IWO HOLDINGS INC. ANDSUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(Continued)December 31, 2004

CondensedConsolidating Statement of Cash FlowsApril  1, 2002 throughDecember  31,2002

|                                                       |  |                            |         |                                           |  |                                                            |         |                      |  |              |         |        |  |        |         |        |  |        |         |         |  |  |
|-------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                                  |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp.(Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                  |  | (Inthousands)              |
| **Cash flows from operatingactivities:**              |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Netcash provided by (used in) operatingactivities     |  | $                          | (10,449 | )                                    |  | $                                                          | (22,251 | )               |  | $            | — |   |  | $      | — |   |  | $      | (32,700 | )  |
| **Cashflows from investingactivities:**               |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Releaseof restricted cash and U.S. Treasurysecurities |  |                       | 10,449  |                                      |  |                                                       | — |                 |  |         | — |   |  |   | — |   |  |   | 10,449  |    |
| Paymentsfor the purchase ofequipment                  |  |                       | — |                                      |  |                                                       | (53,820 | )               |  |         | — |   |  |   | — |   |  |   | (53,820 | )  |
| Acquisitioncosts                                      |  |                       | — |                                      |  |                                                       | (191    | )               |  |         | — |   |  |   | — |   |  |   | (191    | )  |
| Maturitiesand sales of marketablesecurities           |  |                       | — |                                      |  |                                                       | 66,967  |                 |  |         | — |   |  |   | — |   |  |   | 66,967  |    |
| Netcash provided by (used in) investingactivities     |  |                       | 10,449  |                                      |  |                                                       | 12,956  |                 |  |         | — |   |  |   | — |   |  |   | 23,405  |    |
| **Cashflows from financingactivities:**               |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Proceedsfrom long-termdebt                            |  |                       | — |                                      |  |                                                       | 43,184  |                 |  |         | — |   |  |   | — |   |  |   | 43,184  |    |
| Otherfinancingactivities                              |  |                       | — |                                      |  |                                                       | 20      |                 |  |         | — |   |  |   | — |   |  |   | 20      |    |
| Netcash provided by (used in) financingactivities     |  |                       | — |                                      |  |                                                       | 43,204  |                 |  |         | — |   |  |   | — |   |  |   | 43,204  |    |
| Netincrease in cash and cashequivalents               |  |                       | — |                                      |  |                                                       | 33,909  |                 |  |         | — |   |  |   | — |   |  |   | 33,909  |    |
| Cashand cash equivalents at beginning ofperiod        |  |                       | — |                                      |  |                                                       | 1,099   |                 |  |         | — |   |  |   | — |   |  |   | 1,099   |    |
| Cashand cash equivalents at end ofperiod              |  | $                          | — |                                      |  | $                                                          | 35,008  |                 |  | $            | — |   |  | $      | — |   |  | $      | 35,008  |    |
|                                                       |

F-29

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IWO HOLDINGS INC. ANDSUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(Continued)December 31, 2004

CondensedConsolidating Statement of Cash FlowsJanuary  1, 2002through March  31,2002

|                                                       |  |                            |         |                                           |  |                                                            |         |                      |  |              |         |        |  |        |         |        |  |        |         |         |  |  |
|-------------------------------------------------------|--|----------------------------|---------|-------------------------------------------|--|------------------------------------------------------------|---------|----------------------|--|--------------|---------|--------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                                  |  | IWOHoldings, Inc. (Parent) |         | Independent Wireless OneCorp. (Guarantor) |  | Independent Wireless OneLeased Realty Corp.(Non-guarantor) |         | ConsolidatingEntries |  | Consolidated |
|                                                  |  | (Inthousands)              |
| **Cash flows from operatingactivities:**              |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Netcash provided by (used in) operatingactivities     |  | $                          | (10,717 | )                                    |  | $                                                          | (4,151  | )               |  | $            | — |   |  | $      | — |   |  | $      | (14,868 | )  |
| **Cashflows from investingactivities:**               |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Releaseof restricted cash and U.S. Treasurysecurities |  |                       | 10,717  |                                      |  |                                                       | — |                 |  |         | — |   |  |   | — |   |  |   | 10,717  |    |
| Paymentsfor the purchase ofequipment                  |  |                       | — |                                      |  |                                                       | (29,144 | )               |  |         | — |   |  |   | — |   |  |   | (29,144 | )  |
| Maturitiesof marketablesecurities                     |  |                       | — |                                      |  |                                                       | 6,000   |                 |  |         | — |   |  |   | — |   |  |   | 6,000   |    |
| Netcash provided by (used in) investingactivities     |  |                       | 10,717  |                                      |  |                                                       | (23,144 | )               |  |         | — |   |  |   | — |   |  |   | (12,427 | )  |
| **Cashflows from financingactivities:**               |  |                       |    |                                      |  |                                                       |    |                 |  |         |    |   |  |   |    |   |  |   |    |    |
| Proceedsfrom long-termdebt                            |  |                       | — |                                      |  |                                                       | 40,000  |                 |  |         | — |   |  |   | — |   |  |   | 40,000  |    |
| Principalpayments of long-termdebt                    |  |                       | — |                                      |  |                                                       | (15,000 | )               |  |         | — |   |  |   | — |   |  |   | (15,000 | )  |
| Netcash provided by (used in) financingactivities     |  |                       | — |                                      |  |                                                       | 25,000  |                 |  |         | — |   |  |   | — |   |  |   | 25,000  |    |
| Netdecrease in cash and cashequivalents               |  |                       | — |                                      |  |                                                       | (2,295  | )               |  |         | — |   |  |   | — |   |  |   | (2,295  | )  |
| Cashand cash equivalents at beginning ofperiod        |  |                       | — |                                      |  |                                                       | 3,394   |                 |  |         | — |   |  |   | — |   |  |   | 3,394   |    |
| Cashand cash equivalents at end ofperiod              |  | $                          | — |                                      |  | $                                                          | 1,099   |                 |  | $            | — |   |  | $      | — |   |  | $      | 1,099   |    |
|                                                       |

14.    SubsequentEvents

Effective February  10, 2005, US Unwired ceased tohave an equity interest in IWO. Refer to Note 2 for additionalinformation.

F-30

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IWOHOLDINGS INC. AND SUBSIDIARIESSchedule  II – Valuationand Qualifying Accounts(Inthousands)

|                                   |  |                              |         |                              |  |                                                             |         |                                                             |  |        |         |         |  |        |         |         |  |  |
|-----------------------------------|--|------------------------------|---------|------------------------------|--|-------------------------------------------------------------|---------|-------------------------------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                              |  | YearEnded December  31, 2004 |         | Year EndedDecember  31, 2003 |  | For the Period FromApril  1, 2002 through December  31,2002 |         | For the Period From January  1, 2002through March  31, 2002 |
| Incometax valuationallowance      |  |                         |    |                         |  |                                                        |    |                                                        |  |   |    |    |  |   |    |    |
| Balanceat beginning ofperiod/year |  | $                            | 157,891 |                         |  | $                                                           | 117,997 |                                                        |  | $      | 55,879  |    |  | $      | 49,179  |    |
| Additions                         |  |                         | — |                         |  |                                                        | 39,894  |                                                        |  |   | 117,997 |    |  |   | 6,700   |    |
| Reductions                        |  |                         | (2,860  | )                       |  |                                                        | — |                                                        |  |   | (55,879 | )  |  |   | — |    |
| Balanceat end ofperiod/year       |  | $                            | 155,031 |                         |  | $                                                           | 157,891 |                                                        |  | $      | 117,997 |    |  | $      | 55,879  |    |
| Allowancefor doubtfulaccounts     |  |                         |    |                         |  |                                                        |    |                                                        |  |   |    |    |  |   |    |    |
| Balanceat beginning ofperiod/year |  | $                            | 2,228   |                         |  | $                                                           | 2,403   |                                                        |  | $      | 737     |    |  | $      | 615     |    |
| Additions                         |  |                         | 935     |                         |  |                                                        | 952     |                                                        |  |   | 4,531   |    |  |   | 2,007   |    |
| Reductions                        |  |                         | (1,086  | )                       |  |                                                        | (1,127  | )                                                      |  |   | (2,865  | )  |  |   | (1,885  | )  |
| Balanceat end ofperiod/year       |  | $                            | 2,077   |                         |  | $                                                           | 2,228   |                                                        |  | $      | 2,403   |    |  | $      | 737     |    |
| Reservefor inventoryobsolescence  |  |                         |    |                         |  |                                                        |    |                                                        |  |   |    |    |  |   |    |    |
| Balanceat beginning ofperiod/year |  | $                            | 405     |                         |  | $                                                           | 19      |                                                        |  | $      | — |    |  | $      | — |    |
| Additions                         |  |                         | — |                         |  |                                                        | 386     |                                                        |  |   | 19      |    |  |   | — |    |
| Reductions                        |  |                         | (251    | )                       |  |                                                        | — |                                                        |  |   | — |    |  |   | — |    |
| Balanceat end ofperiod/year       |  | $                            | 154     |                         |  | $                                                           | 405     |                                                        |  | $      | 19      |    |  | $      | — |    |
|                                   |

S-1

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SIGNATURES

Pursuant to the requirements of Section  13 or 15(d) of theSecurities Exchange Act of 1934, as amended, the Registrant has dulycaused this report to be signed on its behalf by the undersigned,thereunto duly authorized, on March  30, 2005.

|        |  |                       |  |                                                                                                                                                                                                                                                                                                                                  |  |  |  |  |  |  |
|--------|--|-----------------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--|
|   |  | **IWOHoldings, Inc.** |
|   |  | By:                   |  | /s/   BRETCLOWARD                                                 |
|   |  |                  |  | Name:Bret Cloward                                                                                                                                                                                                                                                                                                                |
|   |  |                  |  | Title: President andChief Executive Officer                                                                                                                                                                                                                                                                                      |
|        |

Power of Attorney

IWO Holdings, Inc., a Delaware corporation, and each person whosesignature appears below constitutes and appoints Bret Cloward andRichard Harris, and either of them, with full power to act without theother, such person's true and lawful attorneys-in-fact, with fullpower of substitution and resubstitution, for him and in his name,place and stead, in any and all capacities, to sign this Annual Reporton Form  10-K, and any and all amendments to such Annual Reporton Form  10-K and other documents in connection therewith, and tofile the same, with the Securities and Exchange Commission, grantingunto said attorneys-in-fact, and each of them, full power and authorityto do and perform each and every act and thing necessary or desirableto be done in and about the premises, as fully and to all intents andpurposes as he might or could do in person, hereby ratifying andconfirming all that said attorneys-in-fact, or either of them, or theirsubstitute or substitutes may lawfully do or cause to be done by virtuehereof.

 Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed by the followingpersons on behalf of IWO Holdings, Inc. and in the capacities and onthe datesindicated.

|                                             |  |                                                                             |
|---------------------------------------------|--|-----------------------------------------------------------------------------|
| Signature                                   |  | Title                                                                       |
|                                             |
| /s/   BRETCLOWARD            |  | President, Chief Executive Officer and Director(Principal ExecutiveOfficer) |
|                                             |
| Bret Cloward March  30,2005                 |
|                                             |
| /s/   RICHARDHARRIS          |  | Chief Financial Officer (Principal FinancialOfficer)                        |
|                                             |
| Richard Harris March  30,2005               |
|                                             |
| /s/ MICHAEL E.CUSACK                   |  | Vice President andSecretary                                                 |
|                                             |
| Michael E. CusackMarch30, 2005              |
|                                             |
| /s/   CHARLES E.BAYLESS |  | Chairman of the Board ofDirectors                                           |
|                                             |
| Charles E. BaylessMarch30, 2005             |
|                                             |
| /s/   CAROLYN F.KATZ    |  | Director                                                                    |
|                                             |
| Carolyn F. KatzMarch  30,2005               |
|                                             |
| /s/   RYANL. LANGDON    |  | Director                                                                    |
|                                             |
| Ryan L. LangdonMarch30, 2005                |
|                                             |

----

|                                             |  |          |
|---------------------------------------------|--|----------|
| Signature                                   |  | Title    |
|                                             |
| /s/   LOWELL W.ROBINSON |  | Director |
|                                             |
| Lowell W.RobinsonMarch  30,2005             |
|                                             |
| /s/   DAVIDP. TOMICK    |  | Director |
|                                             |
| David P. TomickMarch30,2005                 |
|                                             |

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