SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                    FORM 10-Q


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


For the quarter ended   September 30, 2001       Commission File No.   0-16751
                      ----------------------                         -----------

                                   NTELOS Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           VIRGINIA                                             54-1443350
--------------------------------------------------------------------------------
(State or other  jurisdiction of                             (I R S employer
 incorporation or organization)                            identification no.)


P. O. Box 1990, Waynesboro, Virginia                             22980
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip code)


Registrant's telephone number, including area code         540-946-3500
                                                  ----------------------------


                                      None
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


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

                                    Yes x  No
                                       ---   ---

                     (APPLICABLE ONLY TO CORPORATE ISSUERS)

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.



Class    COMMON STOCK, NO PAR VALUE        Outstanding 10/31/01    16,914,210
         --------------------------


<PAGE>
                                   NTELOS Inc.


                                    I N D E X



                                                                           Page
                                                                          Number
                                                                          ------

PART I. FINANCIAL INFORMATION

         Condensed Consolidated Balance Sheets, September 30, 2001 and
         December 31, 2000                                                 3-4


         Condensed Consolidated Statements of Operations, Three and Nine
         Month Periods Ended September 30, 2001 and 2000                     5


         Condensed Consolidated Statements of Cash Flows, Nine Month
         Periods Ended September 30, 2001 and 2000                           6


         Condensed Consolidated Statements of Shareholders' Equity,
         Three Quarter Periods Ended September 30, 2001 and 2000             7


         Notes to Condensed Consolidated Financial Statements             8-13


         Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       14-27


PART II. OTHER INFORMATION                                                  28


SIGNATURES                                                               29-30


                                       2
<PAGE>
<TABLE>
                                                            NTELOS Inc.

                                               Condensed Consolidated Balance Sheets
<CAPTION>
                                                                                               September 30,       December 31,
(In thousands)                                                                                     2001                2000
----------------------------------------------------------------------------------------------------------------------------------
Assets                                                                                          (Unaudited)
<S>                                                                                         <C>                 <C>
Current Assets
   Cash and cash equivalents                                                                $        8,971      $       1,637
   Restricted cash                                                                                   4,550             20,121
   Accounts receivable, net of allowance of $13,573 and $5,100, respectively                        36,305             24,268
   Inventories and supplies                                                                          7,062              7,896
   Other receivables and deposits                                                                   10,443             11,500
   Prepaid expenses and other                                                                        4,600              3,178
   Income tax receivable                                                                                 -              2,930
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                    71,931             71,530
----------------------------------------------------------------------------------------------------------------------------------

Investments and Advances
   Advances to affiliates                                                                                -             66,210
   Securities and investments                                                                       14,440             17,405
   Restricted cash                                                                                  31,317             50,903
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                    45,757            134,518
----------------------------------------------------------------------------------------------------------------------------------

Property and Equipment
   Land and building                                                                                47,156             26,988
   Network plant and equipment                                                                     397,028            285,489
   Furniture, fixtures, and other equipment                                                         58,025             39,539
   Radio spectrum licenses                                                                         444,742            428,317
----------------------------------------------------------------------------------------------------------------------------------
      Total in service                                                                             946,951            780,333
   Under construction                                                                               62,744             47,072
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                 1,009,695            827,405
   Less accumulated depreciation                                                                   130,556             81,612
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                   879,139            745,793
----------------------------------------------------------------------------------------------------------------------------------

Other Assets
   Cost in excess of net assets of business acquired,
      less accumulated amortization of $8,672 and $4,253, respectively                              94,835             45,861
   Other intangibles, less accumulated amortization of $8,363 and $3,554, respectively              35,029             44,043
   Deferred charges                                                                                 21,374             26,586
   Deferred tax asset                                                                                4,352                  -
   Radio spectrum licenses not in service                                                           10,078              7,874
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                   165,668            124,364
----------------------------------------------------------------------------------------------------------------------------------

                                                                                            $    1,162,495      $   1,076,205
==================================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                 3
<PAGE>
<TABLE>
                                                            NTELOS Inc.

                                               Condensed Consolidated Balance Sheets
<CAPTION>

(In thousands)                                                                           September 30,            December 31,
                                                                                              2000                    2000
----------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity                                                       (Unaudited)
<S>                                                                                  <C>                      <C>
Current Liabilities
   Accounts payable                                                                  $        28,307          $          33,119
   Advance billings and customer deposits                                                     10,216                      6,697
   Accrued payroll                                                                             2,644                      2,420
   Accrued interest                                                                            5,991                     20,894
   Deferred revenue                                                                            6,041                      4,843
   Other accrued liabilities                                                                   7,481                      7,362
   Income taxes payable                                                                          144                          -
----------------------------------------------------------------------------------------------------------------------------------
                                                                                              60,824                     75,335
----------------------------------------------------------------------------------------------------------------------------------

Long-Term Debt                                                                               638,358                    556,287
----------------------------------------------------------------------------------------------------------------------------------

Long-Term Liabilities
   Deferred income taxes                                                                           -                     36,380
   Retirement benefits                                                                        17,163                     12,017
   Long-term deferred liabilities                                                             43,886                     13,750
----------------------------------------------------------------------------------------------------------------------------------

                                                                                              61,049                     62,147
----------------------------------------------------------------------------------------------------------------------------------

Minority Interests                                                                               278                      1,258
----------------------------------------------------------------------------------------------------------------------------------

Redeemable, Convertible Preferred Stock                                                      258,632                    246,906
----------------------------------------------------------------------------------------------------------------------------------

Commitments

Shareholders' Equity
   Preferred stock                                                                                -                          -
   Common stock                                                                              130,006                     45,272
   Stock warrants                                                                             22,874                     22,874
   Retained earnings                                                                             674                     57,668
   Unrealized (loss) gain on securities available for sale and cash flow hedge, net          (10,200)                     8,458
----------------------------------------------------------------------------------------------------------------------------------

                                                                                             143,354                    134,272
----------------------------------------------------------------------------------------------------------------------------------

                                                                                     $     1,162,495          $       1,076,205
==================================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                 4
<PAGE>
<TABLE>
                                                            NTELOS Inc.

                                          Condensed Consolidated Statements Of Operations
                                                            (Unaudited)
<CAPTION>
                                                                        Three Months Ended                Nine Months Ended
------------------------------------------------------------------------------------------------------------------------------------
(In thousands except per share amounts)                           Sept 30, 2001    Sept 30, 2000   Sept 30, 2001    Sept 30, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>              <C>             <C>              <C>
Operating Revenues
  Wireless communications                                        $      31,996    $     15,316    $      87,592    $      19,431
  Wireline communications                                               21,513          14,886           63,270           42,666
  Other communications services                                          2,552           3,222            7,280           13,455
--------------------------------------------------------------------------------------------------  --------------------------------
                                                                        56,061          33,424          158,142           75,552
------------------------------------------------------------------------------------------------------------------------------------

Operating Expenses
  Cost of sales                                                         11,901           5,830           34,627           10,687
  Maintenance and support                                               16,252           8,801           46,012           20,488
  Depreciation and amortization                                         22,373          12,224           56,182           18,975
  Asset write-down and impairment charges                                    -           5,625                -            5,625
  Customer operations                                                   16,029          10,978           46,781           18,369
  Corporate operations                                                   4,806           3,362           14,548            7,521
------------------------------------------------------------------------------------------------------------------------------------
                                                                        71,361          46,820          198,150           81,665
------------------------------------------------------------------------------------------------------------------------------------
Operating Loss                                                         (15,300)        (13,396)         (40,008)          (6,113)

Other Income (Expenses)
  Equity loss from PCS investees
     VA PCS Alliance                                                         -            (840)               -           (3,679)
     WV PCS Alliance                                                         -          (1,934)          (1,286)          (5,750)
  Gain on sale of assets                                                22,261          62,633           22,967           62,633
  Other financing costs                                                      -          (6,276)               -           (6,276)
  Interest expense                                                     (19,542)        (12,278)         (56,989)         (13,748)
  Other income, principally interest                                       733           3,051            4,042            3,610
------------------------------------------------------------------------------------------------------------------------------------
                                                                       (11,848)         30,960          (71,274)          30,677

Income Tax (Benefit) Provision                                          (3,812)         12,317          (25,448)          12,229
------------------------------------------------------------------------------------------------------------------------------------

                                                                        (8,036)         18,643          (45,826)          18,448

Minority Interests in Losses (Earnings) of Subsidiaries                      -               -            3,058             (105)
------------------------------------------------------------------------------------------------------------------------------------

(Loss) Income from Continuing Operations                                (8,036)         18,643          (42,768)          18,343

Discontinued Operation
   Income (loss) from discontinued operation, net of tax                     -            (290)               -              396
   Gain on sale of discontinued operation, net of tax                        -          16,497                -           16,497
------------------------------------------------------------------------------------------------------------------------------------
Net (Loss) Income                                                       (8,036)         34,850          (42,768)          35,236
Dividend requirements on preferred stock                                 4,849           5,670           14,226            5,670
------------------------------------------------------------------------------------------------------------------------------------
(Loss) Income Applicable to Common Shares                        $     (12,885)   $     29,180    $     (56,994)   $      29,566
====================================================================================================================================

Basic Earnings Per Common Share:
  (Loss) income from continuing operations                       $      (0.76)    $     0.99      $      (3.50)    $      0.97
  Income from discontinued operation                                        -           1.23                 -            1.29
------------------------------------------------------------------------------------------------------------------------------------
    Basic (loss) earnings per common share                       $      (0.76)    $     2.22      $      (3.50)    $      2.26
------------------------------------------------------------------------------------------------------------------------------------
Diluted Earnings Per Common Share:
  (Loss) income from continuing operations                       $      (0.76)    $     0.96      $      (3.50)    $      0.95
  Income from discontinued operation                                        -           1.20                 -            1.26
------------------------------------------------------------------------------------------------------------------------------------
    Diluted (loss) earnings per common share                     $      (0.76)    $     2.16      $      (3.50)    $      2.21
------------------------------------------------------------------------------------------------------------------------------------

Average shares outstanding - basic                                      16,890          13,128           16,282           13,099
Average shares outstanding - diluted                                    17,215          13,516           16,622           13,359
------------------------------------------------------------------------------------------------------------------------------------

Cash dividends per common share                                  $           -    $          -    $           -    $   0.11475
====================================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                 5
<PAGE>
<TABLE>
                                                            NTELOS Inc.

                                          Condensed Consolidated Statements of Cash Flows
                                                            (Unaudited)
<CAPTION>

(In thousands)                                                                                   Nine Months Ended
----------------------------------------------------------------------------------------------------------------------------------
                                                                                     September 30, 2001       September 30, 2000
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                      <C>
Cash flows from operating activities
Net (loss) income                                                                  $        (42,768)        $          35,236
Deduct income from discontinued operation                                                         -                      (396)
Deduct gain on sale of discontinued operations                                                    -                   (16,497)
----------------------------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations                                                    (42,768)                   18,343

Adjustments to reconcile net income to net cash provided by operating activities:
   Gain on disposition of investment                                                        (22,967)                  (62,633)
   Asset write-down and impairment charges                                                        -                     5,625
   Depreciation                                                                              48,188                    16,420
   Amortization                                                                               7,994                     2,555
   Deferred taxes                                                                           (27,121)                   22,802
   Retirement benefits and other                                                               (897)                    2,025
   Accrued interest on long-term debt                                                        23,408                         -
   Accrued interest income on restricted cash                                                (3,164)                        -
   Equity loss from PCS Alliances                                                             1,286                     9,428
   Accretion of loan discount and origination fees                                            3,174                         -
Changes in assets and liabilities from operations, net of effects of
     acquisitions and dispositions:
   Increase in accounts receivable                                                           (3,032)                   (7,443)
   Decrease in materials and supplies                                                         1,538                       180
   Increase in other current assets                                                          (4,822)                     (503)
   Net changes in income taxes                                                                3,074                    (9,495)
   Increase (decrease) in accounts payable                                                  (15,496)                    5,669
   Increase (decrease) in other accrued liabilities                                            (442)                    6,505
   Increase in other current liabilities                                                      1,736                     4,081
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) continuing operations                                        (30,311)                   13,559
Net cash used in discontinued operation                                                           -                      (544)
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                                         (30,311)                   13,015

Cash flows from investing activities
Purchases of property and equipment                                                         (72,680)                  (34,153)
Cash payment on purchase of PrimeCo VA                                                            -                  (408,644)
Investment in restricted cash, net                                                                -                   (70,259)
Proceeds from sale of discontinued operation                                                  3,500                    31,744
Investments in PCS Alliances                                                                   (687)                  (15,292)
Cash on hand in merged entity                                                                 4,096                         -
Advances to PCS Alliances                                                                    (2,960)                  (53,805)
Deposit on assets                                                                             8,000                         -
Proceeds from sale of towers and investments                                                 26,992                     3,200
Purchase of minority interest                                                                   (93)                  (10,745)
Acquisition of Internet company and subscribers                                                   -                    (1,364)
Purchase of investments and other                                                              (895)                   (4,618)
----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                       (34,727)                 (563,936)
----------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities
Proceeds from issuance of long-term debt                                                     76,000                   520,459
Proceeds from issuance of preferred stock and warrants                                            -                   242,538
Payoff of VA PCS Alliance long-term debt                                                          -                  (118,570)
Cash dividends                                                                                    -                    (1,501)
Payments on senior notes                                                                          -                   (12,727)
Additional payments under lines of credit (net) and other debt instruments                   (2,943)                  (23,530)
Net proceeds from exercise of stock options                                                     533                     1,095
Payment of debt financing closing costs                                                      (1,218)                  (17,722)
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                    72,372                   590,042
----------------------------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                                         7,334                    39,121
Cash and cash equivalents:
Beginning                                                                                     1,637                       198
----------------------------------------------------------------------------------------------------------------------------------

Ending                                                                             $          8,971         $          39,319
==================================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                 6
<PAGE>
<TABLE>
                                                            NTELOS Inc.

                                     Condensed Consolidated Statements of Shareholders' Equity
                                                            (Unaudited)
<CAPTION>
                                                                                                       Accumulated
                                                                                                          Other           Total
                                             Common Stock                                 Retained    Comprehensive    Shareholders'
(In thousands)                                  Shares         Amount       Warrants      Earnings        Income          Equity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>       <C>          <C>           <C>           <C>              <C>
Balance, December 31, 1999                       13,060    $    43,943  $         -   $    50,385   $     21,856     $   116,184
Comprehensive loss:
  Net income                                                                                   48
  Unrealized loss on securities available
    for sale, net of $1,533 of deferred tax
    benefit                                                                                               (2,409)
  Comprehensive loss                                                                                                      (2,361)
Dividends on common shares                                                                 (1,501)                        (1,501)
Stock options exercised, net                         34            382                                                       382
------------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000                          13,094         44,325            -        48,932         19,447         112,704
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
  Net income                                                                                  337
  Unrealized loss on securities available
    for sale, net of $439 of deferred tax
    benefit                                                                                                  686
  Comprehensive income                                                                                                     1,023
Stock options exercised, net                         23            422                                                       422
------------------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 2000                           13,117         44,747            -        49,269         20,133         114,149
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
  Net income                                                                               34,850
  Unrealized loss on securities available
    for sale, net of $6,148 of deferred tax
    benefit                                                                                               (9,663)
  Comprehensive income                                                                                                    25,187
Dividends on preferred shares                                                              (5,670)                        (5,670)
Issuance of warrants                                                         22,874                                       22,874
Stock options exercised, net                         13            291                                                       291
------------------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 2000                      13,130    $    45,038  $    22,874   $    78,449   $     10,470     $   156,831
====================================================================================================================================

------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000                       13,132    $    45,272  $    22,874   $    57,668   $      8,458     $   134,272
Comprehensive loss:
  Net loss                                                                                (16,259)
  Cash flow hedge:
     Cumulative effect of the adoption of
       SFAS No. 133, net of $2,489 of
       deferred tax  benefit                                                                              (3,900)
     Derivative losses, net of $1,523 of
       deferred tax benefit                                                                               (2,402)
  Unrealized loss on securities available
    for sale, net of $979 of deferred tax benefit                                                         (1,531)
  Comprehensive loss                                                                                                     (24,092)
Common stock issuance pursuant to R&B Merger      3,716         83,851                                                    83,851
Dividends on preferred shares                                                              (4,687)                        (4,687)
Shares issued through Employee Stock
  Purchase Plan                                       7            145                                                       145
------------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001                          16,855        129,268       22,874        36,722            625         189,489
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss:
  Net loss                                                                                (18,473)
  Unrealized gain on securities available
  for sale, net of $3,626 of deferred tax
    obligation                                                                                             5,695
  Derivative gains, net of $866 of deferred
    tax obligation                                                                                         1,361
  Comprehensive loss                                                                                                     (11,417)
Dividends on preferred shares                                                              (4,690)                        (4,690)
Stock options exercised, net                         12            106                                                       106
Shares issued through Employee Stock
  Purchase Plan                                       7            146                                                       146
------------------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 2001                           16,874        129,520       22,874        13,559          7,681         173,634
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss:
  Net loss                                                                                 (8,036)
  Realization of gain due to sale of equity
    interest in Illuminet Holdings, Inc.,
    net of $8,138 of deferred tax obligation                                                             (12,805)
  Derivative losses, net of $3,231 of
    ferred tax Benefit                                                                                    (5,076)
  Comprehensive loss                                                                                                     (25,917)
Dividends on preferred shares                                                              (4,849)                        (4,849)
Stock issuance for purchase of minority
  interest                                           20            350                                                       350
Stock options exercised, net                          3              -                                                         -
Shares issued through Employee Stock
  Purchase Plan                                      11            136                                                       136
------------------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 2001                      16,908    $   130,006  $    22,874   $       674   $    (10,200)    $   143,354
====================================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                 7
<PAGE>
                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements

1. SIGNIFICANT ACCOUNTING POLICIES
        In  the  opinion  of  NTELOS  Inc.  ("NTELOS"  or  the  "Company"),  the
        accompanying  condensed  consolidated  financial  statements  which  are
        unaudited,  except for the  condensed  consolidated  balance sheet dated
        December 31, 2000, which is derived from audited  financial  statements,
        contain all adjustments  (consisting of only normal recurring  accruals)
        necessary to present fairly the financial position at September 30, 2001
        and December 31, 2000,  the results of operations for the three and nine
        month periods  ended  September 30, 2001 and 2000 and cash flows for the
        nine month  periods ended  September  30, 2001 and 2000.  The results of
        operations for the nine month periods ended  September 30, 2001 and 2000
        are not  necessarily  indicative  of the results to be expected  for the
        full year.

        The Company adopted Statement of Financial  Accounting Standard ("SFAS")
        No.  133,  as  amended  by SFAS  No.  138,  "Accounting  for  Derivative
        Instruments  and Hedging  Activities".  On January 1, 2001,  the Company
        reported the cumulative  effect of adoption of $3.9 million reduction in
        other  comprehensive  income,  net of $2.5 million deferred tax benefit.
        For the nine month period ended September 30, 2001, the Company reported
        derivative  losses of $6.1  million,  net of $3.9  million  deferred tax
        benefit.  The related  $16.4  million  liability is  classified in other
        long-term liabilities.

        In June 2001, the Financial Accounting Standards Board issued Statements
        of Financial  Accounting Standards No. 141, Business  Combinations,  and
        No. 142,  Goodwill and Other  Intangible  Assets,  effective  for fiscal
        years beginning after December 15, 2001.  Under the new rules,  goodwill
        [and intangible  assets deemed to have indefinite  lives] will no longer
        be  amortized  but  will  be  subject  to  annual  impairment  tests  in
        accordance with the Statements. Other intangible assets will continue to
        be amortized over their useful lives.

        The Company  will apply the new rules on  accounting  for  goodwill  and
        other intangible  assets beginning in the first quarter of 2002.  During
        2002,  the Company  will  perform the first of the  required  impairment
        tests of goodwill  and  intangible  assets with  indefinite  lives as of
        January  1,  2002 and has not yet  determined  what the  effect of these
        tests will be on the earnings and financial position of the Company.

        Certain  amounts  on the  prior  year  financial  statements  have  been
        reclassified,   with  no  effect  on  net   income,   to  conform   with
        classifications adopted in 2001.

2. DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
        The Company  manages its six primary  business  segments with  separable
        management  focus and  infrastructures.  These segments are described in
        more  detail  in  Note  2  of  the  Company's   2000  Annual  Report  to
        Shareholders.  Some changes were made to the  reportable  segments which
        are described in Note 2 of the Company's Form 10-Q for the quarter ended
        March  31,  2001.  Summarized  financial   information   concerning  the
        reportable segments is shown in the following table.

        Depreciation  and  amortization  of corporate  assets is included in the
        "other" column in the tables below. For the quarters ended September 30,
        2000  and  2001,   this  amounted  to  $.4  million  and  $1.4  million,
        respectively,  of the total "other"  depreciation and amortization.  For
        the nine month periods ended  September 30, 2000 and 2001, this amounted
        to $.9  million and $3.2  million,  respectively,  of the total  "other"
        depreciation and amortization.


                                       8
<PAGE>
<TABLE>
                                                            NTELOS Inc.
                                        Notes to Condensed Consolidated Financial Statements
                                                             Continued
<CAPTION>
                                                                                             Analog
(in thousands)            Telephone      Network      CLEC       Internet   Wireless PCS    Cellular       Other          Total
------------------------------------------------------------------------------------------------------------------------------------
For the three month period ended September 30, 2001
<S>                     <C>            <C>         <C>         <C>          <C>           <C>           <C>          <C>
Revenues                $    10,929    $    2,397  $     4,022 $     4,165  $     31,996  $          -  $     2,552  $       56,061
EBITDA*                       6,873         1,951         (226)        354        (2,968)            -        1,089           7,073
Depreciation &
   Amortization               1,688           535          609         996        16,658             -        1,887          22,373

For the three month period ended September 30, 2000
Revenues                $     8,058    $      795  $     2,578 $     3,455  $     15,316  $        709  $     2,513  $       33,424
EBITDA*                       5,632           525           91        (145)       (2,770)          210          910           4,453
Depreciation &
   Amortization               1,075           256          503       1,117         8,187           (18)       1,104          12,224
Asset Write-Down Charge           -             -                        -         5,625                          -           5,625

<CAPTION>
                                                                                             Analog
(in thousands)            Telephone      Network      CLEC       Internet   Wireless PCS    Cellular       Other          Total
------------------------------------------------------------------------------------------------------------------------------------
As of and for the nine month period ended September 30, 2001
Revenues                $    31,472    $    6,312  $    13,020 $    12,466  $     87,592  $          -  $     7,280  $      158,142
EBITDA*                      20,039         5,087        1,261         668       (13,705)            -        2,824          16,174
Depreciation &
   Amortization               4,729         1,308        1,748       2,905        40,684             -        4,808          56,182

Total Segment Assets         72,715        26,500       30,108      18,220       793,695             -       32,101         973,339
Corporate Assets                                                                                                            189,156
                                                                                                                     ---------------
Total Assets                                                                                                         $    1,162,495
                                                                                                                     ===============

As of and for the nine month period ended September 30, 2000
------------------------------------------------------------
Revenues                $    24,049    $    2,667  $     6,123 $     9,827  $     19,431  $      5,556  $     7,899  $       75,552
EBITDA*                      16,611         1,760         (452)       (724)       (4,006)        2,652        2,646          18,487
Depreciation &
   Amortization               3,142           605        1,147       2,582         8,187           394        2,918          18,975
Asset Write-Down Charge           -             -            -           -         5,625             -            -           5,625
Total Segment Assets         50,748        11,580       22,271      19,035       679,398             -       33,649         816,681
Corporate Assets                                                                                                            253,248
                                                                                                                     ---------------
Total Assets                                                                                                         $    1,069,929
                                                                                                                     ===============
        * Operating Income (loss) before depreciation and amortization and asset write-down charge.
</TABLE>

3. INVESTMENTS IN WIRELESS AFFILIATES
        As of  September  30,  2001,  the  Company  had a 93%  common  ownership
        interest in the Virginia  PCS  Alliance,  L.C.  ("VA  Alliance"),  a PCS
        provider  serving a 1.7  million  populated  area in central and western
        Virginia. On July 25, 2000, the Company converted its preferred interest
        to common interest and exercised its right to fund the redemption of the
        VA Alliance's  Series A preferred  membership  interest.  As a result of
        these events,  the Company increased its common interest from 21% to 65%
        and  commenced  consolidating  the VA Alliance as of July 26, 2000.  The
        Company's  ownership  interest increased again on February 13, 2001 from
        65% to 91% as a  result  of the  merger  with R&B  Communications,  Inc.
        ("R&B") (Note 4). Finally, the Company increased its ownership to 93% on
        August 16, 2001 by purchasing  additional  minority interest in exchange
        for 20,000 shares of its common stock valued at $.4 million.

        As of  September  30,  2001,  the  Company  had a 79%  common  ownership
        interest in the West Virginia PCS Alliance, L.C. ("WV Alliance"),  a PCS
        provider serving a 2.0 million populated area in West Virginia and parts


                                        9
<PAGE>
                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued

        of eastern  Kentucky,  southwestern  Virginia and eastern Ohio. Prior to
        the R&B merger,  the Company held a 45% ownership  interest and used the
        equity  method to account  for this  investment.  As a result of the R&B
        merger,  the Company's  ownership  interest  increased  from 45% to 79%.
        Based  on  this  change,  the  Company  commenced  consolidating  the WV
        Alliance as of the February 13, 2001 merger date (Note 4).

        At December 31, 2000, $66.2 million had been advanced to the WV Alliance
        which has been  reflected  as advances to  affiliates  in the  Company's
        consolidated  balance  sheet.  At  September  30,  2001,  the advance is
        reflected as an  inter-company  obligation  which is eliminated from the
        Company's balance sheet pursuant to consolidation.

4. MERGER AND ACQUISITIONS

        R&B Communications Merger
        -------------------------
        Effective  February 13, 2001, the Company closed on its merger with R&B.
        Under the terms of the merger,  the  Company  issued  approximately  3.7
        million  shares  of its  common  stock  in  exchange  for  100% of R&B's
        outstanding  common  stock.  The  merger  was  accounted  for  under the
        purchase  method of  accounting  and was  valued at $83.9  million.  The
        purchase price in excess of the net assets acquired is approximately $52
        million and has been classified as goodwill and is included in corporate
        assets in the segment  table in Note 2, pending the  completion of asset
        valuations.

        In  connection  with the R&B merger,  the Company  assumed  debt of $7.3
        million payable in the years 2001 through 2026. The Company's results of
        operations  include R&B  operating  results  commencing  on February 13,
        2001.

        R&B is an Integrated Communications Provider ("ICP") providing local and
        long  distance  telephone  service and dial-up and  high-speed  Internet
        service to business and residential  customers in Roanoke,  Virginia and
        the surrounding area, as well as in the New River Valley of Virginia.

        PrimeCo VA Acquisition
        ----------------------
        On July 26,  2000,  the  Company  closed on the  acquisition  of the PCS
        licenses, assets and operations of PrimeCo Personal Communications, L.P.
        ("PrimeCo  VA")  located in the  Richmond  and  Hampton  Roads  areas of
        Virginia,  which serves an area with a total  population of 2.9 million.
        The Company acquired the PrimeCo VA licenses,  assets and operations for
        cash of $408.6 million, the assumption of approximately $20.0 million of
        lease obligations and the transfer of a limited partnership interest and
        the assets,  licenses and operations of our analog  wireless  operation,
        with a combined value of approximately  $78.5 million.  This acquisition
        was accounted for under the purchase method of accounting. The Company's
        results of operations include PrimeCo VA operating results commencing on
        July 26, 2000.

5. DISPOSITIONS
        Effective July 11, 2000,  pursuant to a stock purchase  agreement  dated
        May  17,  2000  with   telegate  AG,  a  Federal   Republic  of  Germany
        corporation,  the  Company  sold the  capital  stock of CFW  Information
        Services,  Inc.,  through  which  directory  assistance  operations  are
        conducted.  In exchange,  the Company  received $32.0 million at closing
        and $3.5 million in January 2001 and recognized a $26.2 million  pre-tax
        gain ($16.0  million after tax). As a result,  the directory  assistance
        operation is treated as a  discontinued  operation in the 2000 financial
        statements.

        Revenue,  operating  income  and  income  taxes  from  the  discontinued
        operation through the date of disposition were $6.8 million, $.6 million
        and $.3 million,  respectively. For the period from July 1, 2000 to July
        11,  2000  disposition  date,  revenue,  operating  loss and  income tax
        benefit from the  discontinued  operations were $4,000,  $.5 million and
        $.2 million, respectively.

6. SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
        The Company made its first  scheduled  semi-annual  payment of interest,
        including  the period from July 26, 2000 to August 15,  2000,  for $20.1
        million on February  15, 2001 on the $280  million  senior  notes out of
        restricted cash in accordance with the terms and conditions set forth in


                                       10
<PAGE>
                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued

        the senior note  indenture.  On August 15, 2001, the second  semi-annual
        payment of interest on senior notes was due and made for $18.2 million.

        In February 2001, the Company closed on the non-cash merger  transaction
        with R&B (see Note 4).

        In April 2001,  the Company  acquired PCS licenses from AT&T in southern
        and central  Pennsylvania,  an area with a  population  of more than 2.5
        million  people which is contiguous to the  Company's  existing  license
        holdings. This was a non-cash transaction,  accounted for as a like-kind
        exchange,  in which the Company  exchanged  certain of its non-operating
        WCS licenses, with a book value of $.1 million, for these PCS licenses.

        As of  September  30,  2001,  the Company  has sold all its  holdings in
        Illuminet,  Inc.  for  proceeds  of $30.6  million,  with  $6.6  million
        received  after  September  30,  2001.  The Company  recognized  a $19.3
        million pre-tax gain on this transaction.

7. FINANCIAL INSTRUMENTS
        As noted in Note 1, the Company has adopted SFAS No. 133 and 138 and has
        reported the effect of this adoption in other comprehensive  income. The
        underlying  derivative  activity,  more fully described in Note 9 of the
        Company's 2000 Annual Report to  Shareholders,  related to interest rate
        swap  agreements  entered  into in 2000 for a total  notional  amount of
        $162.5  million.  These  instruments,   required  by  the  senior  notes
        indenture,  mature in 5 years and exist for the purpose of managing  the
        Company's exposure to interest rate movements by effectively  converting
        a portion  of its  long-term  debt from  variable  to fixed.  Thus,  the
        Company  has  interest  rate risk on its  variable  rate  senior  credit
        facility in the amount above the $162.5 million swap hedge. At September
        30, 2001,  the Company's  senior credit  facility  totaled $251 million,
        $88.5 million over the swap agreements. A one percentage point change in
        the Company's  variable rate exposure would result in $.9 million change
        in interest expense on an annual basis.

        The  Company's  senior  notes are trading at rates well below their book
        values.  The  Company's  management  believes  that the risk of the fair
        value  exceeding  the  carrying  value of this  debt in the  foreseeable
        future is remote due to the current trading level, as well as market and
        industry conditions.

8. INCOME TAXES
        The  effective tax rate in the nine month period ended June 30, 2001 was
        37.3% as compared to an  effective  income tax rate at December 31, 2000
        of 25.6%.  Non deductible  amortization  totaled $.3 million in 2000 and
        the Company  estimates the  non-deductible  amortization in 2001 will be
        $3.3  million.   Additionally,   the   Company's   net  operating   loss
        carryforward was  approximately $22 million at December 31, 2000 and, at
        September 30, 2001, is estimated to be approximately $47 million for the
        2001 year end.  The Company  has not  recognized  a valuation  allowance
        based on  available  tax planning  strategies  which would result in the
        Company  recognizing  the  tax  benefit  over  the  remaining  statutory
        carryforward period.

9. EARNINGS PER SHARE
        The weighted average number of common shares outstanding, which was used
        to  compute  diluted  net  income  per  share in  accordance  with  FASB
        Statement  No. 128,  Earnings  Per Share,  was  increased by 388,000 and
        260,000 shares for the three and nine months ended September 30, 2000 to
        reflect the assumed  conversion of dilutive  stock options and warrants.
        For the three and nine months ended  September 30, 2001, the Company had
        common stock equivalents from options totaling 40,000 and 24,000 shares,
        respectively,  and 300,000 stock warrants for these three and nine month
        periods,  which  would be  dilutive.  However,  due to the fact that the
        Company has a loss from  continuing  operations and a loss applicable to
        common  shares,  these common stock  equivalents  are  antidilutive,  as
        additional   shares  would   decrease   the  computed   loss  per  share
        information;  therefore,  basic  and  diluted  earnings  per  share  are
        calculated  using the basic  average  shares  outstanding.  The  Company
        currently has a total of 1.2 million options outstanding and 1.3 million
        warrants  outstanding  to  acquire  shares  of common  stock.  Of these,
        386,000 options and all of the warrants are currently exercisable.



                                       11
<PAGE>
                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued

10. PRO FORMA RESULTS
        The pro forma unaudited results of operations for the nine month periods
        ended  September  30,  2001  and  2000,  assuming  consummation  of  the
        transactions more fully described in the Notes above and in the Notes to
        the  Consolidated  Financial  Statements  in the  Company's  2000 Annual
        Report as of January 1, 2000, are as follows:
<TABLE>
<CAPTION>
                                                      Nine Months Ended September 30,
                                                  -------------------------------------
         (In thousands, except per share data)           2001               2000
         ------------------------------------------------------------------------------
         <S>                                        <C>                <C>
         Operating revenues                         $   163,309        $   133,117
         Operating expenses                             202,043            183,946
         Operating loss                                 (41,467)           (50,829)
         Net loss from continuing operations            (44,432)           (65,257)
         Dividend requirements on preferred stock       (14,226)           (13,813)
         Loss applicable to common shares               (58,658)           (79,070)
         Net loss per common share:
            Basic and diluted                       $    (3.48)        $    (4.70)
</TABLE>

11. PENDING TRANSACTIONS AND SUBSEQUENT EVENTS
        On July 25,  2001,  the Company  announced  the signing of a  definitive
        merger agreement to acquire Conestoga  Enterprises,  Inc. ("CEI"). Under
        the terms of this agreement, CEI shareholders will receive approximately
        $335  million,  or $40 per share,  and,  additionally,  the Company will
        assume approximately $73 million of CEI's debt. The merger is subject to
        regulatory and shareholder  approvals and customary closing  conditions.
        We anticipate  that regulatory  approval and  shareholder  vote will not
        occur  until first  quarter of 2002.  The merger  agreement  permits CEI
        shareholders  to  elect  to  receive  cash,  Company  common  stock or a
        combination of cash and stock,  provided that not more than an aggregate
        of 58% of the merger  consideration may be paid in cash. The transaction
        will be a  tax-free  reorganization  accounted  for as a  purchase.  The
        number of shares of Company common stock a CEI shareholder  will receive
        will float between a range of 1.3333 and 2.2222,  and will be determined
        by dividing $40 by the volume weighted  average per share sales price of
        the  Company's  common  stock  during  the 20  trading  days  ending two
        business days prior to the effective  time of the merger.  To the extent
        that this average per share sales price is either above $30 or below $18
        per share,  CEI  shareholders  will receive  1.3333 or 2.2222  shares of
        NTELOS stock,  respectively,  for each CEI share for the stock component
        of the merger consideration.

        The Company will finance the cash portion of the merger by issuing up to
        $200 million of a new Series E Redeemable,  Convertible  Preferred Stock
        ("Series  E  Preferred  Stock")  to  Welsh,  Carson,  Anderson  &  Stowe
        ("WCAS"),  an  existing  preferred  shareholder.  The Series E Preferred
        Stock will have a $21.25 conversion price, provide an 8.5% annual coupon
        rate, compounded semi-annually,  and be payable in kind at the Company's
        option. In addition,  at closing, the Company will exchange WCAS' Series
        B  and  Series  C  Preferred  Stock  for  a  new  Series  F  Redeemable,
        Convertible  Preferred Stock ("Series F Preferred Stock").  The Series F
        Preferred Stock will have a 7% coupon rate, compounded semi-annually and
        payable in kind at the Company's  option.  The Series F Preferred  Stock
        and the  warrants  previously  issued with the Series B Preferred  Stock
        will  have  a  conversion   price  determined  in  accordance  with  the
        anti-dilution protection provided in the Series B and Series C Preferred
        Stock  agreements,  but not to  exceed  $34 per  share.  WCAS  will also
        receive a 1% cash  commitment  fee and one million  warrants to purchase
        the Company's common stock with an exercise price of $21.25 per share.

        CEI is an ICP with a  service  area that  covers  southern  and  central
        Pennsylvania  and is  contiguous  to the  Company's  Virginia  and  West
        Virginia operations.  CEI provides local and competitive local telephone
        services with 85,000 and 17,000 access lines,  respectively,  throughout


                                       12
<PAGE>
                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued

        central  Pennsylvania.   Additionally,  CEI  has  41,000  long  distance
        customers,  19,000  wireless  PCS  subscribers,  over  1,000  high-speed
        Internet  customers and 5,000 paging customers.  CEI generated  earnings
        before income taxes,  depreciation  and amortization of $19.2 million in
        2000 and $21.3 million for the nine months ended September 30, 2001.

        On August  28,  2001 the  Company  and CEI  announced  the  signing of a
        definitive  purchase  agreement  with  VoiceStream  Wireless  to sell to
        VoiceStream  the  Conestoga   Wireless  GSM  (Global  System  of  Mobile
        Communications)  network in central  Pennsylvania for $60 million.  This
        sale of assets  includes the PCS licenses,  the wireless  network assets
        and  operations  and  approximately  19,000 PCS  customers  of Conestoga
        Wireless.   The   transaction   is  subject   to  the   closing  of  the
        aforementioned   merger,   regulatory   approvals  and  other  customary
        conditions.

        On July 20, 2001 the Company entered into a definitive agreement to sell
        the PCS license in Kingsport,  Tennessee to Lafayette Communications for
        $11.6  million.  Consummation  of the  sale  is  subject  to  regulatory
        approval.  Additionally,  on July 24, 2001,  the Company  entered into a
        definitive  agreement  to sell  and  leaseback  up to 82  communications
        towers in the Virginia  East Market to American  Towers,  Inc. for up to
        $27.9  million.  On November 1, 2001,  the Company closed on 46 of these
        towers  for  $15.6  million  and  anticipates  a second  closing  before
        year-end  for  up  to  36  additional  towers  for  proceeds  of  up  to
        approximately $12 million.

        On October 19,  2001,  the Company  exchanged a Wireless  Communications
        Services  (WCS)  license for  certain  digital  PCS  licenses  from AT&T
        Wireless  covering an area with  400,000  people in  southeastern  Ohio,
        which is contiguous to the Company's existing PCS license holdings,  and
        received   additional  spectrum  in  one  of  its  existing  areas.  The
        transaction was structured as a like-kind exchange.


                                       13
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations

Overview

         We are a leading regional  integrated  communications  provider ("ICP")
offering a broad  range of  wireless  and  wireline  products  and  services  to
business  and  residential  customers  in  Virginia,  West  Virginia,  Kentucky,
Tennessee and North Carolina.  We own our own digital PCS licenses,  fiber optic
network,  switches  and  routers,  which  enables  us  to  offer  our  customers
end-to-end  connectivity  in the regions  that we serve.  This  facilities-based
approach  allows  us  to  control   product   quality  and  generate   operating
efficiencies. As of September 30, 2001, we had approximately 203,800 digital PCS
subscribers and approximately  82,500 combined  incumbent local exchange carrier
("ILEC") and competitive local exchange carrier ("CLEC") access lines installed.

Historically,  we have derived much of our revenues from our ILEC services. As a
result of our increasing focus on and growth in digital PCS, Internet access and
CLEC services,  a significant  portion of our operating revenues is generated by
businesses  other than our ILEC.  These newer  businesses  have generated  lower
operating  margins due to start-up  costs  associated  with  expansion  into new
markets and  introduction  of new service  offerings  throughout  the regions we
serve.  As we continue  expansion of these new markets and  services,  we expect
these lower operating margins to continue.

During the second half of 2000 and into 2001, we have significantly expanded the
scope of the  geographic  markets  that we serve  and have  focused  our  growth
efforts on our core  communications  services,  primarily  digital PCS services,
local telephone services and Internet access,  including  dedicated,  high-speed
DSL and dial-up services,  high-speed data transmission.  Over the last eighteen
months, we completed the following:

o    closed the merger agreement with R&B, an integrated communications provider
     in a  geographic  market  contiguous  to ours and  commensurate  therewith,
     consolidated the WV Alliance (final closing in February 2001) (Note 4);

o    acquired  certain  PCS  licenses  currently  owned  by  AT&T  that  added a
     population of 2.5 million in certain markets in Pennsylvania  contiguous to
     our  existing  license  holdings in  exchange  for  Wireless  Communication
     Services  ("WCS") licenses that we own but which were not in service (final
     closing in April 2001);

o    acquired  additional  PCS  licenses  from  AT&T  that  added an  additional
     population of .4 million in southeastern Ohio in markets  contiguous to our
     existing license holdings in exchange for other  non-operating WCS licenses
     (final closing in October 2001);

o    acquired the wireless  licenses,  assets and operations of PrimeCo Personal
     Communications,  L.P.  ("PrimeCo")  in  the  Richmond  and  Hampton  Roads,
     Virginia  markets  ("PrimeCo VA" and also referred to within our operations
     as "VA East");

o    issued and sold of $375 million of senior and subordinated notes;

o    closed on $325 million senior credit  facility,  with $150 million borrowed
     on the date of the PrimeCo VA closing, $175 million outstanding at year-end
     and $251 million outstanding at September 30, 2001;

o    paid existing  senior  indebtedness  and refinanced VA and WV Alliance debt
     obligations;

o    issued and sold $250 million of redeemable, convertible preferred stock;

o    redeemed the series A preferred  membership interest in the VA Alliance and
     converted the series B preferred membership interest into common interest;

o    disposed of RSA5 and the analog assets and operations of RSA6 in connection
     with the PrimeCo VA acquisition; and,

                                       14
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued


o    disposed of our directory assistance operations.

Collectively  these  events are referred to as the  "Transactions"  elsewhere in
this document.

We have  accounted for the directory  assistance  operation  disposed of in July
2000 as a discontinued operation.  Therefore, the directory assistance operating
results for 2000 are separated in the financial  statements  from the results of
continuing operations.

As a result of the Transactions,  results from the period after July 2000 differ
significantly from those prior to July 2000. Additionally,  the first quarter of
2001 differed  significantly  from any prior quarter due to the inclusion of R&B
and the WV Alliance in the  consolidated  results from  February  14,  2001.  We
reported  significant  losses from operations  beginning in the third quarter of
2000 due to the  addition  of the VA East  operations,  consolidation  of the VA
Alliance  results,  increase in  amortization  of  goodwill,  licenses and other
intangible assets and the increases in interest related costs.

In addition to the Transactions  mentioned above, the following events (Note 10)
have  occurred  during the quarter  ended  September  30, 2001 which are not yet
completed:

o    On July 24, 2001, we signed a definitive  merger  agreement  with Conestoga
     Enterprises,  Inc.  ("CEI"),  an ICP with a service area  contiguous to our
     Virginia and West Virginia operations in southern and central Pennsylvania.
     The merger is subject to shareholder and regulatory approval.

o    On August 28, 2001,  NTLEOS and CEI  announced  the signing of a definitive
     purchase  agreement with  VoiceStream  Wireless to sell to VoiceStream  the
     Conestoga Wireless GSM ("Global System of Mobile  Communications")  network
     in central Pennsylvania for $60 million.  This sale of assets is subject to
     consummation  of the CEI merger,  regulatory  approvals and other customary
     conditions and includes the PCS licenses,  the wireless  network assets and
     operations and approximately 19,000 PCS customers of Conestoga Wireless.

o    On July 20, 2001, we entered into a definitive agreement,  which is subject
     to FCC  approval,  to sell  the PCS  license  in  Kingsport,  Tennessee  to
     Lafayette Communications for $11.6 million.

o    On July 24,  2001,  we  entered  into a  definitive  agreement  to sell and
     leaseback up to 82  communications  towers in the  Virginia  East market to
     American  Towers,  Inc. for up to $27.9  million.  On November 1, 2001, the
     Company  closed on 46 towers for  proceeds of $15.6  million.  A subsequent
     closing of up to 36 towers is anticipated to occur before year-end.

o    On August  24,  2001,  we signed an  amendment  to the  existing  wholesale
     network  services  agreement  between the VA Alliance  and WV Alliance  and
     Horizon   Personal   Communications,    Inc.   The   amendment   stipulated
     implementation  of third  generation  digital  PCS  technology  across  the
     alliances'  network and modified the standard  wholesale prices for network
     services over the next 30 month term.

The  discussion  and  analysis  herein  should be read in  conjunction  with the
financial  statements  and  the  notes  thereto  included  herein.  Much  of the
discussion  in this  section  involves  forward-looking  statements.  Our actual
results  may  differ   significantly   from  the  results   suggested  by  these
forward-looking   statements.   We   wish  to   caution   readers   that   these
forward-looking statements and any other forward-looking statements that we make
are based on a number  of  assumptions,  estimates  and  projections.  The risks
related to these assumptions  include but are not limited to the following:  the
competitive nature of the wireless telephone and other  communications  services
industries;  changes  in  industry  conditions  created  by  federal  and  state
legislation  and  regulations;   successful  integration  of  acquisitions;  the
achievement of build-out,  operational,  capital,  financing and marketing plans
relating to deployment of PCS services;  retention of our existing customer base
and service levels and our ability to attract new customers;  the ability of the
Company to attract and retain qualified  management  personnel;  continuation of
economic  growth and demand for wireless and wireline  communications  services;
rapid  changes in  technology;  adverse  changes in the roaming and other access
related rates we charge and pay; the capital intensity of the wireless telephone


                                       15
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued


business  and our debt  structure;  our  substantial  debt  obligations  and our
ability to service those obligations; the cash flow and financial performance of
our subsidiaries; restrictive covenants and consequences of default contained in
our financing  arrangements;  our opportunities for growth through  acquisitions
and investments and our ability to manage this growth and successfully integrate
the businesses;  the level of demand for competitive  local exchange services in
smaller markets;  our ability to manage and monitor billing; and possible health
effects of radio frequency  transmission.  Our results are also dependent on our
ability to consummate the merger with Conestoga and our ability to  successfully
integrate  Conestoga's  operations  with ours.  Investors are cautioned that any
such  forward-looking  statements are not guarantees of future  performance  and
involve risks and uncertainties,  and that any significant deviations from these
assumptions  could cause actual results to differ  materially  from those in the
above and other forward-looking statements.  Forward-looking statements included
herein are as of the date hereof and we  undertake  no  obligation  to revise or
update such statements to reflect events or circumstances  after the date hereof
or to reflect the occurrence of unanticipated events.

     Revenues

     Our revenues are generated from the following categories:

     o    wireless  communications,  consisting of retail, service and wholesale
          digital PCS revenues;

     o    wireline  communications,  including telephone  revenues,  fiber optic
          network usage (or carrier's  carrier  services),  Internet,  CLEC, and
          long distance revenues; and,

     o    other  communications  services  revenues,   including  revenues  from
          paging,  voicemail,  wireless and wireline cable television,  our sale
          and lease of  communications  equipment and security alarm  monitoring
          and rental of property and equipment,  primarily to tenants of certain
          company owned  facilities.  Through the  disposition  date of July 26,
          2000, analog cellular revenues are included in this category.

     Operating Expenses

     Our  operating   expenses  are   generally   incurred  from  the  following
     categories:

     o    cost  of  sales,   including  digital  PCS  handset  equipment  costs,
          usage-based access charges,  including long distance, roaming charges,
          and other direct  costs.  We sell handsets to our customers at a price
          below our cost.  Previously,  we have netted these discounts and costs
          against our revenues. We have reclassified prior periods to conform to
          our new policy of separately reporting these cost of sales;

     o    maintenance and support expenses,  including costs related to specific
          property and equipment,  as well as indirect costs such as engineering
          and general administration of property and equipment;

     o    depreciation and amortization,  including amortization of goodwill and
          other  intangibles  from  acquisitions,  merger and capital outlays to
          support continued business expansion;

     o    customer operations expenses, including marketing, product management,
          product  advertising,  sales,  publication  of  a  regional  telephone
          directory, customer services and directory services; and,

     o    corporate  operations  expenses,  including  taxes other than  income,
          executive,  accounting,  legal,  purchasing,  information  technology,
          human resources and other general and administrative expenses.


     Other Income (Expenses)

     Our other income  (expenses) are generated  (incurred) from interest income
     and expense,  equity income or loss from RSA5 (through July 25, 2000),  and
     equity  income or loss from the VA Alliance  (through July 25, 2000) and WV
     Alliance (through February 13, 2001).


                                       16
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued


     Income Taxes

     Our income tax  liability  and  effective  tax rate  increases or decreases
     based upon changes in a number of factors,  including our pre-tax income or
     loss,  losses sustained by the Alliances,  net operating losses and related
     carryforwards,  alternative minimum tax credit carryforwards, state minimum
     tax  assessments,  gain or loss on the  sale  of  assets  and  investments,
     write-down  of assets and  investments,  non-deductible  amortization,  and
     other tax deductible amounts.








                                       17
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

Results of Operations

Three and Nine Month Periods Ended September 30, 2001
Compared to Three and Nine Month Periods Ended September 30, 2000

OVERVIEW

Operating  income before  depreciation and amortization and asset write-down and
impairment charges ("EBITDA")  increased $2.6 million, or 59%, from $4.5 million
to $7.1  million for the three months  ended  September  30, 2001 as compared to
2000.  Operating loss  increased by $1.9 million,  or 14%, from $13.4 million to
$15.3  million  for  the  three  months  ended  September  30,  2000  and  2001,
respectively.  Pro forma EBITDA  improved $4.1 million from $3.0 million to $7.1
million for the three months ended September 2000 and 2001, respectively. EBITDA
improvements  reflect relatively steady pro forma year over year improvements in
the wireless  and  wireline  revenue and  operating  performance.  PCS pro forma
operating cash flows before costs of acquisition  ("COA") continued  improvement
trends at $9.0 million for the third  quarter 2001  compared to $8.0 million and
$6.0  million in the second and first  quarters  2001,  respectively.  Operating
losses  increased $1.9 million,  or 14%, from $13.4 million to $15.3 million for
the three  months  ended  September  30 2000 and 2001,  respectively,  with $2.6
million of  depreciation  acceleration  recognized  in the third quarter of 2001
with respect to certain wireless network and equipment  scheduled to be replaced
in 2002  and  2003 due to  recently  announced  plans  to  upgrade  to  3G-1XRTT
technology (see "Depreciation and Amortization Expenses" below).

EBITDA  decreased $2.3 million,  or 13%, from $18.5 million to $16.2 million for
the nine months ended September 30, 2000 and 2001, respectively.  Operating loss
increased $33.9 million,  from $6.1 million to $40.0 million for the nine months
ended September 30, 2000 and 2001, respectively. Pro forma EBITDA improved $10.4
million from $5.6 million to $16.0  million for the nine months ended  September
30, 2000 and 2001,  respectively.  For the nine months ended September 30, 2001,
PCS pro forma operating cash flows before COA totaled $23.1 million, an increase
of 85% over the $12.5  million  from the same nine  months in 2000.  Nine  month
actual  result  comparisons  do not  reflect  the  effects  of  the  significant
transactions  we have  executed  just prior to or during this  period  which are
discussed  above  and are  defined  as the  "Transactions".  Pro  forma  results
demonstrate operating result growth in the wireless and wireline businesses. Pro
forma  operating  loss  decreased  $9.4  million,  or 18%,  from a loss of $50.8
million for the nine months ended  September 30, 2000 to a loss of $41.4 million
for the nine months ended September 30, 2001.

The combination of digital PCS customers from  acquisitions  and internal growth
as well as growth in ILEC,  CLEC and Internet  customers  contributed  to a year
over year  increase in revenue of $82.6  million  ($30.1  million on a pro forma
basis).  Negative  operating  margins  from  mid-stage  PCS  operations  and the
associated  costs  of  adding  new  PCS  customers  (referred  to as  subscriber
acquisition  costs),  primarily  handset  subsidies and  commissions,  drove the
decline in overall operating  margins.  In addition,  costs relating to internal
growth and increased  depreciation and amortization  from acquisition and merger
activity and the  consolidation  of the VA Alliance and the WV Alliance  reduced
income  from  operations  to a  greater  loss in 2001  than the  operating  loss
recognized  in the prior  year  comparable  period.  For the nine  months  ended
September 30, 2000, the Company reported its equity share of the VA Alliance and
the WV Alliance on separate lines at its ownership percentage during this period
(21%  for VA  Alliance  until  July  26,  2000  and 65%  thereafter;  45% for WV
Alliance).  However,  the Company  reported  100% of the VA  Alliance  operating
results for the nine month  period ended  September  30, 2001 and 100% of the WV
Alliance  operating  results for the period from  February 14, 2001 to September
30,  2001  (period  after  consolidation)  in the  details of the  statement  of
operations.

Net loss  applicable to common  shares for the three months ended  September 30,
2001 was $12.9 million as compared to net income  applicable to common shares of
$29.2  million for the 2000  comparable  period.  Net loss  applicable to common
shares  for the nine  months  ended  September  30,  2001 was $57.0  million  as
compared to net income  applicable  to common  shares for the nine months  ended
September  30,  2000 of $29.6  million.  The  current  year to date  results  as
compared to the prior year include a $22.3 gain for sale of  investments in 2001


                                       18
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

versus a $62.6 million gain on sale of assets in 2000, a $43.2 million  increase
in interest  expense  associated  with the increased  average debt  outstanding,
significant   increases  in   intangible   amortization   associated   with  the
Transactions,  and a $8.6 million  increase in preferred stock dividends in 2001
over 2000 due primarily to a full versus partial period.


OPERATING REVENUES
Operating revenues  increased $22.6 million,  or 68%, from $33.4 million for the
three  months  ended  September  30, 2000 to $56.0  million for the three months
ended September 30, 2001.  Operating revenues increased $82.6 million,  or 109%,
from $75.5  million to $158.1  million for the nine months ended  September  30,
2000 and 2001, respectively.

WIRELESS  COMMUNICATIONS  REVENUES--Wireless  communications  revenues increased
$16.7 million, or 109%, from $15.3 million to $32.0 million for the three months
ended  September 30, 2000 and 2001,  respectively,  and increased  $68.2 million
from $19.4 million to $87.6 million for the nine months ended September 30, 2000
and 2001,  respectively.  This increase is primarily due to the  acquisition  of
PrimeCo VA, the  consolidation of the VA Alliance on July 26, 2000 (Note 4), and
the  consolidation  of the WV  Alliance  on  February  13,  2001  (Note 4).  The
acquisition  of PrimeCo VA (now  referred  to as the "VA East"  market)  and the
consolidation  of the VA Alliance  accounted  for $6.7  million,  or 40%, of the
total three month  increase and $51.0  million,  or 75%, of the total nine month
increase.  The consolidation of the WV Alliance in February 2001 also added $6.4
million and $14.8  million to the year over year revenues for the three and nine
month periods ended  September 30, 2001 as compared to 2000,  respectively.  Pro
forma  revenues  increased  $8.0 million from $24.0 million to $32.0 million for
the three  months ended  September  30, 2000 and 2001,  respectively,  and $21.1
million from $69.0 million to $90.1 million for the nine months ended  September
30, 2000 and 2001, respectively.

On a pro forma basis,  we increased PCS subscribers by 46,100 from 157,700 as of
September  30, 2000 to 203,800 as of September  30, 2001.  Gross PCS  subscriber
additions for the third quarter of 2001 were 32,140 of which 80% were high-value
post-pay additions. This increase in subscribers,  combined with product mix and
average revenue per subscriber ("ARPU") increases, translated to a $15.2 million
year over year  increase  in pro forma  subscriber  revenue  (actual  subscriber
revenue increased $51.0 million). ARPU decreased $1.21, or 2.7%, from $44.57 for
the nine months  ended  September  30, 2000 to $43.36 for the nine months  ended
September 30, 2001 due to competition and promotional introductory rates offered
in the initial months of certain post-pay rate plans. ARPU for the third quarter
of 2001  increased to $45.99,  primarily due to growth  initiatives  and service
offerings  targeted at higher-end rate plans. Since the end of the first quarter
of 2001,  post pay rate plans of $50 per month or greater have  increased by 48%
and now represent 34% of post pay customers.  We have  successfully  shifted the
post-pay/pre-pay  customer mix from 61%  post-pay at  September  30, 2000 to 77%
post-pay  at  September  30,  2001.  This is a leading  factor in our ability to
sustain ARPU levels despite the competitive factors described above.

Wholesale and roaming  revenue  increased $3.4 million and $12.8 million for the
three  and nine  months  ended  September  30,  2001 as  compared  to 2000.  Our
wholesale and roaming agreement with  Sprint/Horizon,  which accounted for $13.7
million,  or 95%, of our wholesale  revenues for the nine months ended September
30, 2001,  was amended during the third quarter of 2001.  This amendment  covers
the next 30 months of our 10 year  existing  agreement  and will result in lower
average unit rates but predictable and increased monthly  revenues.  Pursuant to
this agreement,  minimum wholesale  revenues will be $5.1 million for the fourth
quarter  2001,  and $27.4 million and $38.6 million for the years 2002 and 2003,
respectively.

WIRELINE  COMMUNICATIONS  REVENUES--Wireline  communications  revenues increased
$6.6  million,  or 45%, from $14.9 million to $21.5 million for the three months
ended September 30, 2000 and 2001,  respectively.  Wireline  revenues  increased
$2.5  million,  or 13%, from $19.0 million to $21.5 million on a pro forma basis
for the three months ended September 30, 2000 and 2001, respectively.

Wireline  revenues  increased $20.6 million,  or 48%, from $42.7 million for the
nine months ended  September 30, 2000 to $63.3 million for the nine months ended
September  30,  2001.  On a pro forma  basis,  these  revenues  increased  $10.8
million,  or 20%,  from $55.0 million to $65.8 million for the nine months ended
September 30, 2000 and 2001, respectively.



                                       19
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

o Telephone Revenues.  Telephone revenues,  which include local service,  access
and toll service,  directory  advertising and calling feature  revenues from our
ILEC business  increased  $2.9 million,  or 36%, from $8.0 million for the three
months  ended  September  30, 2000 to $10.9  million for the three  months ended
September 30, 2001.  Telephone  revenues  increased  $7.4 million,  or 31%, from
$24.0 million for the nine months ended  September 30, 2000 to $31.4 million for
the nine months ended September 30, 2001. The  consolidation of R&B Telephone in
the first  quarter of 2001  accounted  for $2.5  million  (87%) and $6.4 million
(86%) of the three and nine month increases, respectively, over the period ended
September 30, 2000. On a pro forma basis for the comparable  nine month periods,
ILEC  revenues  were up 7% due to a .5%  increase  in  access  lines and an 8.8%
increase in carrier access minutes.

o Fiber Optic  Network Usage  Revenues.  Revenues from fiber optic network usage
operations  increased  $1.6  million,  from $.8 million to $2.4  million for the
three months ended  September 30, 2000 and 2001,  respectively.  These  revenues
increased $3.6 million, or 137%, from $2.7 million to $6.3 million for the three
months ended September 30, 2000 and 2001, respectively. Of these increases, $1.5
million and $3.3 million for the three and nine month  periods  ended  September
30, 2000 and 2001,  respectively,  are attributable to the  consolidation of R&B
Network in February  2001.  On a pro forma  basis,  these  revenues  were up $.5
million,  or 27%,  and $1.1  million,  or 19%,  for the  three  and  nine  month
comparable periods.

o CLEC Revenues. CLEC revenues increased $1.4 million, or 56%, from $2.6 million
for the three  months  ended  September  30, 2000 to $4.0  million for the three
months ended  September 30, 2001 and increased $6.9 million,  or 113%, from $6.1
million for the nine months ended  September  30, 2000 to $13.0  million for the
nine months ended  September  30, 2001.  Of the increases for the three and nine
month  periods,  $.9 million  (61%) and $2.1  million  (31%),  respectively,  is
attributable to the  consolidation  of R&B's CLEC operation in February 2001 and
$.6 million  (43%) and $3.2  million  (46%),  respectively,  is due to increased
revenues in the Virginia CLEC market.  Excluding the R&B market, which increased
2,800 lines (57%),  CLEC access lines  increased  9,700, or 74%. We finished the
third quarter 2001 with 30,700 CLEC access lines,  an increase of 15.6% over the
previous quarter. Reciprocal compensation revenues for the comparable nine month
periods increased $.6 million from $2.4 million to $3.0 million but fell sharply
to $.4 million for the third quarter of 2001 compared to $1.2 million in each of
the first two  quarters of 2001 due to lower rates that went into effect in June
2001.

o Internet Revenues.  Revenues from Internet services increased $.7 million,  or
21%, from $3.4 million to $4.1 million for the three months ended  September 30,
2000 and 2001, respectively. These revenues increased $2.6 million, or 27%, from
$9.8 million to $12.4  million for the nine months ended  September 30, 2000 and
2001,  respectively.  The consolidation of R&B's Internet  operation in February
2001 accounted for $.2 million (29%) and $.5 million (20%) of the total increase
for the  three  and  nine  month  periods,  respectively.  Internet  subscribers
increased  12,500,  or 21%, in third quarter 2001 over third quarter 2000,  with
DSL customer  additions  accounting  for 1,800 of this total,  as DSL  customers
increased  from 1,200  customers  at  September  30, 2000 to 3,000  customers at
September  30, 2001.  DSL showed 30.1%  customer  growth in the third quarter of
2001 over the second  quarter of 2001 and the number of dial up  customers  grew
6.7% during this same period.

OTHER COMMUNICATIONS SERVICES REVENUES--Other  communications services revenues,
including  other R&B,  decreased $.7 million,  or 21%, from $3.2 million to $2.5
million  for the  three  month  periods  ended  September  30,  2000  and  2001,
respectively,  and decreased  $6.2  million,  or 46%, from $13.5 million to $7.3
million  for  the  nine  month  periods  ended  September  30,  2000  and  2001,
respectively.

o Other  Wireless  Revenues.  Other wireless  revenues  consist of revenues from
analog cellular, paging and voicemail. These revenues decreased $1.0 million, or
65%,  from $1.5 million to $.5 million for the three months ended  September 30,
2000 and 2001, respectively. These revenues decreased $6.2 million, or 79%, from
$7.9 million to $1.7 million for the nine months  ended  September  30, 2000 and
2001,  respectively.  This  decrease  reflects  the  absence of analog  cellular
revenue in 2001,  as the business was sold in July 2000 in  connection  with the
acquisition of VA East.  Analog  cellular  revenue was $.7 million for the three
months  ended  September  30, 2000 and $5.6  million  for the nine months  ended
September 30, 2000.  Voicemail and paging revenue decreased $.3 million, or 36%,


                                       20
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

from $.8 million for the three  months ended  September  30, 2000 to $.5 million
for the three months ended September 30, 2001 and decreased $.7 million, or 28%,
from $2.3 million for the nine months ended  September  30, 2000 to $1.6 million
for the nine months ended  September  30, 2001 due primarily to the 20% decrease
in paging customers.

o Cable and other  Revenues.  Cable  revenues,  including  wireless and wireline
cable,  remained flat for the three months ended  September 30, 2001 as compared
to 2000, and decreased $.2 million, or 8%, from $3.0 million to $2.8 million for
the nine months ended  September 30, 2000 and September 30, 2001,  respectively.
Other  communications  services revenues remained  relatively flat for the three
months  ended   September  30,  2001  as  compared  to  2000.   However,   other
communications  services  revenues  decreased  $.5  million,  or 18%,  from $2.5
million for the nine months  ended  September  30, 2000 to $2.0  million for the
nine  months  ended  September  30,  2001.  The  decline  from the prior year is
attributable  primarily to 13% decrease in wireless  cable  subscribers  partial
offset by the  consolidation  of R&B's cable and paging  operations  in February
2001 which accounted for $.3 million and $.7 million of the total three and nine
month revenues in 2001.


OPERATING EXPENSES

TOTAL OPERATING  EXPENSES--Total  operating expenses increased $24.6 million, or
52%, from $46.8  million to $71.4  million for the three months ended  September
30,  2000 and 2001,  respectively,  and  increased  $116.5  million,  from $81.7
million for the nine months ended  September 30, 2000 to $198.2  million for the
nine months ended September 30, 2001. Of this increase,  $10.2 million and $37.2
million relates to the increase in depreciation  and  amortization for the three
and nine month respective  periods. Of the remaining increase for the comparable
three and nine month  periods,  $6.1  million and $56.9  million,  respectively,
relates to operating  expenses other than depreciation and amortization from the
VA Alliance and VA East, which were  consolidated  into our results beginning in
July 2000,  and $10.5 million and $25.7  million,  respectively,  is from the WV
Alliance and R&B,  which were  consolidated  into our results after February 13,
2001. Additionally,  operating expenses increased by a total of $3.6 million and
$5.7 million in our operations that were present in both of the comparable three
and nine  month  respective  periods.  These  increases  were  offset by the $.5
million  and  $2.9  million  decreases   attributable  to  the  analog  cellular
operation,  which was  disposed  of in July 2000,  for the three and nine months
ended September 30, 2001 as compared to 2000, respectively.

On  a  pro  forma  basis,   operating  expenses,   excluding   depreciation  and
amortization,  increased  $6.0  million,  or  14%,  in the  three  months  ended
September 30, 2001 as compared to the three months ended  September 30, 2000 and
increased $19.6 million,  or 15%, in the nine months ended September 30, 2001 as
compared  to the nine  months  ended  September  30,  2000.  During  these  same
comparative periods,  revenues increased by 22% and 23%, respectively.  Over the
three quarters of 2001, these expenses have remained essentially flat in total.

COST OF SALES--Cost of sales increased $6.1 million,  or 104%, from $5.8 million
for the three months  ended  September  30, 2000 to $11.9  million for the three
months ended  September 30, 2001 and increased  $23.9 million from $10.7 million
for the nine  months  ended  September  30,  2000 to $34.6  million for the nine
months ended September 30, 2001. Cost of sales as a percentage of wireless sales
remained flat for the three month  comparable  periods and decreased from 55% to
40% for the nine  month  comparable  periods.  This is due to the  change in the
product mix, with a higher  percentage of the total being  comprised of post pay
as compared to prepay  customers,  the  increase in  wholesale  revenues and the
leveraging of the recurring revenues from the growing customer base.

MAINTENANCE AND SUPPORT  EXPENSES--Maintenance  and support  expenses  increased
$7.5  million,  or 85%,  from $8.8 million to $16.3 million for the three months
ended September 30, 2000 and 2001, respectively, and increased $25.5 million, or
125%,  from $20.5 million to $46.0  million for the nine months ended  September
30, 2000 and 2001, respectively. This increase was primarily attributable to the
significant growth by acquisition in the wireless segment, as this accounted for
$3.3 million of the total three month  increase  and $16.4  million of the total
nine month increase.  In addition,  CLEC accounted for $1.3 million of the total
three month increase and $5.0 million of the total nine month increase, and ILEC
accounted for $.5 million of the total three month  increase and $2.0 million of
the  total  nine  month  increase.  The  other  remaining  increase  was  spread


                                       21
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

relatively  evenly  among the other  segments.  The  largest  driver of  expense
increase in all cases relates to network access and other plant related expenses
due to geographic expansions and new facilities-related costs from acquisitions.
These types of expenses  represent the largest  start-up expense from geographic
expansion.  Maintenance  and  support  expenses  as a percent of total  revenues
increased  from 26% and 27% for the three and nine months  ended  September  30,
2000,  respectively,  to 29% for the three and nine months ended  September  30,
2001 due to higher composition of wireless business to the total company,  which
carries slightly higher maintenance and support costs.

DEPRECIATION AND AMORTIZATION  EXPENSES--Depreciation  and amortization expenses
increased  $10.2  million,  or 83%,  from $12.2 million to $22.4 million for the
three months ended  September  30, 2000 and 2001,  respectively,  and  increased
$37.2  million,  from $19.0  million to $56.2  million for the nine months ended
September  30, 2000 and 2001,  respectively.  Of the total nine month  increase,
$7.1 million is from  amortization  of  goodwill,  other  intangible  assets and
licenses, primarily from the acquisition activity. The WV Alliance consolidation
and the R&B  merger,  none of which were  included in the results for the period
ended  September  30,  2000,  accounted  for  $2.9  million  and  $4.8  million,
respectively,  of  depreciation  for the nine month period ending  September 30,
2001. The inclusion of VA East and VA Alliance  depreciation for the full versus
the prior year partial  period,  together with the  significant  increase in the
related  property and  equipment,  accounted  for $17.3 million of the increase.
Also within the VA Alliance and WV Alliance third quarter 2001 depreciation,  we
recognized an additional  $2.6 million  depreciation  charge  related to certain
wireless network  equipment  scheduled to be replaced due to our planned upgrade
to the  third  generation  (3G-1XRTT)  technology  to be  implemented  in the VA
Alliance and WV Alliance markets over the period from October 2001 to June 2003.
This is in  connection  with a recent  amendment to our  Sprint/Horizon  network
services  agreement  which,  as noted above,  provides for  scheduled  wholesale
revenue  minimums over the 30 months  commencing  July 1, 2001 in return for the
Company's  commitment to upgrade the Alliances'  network to 3G-1XRTT  technology
for an estimated  capital outlay of $40-$45 million which will enable  offerings
of high-speed data  applications.  The remaining  increase related to the higher
property and equipment asset base.

CUSTOMER  OPERATIONS   EXPENSES--Customer  operations  expenses  increased  $5.0
million,  or 46%, from $11.0 million to $16.0 million for the three months ended
September  30,  2000  and  2001,  respectively.   Customer  operations  expenses
increased  $28.4 million,  or 155%,  from $18.4 million to $46.8 million for the
nine  months  ended  September  30, 2000 and 2001,  respectively.  Of this total
increase,  $3.1 million and $25.7 million  occurred in the wireless  segment for
the three and nine month periods,  respectively.  The total customer  operations
increase  relates  primarily  to  marketing  and sales  activities,  such as the
increases to operating expenses  associated with adding new retail locations (24
added since September  2000) and other resources to the sales function,  as well
as the direct  commissions  associated  with customer  additions.  Additionally,
customer  care  costs  increased  significantly,  primarily  resulting  from the
significant PCS customer additions.  Despite this overall increase, PCS customer


                                       22
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

care costs per  subscriber  per month fell from an average of $4.84 for the nine
month period ended September 30, 2000 to $2.89 for the same period in 2001. As a
percentage of total revenue,  customer operations expenses increased from 24% to
30% over the  related  nine month  periods  ended  September  30, 2000 and 2001,
respectively.  However,  customer  operations as a percentage of total  revenues
decreased  from 33% in the third  quarter of 2000 to 29% in the third quarter of
2001. The nine month comparative increase is due to the partial period inclusion
of the  acquired  PCS  businesses  which  contain  a higher  ratio  of  customer
operations  costs to revenues due to the  transaction  volume and the  increased
retail sales channel activity as compared to the overall wireline businesses.

CORPORATE  OPERATIONS  EXPENSES--Corporate  operations  expenses  increased $1.4
million,  or 43%,  from $3.4  million to $4.8 million for the three months ended
September 30, 2000 and 2001,  respectively,  and increased $7.0 million, or 93%,
from $7.5 million to $14.5 million for the nine months ended  September 30, 2000
and 2001, respectively.  This was due to the growth in the infrastructure needed
to support  the  acquired  PCS  businesses  ($1.5  million  for the three  month
increase  and $6.8  million  for the nine  month  increase).  Additionally,  R&B
accounted for $.2 million of the total corporate operations expense increase for
the comparable nine month periods. A portion of the increase in the wireless PCS
corporate  operations  expenses  resulted  from  the  reallocation  of  existing
overhead due to the shift in focus to our core strategic  segments.  Despite the
overall increase,  PCS general and administrative  expenses have fallen on a per
subscriber per month basis from an average of $9.98 in the third quarter of 2000
to  $6.38 in the  third  quarter  of 2001.  As a  percentage  of total  revenue,
corporate  operations  expenses  decreased  from  10% to 9% for  the  comparable
periods due to our focus on cost containment.


OTHER INCOME (EXPENSES)
Total other income (expenses)  decreased $40.9 million, or 92%, from a net other
income of $44.4  million for the three months ended  September 30, 2000 to a net
other income of $3.5 million for the three months ended  September  30, 2001 and
decreased  $68.1 million,  or 185%, from a net other income of $36.8 million for
the nine months ended September 30, 2000 to a net other expense of $31.3 million
for the nine months ended September 30, 2001.

Interest  expense  increased  $7.3 million,  or 59%, from $12.2 million to $19.5
million for the three months ended  September  30, 2000 and 2001,  respectively.
Interest  expense  increased $43.2 million,  from $13.7 million to $56.9 million
for the nine  months  ended  September  30,  2000 and 2001,  respectively.  This
increase is due to  additional  financing to fund  acquisitions  and other third
quarter 2000  transactions,  and to fund future  growth  activity in an expanded
market  (see Note 4 and  overview  above).  Gain on sale of assets  for the nine
months  ended  September  30,  2000  was  $62.6  million.  This  relates  to the
disposition  of the RSA6 analog  assets and  operations  and the sale of the 22%
limited partnership  interest in RSA5. The 2001 gain of $22.9 million relates to
the sale of Illuminet Holding, Inc.  ("Illuminet") stock, $22.3 million of which
occurred  during the third quarter of 2001.  Additionally,  in 2000, we incurred
$6.3 million in financing costs which were expensed in the third quarter related
to the Transactions.  Other income,  principally interest decreased $2.3 million
and increased $.4 million for the three and nine month comparative periods. This
income  related  primarily  to  interest  from  loans to  affiliates  (prior  to
consolidation)  and  from  restricted  cash  (for  the  period  from the July 26
transaction  date  to the  end of the  quarter).  The  interest  from  loans  to
affiliates is now eliminated in  consolidation  and the restricted  cash balance
generated  income  for the full  nine  months  in  2001.  However,  the  average
restricted cash balance decreased  significantly during 2001 due to the February
2001 and August 2001 interest  payments made on the senior notes from restricted
cash which totaled $38.3 million.

Our share of losses  from the VA Alliance  was $.8 million for the three  months
ended  September  30, 2000 and $3.7 million for the nine months ended  September
30, 2000.  Because the VA Alliance was  consolidated  in July 2000, no such line
item  exists in our 2001  income  statement.  Our  share of  losses  from the WV
Alliance  declined due to WV Alliance  being  consolidated  on February 13, 2001
concurrent with our merger with R&B. Our ownership  interests in the VA Alliance
and the WV Alliance increased to 91% and 79%,  respectively,  upon completion of
the R&B merger (Notes 3 and 4) on February 13, 2001.

INCOME TAXES
Income tax  benefits  increased  $16.1  million,  from a tax  liability of $12.3
million for the three months ended  September  30, 2000 to a tax benefit of $3.8
million for the three  months  ended  September  30,  2001.  Income tax benefits
increased  $37.6  million,  from a tax  liability of $12.2  million for the nine
months ended  September  30, 2000 to a tax benefit of $25.4 million for the nine
months ended  September 30, 2001.  This increase was primarily due to the change
in the pre-tax  income for the  comparable  periods.  The effective tax rate for
nine months ended  September  30, 2001 was a 37.3%  benefit,  as compared to the
expense rate for the nine months ended  September 30, 2000 of 40%. The 2000 rate
was  significantly  above  statutory  rates due to the  impact of  nondeductible
goodwill from the Net Access  Internet  acquisition and state minimum taxes on a
near  breakeven  profit  before  income tax.  The 2001 benefit rate is below the
statutory  income tax rates due to the same  factors  that were  present in 2000
and, additionally, nondeductible goodwill from the R&B merger (Notes 4 and 7).

LIQUIDITY AND CAPITAL RESOURCES
We have funded our working capital  requirements and capital  expenditures  from
net  cash  provided  from  operating  activities  and  borrowings  under  credit
facilities.  We anticipate  proceeds in the second half of 2001 of approximately
$20  million  from the sale of certain  towers and PCS  licenses  (Note 11).  At
September 30, 2001, we had $74 million in unused borrowings  available under our
senior credit facility. We borrowed an additional $21 million against our senior
credit facility in the third quarter of 2001.  Subsequent to September  30,2001,
the Company  received $6.4 million from the late September sale of its remaining
holdings of Illuminet  stock and on November 1 received  $15.6  million from the


                                       23
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

sale of 46 towers.  On November  6, 2001,  the  Company  used these  proceeds to
reduce its borrowing under its credit facility by $23 million,  resulting in $97
million of available funds for future drawdown under its senior credit facility.

OPERATING CASH FLOWS
During  the nine  month  period  ended  September  30,  2001,  net cash  used in
operating  activities was $30.3  million,  with $12.9 million used in operations
and net negative  changes in operating  assets and  liabilities  totaling  $17.4
million.  Principle changes in operating assets and liabilities were as follows:
accounts receivable was up $3.0 million; inventories and supplies decreased $1.5
million due to the reduction in inventory  levels from the quantities on hand at
year-end,  which were  higher to support the  seasonal  sales  activity  through
February;  other  current  assets  were up $4.8  million,  primarily  related to
increases in other  receivables  related to various non-trade  programs;  income
taxes  went  from a  receivable  at the 2000 year end of $2.9  million  to a $.1
million  payable  position at September  30, 2001 due to the receipt of the year
end  receivable  and the state minimum tax payable at September  30, 2001;  and,
accounts  payable and other  liabilities  decreased by $14.2  million due to the
timing of payments at and around the respective period ends.

During the nine month period ended  September  30,  2000,  net cash  provided by
operating  activities  was  $13.0  million,   with  $14.5  million  provided  by
operations,  $1.0 million used by the net negative  changes in operating  assets
and  liabilities  and $.5  million  used by  discontinued  operation.  Principal
changes in  operating  assets and  liabilities  were as  follows:  income  taxes
receivable  decreased  $9.5 million due  primarily  to PCS losses,  offset by an
$11.1 million tax gain on sale of discontinuing  operation; and accounts payable
and other current liabilities increased $16.3 million due primarily to increases
in current  liabilities of the VA Alliance and the VA East  operations  from the
July 25, 2000 transaction date.

Our cash flows used in  investing  activities  for the nine month  period  ended
September 30, 2001 aggregated $34.7 million and included the following:

o    $72.7 million for the purchase of property and equipment;

o    $3.5  million  of  proceeds  from the  final  payment  from the sale of the
     directory assistance operation (Note 5);

o    $4.1 million of cash and cash equivalents on hand at R&B at the time of the
     merger;

o    $3.0 million of advances to the Alliances;

o    $8.0  million of  deposits  refunded  at the  conclusion  of an FCC license
     auction as no additional licenses were purchased from this auction; and,

o    $27.0  million  received  from the sale of  investments  and towers with an
     additional $6.6 million in other  receivables at September 30, 2001,  which
     was received in October 2001.

During the nine month period ended September 30, 2000, our investing  activities
included;  $34.2  million for the  purchase of property  and  equipment;  $408.6
million  cash  payment  on  purchase  of the  PrimeCo  VA  licenses,  assets and
operations;  $53.8  million in net  advances  to the  Alliances;  $70.3  million
investment  in  restricted  cash,  net;  $31.7 million of proceeds from sales of
discontinued  operation;  $3.2  million in proceeds  from the sale of towers and
investments;  $10.7 million for the purchase of minority interest;  $1.4 million
for the purchase of an Internet company and its  subscribers;  and, $4.6 million
for purchases of investments and other investing activities.

Net cash  provided  by  financing  activities  for the nine month  period  ended
September 30, 2001 aggregated $72.4 million, which included the following:

o    $76.0 million proceeds from the issuance of long-term debt;

o    $2.9 million in other debt payments; and,

o    $1.2 million in debt amendment costs related to the CEI  transaction  (Note
     11).

                                       24
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

During the nine month period ended  September  30,  2000,  net cash  provided by
financing activities aggregated $590.0 million,  which included;  $520.4 million
of proceeds from  issuance of long-term  debt;  $242.5  million of proceeds from
issuance  of  preferred  stock  and  warrants;  $118.6  million  in payoff of VA
Alliance  debt;  $23.5 million of cash outlay to payoff the  Company's  existing
lines of credit;  $17.7 million in payments for  investment  banking,  legal and
other  professional  services  associated  with the issuance of long-term  debt;
$12.7  million  redemption  payment on senior  notes;  $1.5  million used to pay
dividends on common shares;  and, $1.1 million of net proceeds from the exercise
of stock options.

Our liquidity needs will be influenced by numerous factors including:

o    significantly  reduced  EBITDA that we expect to continue  through at least
     2001 as a result of acquiring capital  intensive  businesses in their early
     stages,  entering new markets and  disposing of  businesses  that  generate
     positive EBITDA;

o    increased  capital  expenditures  to support planned PCS network growth and
     customer expansion;

o    our own  continuing  capital  expenditures  due to our ongoing  strategy of
     offering our services in new markets, adding new products and services, and
     enhancing organic growth;

o    significant  capital  expenditures  to become an integrated  communications
     provider  in many of our  existing,  newly  acquired  and  other  potential
     markets by offering a broader range of products and services;

o    future acquisitions; and,

o    significantly increased interest expense.

Our liquidity sources include:

o    cash flows from operations, if any;

o    approximately  $35.9  million  at  September  30,  2001 held in the  escrow
     account to fund the next two  semi-annual  interest  payments on the senior
     notes,  the first of which  occurred in February 2001 with the next payment
     to be made in February 2002;

o    $74 million  available under our senior credit facility  subject to certain
     conditions;

o    disposition  of  additional   non-core   businesses  and  assets,  such  as
     additional  cell towers owned in VA East and excess PCS spectrum (Note 10),
     and  available  for sale  investments;  and, o public and private  debt and
     equity markets.


We expect  capital  expenditures  for the  remainder  of 2001 to be between  $30
million and $40 million. We expect these capital expenditures to be used to:

o    support the capital needs of our expanded PCS markets and operations;

o    support the capital needed to begin  implementation of the third generation
     digital PCS technology in markets covered by the Sprint/Horizon  agreement;
     and,

o    support  potential  future  expansion  of PCS,  CLEC  and  Internet  access
     services.



                                       25
<PAGE>
                                   NTELOS Inc.

Item 2.               Management's Discussion And Analysis
                Of Financial Condition And Results Of Operations
                                    Continued

We  expect  capital  expenditures  for 2002 to be $60  million  to $65  million,
exclusive  of an  estimated  $40 million to $45 million to be incurred  over the
period from October 2001 to August 2003 in  connection  with our  commitment  to
upgrade the Alliance's PCS network to 3G-1XRTT technology (see "Depreciation and
Amortization Expenses" above for additional information).

Based on our assumptions about the future of our operating results,  our capital
expenditure  needs, and the availability of borrowings under our credit facility
and our other  sources of  liquidity,  we believe  that we will have  sufficient
resources to fund our existing  operations and strategic plans.  However, if any
of our assumptions prove incorrect, we may not have sufficient capital resources
or may not remain in compliance with our debt  covenants.  If so, we may have to
delay or  abandon  some of our  anticipated  capital  expenditures,  modify  our
operating plans or seek  additional  capital  resources,  including the possible
sale of  non-strategic  assets,  and our ability to make  interest and principal
payments would be significantly impaired.

Item 3.  Quantitative and qualitative disclosures about market risk

The Company's senior credit facility of $325 million,  $251 million of which was
outstanding  at September 30, 2001,  bears  interest at rates 3% to 4% above the
Eurodollar  rate or 2.5% to 3% above the  federal  funds  rates.  The  Company's
unsecured  senior notes and unsecured  subordinated  notes are at fixed interest
rates  of 13% and  13.5%,  respectively.  The  Company  has  other  fixed  rate,
long-term debt totaling $19.7 million.

The Company is exposed to market risks  primarily  related to interest rates. To
manage its exposure to interest rate risks and in accordance  with conditions of
the senior note indenture, the Company entered into two, five year interest rate
swap agreements with notional amounts of $162.5 million in September 2000. These
swap  agreements  manage the Company's  exposure to interest  rate  movements by
effectively  converting a portion of the  long-term  debt from variable to fixed
rates.  Fixed interest rate payments are at a per annum rate of 6.76%.  Variable
rate payments are based on one month US dollar LIBOR. The weighted average LIBOR
rate  applicable to these  agreements  was 2.63% as of September  30, 2001.  The
notional amounts do not represent amounts exchanged by the parties, and thus are
not a measure of exposure of the  Company.  The amounts  exchanged  are normally
based on the  notional  amounts  and other  terms of the  swaps.  Interest  rate
differentials  paid or received under these  agreements are recognized  over the
one-month  maturity periods as adjustments to interest expense.  The fair values
of our interest rate swap  agreements  are based on dealer  quotes.  Neither the
Company nor the  counterparties,  which are  prominent  bank  institutions,  are
required to collateralize  their respective  obligations  under these swaps. The
Company  is  exposed to loss if one or more of the  counterparties  default.  At
September 30, 2001,  the Company had no exposure to credit loss on interest rate
swaps. At September 30, 2001, the swap agreements had a fair value $16.4 million
below their face value.  The effects of a one  percentage  point change in LIBOR
rates would change the fair value of the swap  agreements  by $5.3 million for a
one  percentage  point  increase in the rate (to $18.9 million below face value)
and $8.0  million  for a one  percentage  point  decrease  in the rate (to $32.3
million  below face value).  The Company  does not believe  that any  reasonably
likely  change in  interest  rates would have a material  adverse  effect on the
financial position, the results of operations or cash flows of the Company.

At September 30, 2001, fair value of the Company's financial assets approximates
their related carrying amounts.

The Company has  interest  rate risk on the amount  above the $162.5  million of
senior bank debt covered by the swap noted above.  At  September  30, 2001,  the
Company  senior bank debt totaled $251  million,  or $88.5 million over the swap
agreements.  A one  percentage  point  change  in the  Company's  variable  rate
exposure  would  result in $.9 million  change in interest  expense on an annual
basis.

The  Company's  senior  notes are trading at rates well below their book values.
The Company's  management believes that the risk of the fair value exceeding the
carrying  value of this debt in the  foreseeable  future  is  remote  due to the
current trading level, as well as market and industry conditions.


                                       26
<PAGE>
                                   NTELOS Inc.

                           Part II. OTHER INFORMATION

Item 1.  Legal Proceedings

         Not applicable

Item 2.  Changes In Securities

         Not applicable

Item 3.  Defaults Upon Senior Securities

         Not applicable

Item 4.  Submission Of Matters To A Vote Of Security Holders

         Not applicable

Item 5.  Other Information

         Not applicable

Item 6.  Exhibits and Reports on Form 8-K

(A)      Exhibits

         Not applicable

(B)      Reports on Form 8-K

      Form 8-K dated July 20,  2001,  updating  certain  information  previously
      filed by the Company relating to certain previously announced acquisitions
      and attaching the unaudited pro forma consolidated  financial  information
      of the Company.

      Form 8-K dated July 25, 2001,  announcing the agreement and plan of merger
      with Conestoga Enterprises, Inc. and attaching a copy of the agreement.

      Form 8-K dated August 30, 2001,  pertaining to presentations to be made by
      Mr.  James S.  Quarforth,  Chief  Executive  Officer,  and Mr.  Michael B.
      Moneymaker,  Chief Financial Officer,  at investor meetings,  providing an
      overview of NTELOS'  strategy,  transactions  and performance  through the
      second quarter of 2001 and certain guidance for 2001.

      Form 8-K dated  September  17,  2001 (as  amended by Form  8-K/A  filed on
      September 17, 2001),  pertaining to  presentations to be made by Mr. James
      S. Quarforth,  Chief  Executive  Officer,  and Mr. Michael B.  Moneymaker,
      Chief Financial Officer,  at investor  meetings,  providing an overview of
      NTELOS'   strategy,   performance   and  proposed  merger  with  Conestoga
      Enterprises,  Inc.  and  modified  guidance  previously  given  related to
      subscriber levels and provided  additional guidance in connection with the
      proposed merger.


                                       27
<PAGE>
                                   SIGNATURES


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



                           NTELOS Inc.

November 14, 2001          /s/J. S. Quarforth
                           -----------------------------------------------------
                           J. S. Quarforth, Chairman and Chief Executive Officer








November 14, 2001          /s/M. B. Moneymaker
                           -----------------------------------------------------
                           M. B. Moneymaker, Senior Vice President and
                           Chief Financial Officer, Treasurer, and Secretary





                                       28