##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-K



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

For the fiscal year ended December 31,
2001

Or



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

For the transition period
from 
to

Commission file no. 333-71051



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DOBSON/ SYGNET COMMUNICATIONS
COMPANY

(Exact name of registrant as specified in its
charter)


|                                                                                     |  |                                               
|------------------------------------------------------------------------------------ |  | ----------------------------------------------
|Oklahoma(State or other jurisdiction of
	incorporation or organization)              |  | 73-1547216(I.R.S. Employer Identification No.)
|                                                                                    
|14201 Wireless Way
	Oklahoma City, Oklahoma(Address of principal executive
	offices) |  | 73134(Zip Code)                               

(405) 529-8500

(Registrants telephone number, including
area code)




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

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



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

Indicate by check
mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.x

As of
March 22, 2002, there were 100 shares of the
registrants $1.00 par value common stock outstanding,
all of which were beneficially owned by Dobson Communications
Corporation.

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

Documents
incorporated by reference: None



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TABLE OF CONTENTS



|                                           |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                    
|                                           | Item 1. Business                                                                             
|                                           | Item 2. Properties                                                                           
|                                           | Item 3. Legal Proceedings                                                                    
|                                           | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                   
|                                           | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                                           | Item 6. Selected Financial Data of Dobson/Sygnet                                             
|                                           | Item 7. Managements Discussion And Analysis Of Financial Condition And Results Of Operations
|                                           | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|                                           | Item 8. Financial Statements and Supplementary Data                                          
|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS  
|                                           | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III                                  
|                                           | Item 10. Directors and Executive Officers of the Registrant                                  
|                                           | Item 11. Executive Composition                                                               
|                                           | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                           | Item 13. Certain Relationships and Related Transactions                                      
|PART IV                                   
|                                           | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES                                
|EX-10.1.6 License Agreement               
|EX-10.1.7 License Agreement               
|EX-99 Letter regarding Arthur Andersen LLP



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY

ANNUAL REPORT ON FORM 10-K


FOR THE YEAR ENDED DECEMBER 31,
2001

TABLE OF CONTENTS

|         |    |  |  |                                                                                        |  |  |    | 
|-------- | -- |  |  | -------------------------------------------------------------------------------------- |  |  | -- | 
|Item     |    |  |  |                                                                                       
|Number   |    |  |  | Page                                                                                  
|         |    |  |  |                                                                                       
|PART I  
|        
|         | 1  |  |  | Business                                                                               |  |  | 3  | 
|         | 2  |  |  | Properties                                                                             |  |  | 14 | 
|         | 3  |  |  | Legal Proceedings                                                                      |  |  | 14 | 
|         | 4  |  |  | Submission of Matters to a Vote of Security
	Holders                                   |  |  | 14 | 
|PART II 
|        
|         | 5  |  |  | Market for Registrants Common Equity and
	Related Stockholder Matters                 |  |  | 15 | 
|         | 6  |  |  | Selected Financial Data of Dobson/Sygnet                                               |  |  | 15 | 
|         | 7  |  |  | Managements Discussion And Analysis Of
	Financial Condition And Results Of Operations |  |  | 15 | 
|         | 7A |  |  | Quantitative and Qualitative Disclosure About
	Market Risk                             |  |  | 22 | 
|         | 8  |  |  | Financial Statements and Supplementary Data                                            |  |  | 24 | 
|         | 9  |  |  | Changes in and Disagreements with Accountants on
	Accounting and Financial Disclosure  |  |  | 39 | 
|PART III
|        
|         | 10 |  |  | Directors and Executive Officers of the Registrant                                     |  |  | 39 | 
|         | 11 |  |  | Executive Composition                                                                  |  |  | 39 | 
|         | 12 |  |  | Security Ownership of Certain Beneficial Owners
	and Management                        |  |  | 39 | 
|         | 13 |  |  | Certain Relationships and Related Transactions                                         |  |  | 39 | 
|PART IV 
|        
|         | 14 |  |  | Exhibits, Financial Statement Schedules, and
	Reports on Form 8-K                      |  |  | 40 | 

2



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PART I




Item 1. Business

Overview

We are a wholly owned subsidiary of Dobson
Communications Corporation. On December 23, 1998, we
acquired Sygnet Wireless, Inc. and its wholly-owned subsidiary,
Sygnet Communications, Inc. Sygnet is our predecessor company
and its operations currently are our only business. We own and
operate rural and suburban wireless telephone systems serving a
single large cluster of properties that includes a population of
approximately 2.4 million, with 290,300 subscribers
and a 12.3% market penetration in northeastern Ohio,
western Pennsylvania and western New York. The cluster includes
Youngstown, Ohio, Erie, Pennsylvania, and suburban and rural
areas between the Cleveland, Akron-Canton, Pittsburgh, Buffalo
and Rochester metropolitan areas. For the year ended
December 31, 2001, we had total revenues of
$187.6 million and a net loss of $38.2 million. At
December 31, 2001, we had approximately $500.1 million
of indebtedness and stockholders equity of
$108.3 million.

We have established and maintained a strong and
visible local presence. Our existing local management has
day-to-day operating authority, with the flexibility to respond
to individual market requirements and to foster a strong sense
of customer service and community spirit. However, certain
functions such as control of pricing, customer service and
marketing, systems design, engineering, purchasing, financial
and administrative functions and billing, are directed by Dobson
Communications to gain efficiencies.

Our markets are primarily rural and suburban and
include a high concentration of expressway corridors that tend
to have a significant amount of roaming activity. Roaming
revenue represented approximately 24.6% of our total revenues
for the years ended December 31, 2001 and 2000. We have
entered into roaming agreements with operators of wireless
systems in neighboring metropolitan service areas, or MSAs, and
rural service areas, or RSAs, which allow customers to roam at
competitive prices. Our principal roaming partners are
AT&T Wireless and Cingular Wireless. We also have
roaming agreements with PCS providers, such as
AT&T Wireless and Sprint, to allow the PCS
providers customers with tri-mode telephones to roam in
our markets.

Strategy

Our business strategy is to focus on continued
integration of our operations with those of Dobson
Communications, increasing our market penetration and further
developing our wireless systems to sustain growth in cash flows.
The following are the principal elements of our business
strategy:

Continue Integrated Operations with Dobson
Communications.We have integrated our
operations with Dobson Communications existing wireless
operations to achieve economies of scale. We believe that these
increased efficiencies have come from the centralized control of
pricing, billing functions, marketing, engineering, purchasing
and financial and administrative functions.

Expand Strategic Relationships.We intend to continue to maintain and
expand strategic relationships with operators of wireless
systems in major MSAs near our systems. These relationships
include roaming agreements, which allow our subscribers to use
the system in the neighboring MSA or RSA at favorable rates.
Under these agreements, the MSA or RSA operators
subscribers receive similar benefits roaming in our operating
areas. We have roaming agreements with the dominant wireless
operators in the neighboring MSAs and RSAs and others, including
AT&T Wireless and Cingular Wireless. We also have
agreements with PCS providers, such as AT&T Wireless and
Sprint, to allow the PCS providers customers with tri-mode
telephones to roam in certain of our markets. By entering into
these strategic agreements, we are able to increase our roaming
revenue and offer our subscribers larger home rate
areas.

Aggressive Local Marketing and Promotion of
Wireless Services.We plan to continue
to distinguish ourselves as the local markets leading
wireless services provider, stressing service quality, local
sales offices and commitment to the community. Our sales efforts
have been conducted primarily through our 65 retail stores and
outlets and our direct sales force and through independent
agents. We believe that, as an operator

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with strong local distribution of products and
services, we have an advantage over our competitors who do not
emphasize a local presence or focus on local market requirements
and community involvement. We intend to continue to open new
retail outlets and coordinate marketing efforts with Dobson
Communications, which should increase efficiencies by spreading
costs over a larger customer base.


Targeted Sales Efforts.Our marketing programs seek to attract
subscribers who are likely to generate high monthly revenue and
low churn rates. We will undertake extensive market research to
identify and design marketing programs to attract these
subscribers and tailor distinctive rate plans to emphasize the
quality, value and advantage of our wireless service.

Superior Customer Service.We intend to maintain a high level of
customer satisfaction through a variety of techniques, including
24-hour customer service call centers. We will continue to
support local customer service through our direct sales force
and retail stores.

Continued System Development.We believe that increasing capacity
and upgrading our systems will attract additional subscribers,
enhance the use of our systems by existing subscribers, increase
roaming activity and further enhance the overall efficiency of
the network. During 1999, we completed the upgrade to digital
time division multiple access (TDMA), IS-136 digital
technology in all of our markets, which has enabled us to
continue the increase in roaming (by servicing the increasing
number of digital wireless subscribers and PCS subscribers with
tri-mode telephones) and provide enhanced capabilities,
including caller ID, longer battery life and zone billing.
We spent $22.5 million in 2001, $31.5 million in 2000
and $20.6 million in 1999 to upgrade and expand our
network. By upgrading our network, we have continued to improve
coverage, increase capacity and build out our systems.

We already have plans in place to upgrade our
system to support the Global System for Mobile Communications
(GSM) and General Packet Radio Service
(GPRS) 2.5G data technology. With this data
network we expect to be able to offer 40Kb to 60Kb individual
data speeds to subscribers and roamers. We plan to complete a
full GSM/GPRS overlay by the end of 2003. GSM/GPRS is the 2.5G
technology choice of both AT&T Wireless and Cingular
Wireless.

Markets and Systems

The following table sets forth certain data with
respect to our wireless markets as of December 31, 2001.

|               |       |            |           |             |  |             |  |         |  |  |  |       | 
|-------------- | ----- | ---------- | --------- | ----------- |  | ----------- |  | ------- |  |  |  | ----- | 
|               |       | Total      |           | Total       |  | Market     
|Markets        |       | Population |           | Subscribers |  | Penetration
|               |       |            |           |             |  |            
|Erie MSA       |       |            | 280,800   |             |  |             |  |         |  |  |  |      
|New York 3 RSA |       |            | 476,200   |             |  |             |  |         |  |  |  |      
|Pennsylvania   |       |            | 594,200   |             |  |             |  |         |  |  |  |      
|Youngstown     |       |            | 1,006,500 |             |  |             |  |         |  |  |  |      
|               |       |            |           |             |  |             |  |         |  |  |  |      
|               | Total |            |           | 2,357,700   |  |             |  | 290,300 |  |  |  | 12.3% | 
|               |       |            |           |             |  |             |  |         |  |  |  |      

We conduct our operations in a single large
cluster of properties with a population of approximately
2.4 million and 290,300 subscribers in northeastern
Ohio, western Pennsylvania and western New York. The large
cluster of properties includes two smaller clusters and two
individual markets: the Youngstown cluster, the Erie market, the
Pennsylvania cluster, and the New York market. As of
December 31, 2001, all 256 of our cell sites are capable of
TDMA IS-136 digital service. The following is a description of
our wireless markets.

Youngstown Cluster

Our Youngstown cluster includes the Youngstown,
Ohio MSA, the Sharon, Pennsylvania MSA and the Ohio 11 RSA.
We initiated cellular operations in the Youngstown cluster in
1985. Our Youngstown cluster covers a contiguous area that is
located at a midway point between Pittsburgh and Cleveland along
the Ohio Turnpike and Interstate 76 and includes
Interstate 80, a major transportation access route from the
Midwest to New York City.

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Erie Market

Our Erie market includes the Erie, Pennsylvania
MSA. We initiated cellular operations in the Erie market in
September 1995. Our Erie market covers a contiguous area that
includes Interstate 90, which connects Buffalo and
Cleveland, and Interstate 79, which connects Erie directly
to Pittsburgh.

Pennsylvania Cluster

Our Pennsylvania cluster includes
Pennsylvania 1 RSA, Pennsylvania 2 RSA,
Pennsylvania 6 RSA and Pennsylvania 7 RSA. Our
Pennsylvania cluster covers a contiguous area that includes
Interstate 79 and Interstate 80, which link the major
population centers in north-central Pennsylvania, including
Pittsburgh and Erie. Our Pennsylvania cluster also includes a
portion of Route 60, a recently completed toll road, which
serves as an expressway to the Pittsburgh International Airport.

New York Market

Our New York market is composed of the New
York 3 RSA. We initiated cellular operations in the New
York market in October 1996. Our New York market is located in
the western part of New York and includes six counties. The
system borders Buffalo and Rochester to the north, Erie,
Pennsylvania to the west and Binghamton/ Elmira to the east.
Interstates 90 and 390 and Route 17 run through the
New York 3 market. Interstate 90 (the New York
Thruway) connects Buffalo, Rochester and Erie.
Interstate 390 connects Rochester, Corning, Binghamton and
Elmira. Route 17 connects Interstate 390 west to
Interstate 90 in Erie.

Products and Services

We develop and deploy some of the most advanced
wireless products and services. From a fully digital network to
the introduction of a wireless Internet product, we strive to
consistently deliver cutting-edge services and technologies to
our customer base. We attempt to maximize the choices available
to our customers through offering the latest line of hand-held
wireless phones from a wide-variety of manufacturers. We design
our rate plans to fit the specific needs of our customers. In an
effort to meet the needs of our customers, we specially tailor
business plans to nation-wide no-roaming. We offer no-toll plans
to unlimited local calling plans branded as Breeze. In addition,
we focus on the development of plans that maximize our profit
margin. We balance the needs of the customer with our on-going
objective to increase profitability. We solidify our commitment
to our customer base through the high priority we place on
deploying the latest products, services and competitive rate
plans.

Customer Service

Customer service remains an essential element of
our marketing and operating philosophies. We are committed to
attracting new subscribers and retaining existing subscribers by
providing high-quality customer service. In each of our wireless
service areas, we maintain installation and repair facilities
and a local staff, including a market manager, customer service
field representatives and technical and sales representatives.
We believe our local offices and installation and repair
facilities enhance our knowledge of local markets and enable us
to serve customers better, schedule installations and make
repairs. Through the use of sophisticated, centralized
monitoring equipment, we are able to centrally monitor the
technical performance of our wireless service areas.

In addition, our customers are able to report
wireless telephone service or account problems 24-hours a day to
a call service center on a toll-free access number with no
airtime charge. We believe that our emphasis on customer service
affords us a competitive advantage over our competitors.

Sales, Marketing and Distribution

We focus our marketing program on attracting
subscribers who we believe are likely to generate high monthly
revenue and low churn rates. We conduct extensive market
research to identify and design marketing programs to attract
these subscribers and tailor distinctive rate plans and roaming
rates to emphasize the

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quality, value and the advantage of our wireless
service. We have established marketing alliances with
neighboring wireless systems to create larger home rate areas in
order to increase roaming revenues and to attract new
subscribers. We market our service offerings primarily through
our direct sales force and retail stores we own. We also use a
network of dealers and other agents, such as electronics stores,
car dealerships and department stores. In addition to these
traditional channels, our marketing team evaluates other, less
traditional, methods of distributing our services and products,
such as targeted telemarketing and direct mail programs.


We market our wireless products and services
under the brand name CELLULAR ONE®, one of the most
recognized brand names in the wireless industry, in all of our
markets. The national advertising campaign conducted by the
Cellular One Group enhances our advertising exposure at a
fraction of the cost of what we could achieve alone.

We train and compensate our sales force in a
manner designed to stress the importance of customer service,
high penetration levels and minimum acquisition costs per
subscriber. We believe that our direct sales force selects and
screens new subscribers and select pricing plans that
realistically match subscriber means and needs better than our
independent agents. As a result, our use of a direct sales force
keeps marketing costs low both directly, because commissions are
lower, and indirectly, because subscriber retention is higher
than when independent agents are used.

Our after-sale telemarketing program conducted by
our sales force and customer service personnel helps to reduce
customer churn rate. This program enhances customer loyalty and
allows the sales staff to check customer satisfaction as well as
to offer additional calling features, such as voicemail, call
waiting and call forwarding.

As of December 31, 2001, we had
approximately 65 retail stores and outlets. Most of our retail
stores are fully equipped to handle customer service and
telephone maintenance. Some of these stores are also authorized
warranty repair centers. Our stores provide subscriber-friendly
retail environments, including extended hours, a large selection
of equipment and accessories, an expert sales staff and
convenient locations which make the sales process quick and easy
for the subscriber.

Roaming

Roaming is an important service component for our
business. Accordingly, where possible, we attempt to arrange
roaming agreements that allow our customers to roam at
competitive prices. We believe this increases usage on all
wireless systems, including our own. We focus on systems that
are adjacent to major metropolitan areas and include a high
concentration of expressway corridors, which tend to have a
significant amount of roaming activity. Our principal roaming
partners are AT&T Wireless and Cingular Wireless.

We are included in the North America Cellular
Network (NACN), which is the largest wireless
telephone network system in the world linking wireless operators
throughout the United States and Canada. NACN connects key areas
across North America so that our customers can use their
wireless phones to place and receive calls in these areas as
easily as they do in their home areas. Through NACN, customers
receive calls automatically without the use of complicated
roaming codes as they roam in more than 5,000 cities and
towns in the United States and Canada. In addition, special
services such as call forwarding and call waiting, automatically
follow subscribers as they travel.

System Development and Technology

System Development.We develop or build out our network
service areas in response to projected subscriber demand and
competitive factors by adding voice circuits to existing cell
sites and by building new cell sites to increase capacity with
an emphasis on improving coverage for hand-held phones in
high-traffic areas. We develop projected subscriber service
demand for each wireless market area on a cell-by-cell basis.

We expect our cell site expansion to enable us to
continue to add and retain subscribers, enhance subscriber use
of the systems, increase roaming traffic due to the large
geographic area covered by the wireless network and further
enhance the overall efficiency of our wireless systems. We
believe that the increased

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wireless coverage and capacity will continue to
have a positive impact on our market penetration and subscriber
usage.


Digital Technology.We use one basic protocol in our
digital networks. This digital technology or protocol is TDMA,
which divides each channel into three voice circuits providing
service to three simultaneous users instead of using the same
spectrum for one analog voice circuit. Our digital services
include digital voice circuits, short messaging services,
message waiting indicator, increased battery life and
caller ID services.

We have upgraded our entire network to digital
technology and offer digital voice and digital feature services
to all of our covered population. We match the digital protocols
of our markets to those used by our roaming partners in
adjoining markets in order to increase revenue opportunities.

We already have plans in place to upgrade our
system to support the Global System for Mobile Communications
(GSM) and the General Packet Radio Service
(GPRS) 2.5G data technology. With this data
network we expect to be able to offer 40Kb to 60Kb individual
data speeds to subscribers and roamers. We plan to complete a
full GSM/GPRS overlay by the end of 2003.

Billing System.H.O.
Systems, Inc. provides the billing function for all of our
wireless operations. Proprietary software furnished by
H.O. Systems serves all functions of billing for corporate
and retail locations. All administrative and customer
maintenance functions are handled in-house. H.O. Systems
prints and processes all of our customer invoices. We use
software that complements this billing system, allowing the use
of credit, collection and switch interfaces.

Service Marks

We use the CELLULAR ONE® service mark to
identify and promote our wireless service pursuant to licensing
agreements with Cellular One Group. We pay licensing and
advertising fees based upon the population of the licensed
areas. The licensing agreements require us to provide
high-quality wireless service to our customers and maintain a
certain minimum overall customer satisfaction rating in surveys
commissioned by Cellular One Group. The licensing agreements we
have entered into are for five-year terms expiring on various
dates. We may renew these agreements, subject to satisfaction of
certain operating standards, for one to three additional
five-year terms. From time to time, we may consider alternative
brand name strategies and service marks.

Competitive Strengths/ Competition

We believe that our competitive strengths are:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Established Operating History in Rural and
	Suburban Markets.Our parent, Dobson
	Communications, began providing wireless telephone service in
	1990 and since then has rapidly expanded their wireless
	operations to include systems in several rural and suburban
	markets. Dobson Communications acquired us in 1998 and
	successfully integrated us with their operations during 1999. We
	believe that during this time we have gained substantial
	experience as an operator of wireless systems in rural and
	suburban markets.
|
| |  | Strong Current Market
	Position.We have significant market
	share in virtually all of our wireless markets. We distinguish
	ourselves from our competition by emphasizing digital
	technology, customer care and a commitment to the local
	community. We plan to attract additional subscribers by
	leveraging our strategic relationships, digital technologies,
	local sales channels and diverse service offering, including
	national, regional and local rate plans.                                                             
|
| |  | Attractive Markets.Our markets are attractive for providing wireless communications
	services, due in part, to their proximity to markets operated by
	AT&T Wireless and major metropolitan areas. Our markets
	have a relatively high density of highway and other traffic
	corridors and strong tourist activity due to seasonal
	attractions. Additionally, our markets have demonstrated
	positive demographic growth trends and generally maintain a high
	population density relative to other rural service providers.          

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Strategic Relationships with AT&T Wireless
	and Cingular Wireless.We have
	strategic relationships with AT&T Wireless and Cingular
	Wireless. Through these relationships, we have roaming
	agreements that enable our customers to use
	AT&T Wireless and Cingular Wireless systems
	and their customers to use our systems, each at favorable rates.
	AT&T Wireless and Cingular Wireless customers accounted
	for approximately 85% of our roaming revenues, or approximately
	21% of our total revenues, for the year ended December 31,
	2001.
|
| |  | Experienced Management
	Team.Our senior management team,
	consisting of Everett R. Dobson, Doug Stephens and Bruce
	Knooihuizen, has over 50 years of telecommunications
	experience on a combined basis and is extremely knowledgeable in
	the telecommunications industry.                                                                                                                                                                                                                                                                         
|
| |  | Ability to Offer a Variety of Digital
	Services, including digital voice and digital feature services
	to 100% of our covered population.We
	have upgraded our wireless network to offer digital voice and
	digital feature services to 100% of our covered population,
	which both enhances our attractiveness as a roaming partner to
	personal communications service and other wireless providers and
	provides increased services to our current subscribers,
	including digital voice services.                                                

The telecommunications industry is experiencing
significant technological evolution, as evidenced by the
increasing pace of improvements in the capacity and quality of
digital technology, shorter cycles for new products and
enhancements and changes in consumer preferences and
expectations. Accordingly, we expect competition in the wireless
telecommunications industry to be dynamic and intense as a
result of competitors and the development of new technologies,
products and services. Many of our competitors have been
operating for a number of years, operate nationwide systems,
currently serve a substantial subscriber base and have
significantly greater financial, personnel, technical,
marketing, sales and distribution resources than we do. Some
competitors may market other services, such as long distance,
landline local exchange and internet access service, with their
wireless telecommunication service offerings.

We compete primarily against one other
facilities-based cellular carrier (a carrier having company
owned stores) in each of our wireless markets. We also compete
with personal communications service and enhanced specialized
mobile radio providers. Our principal competitors are ALLTEL,
Nextel, Sprint PCS and Verizon Wireless. We compete for
customers based principally upon price, the services and
enhancements offered, the quality of our wireless system,
customer service, system coverage and capacity. This competition
may increase to the extent that licenses are transferred from
smaller stand-alone operators to larger better capitalized and
more experienced wireless operators that may be able to offer
consumers certain network advantages.

AT&T Wireless, Cingular Wireless,
Verizon Wireless, Nextel Communications, Sprint PCS and
VoiceStream operate substantially nationwide networks. If any of
our roaming partners, including AT&T Wireless, were to
build out wireless networks in our markets to provide their
customers with wireless service, this would reduce our roaming
revenues. Any increased competition from wireless providers in
rural markets covered by our systems could also have the effect
of further reducing the roaming rates we could charge.

We also face, to a lesser extent, competition
from mobile satellite service providers, as well as from
resellers of these services and wireless service. In the future,
we may also compete more directly with traditional landline
telephone service providers. The FCC has created potential
sources of new competition by auctioning additional personal
communications service licenses, as well as licenses for
wireless communications services, local multipoint distribution
service, 39 GHz service and 220 to 222 MHz service.
Further, the FCC has announced plans to auction licenses in the
4.9 GHz, 24 GHz and 700 MHz bands that may be
usable for mobile services. The FCC has also recently initiated
a rule making proceeding to allocate approximately 200 MHz
of additional spectrum to wireless use, much of which can be
licensed for commercial wireless purposes. Continuing
technological advances in telecommunications make it impossible
to predict the extent of future competition. However, due to the
depth and breadth of these competitive services offered by
operators using these other technologies, future competition
from these operators could be intense.

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Regulation

The wireless telecommunications industry is
subject to extensive governmental regulation on the federal
level and to varying degrees on the state level. The enactment
of the Telecommunications Act of 1996 has had an impact on many
aspects of this regulation. In addition, this regulation
currently is the subject of administrative rulemakings and
judicial proceedings that are significant to us.

Federal Regulation

The licensing, construction, modification,
operation, ownership and acquisition of wireless telephone
systems are subject to regulations and policies of the FCC under
the Communications Act of 1934, as amended. The FCC has
promulgated rules and regulations governing, among other things,
applications to construct and operate wireless communications
systems, applications to transfer control of or assign wireless
licenses and technical and operational standards for the
operation of wireless systems (such as maximum power and antenna
height).

The FCC licenses cellular systems in accordance
with 734 geographically defined market areas comprised of
306 Metropolitan Statistical Areas, or MSAs and 428 Rural
Service Areas, or RSAs. In each market, the FCC licenses two
cellular systems operating on different 25 MHz frequency
blocks designated as Block A and Block B. Apart from
the different frequency blocks, there is no technical difference
between the two cellular systems and the operational
requirements imposed on each by the FCC are the same. Under FCC
rules, the authorized service area of a cellular provider in
each of its markets is referred to as the cellular geographic
service area. The cellular geographic service area may conform
exactly with the boundaries of the FCC designated MSA or RSA, it
may be smaller if a licensee has chosen not to provide services
to certain areas. A cellular licensee has the exclusive right to
expand its cellular geographic service area boundaries within
the licensees MSA or RSA for a period of five years after
grant of the licensees initial construction permit. At the
end of this five-year build-out period, however, other entities
may apply to serve portions of the MSA or RSA in areas outside
the licensees then designated cellular geographic service
area. The five year build-out period has expired for most
licensees and the FCC has granted several unserved
area applications filed by parties other than the original
MSA or RSA licensee.

The FCC has in the past restricted an
entitys ability to own interests in both cellular
frequency blocks in a market (the so-called cellular cross
interest rule) and further restricted the amount of commercial
mobile radio service (CMRS) spectrum in which an
entity may hold an attributable interest (the so-called spectrum
cap rule). On November 8, 2001, the FCC adopted a Report
and Order in which it (1) repealed the cellular cross
interest restriction as applied to ownership interests in MSAs,
but retained the rule as applied to ownership interests in RSAs;
and (2) increased the amount of attributable CMRS spectrum
that may be held to 55 MHz throughout all MSAs and RSAs.
The FCC will sunset the CMRS spectrum cap rule by eliminating it
effective January 1, 2003. Starting January 1, 2003,
the FCC will engage in a case-by case review of transactions
that would raise concerns similar to those that the spectrum cap
was designed to address. The transition period prior to
January 1, 2003 is intended to provide the FCC and
transacting parties an opportunity to prepare for the
case-by-case approach. The changes adopted by the FCC in the
November 8, 2001 Report and Order could further increase
our ability to attract capital or to make investments in other
wireless operators.

Cellular providers also must satisfy a variety of
FCC requirements relating to technical and reporting matters.
One requirement of cellular providers is the coordination of
proposed frequency usage with adjacent cellular users,
permittees and licensees in order to avoid interference between
adjacent systems. In addition, the height and power of cellular
base station transmitting facilities and the type of signals
they emit must fall within specified parameters. We are
obligated to pay annual regulatory fees and assessments to
support the FCCs regulation of the cellular industry, as
well as fees necessary to support federal universal service
programs, number portability regional database costs,
centralized administration of telephone numbering,
telecommunications relay service for the hearing-impaired and
application filing fees. These regulatory payment obligations
increase our costs of doing business.

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The FCC may prohibit or impose conditions on
transfers of licenses. The Communications Act requires prior FCC
approval for substantive, non pro forma transfers or assignments
to or from us of a controlling interest in any license or
construction permit, or any rights thereunder. Although we
cannot assure you that the FCC will approve or act in a timely
fashion upon any future requests for approval of applications
that we file, we have no reason to believe that the FCC would
not approve or grant such requests or applications in due
course. Because an FCC license is necessary to lawfully provide
cellular service, if the FCC were to disapprove any such filing
our business plans would be adversely affected.

The FCC also regulates a number of other aspects
of the cellular business. For example, the FCC regulates
cellular resale practices and currently also applies such
cellular resale requirements to A and B Block (and A/ B
Block controlled) licensees. These cellular providers may not
restrict any customers resale of their services or
unreasonably discriminate against resellers of their services.
All resale obligations for cellular operators are currently
scheduled to terminate on November 24, 2002. Moreover,
federal legislation enacted in 1993 requires the FCC to reduce
the disparities in the regulatory treatment of similar mobile
services, such as cellular services. Under this regulatory
structure, all of our cellular licenses are classified as CMRS.
As a CMRS provider, the FCC regulates us as a common carrier.
The FCC, however, has exempted cellular services from some
typical common carrier regulations, such as tariff and
interstate certification filings, thereby allowing us to respond
more quickly to our competition in the marketplace, and
preempted state rate and entry regulation.

The FCC has also adopted requirements for
cellular and other CMRS providers to implement basic and
enhanced 911 services. These services provide emergency
service providers with the ability to better identify and locate
callers using wireless services, including callers using special
devices for the hearing impaired. Our obligations to implement
these services occur in several stages, and on a
market-by-market basis. We and virtually all other CMRS
providers have requested that the FCC extend the deadlines for
meeting these 911 requirements. Our request remains
pending, during which time the FCC will not enforce these
requirements. The extent to which the FCC grants our requested
relief will affect our capital spending obligations. The FCC in
1999 amended its rules to eliminate a requirement that carriers
be compensated for enhanced 911 costs and expand the
circumstances under which wireless carriers may be required to
offer enhanced 911 services. Federal legislation enacted in 1999
may limit our liability relative to incomplete 911 calls to
a degree commensurate with wireline carriers in our markets.
Under certain circumstance, federal law also requires cellular
carriers to provide law enforcement agencies with capacity to
support lawful wiretaps and technical capabilities for wiretaps
beginning June 30, 2000 for voice services and
November 19, 2001 for packet-mode services, and to comply
with wiretap-related record-keeping and personnel-related
obligations. Maintaining compliance with these wireless
911 and law enforcement wiretap requirements may create
additional capital obligations for us to make necessary system
changes.

In addition, the FCC regulates the ancillary
service offerings that cellular licensees can provide and
permits cellular licensees to offer fixed services on a
co-primary basis along with mobile services. This rule may
facilitate the provision of wireless local loop service, which
involves the use of wireless links to provide local telephone
service by cellular licensees, although the extent of lawful
state regulation of such wireless local loop service
is undetermined. In this regard, the FCC has also adopted
telephone number portability rules for local exchange carriers,
as well as cellular licensees that could facilitate the
development of local exchange competition, including wireless
local loop service. The number portability rules generally
require cellular licensees, to have the capability to deliver
calls from their systems to ported numbers effective
December 31, 1998 and offer number portability in a manner
that supports roaming to ported numbers by November 24,
2002. These requirements may result in added capital
expenditures for us to make necessary system changes, although
we currently have no plans for any such expenditures.

The FCC generally grants cellular licenses for
terms of ten years that are renewable upon application to the
FCC. Near the conclusion of the license term, we must file
applications for renewal of licenses to obtain authority to
operate for an additional 10-year term. To date, the FCC has
renewed each of our licenses for which a renewal application was
required for a new ten-year term. The FCC may revoke our
licenses and may deny our license renewal applications for cause
after appropriate notice and hearing. The FCC will award a
renewal expectancy to us if we meet certain standards of past
performance. If we receive a renewal

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expectancy, it is very likely that the FCC will
renew our existing cellular licenses so that they will not
become subject to competing applications. To receive a renewal
expectancy, we must show that we have provided
substantial service during our past license term,
and have substantially complied with applicable FCC rules and
policies and the Communications Act. The FCC defines
substantial service as service, which is sound,
favorable and substantially above a level of mediocre service
that might only minimally warrant renewal. If a licensee does
not receive a renewal expectancy, then the FCC will accept
competing applications for the license, subject to a comparative
hearing, and the FCC may award the license to another entity.
The FCC has also adopted rules to govern customer billing by
CMRS providers and is considering whether to extend billing
rules currently applicable to landline carriers to CMRS
carriers. Adoption of some of the FCCs proposals could
increase the complexity and costs of our billing processes and
limit the manner in which we bill for services.


The FCC may deny applications for FCC authority,
and in extreme cases revoke licenses, if it finds that an entity
lacks the requisite character qualifications to be a
licensee. In making the determination, the FCC considers whether
an applicant or licensee has been the subject of adverse
findings in a judicial or administrative proceeding involving
felonies, the possession or sale of unlawful drugs, fraud,
antitrust violations or unfair competition, employment
discrimination, misrepresentations to the FCC or other
government agencies, or serious violations of the Communications
Act or FCC regulations. To our knowledge, there are no
activities and no judicial or administrative proceedings
involving either the licensees, or us in which we hold a
controlling interest that would warrant such a finding by the
FCC.

If foreign nationals or their representatives, a
foreign government or its representative or any corporation
organized under the laws of a foreign country own of record or
vote greater than 25 percent of our equity and the FCC
determines that the public interest would be so served, it may
revoke our cellular licenses or require an ownership
restructuring. The FCC will generally permit additional indirect
ownership in excess of the statutory 25 percent benchmark
where that interest is to be held by an entity or entities from
member countries of the World Trade Organization. For investors
from countries that are not members of the World Trade
Organization, the FCC will determine whether the home country of
the foreign investor extends reciprocal treatment called
equivalent competitive opportunities to
U.S. entities. If these opportunities do not exist, the FCC
may not permit investment beyond the 25 percent benchmark.
These restrictions could adversely affect our ability to attract
additional equity financing. We have no knowledge that any
foreign entity directly or indirectly owns a significant
percentage of our capital stock.

The Telecommunications Act of 1996, which made
significant changes to the Communications Act, requires state
public utilities commissions and/or the FCC to implement
policies that mandate reciprocal compensation between local
exchange carriers, a category that will, for these purposes,
include cellular carriers, for interconnection services at rates
more closely related to cost. In a rulemaking proceeding
pertaining to interconnection between local exchange carriers
and CMRS providers such as us, the FCC concluded that local
exchange carriers are required to compensate CMRS providers for
the reasonable costs incurred by these providers in terminating
traffic that originates on local exchange carrier facilities,
and vice versa. Consistent with this ruling, the FCC has
determined that local exchange carriers may not charge a CMRS
provider or other carrier for terminating local exchange
carrier-originated traffic and that local exchange carriers may
not charge CMRS providers for number activation and usage fees.
Depending on further FCC disposition of these issues, we may or
may not be successful in securing refunds, future relief or
both, with respect to charges for termination of local exchange
carrier-originated local traffic. If the FCC ultimately resolves
these issues in favor of CMRS providers, then we will pursue
relief through settlement negotiations, administrative complaint
procedures or both. If these issues are ultimately decided in
favor of the local exchange carriers, we likely would be
required to pay all past due contested charges and may also be
assessed interest and late charges for the withheld amounts.
These requirements could in the future have a material effect on
us. The FCC is currently considering changes to local exchange
carrier-CMRS interconnection and other so-called
intercarrier compensation schemes, and the outcome
of the proceeding may affect the manner in which CMRS carriers
are charged for such traffic.

The Telecommunications Act requires, and the FCC
has adopted, rules that require interstate communications
carriers, including cellular carriers, to make an
equitable and non-discriminatory contribution to a

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universal service fund that reimburses
communications carriers that provide basic communications
services to users who receive services at subsidized rates. We
have made such payments as the FCC has required. We may also
seek to qualify for payments from these federal and state
programs in high cost areas where we provide wireless
communications services, although we are not certain of the
extent to which such payments will be available to cellular
carriers. If such payments are made available to us, they would
be an additional source of revenue to us that could be used to
subsidize service we provide in the high cost areas. The FCC
recently initiated a rule making proceeding in which it solicits
public comment on ways of reforming both the manner by which it
assesses carrier contributions to the Universal Service Fund and
the way in which carriers may recover their costs from
customers. Reforms adopted in this proceeding may have an impact
on carriers operating expenses and on their ability to
recover universal service contributions from customers.


The Telecommunications Act also eases the
restrictions on the provision of interexchange telephone
services by wireless carriers affiliated with regional Bell
operating companies. Regional Bell operating company-affiliated
wireless carriers have interpreted the legislation to permit
immediate provision of in-region long distance call delivery for
their cellular customers, thus presenting an additional source
of competition to us.

Additionally, the Telecommunications Act
specifically exempts all cellular carriers from the obligation
to provide equal access to interstate long distance carriers.
However, the Telecommunications Act gives the FCC the authority
to impose rules to require unblocked access through carrier
identification codes or 800/888 numbers, so that cellular
subscribers are not denied access to the long distance carrier
of their choosing, if the FCC determines that the public
interest so requires. We currently provide dial
around equal access to all of our customers.

The Telecommunications Act also imposes
restrictions on a telecommunications carriers use of
customer proprietary network information without prior customer
approval. FCC rules implementing these restrictions are being
revised but have the potential to impose upon us new costly
obligations and impose burdens on our current marketing
activities. The FCCs rules implementing the
Telecommunications Acts customer proprietary network
information provisions were vacated by the United States Court
of Appeals for the Tenth Circuit on First Amendment grounds and
the Supreme Court declined to review the Tenth Circuits
decision. The FCC has sought public comment on whether to modify
its rules to address the courts concerns, and imposition
of rules similar to those vacated by the court could impose
additional costs on us and inhibit our marketing efforts.

The Telecommunications Act also requires
telecommunications carriers to make their services accessible to
persons with disabilities and the FCCs rules implementing
these requirements are in effect. These rules generally require
service providers to offer equipment and services that are
accessible to and usable by persons with disabilities, if
readily achievable, and to comply with complaint/ grievance
procedures for violations of these provisions. These rules are
largely untested and are subject to interpretation through the
FCCs complaint process. While much of the focus of these
rules is on the manufacture of equipment, carriers such as us
could, if found to have violated the rules, be subject to fines
and/or the imposition of costly new requirements. As a related
matter, the FCC has proposed requiring wireless handsets to be
compatible with hearing aids, which may increase the price of
handsets for customers.

In addition, the FCC has adopted rules to promote
the conservation of numbering resources and is considering
additional rules in this area. These rules require wireless
carriers to participate in number pooling (whereby phone numbers
are allocated in blocks of 1,000 rather than 10,000) when they
have implemented number portability capabilities, and imposed
additional administrative, monitoring and number reclamation
obligations on all carriers (currently required by
November 24, 2002), including wireless carriers. These
efforts may affect wireless service providers by imposing
additional costs or limiting access to numbering resources. The
FCC also has authorized states to initiate limited numbering
administration to supplement federal requirements including a
number of states in which we provide service.

The FCC has determined that interexchange (long
distance) service offerings of CMRS providers are subject to
rate averaging and rate integration requirements of the
Telecommunications Act. Rate averaging requires us to average
our intrastate long distance CMRS rates between high cost and
urban costs. The FCC

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has delayed implementation of the rate
integration requirements with respect to wide area rate plans
pending further reconsideration of its rules, and has delayed
the requirement that CMRS carriers integrate their rates among
CMRS affiliates. Other aspects of the FCCs rules have been
vacated by the United States Court of Appeals for the District
of Columbia, and are subject to further consideration by the
FCC. There is a pending proceeding in which the FCC will
determine how integration requirements apply to CMRS offerings,
including single rate plans. To the extent that we offer
services subject to these requirements, our pricing flexibility
is reduced, and there is no assurance that the FCC will decline
to impose these requirements on us and/or across our various
CMRS affiliates.


The overall impact of the Telecommunications Act
on our business is unclear and will likely remain so for the
foreseeable future. For example, limitations on local zoning
requirements imposed by the Telecommunications Act may
facilitate the construction of new cell sites and related
facilities. However, these restrictions on zoning authority may
provide only limited assistance to cellular carriers. On the
other hand, other provisions of the new statute relating to
interconnection, telephone number portability, universal
service, equal access, use of customer proprietary network
information and resale could subject us to additional costs and
increased competition.

State, Local and Other
Regulation

The Communications Act preempts state or local
regulation of the market entry of, or the rates charged by, any
CMRS provider, which include cellular telephone service
providers. The FCC denied the petitions of eight states to
continue their rate regulation authority, including authority
over cellular operators. As a practical matter, we are free to
establish rates and offer new products and service with a
minimum of regulatory requirements. The states in which we
operate maintain nominal oversight jurisdiction, primarily
focusing upon prior approval of acquisitions and transfers of
licenses and resolution of customer complaints. However, states
may continue to regulate other terms and conditions
of wireless service, and a number of state authorities have
initiated actions or investigations of various wireless carrier
practices. The outcome of these proceedings is uncertain and
could require us to change certain of our marketing practices
and ultimately increase state regulatory authority over the
wireless industry.

The location and construction of our cellular
transmitter towers and antennas are subject to FCC and Federal
Aviation Administration regulations and are subject to federal,
state and local environmental regulation, as well as state or
local zoning, land use and other regulation. Before we can put a
system into commercial operation, we must obtain all necessary
zoning and building permit approvals for the cell site and
microwave tower locations. The time needed to obtain zoning
approvals and requisite state permits varies from
market-to-market and state to state. Likewise, variations exist
in local zoning processes. Additionally, any proposed site must
comply with the FCCs environmental rules. If zoning
approval or requisite state permits cannot be obtained, or if
environmental rules make construction impossible or infeasible
on a particular site, our network design might be adversely
affected, network design costs could increase and the service
provided to our customers might be reduced.

We cannot assure you that any state or local
regulatory requirements currently applicable to our systems will
not be changed in the future or that regulatory requirements
will not be adopted in those states and localities, which
currently have none. Such changes could impose new obligations
on us that would adversely affect our operating results.

Future Regulation

From time to time, federal or state legislators
propose legislation that could affect us, either beneficially or
adversely. We cannot assure you that federal or state
legislation will not be enacted, or that regulations will not be
adopted or actions taken by the FCC or state regulatory
authorities that might adversely affect our business. Changes
such as the allocation by the FCC of radio spectrum for services
that compete with our business could adversely affect our
operating results.

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Employees and Agents

We have no employees. Our operations are entirely
managed by our parent, Dobson Communications.




Item 2. Properties

Our headquarters are in Oklahoma City, Oklahoma.
We also own office buildings in Youngstown, Ohio and Boardman,
Ohio. As of December 31, 2001, our wireless operations
leased approximately 65 retail stores and outlets and 1
administrative office. We will review these leases from time to
time and may, in the future, lease or acquire new facilities as
needed. We do not expect to encounter any material difficulties
in meeting our future needs for any leased space. We
collectively owned and leased approximately 256 cell sites
as of December 31, 2001.




Item 3. Legal Proceedings

Our wholly-owned subsidiary, Sygnet
Communications Inc. is currently involved in a pending legal
proceeding with the Commonwealth of Pennsylvania. This lawsuit
was brought by the Attorney General of Pennsylvania (AG) against
Sygnet Communications, and alleges that Sygnet Communications
violated the Pennsylvania Unfair Trade Practices Act. We deny
any wrongdoing and intend to vigorously defend the claim. Total
damages sought are estimated at $5.0 million.




Item 4. Submission of Matters to a
Vote of Security Holders

Information omitted in accordance with General
Instruction I(2)(c).

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PART II




Item 5. Market for Registrants
Common Equity and Related Stockholder Matters

There is no established trading market for our
common stock. As of March 22, 2002, our parent, Dobson
Communications Corporation was the only holder of record for our
common stock.




Item 6. Selected Financial Data of
Dobson/ Sygnet

Information omitted in accordance with General
Instruction I(2)(a)






|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|Item 7. | Managements Discussion And Analysis Of
	Financial Condition And Results Of Operations

The following discussion and analysis presents
factors, which we believe are relevant to an assessment and
understanding of our consolidated financial position and results
of operations. This financial and business analysis should be
read in conjunction with our consolidated financial statements
and the notes thereto included in Item 8.

Overview

We own and operate rural and suburban wireless
communication systems serving a large cluster of properties. As
of December 31, 2001, our systems covered a total
population of approximately 2.4 million and we had
290,300 subscribers. Our wireless systems are located in
Youngstown, Ohio and Erie, Pennsylvania, and in primarily rural
and suburban areas between the Cleveland, Akron-Canton,
Pittsburgh, Buffalo and Rochester metropolitan areas. The
following discussion and analysis is of the historical financial
condition and results of operations for us during 2001, 2000 and
1999.

Revenue

Our operating revenue consists of service
revenue, roaming revenue and equipment and other revenue.

We primarily derive service revenue by providing
wireless services to our subscribers. The industry has
experienced a trend of declining average revenue per minute as
competition among wireless service providers has led to
reductions in rates for airtime. The yield on our service
revenue (service revenue divided by subscriber minutes of use)
was $.30, $.30, and $.36 per minute for the years ended
December 31, 2001, 2000 and 1999, respectively. These
declines have been generally offset by increases in average
minutes of use per subscriber. We believe that the industry
trend of increasing minutes of use per subscriber will continue
to offset declining revenues per minute of use due to the
continued popularity of single rate calling plans and the
enhanced service capacity of recently developed digital networks.

Our service revenue also includes charges to our
subscribers when those subscribers roam into other wireless
providers markets. Through 1999, our accounting practice
was to net those revenues against the associated expenses
charged to us by third-party wireless providers (that is, the
fees we pay the other wireless providers for carrying our
subscribers calls on their network) and to record the net
expense as cost of service. Historically, we have been able to
pass through to our subscribers the majority of the costs
charged to us by third-party wireless providers. Recently, the
industry has been moving to pricing plans that include flat rate
pricing and larger home areas. Under these types of plans,
amounts charged to us by other wireless providers may not
necessarily be passed through to our subscribers. Therefore,
effective January 1, 2000, we changed our accounting
procedures to report these revenues and expenses separately in
our statement of operations and have reclassified prior year
amounts to reflect this change in accounting practice.

We derive roaming revenue by providing service to
subscribers of other wireless providers when those subscribers
roam into our markets and use our systems to carry
their calls. Roaming accounted for 24.6%, 24.6% and 26.3% of our
operating revenue for the years ended December 31, 2001,
2000 and 1999, respectively. Roaming revenues typically yield
higher average per minute rates and higher margins than revenues
from our subscribers. We achieve these higher margins because we
incur relatively lower incremental costs related to network
operation, billing, customer service and collections in
servicing roaming customers as

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compared to our home subscribers. However, even
though roaming revenue yields higher margins than revenue from
our subscribers, the yields are declining due to increased
market pressures and competition between wireless providers. Our
roaming yield (roaming revenue, which includes airtime, toll
charges and surcharges, divided by roaming minutes of use) was
$.32, $.37 and $.46 for the years ended December 31, 2001,
2000 and 1999, respectively. We believe that the trend of
increasing roaming minutes will continue to offset declining
roaming yields. Roaming revenue tends to be impacted by
seasonality. We typically have higher roaming revenue during the
second and third quarters of each year, as users tend to travel
more and therefore use their wireless phones more during the
spring and summer months.


We include any toll, or long-distance, revenues
related to our wireless and roaming services in service revenue
and roaming revenue. Equipment revenue is revenue from selling
wireless equipment to our subscribers.

Costs and Expenses

Our primary operating expense categories include
cost of service, cost of equipment, marketing and selling costs,
general and administrative costs and depreciation and
amortization.

Our cost of service consists primarily of costs
to operate and maintain our facilities utilized in providing
service to customers and amounts paid to third-party wireless
providers for providing service to our subscribers when our
subscribers roam into their markets. As discussed above with
regard to service revenue, there is a continuing trend toward
increasing minutes-of-use per subscriber. This includes minutes
used by our subscribers when they roam into other
providers markets. Consistent with this trend, our roaming
expense per minute has declined as well. This decline in expense
per minute has helped offset the increased expense from growth
in minutes-of-use per subscriber.

Our cost of equipment represents the cost
associated with telephone equipment and accessories sold to
customers. In recent years, we and other wireless providers have
increased the use of discounts on phone equipment and free phone
promotions, as competition between service providers has
intensified. As a result, we have incurred, and expect to
continue to incur, losses on equipment sales, which have
resulted in increased marketing and selling costs per gross
subscriber addition. While we expect to continue these discounts
and promotions, we believe that these promotions will result in
increased revenue from increases in the number of wireless
subscribers.

Our marketing and selling costs include
advertising, compensation paid to sales personnel and
independent agents and all other costs to market and sell
wireless products and services and certain costs related to
customer retention. We pay commissions to sales personnel and
independent agents for new business generated.

Our general and administrative costs include all
infrastructure costs, including costs for customer support,
billing, collections, and corporate administration.

Our depreciation and amortization expense
represents the costs associated with the depreciation of our
fixed assets and the amortization of our intangible assets,
primarily wireless license acquisition costs and customer lists.

Critical Accounting Policies and
Practices

We must necessarily use estimates in the
presentation of our financial statements with respect to the
effect of matters that are inherently uncertain. Our use of
estimates and assumptions affects the reported amounts of
assets, liabilities, and the amount of revenues and expenses we
recognize for and during the reporting period.

Our general and administrative expenses and
certain other operating expenses include all infrastructure
costs, including costs for customer support, billing,
collections and corporate administration, all of which is
provided by our parent, Dobson Communications. Dobson
Communications shares these costs with us based primarily on the
estimated subscribers and populations in our respective licensed
areas. If there were a change

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in the method used to allocate shared costs
between us and Dobson Communications, the change could have a
significant impact on our results of operations.


We amortize and depreciate our property, plant
and equipment, wireless licenses, customer lists and certain
other long-lived assets over their useful lives. These useful
lives are based on our estimates of the period that the assets
will generate revenue. We review our intangible assets for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
With the implementation of Statements of Financial Accounting
Standards No. 142, Goodwill and Other Intangible
Assets, which requires companies to stop amortizing
existing goodwill and intangible assets with indefinite lives,
we would treat our wireless licenses as indefinite life
intangibles. As a result, effective January 1, 2002, we
will no longer amortize wireless licenses. Instead, we will test
these licenses for impairment at least annually. This change in
policy will have a significant impact to our results of
operations and financial position. During 2001, the aggregate
amount of amortization expense, net of income tax, attributable
to our wireless licenses was approximately $29.7 million.
Through December 31, 2001, our accounting policy was to
evaluate the carrying value of our intangible assets based on
our undiscounted cash flows. However, as a result of
implementing SFAS 142, we are now required to evaluate the
carrying value of our indefinite life intangibles using their
fair values. Upon implementation of this new pronouncement, we
expect to record a charge, net of income tax, of approximately
$138 million to reflect the write-down of our wireless
license acquisition costs to their fair value.

We believe it is necessary for an understanding
of our significant accounting policies to read the above in
conjunction with Note 2 of Item 8, Significant
Accounting Policies, of this Form 10-K.

Results of Operations

In the text below, financial statement numbers
have been rounded; however, the percentage changes are based on
the actual financial statement numbers.

Year Ended December 31, 2001 Compared
to Year ended December 31, 2000

Operating revenues.For the year ended
December 31, 2001, our total operating revenue increased
$22.9 million, or 13.9%, to $187.6 million from
$164.7 million for the comparable period in 2000. Our total
service revenue, roaming revenue and equipment and other revenue
represented 71.7%, 24.6% and 3.7%, respectively, of our total
operating revenue during the year ended December 31, 2001
and 70.0%, 24.6% and 5.4%, respectively, of our total operating
revenue during the year ended December 31, 2000.

The following table sets forth the components of
our revenue for the periods indicated:

|                   |                             |                  |   |         |         |  |   |         |         | 
|------------------ | --------------------------- | ---------------- | - | ------- | ------- |  | - | ------- | ------- | 
|                   |                             |                 
|                   |                             | Year Ended      
|                   |                             | December 31,    
|                   |                             |                 
|                   |                             | 2001             |   | 2000   
|                   |                             |                  |   |        
|                   |                             |                 
|                   |                             | ($ in thousands)
|Operating revenue: |                             |                  |   |         |         |  |   |        
|                   | Service revenue             |                  | $ | 134,613 |         |  | $ | 115,344 |        
|                   | Roaming revenue             |                  |   | 46,098  |         |  |   | 40,509  |        
|                   | Equipment and other revenue |                  |   | 6,915   |         |  |   | 8,853   |        
|                   |                             |                  |   |         |         |  |   |        
|                   |                             | Total            |   | $       | 187,626 |  |   | $       | 164,706 | 
|                   |                             |                  |   |         |         |  |   |        

For the year ended December 31, 2001, our
service revenue increased $19.3 million, or 16.7%, to
$134.6 million from $115.3 million for the year ended
December 31, 2000. This increase was attributable to
increased penetration and usage. Our subscriber base increased
12.0% to 290,300 at December 31, 2001 from 259,200 at
December 31, 2000. Our average monthly service revenue per
subscriber increased 2.5% to $41 for the year ended
December 31, 2001 compared to $40 for the year ended
December 31, 2000. Our average monthly service revenue per
subscriber has been positively impacted by changes in the mix of
digital and analog subscribers in our subscriber base. On
December 31, 2001, 79.6% of our subscribers were on digital
rate plans compared to 48.3% at December 31, 2000. Our
digital rate plans typically produce higher service

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revenue per subscriber and allow subscribers to
use more minutes in a larger home area than our analog rate
plans.


For the year ended December 31, 2001, our
roaming revenue increased $5.6 million, or 13.8%, to
$46.1 million from $40.5 million for the year ended
December 31, 2000. This increase was primarily attributable
to a 33.5% increase in roaming minutes in our markets due to
expanded coverage areas and increased usage in these markets,
offset by a 13.5% decline in our roaming revenue per
minute-of-use.

For the year ended December 31, 2001, our
equipment and other revenue decreased $2.0 million, or
21.9%, to $6.9 million from $8.9 million for the year
ended December 31, 2000. This decrease is due to increased
phone discounts for the year ended December 31, 2001, as a
result of more competitive markets.

Cost of service.For the year ended
December 31, 2001, our total cost of service increased
$10.7 million, or 32.1%, to $43.9 million from
$33.2 million for the comparable period in 2000. This
increase is primarily the result of the increased number of
subscribers and the migration of our subscribers from analog
rate plans to new digital rate plans. As we described with our
service revenue above, on average our digital subscribers use
more minutes than our analog subscribers. This increased usage
also increases the minutes used by our subscribers outside of
our markets, thus increasing the expenses we are charged by
third-party wireless providers.

Cost of equipment.For the year ended
December 31, 2001, our cost of equipment decreased
$0.9 million, or 4.0%, to $22.0 million from
$22.9 million in 2000, primarily as a result of decreases
in the cost of wireless equipment due to new technology.

Marketing and selling costs.For the year ended
December 31, 2001, our marketing and selling costs
decreased slightly to $25.6 million from $26.0 million
for the year ended December 31, 2000. In addition, as a
percentage of total operating revenue, marketing and selling
costs decreased to 13.7% for the year ended December 31,
2001 from 15.8% for the year ended December 31, 2000, as a
result of efficiencies gained from centralized marketing
functions with our parent, Dobson Communications. With these
efficiencies gained, we were able to decrease overall marketing
and selling costs while increasing our gross subscriber
additions. Gross subscriber additions totaled 97,500 for the
year ended December 31, 2001 compared to gross subscriber
additions of 90,900 in 2000.

General and administrative costs.For the year ended
December 31, 2001, our general and administrative costs
increased $2.9 million, or 11.6%, to $27.4 million
from $24.5 million for the year ended December 31,
2000. This increase was the result of increased infrastructure
costs, including customer service, billing, collections and
administrative costs as a result of the overall growth of our
business. Our overall monthly general and administrative costs
per average subscriber remained constant at $8 for 2001 and 2000.

Depreciation and amortization expense.For the year ended
December 31, 2001, our depreciation and amortization
expense increased $5.8 million, or 8.2%, to
$75.6 million from $69.8 million for 2000. This
increase is a result of additional depreciation on fixed assets
acquired in 2000 and 2001.

Interest expense.For the year ended
December 31, 2001, our interest expense decreased
$9.2 million, or 14.2%, to $56.0 million from
$65.2 million for the year ended December 31, 2000.
This decrease is a result of decreased interest rates and the
reduction of the outstanding balance on our revolving credit
facility.

Net loss.For
the year ended December 31, 2001, our net loss was
$38.2 million. Our net loss decreased $8.1 million, or
17.4%, from $46.3 million in the year ended
December 31, 2000. The decrease was primarily a result of
the decrease in operating loss combined with decreased interest
expense for the year ended December 31, 2001, compared to
2000.

Year Ended December 31, 2000 Compared
to Year ended December 31, 1999

Operating revenues.For the year ended
December 31, 2000, total operating revenue increased
$24.6 million, or 17.6%, to $164.7 million from
$140.1 million for the comparable period in 1999. Our total
service revenue, roaming revenue and equipment and other revenue
represented 70.0%, 24.6% and 5.4%,

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respectively, of total operating revenue during
the year ended December 31, 2000 and 69.1%, 26.3% and 4.6%,
respectively, of total operating revenue during the year ended
December 31, 1999.


The following table sets forth the components of
our revenue for the periods indicated:

|                   |                             |                  |   |         |         |  |   |        |         | 
|------------------ | --------------------------- | ---------------- | - | ------- | ------- |  | - | ------ | ------- | 
|                   |                             |                 
|                   |                             | Year Ended      
|                   |                             | December 31,    
|                   |                             |                 
|                   |                             | 2000             |   | 1999   
|                   |                             |                  |   |        
|                   |                             |                 
|                   |                             | ($ in thousands)
|Operating revenue: |                             |                  |   |         |         |  |   |       
|                   | Service revenue             |                  | $ | 115,344 |         |  | $ | 96,812 |        
|                   | Roaming revenue             |                  |   | 40,509  |         |  |   | 36,889 |        
|                   | Equipment and other revenue |                  |   | 8,853   |         |  |   | 6,407  |        
|                   |                             |                  |   |         |         |  |   |       
|                   |                             | Total            |   | $       | 164,706 |  |   | $      | 140,108 | 
|                   |                             |                  |   |         |         |  |   |       

For the year ended December 31, 2000,
service revenue increased $18.5 million, or 19.1%, to
$115.3 million from $96.8 million for the year ended
December 31, 1999. This increase was attributable to
increased penetration and usage in our markets. Our subscriber
base increased 15.8% to 259,200 at December 31, 2000 from
223,800 at December 31, 1999. Our average monthly service
revenue per subscriber remained constant at $40 for the years
ended December 31, 2000 and 1999.

For the year ended December 31, 2000,
roaming revenue increased $3.6 million, or 9.8%, to
$40.5 million from $36.9 million for the year ended
December 31, 1999. This increase was primarily attributable
to a 36.2% increase in roaming minutes in our markets due to
expanded coverage areas and increased usage in these markets,
offset by a 19.6% decline in our roaming revenue per
minute-of-use.

For the year ended December 31, 2000,
equipment and other revenue increased $2.5 million, or
38.2%, to $8.9 million from $6.4 million for the year
ended December 31, 1999. This increase was attributable to
an increase in equipment sales due to the growth in gross
subscriber additions.

Cost of service.For the year ended
December 31, 2000, the total cost of service increased
$3.7 million, or 12.4%, to $33.2 million from
$29.5 million for the comparable period in 1999. This
increase was primarily attributable to increased subscribers and
minutes of use in our markets and markets owned by third-party
wireless providers. However, as a percentage of service and
roaming revenue, our cost of wireless service decreased to 21.3%
for the year ended December 31, 2000 from 22.1% for the
year ended December 31, 1999. This decrease was
attributable to a reduction in rates charged by third-party
wireless providers for providing services to our subscribers.

Cost of equipment.For the year ended
December 31, 2000, our cost of equipment increased
$9.3 million, or 68.7%, to $22.9 million from
$13.6 million in 1999, primarily as a result of increases
in the volume of equipment we sold due to the growth in
subscriber additions and migrations of existing subscribers from
analog service to digital service.

Marketing and selling costs.For the year ended
December 31, 2000, our marketing and selling costs
increased $4.0 million, or 18.1%, to $26.0 million
from $22.0 million for the year ended December 31,
1999. This increase was the result of efforts focused to
increase gross additions during the year. We added
90,900 gross subscribers during the year ended
December 31, 2000, which is a 12.1% increase from
81,100 gross subscribers added during the year ended
December 31, 1999.

General and administrative costs.For the year ended
December 31, 2000, our general and administrative costs
increased $4.5 million, or 22.4%, to $24.5 million
from $20.0 million for the year ended December 31,
1999. This increase was the result of increased infrastructure
costs, including customer service, billing, collections and
administrative costs as a result of the overall growth of our
business. Our overall monthly general and administrative costs
per average subscriber remained constant at $8 for 2000 and 1999.

Depreciation and amortization expense.For the year ended
December 31, 2000, our depreciation and amortization
expense increased $2.3 million, or 3.4%, to
$69.8 million from $67.5 million for 1999. This
increase is a result of depreciation and amortization on assets
that were acquired during 2000 and 1999.

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Interest expense.For the year ended
December 31, 2000, our interest expense decreased
$0.2 million, or 0.2%, to $65.2 million from
$65.4 million for the year ended December 31, 1999.
This decrease was a result of our decreased level of
indebtedness.

Net loss.For
the year ended December 31, 2000, our net loss was
$46.3 million. Our net loss increased $0.6 million, or
1.3%, from $45.7 million in the year ended
December 31, 1999, as a result of the items discussed above.

Liquidity and Capital Resources

We have required, and will likely continue to
require, substantial capital to further develop, expand and
upgrade our wireless systems and those we may acquire. We have
financed our operations through cash flows from operating
activities, capital contributions from our parent, bank debt and
the sale of debt securities.

At December 31, 2001, we had a working
capital deficit of $5.9 million (a ratio of current assets
to current liabilities of 0.8:1) and an unrestricted cash
balance of $4.3 million, which compares to working capital
of $25.1 million (a ratio of current assets to current
liabilities of 1.7:1) and an unrestricted cash balance of
$8.9 million at December 31, 2000.

Our net cash provided by operating activities
totaled $18.3 million and $0.7 million for the years
ended December 31, 2001 and 2000, respectively, compared to
net cash used in operating activities of $10.5 million for
1999. The change from 2000 to 2001 is primarily due to the
decrease in our net loss and the increase in depreciation and
amortization. The change from 2000 to 1999 is primarily due to
the change in accrued expense.

Our net cash used in investing activities totaled
$47.2 million, $15.4 million and $17.7 million
for the years ended December 31, 2001, 2000 and 1999,
respectively. In 2001, the cash used in investing related to
capital expenditures of $22.5 million and a decrease in
payables-affiliate of $25.3 million. In 2000 and 1999, the
cash used in investing related primarily to capital expenditures
with an offset by an increase in payable-affiliates. Capital
expenditures for the years ended December 31, 2001, 2000
and 1999 were $22.5 million, $31.5 million and
$20.6 million, respectively.

Net cash provided by financing activities was
$24.2 million, $21.4 million and $10.2 million
for the years ended December 31, 2001, 2000 and 1999,
respectively. Financing activity sources for the year ended
December 31, 2001 consisted primarily of maturities of
restricted investments of $27.1 million, proceeds from
long-term debt of $63.5 million and capital contributions
of $32.0 million, which was offset by repayments of
long-term debt totaling $98.3 million. Financing activity
sources for the year ended December 31, 2000, consisted
primarily of maturities of restricted investments of
$22.1 million, proceeds from long-term debt of
$20.0 million and capital contributions of
$62.6 million, which was offset by repayments of long-term
debt totaling $83.1 million.

For 2002, we have budgeted approximately $18.0 to
$20.0 million for capital expenditures. The amount and
timing of capital expenditures may vary depending on the rate at
which we expand and develop our wireless systems and whether we
consummate additional acquisitions.

Our wholly-owned subsidiary, Sygnet Wireless,
Inc, has credit facilities, for an aggregate of
$336.0 million, consisting of a $40.4 million
revolving credit facility and $295.6 million of term loan
facilities. Interest on the revolving credit facility and the
term loan facilities is based on a prime rate or a LIBOR
formula, and has ranged between 5.0% and 10.5% since inception.
As of December 31, 2001, we had $300.1 million
outstanding under our credit facility and we had
$26.9 million of availability. Obligations under our
facility are secured by a pledge of the capital stock of our
subsidiary as well as a lien on substantially all of our assets
and our operating subsidiary. The credit facility requires that
we maintain certain financial ratios. The failure to maintain
such ratios would constitute an event of default,
notwithstanding our ability to meet our debt service
obligations. As of December 31, 2001, we were in compliance
with the required financial ratios. In addition, our ability to
borrow under our credit facility is limited by the requirement
that, on a quarterly basis, the amount available under our
credit facility will reduce until it terminates.

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As of December 31, 2001 we had outstanding
$200.0 principal amount of senior notes that bear interest
at an annual rate of 12.25% and mature in 2008. We used
approximately $67.7 million of the net proceeds from the
sale of our senior notes to purchase securities pledged to
secure the first six semi-annual interest payments, which began
June 15, 1999 and ended with the payment we made on
December 15, 2001.

The principal stockholder of Dobson
Communications, Dobson CC Limited Partnership, or DCCLP,
and certain of its affiliates have entered into credit
agreements with Bank of America, N.A. These credit agreements
have aggregate principal amounts outstanding of approximately
$280 million as of March 15, 2002. To secure their
obligations under these credit agreements, DCCLP and these
affiliates individually, pledged certain assets, which include
beneficial ownership of securities representing controlling
interest in DCCLP and Dobson Communications. These loans will
mature on March 31, 2003, unless extended.

If any of the loans are not paid at maturity or
if an event of default occurs under any of the loan agreements
and the lender elects to foreclose on the collateral, we could
experience a change of control under our indenture governing our
outstanding senior notes. Upon a change of control, we would be
required to offer to purchase our outstanding senior notes at
101% of the principal amount plus accrued and unpaid
interest. There can be no assurance that we would have the funds
necessary to complete the repurchase. If we failed to complete
the purchase of the tendered senior notes, the senior
noteholders or their trustee would be entitled to accelerate the
maturity of the senior notes. A foreclosure on DCCLPs
pledge shares could also result in an event of default under the
credit facility of Dobson Operating Company, a subsidiary of
Dobson Communications. An event of default under the Dobson
Operating Company credit facility would result in an event of
default under our credit facility, potentially resulting in the
acceleration of all outstanding indebtedness under our credit
facility.

We had an interest rate swap, which had
effectively fixed the interest on $85.0 million of the
principal outstanding on our credit facility at approximately
5.48% plus a factor based on our leverage. This interest rate
swap expired on March 30, 2001.

In 1999, we sold to Dobson Tower Company, a
wholly owned subsidiary of Dobson Communications, substantially
all of the towers we owned for $25.0 million. On
October 15, 1999, Dobson Tower Company sold all of the
towers acquired from us to American Tower Corporation for
approximately $38.7 million. In connection with this sale,
we have agreed to lease the towers back from American Tower
Corporation for an initial term of ten years, at an annual
rental of approximately $3.0 million.

Although we cannot provide you any assurance, we
believe that, assuming successful implementation of our
strategy, including the further development of our wireless
systems and significant and sustained growth in our cash flow,
borrowings under our bank facility and cash flow from
operations, will be sufficient to satisfy our capital
expenditure, working capital and debt service obligations for
the next twelve months. We will need to refinance our bank
facility and the senior notes at their maturities, which begin
in 2007. Our ability to do so will depend on, among other
things, our financial condition at the time, the restrictions in
the instruments governing our indebtedness and other factors,
including market conditions beyond our control. The actual
amount and timing of our future capital requirements may differ
materially from our estimates as a result of, among other
things, the demand for our services and regulatory,
technological and competitive developments. Sources of
additional financing may include commercial bank borrowings,
vendor financing and the sale of equity or debt securities. We
cannot assure you that any such financing will be available on
acceptable terms or at all.

Effect of New Accounting Standards

In July 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards
No. 141, Business Combinations and
No. 142, Goodwill and Other Intangible Assets.
These standards prohibit the application of the
pooling-of-interests method of accounting for business
combinations effective June 30, 2001 and require companies
to stop amortizing existing goodwill and intangible assets with
indefinite lives effective January 1, 2002. In addition,
any goodwill or indefinite life intangible assets acquired
between July 1, 2001 and December 31, 2001 would not
be amortized. Under the new rules, we will treat our wireless
licenses as indefinite life intangible assets. As a result,
effective January 1, 2002, we will no longer

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amortize wireless licenses. Instead, we will test
our indefinite life intangibles for impairment at least annually
and would only adjust the carrying amount of these intangible
assets upon an impairment of the indefinite life intangible
assets. During the year ended December 31, 2001, we
recorded approximately $29.7 million of amortization
expense, net of income tax, related to our wireless license
acquisition costs. Through December 31, 2001, our
accounting policy was to evaluate the carrying value of our
intangible assets based on our undiscounted cash flows. However,
as a result of implementing SFAS 142, we are now required
to evaluate the carrying value of our indefinite life
intangibles using their fair values. As a result of our
implementation of SFAS No. 142 on January 1, 2002, we
expect to record a charge, net of income tax, of approximately
$138 million to reflect the write-down of our wireless
license acquisition costs to their fair value.


In July 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. This
statement provides accounting and reporting standards for costs
associated with the retirement of long-lived assets. It requires
entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred.
When the liability is initially recorded, the entity capitalizes
a cost by increasing the carrying amount of the related
long-lived asset. Over time, the liability is accreted to its
present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon
settlement. We have not yet determined the effect that this new
accounting standard may have on our results of operations,
financial position and cash flows. We will be required to
implement this standard effective January 1, 2003.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. This statement replaces SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.
However, it maintains the fundamental provisions of SFAS
No. 121 for recognition and measurement of the impairment
of long-lived assets to be held and used and for measurement of
long-lived assets to be disposed of by sale. This statement
applies to all long-lived assets, including discontinued
operations, and replaces the provisions of APB Opinion
No. 30, Reporting the Results of
OperationsReporting the Effects of Disposal of a Segment
of a Business, for the disposal of segments of a business.
This statement requires that those long-lived assets be measured
at the lower of carrying amount or fair value less cost to sell.
We implemented this standard in the fourth quarter of 2001,
effective January 1, 2001, with no impact to our financial
statements.

Forward-Looking Statements

The description of our plans set forth herein,
including planned capital expenditures and acquisitions, are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. These plans involve a number of risks and uncertainties.
Important factors that could cause actual capital expenditures,
acquisition activity or our performance to differ materially
from the plans include, without limitation, our ability to
satisfy the financial covenants of our outstanding debt
instruments and to raise additional capital; our ability to
manage our rapid growth successfully and to compete effectively
in our wireless business against competitors with greater
financial, technical, marketing and other resources; changes in
end-user requirements and preferences; the development of other
technologies and products that may gain more commercial
acceptance than those of ours; and adverse regulatory changes.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof. We undertake no obligation to update or revise these
forward-looking statements to reflect events or circumstances
after the date hereof including, without limitation, changes in
our business strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.






Item 7A. Quantitative and
Qualitative Disclosure About Market Risk


Our primary market risk relates to changes in
interest rates. Market risk is the potential loss arising from
adverse changes in market prices and rates, including interest
rates. We do not enter into derivatives or other financial
instruments for trading or speculative purposes. The objective
of our financial risk management is to minimize the negative
impact of interest rate fluctuations on our earnings and equity.
On March 30, 2001, our interest rate swap that effectively
fixed the interest rate on $85.0 million of the principal
outstanding on our credit facility expired. Thus, we currently
are not involved with any derivatives or other financial
instruments.

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The fair market value of long-term fixed interest
rate debt is subject to interest rate risk. Generally, the fair
market value of fixed interest rate debt will increase as
interest rates fall and decrease as interest rates raise. Since
we are not currently involved with any derivative or other
financial instrument, we have determined that there is no
material market risk exposure to our consolidated financial
position, results of operations or cash flows.

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Item 8. Financial Statements and
Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

|                                                                                                      |  |      |    | 
|----------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                      |  | Page
|                                                                                                      |  |     
|Dobson/ Sygnet Communications
	Company                                                                |  |      |    | 
|Report of Independent Public Accountants                                                              |  |      | 25 | 
|Consolidated Balance Sheets as of
	December 31, 2001 and 2000                                         |  |      | 26 | 
|Consolidated Statements of Operations for the
	years ended December 31, 2001, 2000 and 1999           |  |      | 27 | 
|Consolidated Statements of Stockholders
	Equity for the years ended December 31, 2001, 2000 and 1999 |  |      | 28 | 
|Consolidated Statements of Cash Flows for the
	years ended December 31, 2001, 2000 and 1999           |  |      | 29 | 
|Notes to Consolidated Financial Statements                                                            |  |      | 30 | 

INDEX TO SUPPLEMENTARY DATA

|                                     |  |  |    | 
|------------------------------------ |  |  | -- | 
|Dobson/Sygnet Communications Company |  |  |    | 
|Selected quarterly financial data    |  |  | 38 | 

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REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS

To the Board of Directors of

Dobson/ Sygnet Communications Company:


We have audited the accompanying consolidated
balance sheets of Dobson/ Sygnet Communications Company (an
Oklahoma corporation) and subsidiaries as of December 31,
2001 and 2000 and the related consolidated statements of
operations, stockholders equity and cash flows for the
years ended December 31, 2001, 2000 and 1999. These
consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of Dobson/ Sygnet
Communications Company and subsidiaries as of December 31,
2001 and 2000, and the results of their operations and their
cash flows for the years ended December 31, 2001, 2000 and
1999, in conformity with accounting principles generally
accepted in the United States.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma,

March 22, 2002


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DOBSON/ SYGNET COMMUNICATIONS
COMPANY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2001 AND 2000

|                                                                                                                                     |                                            |      |              |             |  |   |             |             | 
|------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ---- | ------------ | ----------- |  | - | ----------- | ----------- | 
|                                                                                                                                     |                                            | 2001 |              | 2000       
|                                                                                                                                     |                                            |      |              |            
|ASSETS                                                                                                                              
|CURRENT ASSETS:                                                                                                                      |                                            |      |              |             |  |   |             |            
|Cash and cash equivalents                                                                                                            |                                            | $    | 4,286,325    |             |  | $ | 8,871,817   |            
|Restricted cash and investments                                                                                                      |                                            |      |             |             |  |   | 26,153,677  |            
|Accounts receivable, net of allowance for
	doubtful accounts of $433,635 and $421,040 in 2001 and 2000,
	respectively                |                                            |      | 19,326,750   |             |  |   | 20,433,870  |            
|Inventory                                                                                                                            |                                            |      | 4,873,736    |             |  |   | 3,977,359   |            
|Prepaid expenses and other                                                                                                           |                                            |      | 1,151,506    |             |  |   | 1,011,633   |            
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|                                                                                                                                     | Total current assets                       |      |              | 29,638,317  |  |   |             | 60,448,356  | 
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|PROPERTY, PLANT AND EQUIPMENT, net                                                                                                   |                                            |      | 75,529,567   |             |  |   | 72,257,805  |            
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|OTHER ASSETS:                                                                                                                        |                                            |      |              |             |  |   |             |            
|Wireless license acquisition costs, net of
	accumulated amortization of $144,565,027 and $96,728,198 in 2001
	and 2000, respectively |                                            |      | 572,988,085  |             |  |   | 620,824,915 |            
|Deferred financing costs, net of accumulated
	amortization of $15,684,097 and $10,446,283 in 2001 and 2000,
	respectively            |                                            |      | 35,441,469   |             |  |   | 40,558,866  |            
|Customer list, net of accumulated amortization of
	$27,011,262 and $18,073,712 in 2001 and 2000, respectively                        |                                            |      | 17,676,488   |             |  |   | 26,614,038  |            
|Other                                                                                                                                |                                            |      | 84,189       |             |  |   | 285,897     |            
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|                                                                                                                                     | Total other assets                         |      |              | 626,190,231 |  |   |             | 688,283,716 | 
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|                                                                                                                                     | Total assets                               |      | $            | 731,358,115 |  |   | $           | 820,989,877 | 
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|LIABILITIES AND STOCKHOLDERS
	EQUITY                                                                                               
|CURRENT LIABILITIES:                                                                                                                 |                                            |      |              |             |  |   |             |            
|Accounts payable                                                                                                                     |                                            | $    | 10,240,868   |             |  | $ | 10,637,640  |            
|Accrued expenses                                                                                                                     |                                            |      | 2,487,903    |             |  |   | 3,510,931   |            
|Accrued interest payable                                                                                                             |                                            |      | 3,745,008    |             |  |   | 2,531,975   |            
|Deferred revenue and customer deposits                                                                                               |                                            |      | 4,842,107    |             |  |   | 4,386,131   |            
|Current portion of long-term debt                                                                                                    |                                            |      | 14,250,000   |             |  |   | 14,250,000  |            
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|                                                                                                                                     | Total current liabilities                  |      |              | 35,565,886  |  |   |             | 35,316,677  | 
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|OTHER LIABILITIES:                                                                                                                   |                                            |      |              |             |  |   |             |            
|Payablesaffiliates                                                                                                                  |                                            |      | 1,400,227    |             |  |   | 26,740,660  |            
|Long-term debt, net of current portion                                                                                               |                                            |      | 485,886,754  |             |  |   | 520,636,754 |            
|Deferred income taxes                                                                                                                |                                            |      | 100,228,803  |             |  |   | 123,772,343 |            
|Commitments (Note 10)                                                                                                                |                                            |      |              |             |  |   |             |            
|STOCKHOLDERS EQUITY:                                                                                                                |                                            |      |              |             |  |   |             |            
|Common stock, $1.00 par value,
	500 shares authorized and 100 shares issued and
	outstanding in 2001 and 2000, respectively          |                                            |      | 100          |             |  |   | 100         |            
|Additional paid-in capital                                                                                                           |                                            |      | 239,632,804  |             |  |   | 207,632,804 |            
|Retained deficit                                                                                                                     |                                            |      | (131,356,459 | )           |  |   | (93,109,461 | )          
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|                                                                                                                                     | Total stockholders equity                 |      |              | 108,276,445 |  |   |             | 114,523,443 | 
|                                                                                                                                     |                                            |      |              |             |  |   |             |            
|                                                                                                                                     | Total liabilities and stockholders equity |      | $            | 731,358,115 |  |   | $           | 820,989,877 | 
|                                                                                                                                     |                                            |      |              |             |  |   |             |            

The accompanying notes are an integral part of
these consolidated balance sheets.

26



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY

CONSOLIDATED STATEMENTS OF
OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999

|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |            |             | 
|----------------------------------------------------------------- | ----------------------------- | ------------------------ | ----------- | ----------- | ----------- | ---- | ----------- | ----------- | ----------- | - | ----------- | ---------- | ----------- | 
|                                                                  |                               |                         
|                                                                  |                               | Year Ended December 31, 
|                                                                  |                               |                         
|                                                                  |                               | 2001                     |             | 2000        |             | 1999
|                                                                  |                               |                          |             |             |             |     
|OPERATING REVENUE:                                                |                               |                          |             |             |             |      |             |             |             |   |             |           
|                                                                  | Service revenue               |                          | $           | 134,612,913 |             |      | $           | 115,343,806 |             |   | $           | 96,811,512 |            
|                                                                  | Roaming revenue               |                          |             | 46,098,363  |             |      |             | 40,509,670  |             |   |             | 36,889,249 |            
|                                                                  | Equipment and other revenue   |                          |             | 6,915,027   |             |      |             | 8,852,908   |             |   |             | 6,407,302  |            
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|                                                                  |                               | Total operating revenue  |             |             | 187,626,303 |      |             |             | 164,706,384 |   |             |            | 140,108,063 | 
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|OPERATING EXPENSES:                                               |                               |                          |             |             |             |      |             |             |             |   |             |           
|                                                                  | Cost of service               |                          |             | 43,855,595  |             |      |             | 33,193,396  |             |   |             | 29,534,936 |            
|                                                                  | Cost of equipment             |                          |             | 21,966,752  |             |      |             | 22,892,157  |             |   |             | 13,566,343 |            
|                                                                  | Marketing and selling         |                          |             | 25,644,138  |             |      |             | 26,007,187  |             |   |             | 22,015,236 |            
|                                                                  | General and administrative    |                          |             | 27,378,553  |             |      |             | 24,536,409  |             |   |             | 20,039,549 |            
|                                                                  | Depreciation and amortization |                          |             | 75,586,368  |             |      |             | 69,840,697  |             |   |             | 67,515,628 |            
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|                                                                  |                               | Total operating expenses |             |             | 194,431,406 |      |             |             | 176,469,846 |   |             |            | 152,671,692 | 
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|OPERATING LOSS                                                    |                               |                          | (6,805,103  | )           |             |      | (11,763,462 | )           |             |   | (12,563,629 | )         
|INTEREST EXPENSE                                                  |                               |                          | (55,950,891 | )           |             |      | (65,235,347 | )           |             |   | (65,360,804 | )         
|INTEREST INCOME                                                   |                               |                          | 1,047,267   |             |             |      | 2,317,388   |             |             |   | 4,235,890   |           
|OTHER INCOME (EXPENSE), NET                                       |                               |                          | 20,021      |             |             |      | (33,360     | )           |             |   | (57,480     | )         
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|LOSS BEFORE INCOME TAXES                                          |                               |                          | (61,688,706 | )           |             |      | (74,714,781 | )           |             |   | (73,746,023 | )         
|INCOME TAX BENEFIT                                                |                               |                          | 23,441,708  |             |             |      | 28,391,617  |             |             |   | 28,023,488  |           
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|NET LOSS                                                          |                               | $                        | (38,246,998 | )           |             | $    | (46,323,164 | )           |             | $ | (45,722,535 | )         
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDER
	PER COMMON SHARE |                               | $                        | (382,470    | )           |             | $    | (463,232    | )           |             | $ | (457,225    | )         
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           
|BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                  |                               |                          | 100         |             |             |      | 100         |             |             |   | 100         |           
|                                                                  |                               |                          |             |             |             |      |             |             |             |   |             |           

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

27



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999

|                  |                      |              |     |        |  |                   |     |           |  |       |             |            |  |   |              |             |   |   |             |             |  
|----------------- | -------------------- | ------------ | --- | ------ |  | ----------------- | --- | --------- |  | ----- | ----------- | ---------- |  | - | ------------ | ----------- | - | - | ----------- | ----------- | -
|                  |                      |              |     |        |  |                   |     |          
|                  |                      | Common Stock |     |        |  |                   |     |          
|                  |                      |              |     |        |  | Retained Earnings |     |          
|                  |                      | Shares       |     | Amount |  | Paid-in Capital   |     | (Deficit) |  | Total
|                  |                      |              |     |        |  |                   |     |           |  |      
|DECEMBER 31, 1998 |                      |              | 100 |        |  | $                 | 100 |           |  | $     | 145,000,000 |            |  | $ | (1,063,762   | )           |   | $ | 143,936,338 |            
|                  | Net loss             |              |     |       |  |                   |     |          |  |       |             |           |  |   |              | (45,722,535 | ) |   |             | (45,722,535 | )
|                  |                      |              |     |        |  |                   |     |           |  |       |             |            |  |   |              |             |   |   |             |            
|DECEMBER 31, 1999 |                      |              | 100 |        |  | $                 | 100 |           |  | $     | 145,000,000 |            |  | $ | (46,786,297  | )           |   | $ | 98,213,803  |            
|                  | Capital contribution |              |     |       |  |                   |     |          |  |       |             | 62,632,804 |  |   |              |            |   |   |             | 62,632,804  |  
|                  | Net loss             |              |     |       |  |                   |     |          |  |       |             |           |  |   |              | (46,323,164 | ) |   |             | (46,323,164 | )
|                  |                      |              |     |        |  |                   |     |           |  |       |             |            |  |   |              |             |   |   |             |            
|DECEMBER 31, 2000 |                      |              | 100 |        |  | $                 | 100 |           |  | $     | 207,632,804 |            |  | $ | (93,109,461  | )           |   | $ | 114,523,443 |            
|                  | Capital contribution |              |     |       |  |                   |     |          |  |       |             | 32,000,000 |  |   |              |            |   |   |             | 32,000,000  |  
|                  | Net loss             |              |     |       |  |                   |     |          |  |       |             |           |  |   |              | (38,246,998 | ) |   |             | (38,246,998 | )
|                  |                      |              |     |        |  |                   |     |           |  |       |             |            |  |   |              |             |   |   |             |            
|DECEMBER 31, 2001 |                      |              | 100 |        |  | $                 | 100 |           |  | $     | 239,632,804 |            |  | $ | (131,356,459 | )           |   | $ | 108,276,445 |            
|                  |                      |              |     |        |  |                   |     |           |  |       |             |            |  |   |              |             |   |   |             |            

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

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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999

|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |             |             |             |  
|----------------------------------------------------- | ------------------------------------------------------------------------------------------ | -------------------------------------- | ---------------------------------------------------- | ----------- | ----------- | ----------- | --------- | ----------- | ----------- | ----------- | ----------- | ----------- | ----------- | ----------- | -
|                                                      |                                                                                            |                                       
|                                                      |                                                                                            | Year ended December 31,               
|                                                      |                                                                                            |                                       
|                                                      |                                                                                            | 2001                                   |                                                      | 2000        |             | 1999       
|                                                      |                                                                                            |                                        |                                                      |             |             |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                 |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      | Net loss                                                                                   |                                        | $                                                    | (38,246,998 | )           |             | $         | (46,323,164 | )           |             | $           | (45,722,535 | )          
|                                                      | Adjustments to reconcile net loss to net cash
	provided by (used in) operating activities |                                        |                                                      |             |             |             |           |             |             |             |             |             |            
|                                                      |                                                                                            | Depreciation and amortization          |                                                      |             | 75,586,368  |             |           |             | 69,840,697  |             |             |             | 67,515,628  |            
|                                                      |                                                                                            | Amortization of financing costs        |                                                      |             | 5,237,814   |             |           |             | 5,214,730   |             |             |             | 5,231,553   |            
|                                                      |                                                                                            | Deferred income taxes                  |                                                      |             | (23,548,540 | )           |           |             | (28,581,941 | )           |             |             | (29,144,889 | )          
|                                                      |                                                                                            | Other                                  |                                                      |             | (20,021     | )           |           |             | 33,360      |             |             |             | 57,476      |            
|                                                      | Changes in current assets and liabilities                                                 |                                        |                                                      |             |             |             |           |             |             |             |             |             |            
|                                                      |                                                                                            | Accounts receivable                    |                                                      |             | 1,107,120   |             |           |             | (5,367,017  | )           |             |             | (2,546,471  | )          
|                                                      |                                                                                            | Inventory                              |                                                      |             | (896,377    | )           |           |             | (151,764    | )           |             |             | (1,406,219  | )          
|                                                      |                                                                                            | Interest receivable                    |                                                      |             | (953,000    | )           |           |             | 1,112,132   |             |             |             |            |            
|                                                      |                                                                                            | Prepaid expenses and other             |                                                      |             | (134,873    | )           |           |             | (527,967    | )           |             |             | (1,725,690  | )          
|                                                      |                                                                                            | Accounts payable                       |                                                      |             | (436,115    | )           |           |             | 3,050,980   |             |             |             | 7,455,357   |            
|                                                      |                                                                                            | Accrued expenses                       |                                                      |             | 190,005     |             |           |             | 1,334,033   |             |             |             | (11,090,709 | )          
|                                                      |                                                                                            | Deferred revenue and customer deposits |                                                      |             | 455,976     |             |           |             | 1,052,116   |             |             |             | 896,994     |            
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      |                                                                                            |                                        | Net cash provided by (used in) operating
	activities |             |             | 18,341,359  |           |             |             | 686,195     |             |             |             | (10,479,505 | )
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                     
|CASH FLOWS FROM INVESTING ACTIVITIES:                 |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      | Capital expenditures                                                                       |                                        |                                                      | (22,506,189 | )           |             |           | (31,543,675 | )           |             |             | (20,591,960 | )          
|                                                      | Purchase of wireless licenses and properties                                               |                                        |                                                      |            |             |             |           |            |             |             |             | (5,134,969  | )          
|                                                      | Proceeds from sale of assets                                                               |                                        |                                                      | 484,500     |             |             |           | 134,152     |             |             |             | 794,587     |            
|                                                      | Increase in receivable-affiliate                                                           |                                        |                                                      |            |             |             |           | (394,274    | )           |             |             |            |            
|                                                      | (Decrease) increase in payable-affiliate                                                   |                                        |                                                      | (25,340,433 | )           |             |           | 15,955,940  |             |             |             | 7,188,631   |            
|                                                      | Investment in unconsolidated subsidiaries and
	other, net                                  |                                        |                                                      | 199,011     |             |             |           | 421,836     |             |             |             |            |            
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      |                                                                                            |                                        | Net cash used in investing activities                |             |             | (47,163,111 | )         |             |             | (15,426,021 | )           |             |             | (17,743,711 | )
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                     
|CASH FLOWS FROM FINANCING ACTIVITIES:                 |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      | Repayments of long-term debt                                                               |                                        |                                                      | (98,250,000 | )           |             |           | (83,113,246 | )           |             |             | (31,000,000 | )          
|                                                      | Proceeds from long-term debt                                                               |                                        |                                                      | 63,500,000  |             |             |           | 20,000,000  |             |             |             | 22,000,000  |            
|                                                      | Proceeds from capital contributions                                                        |                                        |                                                      | 32,000,000  |             |             |           | 62,632,804  |             |             |             |            |            
|                                                      | Maturities of restricted investments                                                       |                                        |                                                      | 27,106,677  |             |             |           | 22,080,000  |             |             |             | 20,530,000  |            
|                                                      | Deferred financing costs                                                                   |                                        |                                                      | (120,417    | )           |             |           | (247,127    | )           |             |             | (1,310,549  | )          
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      |                                                                                            |                                        | Net cash provided by financing activities            |             |             | 24,236,260  |           |             |             | 21,352,431  |             |             |             | 10,219,451  |  
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|NET (DECREASE) INCREASE IN CASH AND CASH
	EQUIVALENTS |                                                                                            |                                        | (4,585,492                                           | )           |             |             | 6,612,605 |             |             |             | (18,003,765 | )          
|CASH AND CASH EQUIVALENTS, beginning of year          |                                                                                            |                                        | 8,871,817                                            |             |             |             | 2,259,212 |             |             |             | 20,262,977  |            
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|CASH AND CASH EQUIVALENTS, end of year                |                                                                                            | $                                      | 4,286,325                                            |             |             | $           | 8,871,817 |             |             | $           | 2,259,212   |            
|                                                      |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    |                                                                                            |                                        |                                                      |             |             |             |           |             |             |             |             |            
|                                                      | Cash paid for                                                                             |                                        |                                                      |             |             |             |           |             |             |             |             |             |            
|                                                      | Interest, net of amounts capitalized                                                       |                                        | $                                                    | 49,872,107  |             |             | $         | 58,667,815  |             |             | $           | 59,937,253  |            

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

29



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

1. ORGANIZATION:

The Company was incorporated under the name Front
Nine Holdings, Inc. as an Oklahoma corporation on
July 23, 1998. The Company was formed to acquire the
operations of Sygnet Wireless, Inc. Subsequently, the Company
changed its name to Dobson/ Sygnet Communications Company (the
Company) and amended its certificate of
incorporation on December 2, 1998 to reflect this change.
On December 23, 1998, the Company completed the acquisition
of Sygnet Wireless, Inc. for $337.5 million. The Company is a
wholly-owned subsidiary of Dobson Communications Corporation
(Dobson Communications) and is a provider of rural
and suburban wireless telephone services.

Capital Resources and Growth

The Company has substantial indebtedness and debt
service requirements and is subject to significant financial
restrictions and limitations. If the Company is unable to
satisfy any of the covenants under the credit facility,
including financial covenants, the Company will be unable to
borrow under the credit facility during such time period to fund
its ongoing operations, planned capital expenditures or other
permissible uses.

The Companys ability to manage future
growth will depend upon its ability to monitor operations,
control costs and maintain effective quality controls, all of
which will result in higher operating expenses. Any failure to
expand these areas and to implement and improve its systems,
procedures and controls in an efficient manner at a pace
consistent with the growth of the Companys business could
have a material adverse effect on the Companys business,
financial condition and results of operations.

2. SIGNIFICANT ACCOUNTING
POLICIES:

Principles of Consolidation

The consolidated financial statements of the
Company include the accounts of all wholly-owned subsidiaries.

Cash and Cash Equivalents

Cash and cash equivalents on the accompanying
consolidated balance sheets include cash and short-term
investments with original maturities of three months or less.

Inventory

The Company values its inventory at the lower of
cost or market on the first-in, first-out method of accounting.

Impairment of Long-Lived Assets

The Company assesses potential impairments of
long-lived assets and certain identifiable intangibles when
there is evidence that events or changes in circumstances
indicate that an assets carrying value may not be
recoverable. An impairment loss is recognized when the sum of
the expected future net cash flows is less than the carrying
amount of the asset, including intangible assets. The amount of
any recognized impairment would be based on the estimated fair
value of the asset subject to impairment compared to the
carrying amount of such asset. The fair value of intangible
assets will be determined based on the discounted cash flows of
the market or markets to which the intangible assets relate. The
Company has identified no such losses.

30



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)



2. SIGNIFICANT ACCOUNTING POLICIES:
(Continued)


Wireless License Acquisition Costs

Wireless license acquisition costs consist of
amounts paid to acquire FCC licenses to provide wireless
services. Wireless license acquisition costs are being amortized
on a straight-line basis over fifteen years. Amortization
expense of $47,836,830, $46,637,640 and $48,934,995 was recorded
in 2001, 2000 and 1999 respectively.

The ongoing value and remaining useful lives of
intangible and other long-term assets are subject to periodic
evaluation. See Recently Issued Accounting
Pronouncements below for additional discussion of
accounting for wireless license acquisition costs.

Deferred Financing Costs

Deferred financing costs consist primarily of
fees incurred to secure long-term debt. Deferred financing costs
are being amortized on a straight-line basis over the terms of
the debt of nine to ten years. Interest expense related to this
amortization of $5,237,814, $5,214,730 and $5,231,553 was
recorded in 2001, 2000 and 1999, respectively.

Customer List

Customer list acquisition costs are being
amortized on a straight-line basis over five years. Amortization
expense of $8,937,550, $8,639,636 and $9,235,464 was recorded in
2001, 2000 and 1999, respectively.

Advertising Costs

Advertising costs are expensed as incurred and
are included as marketing and selling expenses in the
accompanying consolidated statements of operations.

Income Taxes

The Company files a consolidated income tax
return with its parent, Dobson Communications. Income taxes are
allocated among the various entities included in the
consolidated tax return, as agreed, based on the ratio of each
entitys taxable income (loss) to consolidated taxable
income (loss). For financial reporting purposes, the Company
calculates its provision for income taxes on a stand-alone
basis. Deferred income taxes reflect the estimated future tax
effects of differences between financial statement and tax bases
of assets and liabilities at year-end.

Revenue Recognition

The Company records service revenues over the
period they are earned. The cost of providing service is
recognized as incurred.

Airtime and toll revenue is billed in arrears.
The Company accrued estimated unbilled revenues for services
provided of approximately $2,536,449 and $2,441,645 as of
December 31, 2001 and 2000, respectively, which are
included in accounts receivable in the accompanying consolidated
balance sheets. Monthly access charges are billed in advance and
are reflected as deferred revenue on the accompanying
consolidated balance sheets. Equipment sales are recognized when
the equipment is delivered to the customer. Subscriber
acquisition costs (primarily commissions and losses on equipment
sales) are expensed as incurred.

31



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)



2. SIGNIFICANT ACCOUNTING POLICIES:
(Continued)


As of December 31, 2000, the Company
implemented SEC Staff Accounting Bulleting (SAB)
No. 101 relating to revenue recognition in financial
statements. The impact of this implementation was not material
to the Companys revenues or results of operations.

Earnings Per Share

Basic loss per common share is computed by the
weighted average number of shares of common stock outstanding
during the year. There were no potentially dilutive securities
outstanding during 2001 and 2000.

Use of Estimates

The preparation of these consolidated financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates.

Significant Concentrations

In connection with providing wireless services to
customers of other wireless carriers, the Company has
contractual agreements with those carriers, which provide for
agreed-upon billing rates between the parties. Approximately
92%, 91% and 85% of the Companys roaming revenue was
earned from customers of three wireless carriers during the
years ended December 31, 2001, 2000 and 1999, respectively.

Recently Issued Accounting
Pronouncements

In July 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards
No. 141, Business Combinations and
No. 142, Goodwill and Other Intangible Assets.
These standards prohibit the application of the
pooling-of-interests method of accounting for business
combinations effective June 30, 2001 and require companies
to stop amortizing existing goodwill and intangible assets with
indefinite lives effective January 1, 2002. In addition,
any goodwill or indefinite life intangible assets acquired
between July 1, 2001 and December 31, 2001 would not
be amortized. Under the new rules, the Company would treat its
wireless licenses as indefinite life intangible assets. As a
result, effective January 1, 2002, the Company will no
longer amortize wireless licenses. Instead, the Company will
test its indefinite life intangibles for impairment at least
annually and would only adjust the carrying amount of these
intangible assets upon an impairment of the indefinite life
intangible assets. During the year ended December 31, 2001,
the Company recorded approximately $29.7 million of
amortization expense, net of income tax, related to its wireless
license acquisition costs. Through December 31, 2001, the
Companys accounting policy was to evaluate the carrying
value of its intangible assets based on its undiscounted cash
flows. However, as a result of implementing SFAS 142, the
Company is now required to evaluate the carrying value of its
indefinite life intangibles using their fair values. As a result
of the implementation of SFAS No. 142 on January 1,
2002, the Company expects to record a charge, net of income tax,
of approximately $138 million to reflect the write down of
its wireless license acquisition costs to their fair value.

In July 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. This
statement provides accounting and reporting standards for costs
associated with the retirement of long-lived assets. It requires
entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred.
When the liability is initially recorded, the entity capitalizes
a cost by increasing the carrying amount of the related
long-lived asset. Over time, the liability is accreted to its
present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the

32



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)



2. SIGNIFICANT ACCOUNTING POLICIES:
(Continued)


liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon
settlement. The Company has not yet determined the effect that
this new accounting standard may have on its results of
operations, financial position and cash flows. The Company will
be required to implement this standard effective January 1,
2003.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. This statement replaces SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.
However, it maintains the fundamental provisions of SFAS
No. 121 for recognition and measurement of the impairment
of long-lived assets to be held and used and for measurement of
long-lived assets to be disposed of by sale. This statement
applies to all long-lived assets, including discontinued
operations, and replaces the provisions of APB Opinion
No. 30, Reporting the Results of Operations-Reporting
the Effects of Disposal of a Segment of a Business, for
the disposal of segments of a business. This statement requires
that those long-lived assets be measured at the lower of
carrying amount or fair value less cost to sell. The Company
implemented this standard effective January 1, 2001, with
no impact to its financial statements.

Reclassifications

Certain reclassifications have been made to the
previously presented 1999 balances to conform them to the
current presentation.

3. PROPERTY, PLANT AND
EQUIPMENT:

Property, plant and equipment are recorded at
cost. Newly constructed wireless systems are added to property,
plant and equipment at cost, which includes contracted services,
direct labor and materials overhead. Existing property, plant
and equipment purchased through acquisitions is recorded at its
fair value at the date of the purchase. Repairs, minor
replacements and maintenance are charged to operations as
incurred. The provisions for depreciation are provided using the
straight-line method based on the estimated useful lives of the
various classes of depreciable property. Depreciation expense
totaling $18,811,988, $14,563,421 and $9,345,169 was recorded
for the years ended December 31, 2001, 2000 and 1999,
respectively.

Listed below are the major classes of property,
plant and equipment and their estimated useful lives, in years,
as of December 31, 2001 and 2000:

|                                            |                                    |             |      |      |  |      |             |             |  |   |             |            | 
|------------------------------------------- | ---------------------------------- | ----------- | ---- | ---- |  | ---- | ----------- | ----------- |  | - | ----------- | ---------- | 
|                                            |                                    | Useful Life |      | 2001 |  | 2000
|                                            |                                    |             |      |      |  |     
|Wireless systems and equipment              |                                    |             | 2-10 |      |  | $    | 93,532,993  |             |  | $ | 73,697,891  |           
|Buildings and improvements                  |                                    |             | 5-40 |      |  |      | 12,065,906  |             |  |   | 10,765,681  |           
|Vehicles, aircraft and other work equipment |                                    |             | 3-10 |      |  |      | 330,675     |             |  |   | 331,397     |           
|Furniture and office equipment              |                                    |             | 5-10 |      |  |      | 11,630,898  |             |  |   | 9,052,907   |           
|Plant under construction                    |                                    |             |      |      |  |      | 146,200     |             |  |   | 2,056,962   |           
|Land                                        |                                    |             |      |      |  |      | 188,522     |             |  |   | 188,522     |           
|                                            |                                    |             |      |      |  |      |             |             |  |   |             |           
|                                            | Property, plant and equipment      |             |      |      |  |      |             | 117,895,194 |  |   |             | 96,093,360 | 
|Accumulated depreciation                    |                                    |             |      |      |  |      | (42,365,627 | )           |  |   | (23,835,555 | )         
|                                            |                                    |             |      |      |  |      |             |             |  |   |             |           
|                                            | Property, plant and equipment, net |             |      |      |  |      | $           | 75,529,567  |  |   | $           | 72,257,805 | 
|                                            |                                    |             |      |      |  |      |             |             |  |   |             |           

33



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

4. LONG-TERM DEBT:

The Companys long-term debt as of
December 31, 2001 and 2000 consisted of the following:

|                            |                      |      |             |             |  |   |             |             | 
|--------------------------- | -------------------- | ---- | ----------- | ----------- |  | - | ----------- | ----------- | 
|                            |                      | 2001 |             | 2000       
|                            |                      |      |             |            
|Credit facility             |                      | $    | 300,136,754 |             |  | $ | 334,886,754 |            
|Dobson/ Sygnet Senior Notes |                      |      | 200,000,000 |             |  |   | 200,000,000 |            
|                            |                      |      |             |             |  |   |             |            
|                            | Total debt           |      |             | 500,136,754 |  |   |             | 534,886,754 | 
|Less-current maturities     |                      |      | 14,250,000  |             |  |   | 14,250,000  |            
|                            |                      |      |             |             |  |   |             |            
|                            | Total long-term debt |      | $           | 485,886,754 |  |   | $           | 520,636,754 | 
|                            |                      |      |             |             |  |   |             |            

Credit Facility

On December 23, 1998, the Company obtained
$430.0 million of financing pursuant to a senior secured
credit facility (Dobson/ Sygnet Credit Facility)
from Bank of America, consisting of a $50.0 million
reducing revolving credit facility and $380.0 million of
term loan facilities. During 1999, the maximum availability of
$430.0 million was reduced to $422.0 million as a
result of a combination of a principal payment due and a
mandatory repayment on the term loans totaling
$8.0 million. As of December 31, 2001 and 2000, the
Company had $300.1 million and $334.9 million
outstanding, respectively, at a weighted average interest rate
of 7.8% and 9.6%, respectively. The Companys obligations
under the Dobson/ Sygnet Credit Facility are secured by all
current and future assets of the Company. Initial proceeds were
used primarily to finance the Sygnet Acquisition. The Company
expects to use the remaining availability to finance capital
expenditures and general operations. The facility will terminate
in 2007.

The Dobson/ Sygnet Credit Facility requires the
Company to maintain certain financial ratios. The failure to
maintain such ratios would constitute an event of default,
notwithstanding the Companys ability to meet its debt
service obligations. At December 31, 2001, the Company was
in compliance with all required financial ratios.

The Company had an interest rate swap, which had
effectively fixed the interest on $85.0 million of the
principal outstanding on the Dobson/ Sygnet Credit Facility at
approximately 5.48% plus a factor based on the Companys
leverage. On January 1, 2001, in accordance with
SFAS 133, the Company recorded an asset and a transition
adjustment, net of income tax, to other comprehensive income
totaling $0.4 million relating to its outstanding interest
rate hedges, thus increasing the Companys total equity.
However, on March 31, 2001, these hedges expired leaving no
remaining impact to the Companys financial position.

Senior Notes

On December 23, 1998, the Company issued
$200.0 million of 12.25% Senior Notes maturing in 2008
(Dobson/ Sygnet Senior Notes). The net proceeds were
used to finance the Sygnet Acquisition and to purchase
securities pledged to secure payment of the first six
semi-annual interest payments on the Dobson/ Sygnet Senior
Notes, which began on June 15, 1999 and ended on
December 15, 2001. The pledged securities were reflected as
restricted cash and investments in the Companys
consolidated balance sheet as of December 31, 2000. The
Dobson/ Sygnet Senior Notes are redeemable at the option of the
Company in whole or in part, on or after December 15, 2003,
initially at 106.125%.

34



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)



4. LONG-TERM DEBT: (Continued)


Minimum Future Payments

Minimum future payments of long-term debt for
years subsequent to December 31, 2001, are as follows:

|                    |  |   |             | 
|------------------- |  | - | ----------- | 
|2002                |  | $ | 14,250,000  | 
|2003                |  |   | 28,250,000  | 
|2004                |  |   | 43,000,000  | 
|2005                |  |   | 71,000,000  | 
|2006                |  |   | 60,691,142  | 
|2007 and thereafter |  |   | 282,945,612 | 
|                    |  |   |             | 
|                    |  | $ | 500,136,754 | 
|                    |  |   |             | 

The principal stockholder of Dobson
Communications, Dobson CC Limited Partnership, or DCCLP,
and certain of its affiliates have entered into credit
agreements with Bank of America, N.A. These Credit agreements
have aggregate principal amounts outstanding of approximately
$280 million as of March 15, 2002. To secure their
obligations under these credit agreements, DCCLP and these
affiliates individually pledged, certain assets, which include
beneficial ownership of securities representing controlling
interest in DCCLP and Dobson Communications. These loans will
mature on March 31, 2003, unless extended.

If any of the loans are not paid at maturity, or
if an event of default occurs under any of the loan agreements,
and the lender elects to foreclose on the collateral, the
Company could experience a change of control under its indenture
governing their outstanding senior notes. Upon a change of
control, the Company would be required to offer to purchase
their outstanding senior notes at 101% of the principal
amount plus accrued and unpaid interest. There can be no
assurance that the Company would have the funds necessary to
complete the repurchase. If the Company failed to complete the
purchase of the tendered senior notes, the senior noteholders or
their trustee would be entitled to accelerate the maturity of
the senior notes. A foreclosure on DCCLPs pledge shares
could also result in an event of default under the credit
facility of Dobson Operating Company, a subsidiary of Dobson
Communications. An event of default under the Dobson Operating
Company credit facility would result in an event of default
under the Companys credit facility potentially resulting
in the acceleration of all outstanding indebtedness under the
Companys credit facility.

5. RESTRICTED CASH AND
INVESTMENTS:

At December 31, 2000, restricted cash and
investments consisted of interest pledge deposits for the
Dobson/ Sygnet Senior Notes and an escrow amount to cover any
significant, unforeseeable tower expenses relating to the towers
the Companys affiliate sold (as discussed in
Note 10). The senior notes interest pledge deposit, at
December 31, 2000, includes the initial deposit of
$67.7 million (as discussed in Note 4), net of
interest earned and payments made to bondholders. This final
interest payment from this deposit was made on December 15,
2001, eliminating all restricted cash and investments at
December 31, 2001. Amortization expense of $203,887 and
$503,846 was recorded in 2001 and 2000, respectively, as a
reduction of interest income for bond premiums recorded with the
purchase of the restricted investments.

6. STOCKHOLDERS EQUITY:

The Company received equity contributions of
$32.0 million and $62.6 million for the years ended
December 31, 2001 and 2000, respectively, from its parent
company, Dobson Communications. These contributions were used to
repay debt under the Companys credit facility.

35



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

7. EMPLOYEE BENEFIT PLANS:

All employees are employed by the Companys
parent, Dobson Communications. Dobson Communications maintains a
401(k) plan (the Plan) in which substantially all
employees of Dobson Communications are eligible to participate.
The Plan requires Dobson Communications to match 100% of
employees contributions up to 4% of their salary.
Contributions to the Plan charged to the Companys
operations were approximately $265,000 and $307,000 for the
years ended December 31, 2001 and 2000, respectively.

8. TAXES:

The benefit for income taxes for the years ended
December 31, 2001, 2000 and 1999 differs from amounts
computed at the statutory rate as follows:

|                                                      |  |      |             |      |  |      |             |   |  |   |             |  
|----------------------------------------------------- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | -
|                                                      |  | 2001 |             | 2000 |  | 1999
|                                                      |  |      |             |      |  |     
|Income taxes at statutory rate (34%)                  |  | $    | (20,974,160 | )    |  | $    | (25,403,025 | ) |  | $ | (25,073,649 | )
|State income taxes, net of Federal income tax
	effect |  |      | (2,467,548  | )    |  |      | (2,988,592  | ) |  |   | (2,949,839  | )
|                                                      |  |      |             |      |  |      |             |   |  |   |             |  
|                                                      |  | $    | (23,441,708 | )    |  | $    | (28,391,617 | ) |  | $ | (28,023,488 | )
|                                                      |  |      |             |      |  |      |             |   |  |   |             |  

The tax effects of the temporary differences that
gave rise to deferred tax assets and liabilities at
December 31, 2001 and 2000 were as follows:

|                                  |                                              |                                              |   |              |              |   |   |              |              |  
|--------------------------------- | -------------------------------------------- | -------------------------------------------- | - | ------------ | ------------ | - | - | ------------ | ------------ | -
|                                  |                                              | 2001                                         |   | 2000        
|                                  |                                              |                                              |   |             
|Current deferred income taxes:    |                                              |                                              |   |              |              |   |   |             
|                                  | Allowance for doubtful accounts receivable   |                                              | $ | 165,000      |              |   | $ | 160,000      |             
|                                  |                                              |                                              |   |              |              |   |   |             
|                                  |                                              | Net current deferred income tax asset        |   |              | 165,000      |   |   |              | 160,000      |  
|                                  |                                              |                                              |   |              |              |   |   |             
|Noncurrent deferred income taxes: |                                              |                                              |   |              |              |   |   |             
|                                  | Fixed assets                                 |                                              |   | (1,685,000   | )            |   |   | 28,120       |             
|                                  | Wireless license costs and other intangibles |                                              |   | (162,253,350 | )            |   |   | (168,734,190 | )           
|                                  | Tax credits and carryforwards                |                                              |   | 63,709,547   |              |   |   | 44,933,727   |             
|                                  |                                              |                                              |   |              |              |   |   |             
|                                  |                                              | Net noncurrent deferred income tax liability |   |              | (100,228,803 | ) |   |              | (123,772,343 | )
|                                  |                                              |                                              |   |              |              |   |   |             
|                                  |                                              | Total deferred income tax liability          |   | $            | (100,063,803 | ) |   | $            | (123,612,343 | )
|                                  |                                              |                                              |   |              |              |   |   |             

At December 31, 2001, the Company had NOL
carryforwards of approximately $164.0 million, which may be
utilized to reduce future Federal income taxes payable. The
Companys NOL carryforwards begin to expire in 2012.

9. RELATED PARTY TRANSACTIONS:

At December 31, 2001 and 2000, the Company
had payables due to affiliates of approximately
$1.4 million and $26.7 million, respectively,
primarily due to Dobson Communications for liabilities paid on
behalf of the Company. There are no requirements for payables
due to affiliates to be repaid to Dobson Communications during
2002.

Dobson Communications, as the Companys
parent, provides certain services to the Company. Certain costs
incurred by Dobson Communications are shared-costs of the
Company and Dobson Communications. These shared costs are
allocated between the Company and Dobson Communications
primarily based on each Companys pro rata population
coverage and subscribers.

36



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

10. COMMITMENTS:

In connection with the Sygnet acquisition, the
Company sold substantially all of its wireless towers to an
affiliate for $25.0 million. On October 15, 1999, the
affiliate sold substantially all of the towers acquired during
the Sygnet acquisition to American Tower Corporation for
approximately $38.7 million. In connection with the sale,
the Company has agreed to lease the towers back from American
Tower Corporation for an initial term of ten years, at an annual
rental of approximately $3.0 million, which is included in
the Companys future payments below.

Future minimum lease payments required under
operating leases that have an initial or remaining
noncancellable lease term in excess of one year at
December 31, 2001, are as follows:

|                    |  |   |            | 
|------------------- |  | - | ---------- | 
|2002                |  | $ | 6,399,000  | 
|2003                |  |   | 5,976,000  | 
|2004                |  |   | 5,588,000  | 
|2005                |  |   | 4,946,000  | 
|2006                |  |   | 4,311,000  | 
|2007 and thereafter |  |   | 17,798,000 | 

Lease expense under the above leases was
approximately $7.6 million and $5.7 million for the
years ended December 31, 2001 and 2000 respectively.

11. FAIR VALUE OF FINANCIAL
INSTRUMENTS:

Unless otherwise noted, the carrying value of the
Companys financial instruments approximates fair value.
The Company estimates the fair value of its long-term debt based
on quoted market prices for publicly traded debt or on the
current rates available to the Company for debt with similar
terms and remaining maturation.

Indicated below are the carrying amounts and
estimated fair values of the Companys financial
instruments as of December 31:

|                                |  |                 |             |            |  |                 |             |            |  |   |             |  |  |   |             | 
|------------------------------- |  | --------------- | ----------- | ---------- |  | --------------- | ----------- | ---------- |  | - | ----------- |  |  | - | ----------- | 
|                                |  |                 |             |           
|                                |  | 2001            |             | 2000      
|                                |  |                 |             |           
|                                |  | Carrying Amount |             | Fair Value |  | Carrying Amount |             | Fair Value
|                                |  |                 |             |            |  |                 |             |           
|Restricted cash and investments |  | $               |            |            |  | $               |            |            |  | $ | 26,153,677  |  |  | $ | 26,153,677  | 
|Credit facility                 |  |                 | 300,136,754 |            |  |                 | 300,136,754 |            |  |   | 334,886,754 |  |  |   | 334,886,754 | 
|Dobson/ Sygnet Senior Notes     |  |                 | 200,000,000 |            |  |                 | 213,000,000 |            |  |   | 200,000,000 |  |  |   | 198,000,000 | 
|Interest rate hedge asset       |  |                 |            |            |  |                 |            |            |  |   |            |  |  |   | 583,210     | 

37



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##### Table of Contents



Supplementary Data

Selected quarterly financial data
(unaudited)


|                                                        |  |      |  |                                        |          |          |  |               |          |              |  |   |         |   |  |   |          |  
|------------------------------------------------------- |  | ---- |  | -------------------------------------- | -------- | -------- |  | ------------- | -------- | ------------ |  | - | ------- | - |  | - | -------- | -
|                                                        |  |      |  |                                       
|                                                        |  |      |  | Quarter Ended                         
|                                                        |  |      |  |                                       
|                                                        |  |      |  | March 31,                              |          | June 30, |  | September 30, |          | December 31,
|                                                        |  |      |  |                                        |          |          |  |               |          |             
|                                                        |  |      |  |                                       
|                                                        |  |      |  | ($ in thousands except per share data)
|Operating revenue                                       |  | 2001 |  | $                                      | 42,711   |          |  | $             | 46,067   |              |  | $ | 50,239  |   |  | $ | 48,609   |  
|                                                        |  | 2000 |  | $                                      | 35,890   |          |  | $             | 40,976   |              |  | $ | 44,847  |   |  | $ | 42,993   |  
|Operating (loss) income                                 |  | 2001 |  | $                                      | (4,704   | )        |  | $             | (2,010   | )            |  | $ | 902     |   |  | $ | (993     | )
|                                                        |  | 2000 |  | $                                      | (5,677   | )        |  | $             | (1,864   | )            |  | $ | 1,711   |   |  | $ | (5,933   | )
|Net loss                                                |  | 2001 |  | $                                      | (12,127  | )        |  | $             | (10,708  | )            |  | $ | (7,474  | ) |  | $ | (7,938   | )
|                                                        |  | 2000 |  | $                                      | (13,706  | )        |  | $             | (10,731  | )            |  | $ | (8,578  | ) |  | $ | (13,308  | )
|Loss applicable to common shareholder                   |  | 2001 |  | $                                      | (12,127  | )        |  | $             | (10,708  | )            |  | $ | (7,474  | ) |  | $ | (7,938   | )
|                                                        |  | 2000 |  | $                                      | (13,706  | )        |  | $             | (10,731  | )            |  | $ | (8,578  | ) |  | $ | (13,308  | )
|Loss applicable to common shareholder per common
	share |  | 2001 |  | $                                      | (121,268 | )        |  | $             | (107,080 | )            |  | $ | (74,745 | ) |  | $ | (79,377  | )
|                                                        |  | 2000 |  | $                                      | (137,058 | )        |  | $             | (107,314 | )            |  | $ | (85,776 | ) |  | $ | (133,084 | )

38



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##### Table of Contents






Item 9. Changes in and Disagreements
with Accountants on Accounting and Financial
Disclosure

None




PART III




Item 10. Directors and Executive
Officers of the Registrant

Information omitted in accordance with General
Instruction I(2)(c).




Item 11. Executive
Composition

Information omitted in accordance with General
Instruction I(2)(c).




Item 12. Security Ownership of
Certain Beneficial Owners and Management

Information omitted in accordance with General
Instruction I(2)(c).




Item 13. Certain Relationships and
Related Transactions

Information omitted in accordance with General
Instruction I(2)(c).

39



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##### Table of Contents






PART IV




Item 14. Exhibits, Financial
Statement Schedules, and Reports on Form 8-K

(a)(1)  The following financial
statements of Dobson/Sygnet Communications Company are included
in Item 8:

|                                                                                                      |  |  |  | 
|----------------------------------------------------------------------------------------------------- |  |  |  | 
|Dobson/ Sygnet Communications
	Company                                                                |  |  |  | 
|Consolidated Balance Sheets as of
	December 31, 2001 and 2000                                         |  |  |  | 
|Consolidated Statements of Operations for the
	years ended December 31, 2001, 2000 and 1999           |  |  |  | 
|Consolidated Statements of Stockholders
	Equity for the years ended December 31, 2001, 2000 and 1999 |  |  |  | 
|Consolidated Statements of Cash Flows for the
	years ended December 31, 2001, 2000 and 1999           |  |  |  | 
|Notes to Consolidated Financial Statements                                                            |  |  |  | 

(2) Schedule IIValuation
Allowance Accounts

All other schedules have been omitted since the
required information is not present, or not present in amounts
sufficient to require submission of the schedule, or because the
information required is included in the consolidated financial
statements or notes thereto.

40



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##### Table of Contents



REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS

To the Board of Directors of

Dobson/ Sygnet Communications Company:


We have audited in accordance with auditing
standards generally accepted in the United States, the
consolidated financial statements of Dobson/ Sygnet
Communications Company included in this Form 10-K and have
issued our report thereon dated March 22, 2002. Our audits
were made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in
Item 14(a)2 is the responsibility of the Companys
management and is presented for purposes of complying with the
Securities and Exchange Commissions rules and is not part
of the basic consolidated financial statements. This schedule
has been subjected to the auditing procedures applied in the
audits of the basic consolidated financial statements and, in
our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to
the basic consolidated statements taken as a whole.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma

March 22, 2002


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##### Table of Contents



SCHEDULE II

Item 14(a)2

DOBSON/ SYGNET COMMUNICATIONS
COMPANY

SCHEDULE OF VALUATION ALLOWANCE
ACCOUNTS


YEARS ENDED DECEMBER 31, 2001, 2000 AND
1999


|                                            |  |              |         |            |  |            |           |            |  |   |           |  |  |   |         | 
|------------------------------------------- |  | ------------ | ------- | ---------- |  | ---------- | --------- | ---------- |  | - | --------- |  |  | - | ------- | 
|                                            |  | Balance at   |         | Charged to |  |            |           | Balance at
|                                            |  | beginning of |         | costs and  |  |            |           | end of    
|                                            |  | period       |         | expenses   |  | Deductions |           | year      
|                                            |  |              |         |            |  |            |           |           
|Allowance for Doubtful Accounts Receivable: |  |              |         |            |  |            |           |            |  |   |           |  |  |   |         | 
|2001                                        |  | $            | 421,040 |            |  | $          | 2,081,113 |            |  | $ | 2,068,518 |  |  | $ | 433,635 | 
|2000                                        |  | $            | 500,063 |            |  | $          | 2,331,765 |            |  | $ | 2,410,788 |  |  | $ | 421,040 | 
|1999                                        |  |              |        |            |  | $          | 2,107,913 |            |  | $ | 1,607,850 |  |  | $ | 500,063 | 

Allowance for doubtful accounts are deducted from
accounts receivable in the balance sheet.

42



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##### Table of Contents



(3) Exhibits

|        |        |             |  |                                                                                                                                                                                                                                                                                                                                       |  |  |             | 
|------- | ------ | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |        |             |  | Method of                                                                                                                                                                                                                                                                                                                            
|Numbers |        | Description |  | Filing                                                                                                                                                                                                                                                                                                                               
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                      
|        | 3.1    |             |  | Registrants Amended Certificate of
	Incorporation.                                                                                                                                                                                                                                                                                   |  |  | (2)[3.1]    | 
|        | 3.2    |             |  | Registrants Amended Bylaws.                                                                                                                                                                                                                                                                                                          |  |  | (2)[3.2]    | 
|        | 4.1    |             |  | Indenture dated December 23, 1998 between
	Registrant, as Issuer, and United States Trust Company of New
	York, as Trustee.                                                                                                                                                                                                           |  |  | (1)[4.1]    | 
|        | 4.2    |             |  | Form of Note under Indenture (contained in
	Exhibit 4.1 hereto).                                                                                                                                                                                                                                                                      |  |  | (1)[4.1]    | 
|        | 4.3    |             |  | Pledge Agreement dated December 23, 1998
	between Registrant, as Pledgor, and NationsBanc Montgomery
	Securities LLC, Lehman Brothers, Inc., First Union Capital
	Markets, a division of Wheat First Securities, Inc. and
	TD Securities (USA) Inc., as Initial Purchasers, and
	United States Trust Company of New York, as Trustee. |  |  | (2)[4.3]    | 
|        | 4.4    |             |  | Credit Agreement among the Agents and Lenders
	named therein and Sygnet Wireless, Inc. (f/k/a Dobson/ Sygnet
	Operating Company), dated as of December 23, 1998.                                                                                                                                                                      |  |  | (2)[4.5]    | 
|        | 10.1.1 |             |  | Cellular One License Agreement effective
	December 23, 1998, between Cellular One Group and Sygnet
	Communications, Inc. f/k/a Erie Cellular Telephone Company, as
	amended December 23, 1998.                                                                                                                                        |  |  | (2)[10.3]   | 
|        | 10.1.2 |             |  | Cellular One License Agreement, effective as of
	December 23, 1998, between Cellular One Group and Sygnet
	Communications, Inc. (PA-1).                                                                                                                                                                                               |  |  | (2)[10.3.2] | 
|        | 10.1.3 |             |  | Cellular One License Agreement, effective as of
	December 23, 1998, between Cellular One Group and Sygnet
	Communications, Inc. (PA-6).                                                                                                                                                                                               |  |  | (2)[10.3.3] | 
|        | 10.1.4 |             |  | Cellular One License Agreement, effective as of
	January 30, 1997, between Cellular One Group and Sygnet
	Communications, Inc. (PA-7).                                                                                                                                                                                                |  |  | (2)[10.3.4] | 
|        | 10.1.5 |             |  | Cellular One License Agreement, effective as of
	January 1, 1997, between Cellular One Group and Sygnet
	Communications, Inc. (NY-3).                                                                                                                                                                                                 |  |  | (2)[10.3.5] | 
|        | 10.1.6 |             |  | Cellular One License Agreement, effective as of
	June 14, 1999, between Cellular One Group and Sygnet
	Communications, Inc. (Sharon MSA).                                                                                                                                                                                             |  |  | (3)         | 
|        | 10.1.7 |             |  | Cellular One License Agreement, effective as of
	June 14, 1999, between Cellular One Group and Sygnet
	Communications, Inc. (Youngstown MSA)                                                                                                                                                                                          |  |  | (3)         | 
|        | 99     |             |  | Letter regarding Arthur Andersen LLP                                                                                                                                                                                                                                                                                                  |  |  | (3)         | 



---



|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Current Report on
	Form 8-K of Dobson Communications Corporation (333-23769)
	filed on January 7, 1999, as the exhibit number indicated
	in brackets and incorporated by reference herein.
|   
|(2) | Filed as an exhibit to Dobson/ Sygnet
	Communications Companys Registration Statement on
	Form S-4 (Registration No. 333-71051), as the exhibit
	number indicated in brackets and incorporated by reference
	herein.
|   
|(3) | Filed herewith                                                                                                                                                                                                       

43



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized this 27th day of March
2002.



| |                                      
| | -------------------------------------
| | DOBSON/ SYGNET COMMUNICATIONS COMPANY



| |    |                      
| | -- | ---------------------
| | By | /s/ EVERETT R. DOBSON

| |                                     
| | ------------------------------------
| |                                     
| | Everett R. Dobson                   
| | Chairman of the Board, President and
| | Chief Executive Officer             

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in capacities
and on the dates indicated.

|                                               |  |                                                                                             |  |               
|---------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | --------------
|Signatures                                     |  | Title                                                                                       |  | Date          
|                                               |  |                                                                                             |  |               
|/s/ EVERETT R. DOBSONEverett R. Dobson         |  | Chairman of the Board, President and Chief
	Executive Officer (principal executive officer) |  | March 27, 2002
|/s/ BRUCE R. KNOOIHUIZENBruce R. Knooihuizen   |  | Vice President and Chief Financial Officer
	(principal financial officer)                   |  | March 27, 2002
|/s/ TRENT LEFORCETrent LeForce                 |  | Corporate Controller (principal accounting
	officer)                                        |  | March 27, 2002
|/s/ STEPHEN T. DOBSONStephen T. Dobson         |  | Secretary/ Treasurer, Director                                                              |  | March 27, 2002
|/s/ RUSSELL L. DOBSONRussell L. Dobson         |  | Director                                                                                    |  | March 27, 2002
|/s/ FRED J. HALLFred J. Hall                   |  | Director                                                                                    |  | March 27, 2002
|/s/ JUSTIN L. JASCHKEJustin L. Jaschke         |  | Director                                                                                    |  | March 27, 2002
|/s/ ALBERT H. PHARIS, JR.Albert H. Pharis, Jr. |  | Director                                                                                    |  | March 27, 2002

Supplemental Information to be Furnished With
Reports Filed Pursuant to Section 15(d) of the Act by
Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act.

We have not sent, and do not intend to send, an
annual report to security holders covering our last fiscal year,
nor have we sent a proxy statement, form of proxy or other proxy
soliciting material to our security holders with respect to any
annual meeting of security holders.

44



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##### Table of Contents



INDEX TO EXHIBITS

|        |        |             |  |                                                                                                                                                                                                                                                                                                                                       |  |  |             | 
|------- | ------ | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |        |             |  | Method of                                                                                                                                                                                                                                                                                                                            
|Numbers |        | Description |  | Filing                                                                                                                                                                                                                                                                                                                               
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                      
|        | 3.1    |             |  | Registrants Amended Certificate of
	Incorporation.                                                                                                                                                                                                                                                                                   |  |  | (2)[3.1]    | 
|        | 3.2    |             |  | Registrants Amended Bylaws.                                                                                                                                                                                                                                                                                                          |  |  | (2)[3.2]    | 
|        | 4.1    |             |  | Indenture dated December 23, 1998 between
	Registrant, as Issuer, and United States Trust Company of New
	York, as Trustee.                                                                                                                                                                                                           |  |  | (1)[4.1]    | 
|        | 4.2    |             |  | Form of Note under Indenture (contained in
	Exhibit 4.1 hereto).                                                                                                                                                                                                                                                                      |  |  | (1)[4.1]    | 
|        | 4.3    |             |  | Pledge Agreement dated December 23, 1998
	between Registrant, as Pledgor, and NationsBanc Montgomery
	Securities LLC, Lehman Brothers, Inc., First Union Capital
	Markets, a division of Wheat First Securities, Inc. and
	TD Securities (USA) Inc., as Initial Purchasers, and
	United States Trust Company of New York, as Trustee. |  |  | (2)[4.3]    | 
|        | 4.4    |             |  | Credit Agreement among the Agents and Lenders
	named therein and Sygnet Wireless, Inc. (f/k/a Dobson/ Sygnet
	Operating Company), dated as of December 23, 1998.                                                                                                                                                                      |  |  | (2)[4.5]    | 
|        | 10.1.1 |             |  | Cellular One License Agreement effective
	December 23, 1998, between Cellular One Group and Sygnet
	Communications, Inc. f/k/a Erie Cellular Telephone Company, as
	amended December 23, 1998.                                                                                                                                        |  |  | (2)[10.3]   | 
|        | 10.1.2 |             |  | Cellular One License Agreement, effective as of
	December 23, 1998, between Cellular One Group and Sygnet
	Communications, Inc. (PA-1).                                                                                                                                                                                               |  |  | (2)[10.3.2] | 
|        | 10.1.3 |             |  | Cellular One License Agreement, effective as of
	December 23, 1998, between Cellular One Group and Sygnet
	Communications, Inc. (PA-6).                                                                                                                                                                                               |  |  | (2)[10.3.3] | 
|        | 10.1.4 |             |  | Cellular One License Agreement, effective as of
	January 30, 1997, between Cellular One Group and Sygnet
	Communications, Inc. (PA-7).                                                                                                                                                                                                |  |  | (2)[10.3.4] | 
|        | 10.1.5 |             |  | Cellular One License Agreement, effective as of
	January 1, 1997, between Cellular One Group and Sygnet
	Communications, Inc. (NY-3).                                                                                                                                                                                                 |  |  | (2)[10.3.5] | 
|        | 10.1.6 |             |  | Cellular One License Agreement, effective as of
	June 14, 1999, between Cellular One Group and Sygnet
	Communications, Inc. (Sharon MSA).                                                                                                                                                                                             |  |  | (3)         | 
|        | 10.1.7 |             |  | Cellular One License Agreement, effective as of
	June 14, 1999, between Cellular One Group and Sygnet
	Communications, Inc. (Youngstown MSA)                                                                                                                                                                                          |  |  | (3)         | 
|        | 99     |             |  | Letter regarding Arthur Andersen LLP                                                                                                                                                                                                                                                                                                  |  |  | (3)         | 



---



|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Current Report on
	Form 8-K of Dobson Communications Corporation (333-23769)
	filed on January 7, 1999, as the exhibit number indicated
	in brackets and incorporated by reference herein.
|   
|(2) | Filed as an exhibit to Dobson/ Sygnet
	Communications Companys Registration Statement on
	Form S-4 (Registration No. 333-71051), as the exhibit
	number indicated in brackets and incorporated by reference
	herein.
|   
|(3) | Filed herewith