<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                   FORM 10-Q/A
                                (Amendment No. 1)

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


For the quarter ended   March 31, 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 5/15/01     16,858,274
         --------------------------


<PAGE>

                                EXPLANATORY NOTE
                                ----------------

This Amendment No. 1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2001 is being filed in order to reverse the $5.6
million asset impairment charge recorded during the third quarter of 2000
associated with certain switching equipment planned for early disposition and to
increase depreciation expense by $2.4 million and $1.4 million for the fiscal
year ended Decmber 31, 2000 and the quarter ended March 31, 2001, respectively,
to reflect the shortened useful life. Additionally, this amendment adjusts the
per share value assigned to the common shares issued in the merger with R&B
Communications ("R&B") on February 13, 2001 with a total increase to equity of
$48 million and an increase to amortization expense on the related offsetting
assets of $.2 million for the three months ended March 31, 2001 See Note 1 for
further details of this restatement and for a summary of the financial statement
impact.

                                       2

<PAGE>

                                   NTELOS Inc.


                                    I N D E X

<TABLE>
<CAPTION>



                                                                                                        Page
                                                                                                       Number
                                                                                                       ------

<S> <C>
PART I. FINANCIAL INFORMATION

        Condensed Consolidated Balance Sheets, March 31, 2001 and December 31, 2000                     4-5


        Condensed Consolidated Statements of Operations, Three Months Ended March 31, 2001 and
        2000                                                                                             6


        Condensed Consolidated Statements of Cash Flows, Three Months Ended March 31, 2001 and
        2000                                                                                             7


        Condensed Consolidated Statements of Shareholders' Equity, Three  Months Ended March 31,
        2001 and 2000                                                                                    8


        Notes to Condensed Consolidated Financial Statements                                           9-12


        Management's Discussion and Analysis of Financial Condition and Results of Operations          13-22

        SIGNATURE                                                                                       23

</TABLE>


                                       3

<PAGE>

                                   NTELOS Inc.
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>


                                                                                         March 31,
                                                                                           2001
                                                                                      (Unaudited and           December 31,
(In thousands)                                                                          Restated)                  2000
------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS

Current Assets
  Cash and cash equivalents                                                       $             4,546    $             1,637
  Restricted cash                                                                               5,763                 20,121
  Accounts receivable, net of allowance of $8,714 ($5,100 in 2000)                             37,757                 24,268
  Inventories and supplies                                                                      4,041                  7,896
  Other receivables and deposits                                                                    -                 11,500
  Prepaid expenses and other                                                                    3,773                  3,178
  Income tax receivable                                                                             -                  2,930
------------------------------------------------------------------------------------------------------------------------------
                                                                                               55,880                 71,530
------------------------------------------------------------------------------------------------------------------------------

Investments and Advances
  Advance to affiliates                                                                           172                 66,210
  Securities and investments                                                                   33,443                 17,405
  Restricted cash                                                                              47,001                 50,903
------------------------------------------------------------------------------------------------------------------------------
                                                                                               80,616                134,518
------------------------------------------------------------------------------------------------------------------------------

Property and Equipment
  Land and building                                                                            42,090                 26,988
  Network plant and equipment                                                                 369,817                293,024
  Furniture, fixtures, and other equipment                                                     44,041                 39,539
  Radio spectrum licenses                                                                     457,084                428,317
------------------------------------------------------------------------------------------------------------------------------
     Total in service                                                                         913,032                787,868
  Under construction                                                                           63,673                 47,072
------------------------------------------------------------------------------------------------------------------------------

                                                                                              976,705                834,940
  Less accumulated depreciation                                                               101,527                 86,335
------------------------------------------------------------------------------------------------------------------------------

                                                                                              875,178                748,605
------------------------------------------------------------------------------------------------------------------------------

Other Assets
  Cost in excess of net assets of business acquired, less accumulated
     amortization of $5,651 ($4,253 in 2000)                                                  132,317                 45,861
  Other intangibles, less accumulated amortization of $5,388 ($3,554 in 2000)                  43,950                 44,043
  Deferred charges                                                                             22,025                 26,586
  Radio spectrum licenses not in service                                                       13,645                  7,874
------------------------------------------------------------------------------------------------------------------------------

                                                                                              211,937                124,364
------------------------------------------------------------------------------------------------------------------------------

                                                                                  $         1,223,611    $         1,079,017
==============================================================================================================================
</TABLE>


See Notes to Condensed Consolidated Financial Statements


                                       4

<PAGE>

                                   NTELOS Inc.

                      Condensed Consolidated Balance Sheets

(In thousands)

<TABLE>
<CAPTION>
                                                                          March 31, 2001
                                                                          (Unaudited and              December 31,
                                                                            Restated)                     2000
----------------------------------------------------------------------------------------------------------------------
<S> <C>
Liabilities and Shareholders' Equity

Current Liabilities
   Accounts payable                                                 $              45,521        $           33,119
   Advance billings and customer deposits                                           9,192                     6,697
   Accrued payroll                                                                  1,739                     2,420
   Accrued interest                                                                 5,992                    20,894
   Deferred revenue                                                                 5,539                     4,843
   Other accrued liabilities                                                        6,897                     7,362
   Accrued income taxes payable                                                       229                         -
----------------------------------------------------------------------------------------------------------------------

                                                                                   75,109                    75,335
----------------------------------------------------------------------------------------------------------------------

Long-term Debt                                                                    582,894                   556,287
----------------------------------------------------------------------------------------------------------------------

Long-term Liabilities
   Deferred income taxes                                                           20,464                    37,505
   Retirement benefits                                                             15,006                    12,017
   Other                                                                           40,108                    13,750
----------------------------------------------------------------------------------------------------------------------

                                                                                   75,578                    63,272
----------------------------------------------------------------------------------------------------------------------

Minority Interests                                                                    300                     1,258
----------------------------------------------------------------------------------------------------------------------

Redeemable, Convertible Preferred Stock                                           251,593                   246,906
----------------------------------------------------------------------------------------------------------------------

Commitments

Shareholders' Equity
   Preferred stock                                                                      -                         -
   Common stock                                                                   177,224                    45,272
   Stock warrants                                                                  22,874                    22,874
   Retained earnings                                                               37,414                    59,355
   Unrealized gain on securities available for sale, net                              625                     8,458
----------------------------------------------------------------------------------------------------------------------

                                                                                  238,137                   135,959
----------------------------------------------------------------------------------------------------------------------

                                                                    $           1,223,611        $        1,079,017
======================================================================================================================
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


                                       5

<PAGE>

                                   NTELOS Inc.

                 Condensed Consolidated Statements Of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                          Three Months Ended
-----------------------------------------------------------------------------------------------------------------------
                                                                                     March 31,
                                                                                       2001            March 31,
(In thousands except per share amounts)                                             (Restated)            2000
-----------------------------------------------------------------------------------------------------------------------
<S> <C>
Operating Revenues
  Wireless communications                                                         $       25,265    $         1,783
  Wireline communications                                                                 19,915             13,476
  Other communications services                                                            2,384              5,351
-----------------------------------------------------------------------------------------------------------------------

                                                                                          47,564             20,610
-----------------------------------------------------------------------------------------------------------------------

Operating Expenses
  Cost of wireless sales (exclusive of items shown separately below)                      10,184              2,367
  Maintenance and support                                                                 13,828              5,506
  Depreciation and amortization                                                           17,853              3,343
  Customer operations                                                                     14,791              3,597
  Corporate operations                                                                     4,877              2,101
-----------------------------------------------------------------------------------------------------------------------

                                                                                          61,533             16,914
-----------------------------------------------------------------------------------------------------------------------

Operating Income (Loss)                                                                  (13,969)             3,696

Other Income (Expenses)
  Equity loss from PCS investees
     VA PCS Alliances                                                                          -             (1,523)
     WV PCS Alliances                                                                     (1,286)            (2,144)
  Interest expense                                                                       (18,197)              (460)
  Other income, principally interest                                                       3,028                 41
-----------------------------------------------------------------------------------------------------------------------

                                                                                         (30,424)              (390)

Income Tax Benefits                                                                      (11,423)              (172)
-----------------------------------------------------------------------------------------------------------------------

                                                                                         (19,001)              (218)

Minority Interests                                                                         1,747                (73)
-----------------------------------------------------------------------------------------------------------------------

Loss from continuing operations                                                          (17,254)              (291)

Income from discontinued operations, net of tax                                                -                339
-----------------------------------------------------------------------------------------------------------------------

Net Income (Loss)                                                                        (17,254)                48

Dividend requirements on preferred stock                                                   4,687                  -
-----------------------------------------------------------------------------------------------------------------------
Income (Loss) applicable to common shares                                         $      (21,941)   $            48
=======================================================================================================================

Loss from continuing operations per common share - basic and diluted              $        (1.46)   $         (0.02)
Income from discontinued operations per common share - basic and diluted                       -               0.02
-----------------------------------------------------------------------------------------------------------------------
Net income (loss) per common share - basic and diluted                            $        (1.46)   $             -

Average shares outstanding - basic                                                        15,075             13,066
Average shares outstanding - diluted                                                      15,075             13,296
-----------------------------------------------------------------------------------------------------------------------

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



See Notes to Condensed Consolidated Financial Statements.

                                       6

<PAGE>

                                   NTELOS Inc.

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                              Three Months Ended
---------------------------------------------------------------------------------------------------------------------------------
                                                                                      March 31, 2001
(In thousands)                                                                         (Restated)               March 31, 2000
---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                              $            (17,254)      $                48
Deduct income from discontinued operations                                                        -                      (339)
---------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations                                                             (17,254)                     (291)
Adjustments to reconcile net income to net cash provided by operating
    activities:
   Depreciation                                                                              15,235                     2,882
   Amortization                                                                               2,618                       461
   Deferred taxes                                                                           (11,230)                   (2,397)
   Other                                                                                      1,602                      (935)
   Accrued interest on long-term debt                                                         5,220                        43
   Accrued interest income on restricted cash                                                (1,861)                        -
   Equity loss from PCS Alliances                                                             1,271                     3,668
   Accretion of loan discount and origination fees                                              582                         -
Changes in assets and liabilities from operations, net of effects of
    acquisitions and dispositions:
   (Increase) decrease in accounts receivable                                                (4,039)                      209
   (Increase) decrease in materials and supplies                                              4,559                        (4)
   Increase in other current assets                                                            (163)                     (253)
   Changes in income taxes                                                                    2,548                     3,308
   Decrease in accounts payable                                                                (676)                   (1,293)
   Increase (decrease) in other accrued liabilities                                          (1,460)                       56
   Increase in other current liabilities                                                        791                       203
---------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) continuing operations                                         (2,257)                    5,657
Net cash provided by discontinued operations                                                      -                       796
---------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                                          (2,257)                    6,453

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                                                         (25,505)                   (8,429)
Proceeds from sale of discontinued operation                                                  3,500                         -
Investments in PCS Alliances                                                                   (634)                   (3,892)
Cash on hand in merged entity                                                                 4,096                         -
Advances to PCS Alliances                                                                    (2,960)                   (2,016)
Deposit refunds (deposit) on assets                                                           8,000                      (100)
Proceeds from sale of tower and investments                                                   1,050                     3,200
Other                                                                                          (814)                     (661)
---------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                       (13,267)                  (11,898)
---------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt                                                     20,000                         -
Cash dividends                                                                                    -                    (1,501)
Payments on senior notes                                                                          -                   (12,727)
Additional borrowing (payments) under lines of credit and other debt                         (1,652)                   19,404
instruments, net
Net proceeds from issuance of stock                                                             145                       382
Other                                                                                           (60)                        -
---------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                    18,433                     5,558
---------------------------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                                         2,909                       113
Cash and cash equivalents:
Beginning                                                                                     1,637                       198
---------------------------------------------------------------------------------------------------------------------------------

Ending                                                                         $              4,546       $               311
=================================================================================================================================
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


                                       7

<PAGE>

                                   NTELOS Inc.

                 Consolidated Statements of Shareholders' Equity
                            (Unaudited and restated)

<TABLE>
<CAPTION>


                                                                                                       Accumulated
                                                                                                          Other           Total
                                               Common Stock                              Retained     Comprehensive    Shareholders'
(In thousands)                            Shares          Amount         Warrants        Earnings        Income          Equity
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Balance, December 31, 1999                  13,060    $     43,943    $          -    $     50,385    $     21,856    $    116,184
Comprehensive income:
   Net Income                                                                                   48
   Unrealized loss on securities
     available for sale, net of $1,533
     of deferred tax benefit                                                                                (2,409)
   Comprehensive income                                                                                                     (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
====================================================================================================================================


------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000                  13,132    $     45,272    $     22,874    $     59,355    $      8,458    $    135,959
Comprehensive income:
   Net loss                                                                                (17,254)
   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                                                                                                      (25,087)
Common stock issuance
   pursuant to R&B Merger                    3,716         131,807                                                         131,807
Dividends on preferred shares                                                               (4,687)                         (4,687)
Shares issued through Employee Stock
   Purchase Plan                                 7             145                                                             145
------------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001                     16,855    $    177,224    $     22,874    $     37,414    $        625    $    238,137
====================================================================================================================================
</TABLE>

 See Notes to Consolidated Financial Statements.


                                       8

<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 as of March 31, 2001
        and December 31, 2000, the results of operations for the three months
        ended March 31, 2001 and 2000 and cash flows for the three months ended
        March 31, 2001 and 2000. The results of operations for the three months
        ended March 31, 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 three month period ended March 31, 2001, the Company reported
        derivative losses of $2.4 million, net of $1.5 million deferred tax
        benefit. The related $10.3 million liability is classified in other
        long-term liabilities.

        Certain amounts on the prior year financial statements have been
        reclassified, with no effect on net income, to conform to
        classifications adopted in 2001. In periods prior to the second quarter
        of 2000, the Company reported wireless revenues net of cost of sales,
        primarily handsets. On June 1, 2000, the Company retroactively revised
        its reporting to no longer net the cost of sales for handsets and to
        present these amounts as a separate component of operating expenses.
        Operating revenues for wireless communications were increased by an
        identical amount. This revision was made because, in the opinion of
        management, it more appropriately reflects the revenues and costs of its
        wireless operations in accordance with industry practice.

        As a result of the PrimeCo VA acquisition in July 2000 and the planned
        merger with R&B Communications, Inc. ("R&B") (announced in May 2000),
        both of which utilize Lucent switching equipment, the Company decided to
        convert to a uniform Lucent switching platform. Accordingly, the Company
        recognized a $5.6 million ($3.4 million after tax) write-down of
        existing equipment in the third quarter 2000. This represents a
        write-down to its estimated net realizable value with planned
        disposition in the middle of 2001. This write-down was calculated using
        the held for disposal method under Statement of Financial Accounting
        Standards ("SFAS") No. 121. However, the Company continued to utilize
        this equipment within its business prior to the planned disposal date
        and did not have the ability to replace the assets at the time of
        write-down according to ability as discussed in "Staff Accounting
        Bulletin 100: Restructuring and Impairment Charges" (SAB 100) since the
        replacement switch was not physically on site and operational at the
        time of the original write-down. SAB 100 is an interpretive guidance
        issued by the Securities and Exchange Commission to, among other things,
        clarify the appropriate timing of this type of write-down under SFAS No.
        121. Therefore, this document restates the original Form 10-Q to reflect
        the reversal of the $5.6 million asset impairment charge taken in the
        quarter ended September 30, 2000 and to recognize $2.8 million in
        additional depreciation taken during in the third and fourth quarters of
        2000. Additionally, $1.4 million in additional depreciation is reflected
        in the quarter ended March 31, 2001 to reflect the planned replacement
        of this switching equipment by the end of the second quarter of 2001.

        Relative to the merger with R&B, the Company issued 3.7 million shares
        of its common stock in exchange for 100% of R&B's outstanding common
        stock. The merger was accounted for using the purchase method of
        accounting. The value that the Company assigned to the 3.7 million
        shares was $83.9 million, or $22.56 per share, based on an average
        trading price of the Company's common stock on the transaction closing
        date. However, since the exchange of shares was not subject to change
        pursuant to the existing terms of the merger agreement, "Emerging Issue
        Task Force Bulletin 99-12" (EITF 99-12) requires the price to be set at
        the time the terms were agreed to and announced. Significant terms of
        the merger were agreed to and the transaction was announced in May 2000
        at which time the value of the 3.7 million shares, using average trading
        prices at the time, was $131.8 million, or $35.47 per share. Therefore,
        the original Form 10-Q is restated to reflect the value of the common
        stock issued in the R&B merger at $131.8 million in the quarter ended
        March 31, 2001, and to record additional goodwill and license write-up
        of $48.0 million and the related $.2 million in amortization associated
        with this write-up for the three months ended March 31, 2001.As noted in
        the explanatory note which precedes these financial statements, this
        Form 10Q-A is being filed to amend the previously reported Form 10Q for
        the fiscal period ended September 30, 2000. The following is a summary
        of the effects this restatement has on the September 30, 2000 financial
        statements (amounts in 000's except Earnings Per Share):

                                       9

<PAGE>



                                  NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Contnued


<TABLE>
<CAPTION>

                                                                                 March 31, 2001
                                                                     --------------------------------------
                                                                                              Originally          Increase
        Excerpt from Condensed Consolidated Balance Sheet                 (Restated)           Reported          (decrease)
        ----------------------------------------------------------------------------------------------------------------------
<S> <C>
        Network plant and equipment                                  $      369,817      $      362,281     $        7,536
        Radio spectrum licenses                                             457,084             446,401             10,683
        Less accumulated depreciation                                       101,527              95,360              6,167
        Net property and equipment                                          875,178             863,126             12,052
        Costs in excess of net assets of business acquired                  132,317              99,004             33,313
        Radio spectrum licenses in other assets                              13,645               9,895              3,750
        Deferred income taxes liability                                      20,464              19,997                467
        Common Stock, no par value per share                                177,224             129,268             47,956
        Retained Earnings                                                    37,414              36,722                692

</TABLE>


<TABLE>
<CAPTION>
                                                                               Three Months Ended
                                                                                March 31, 2001
                                                                     --------------------------------------
        Excerpt from Condensed Consolidated Statements of                                     Originally          Increase
        Income                                                             (Restated)          Reported          (decrease)
        ----------------------------------------------------------------------------------------------------------------------
<S> <C>
        Depreciation and amortization                                $       17,853      $       16,199     $        1,654
        Operating loss                                                      (13,969)            (12,315)             1,654
        Income taxes                                                        (11,423)            (10,764)               659
        Loss from continuing operations                                     (17,254)            (16,259)               995
        Net loss                                                            (17,254)            (16,259)               995
        Loss applicable to common shares                                    (21,941)            (20,946)               995
        Loss from continuing operations per common
          share - basic and diluted                                  $        (1.46)     $        (1.39)    $         0.07
        Loss per common share - basic and diluted                    $        (1.46)     $        (1.39)    $         0.07

</TABLE>


2.  DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

        The Company manages its business segments with separable management
        focus and infrastructures. As a result of the transactions described in
        the notes 3, 4, and 5 and a change in the focus of the businesses that
        comprised the wireless and wireline segments, voicemail and paging
        operations, previously included in the wireless segment, and all cable
        operations are now included in the "Other" column. Additionally, the
        analog cellular operation, disposed of in July 2000 (Note 4), is
        separated from all digital operations. The wireless personal
        communications services ("PCS") segment now includes PCS operations,
        consisting of the Virginia RSA6 Cellular Limited Partnership ("RSA6")
        digital operation, the Richmond-Norfolk PCS market ("VA East"), the
        Virginia PCS Alliance, L.C. ("VA Alliance"), and the West Virginia PCS
        Alliance, L.C. ("WV Alliance"). Additionally, the Company previously had
        a directory assistance segment, also disposed of in July 2000 (Note 5),
        which is accounted for as a discontinued operation in 2000. The prior
        year income statement information noted in the table below excludes the
        directory assistance segment and assets of this segment are reflected in
        the "Other" category in the prior year.

        Summarized financial information concerning the Company's reportable
        segments is shown in the following table. These segments are described
        in more detail in Note 2 of the Company's 2000 Annual Report to
        Shareholders.

                                       10

<PAGE>


                                  NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                   Continued


<TABLE>
<CAPTION>


                                                                                             Analog
(in thousands)             Telephone     Network      CLEC       Internet   Wireless PCS    Cellular       Other          Total
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
As of and for the three months ended March 31, 2001 (Restated)
--------------------------------------------------------------
Revenues                 $   9,712     $    1,776  $    4,293  $     4,134  $   25,265    $       -     $     2,384  $       47,564
EBITDA*                      6,449          1,367         812           85      (5,743)           -             914           3,884
Depreciation
   & Amortization            1,801            501         502          987      13,512            -             550          17,853

Total Segment Assets       132,362         52,249      31,175       19,316     799,700            -          35,658       1,070,460
Corporate assets                                                                                                            153,151
                                                                                                                     ---------------
Total Assets                                                                                                         $    1,223,611
                                                                                                                     ===============

As of and for the three months ended March 31, 2000
---------------------------------------------------
Revenues                 $   7,969     $      869  $    1,614  $     3,023  $    1,783    $   2,677     $     2,675  $       20,610
EBITDA*                      5,493            574        (212)        (329)       (657)       1,336             834           7,039
Depreciation
   & Amortization            1,026            217         229          728           -          204             939           3,343

Total Segment Assets        46,276         21,224       6,730       17,822           -        5,571          49,198         146,821
Corporate assets                                                                                                             73,788
                                                                                                                     ---------------
Total Assets                                                                                                         $      220,609
                                                                                                                     ===============

</TABLE>

*  Operating Income before depreciation and amortization.


3.  INVESTMENTS IN WIRELESS AFFILIATES

        As of March 31, 2001, the Company had a 91% common ownership interest in
        the 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. Pursuant to 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).

        As of March 31, 2001, the Company had a 79% common ownership interest in
        the WV Alliance, a PCS provider serving a 2.0 million populated area in
        West Virginia and parts of eastern Kentucky, southwestern Virginia and
        eastern Ohio. Prior to the R&B merger, the Company held a 45% ownership
        interest and accounted for this investment under the equity method of
        accounting. The Company's ownership interest increased from 45% to 79%
        as a result of the R&B merger and 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 March 31, 2001, this is
        reflected as an inter-company obligation, which is eliminated from the
        Company's balance sheet pursuant to the 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 is being accounted for using the
        purchase method of accounting and was valued at $131.8 million or $35.47
        per share based on the average share price for the two days preceding
        May 28, 2000, the date the merger terms were agreed to and announced.
        The purchase price in excess of the net assets acquired is approximately
        $100.5 million and has been classified as goodwill ($86 million),
        principally allocated to the Telephone and Network segments, and to
        active PCS licenses ($10.7 million) located in the Wireless PCS
        segment and inactive PCS licenses ($3.8 million) held in corporate
        assets.

        As of February 13, 2001, the Company assumed debt of $7.3 million from
        R&B payable in the years 2001 through 2026.

                                       11

<PAGE>


                                  NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                   Continued


        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., which is located in the Richmond and Hampton Roads areas of
        Virginia ("PrimeCo VA"). The Company acquired PrimeCo VA 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 such, 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 were $3.3 million, $.6 million and $.2 million, respectively,
        for the three months ended March 31, 2000.

6.   SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION

        The Company made its first scheduled semi-annual payment of interest for
        $20 million on the $280 million senior notes out of restricted cash in
        accordance with the terms and conditions set forth in the senior note
        agreement. Additionally, see Note 4 above for the non-cash merger
        transaction with R&B.

7.   INCOME TAXES

        The effective tax rate in the first quarter of 2001 was 39.8% 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 $5.0 million.
        Additionally, the Company's net operating loss carryforward was
        approximately $29 million at December 31, 2000 and, at March 31, 2001,
        is estimated to be approximately $47 million by 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.

8.   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 229,000 shares
        for the three months ended March 31, 2000, to reflect the assumed
        conversion of dilutive stock options. For the three months ended March
        31, 2001, the Company had common stock equivalents from options totaling
        51,000 shares and 300,000 stock warrants 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 and therefore, basic and diluted
        earnings per share are the same. The Company currently has a total of
        1.1 million options outstanding and 1.3 million warrants outstanding to
        acquire shares of common stock. Of these, 373,600 options and no
        warrants are currently exercisable.

9.   PRO FORMA RESULTS

        The pro forma unaudited results of operations for the three months ended
        March 31, 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:


                                       12

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

                                                              Three Months Ended March 31,
                                                                2001
(In thousands, except per share data)                        (Restated)             2000
-------------------------------------------------------------------------------------------
<S> <C>
Operating revenues                                         $    52,731        $    41,682
Operating expenses, before depreciation and amortization        48,950             42,414
Operating loss                                                 (15,234)           (17,510)
Net loss                                                       (18,894)           (24,622)
Dividend requirements on preferred stock                         4,849              4,563
Loss applicable to common shares                               (23,743)           (29,185)
Net loss per common share:
   Basic and diluted                                       $    (1.43)             (1.74)

</TABLE>


                              13

<PAGE>

Overview

         We are a leading regional integrated communications provider 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 March 31, 2001, we
had approximately 186,100 digital PCS subscribers and approximately 75,600
combined incumbent local exchange carrier ("ILEC") and competitive local
exchange carrier ("CLEC") access lines installed. R&B Communications, Inc.
("R&B"), who we merged with on February 13, 2001, accounted for 18,600 of the
combined ILEC and CLEC lines.

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 and EBITDA
(earnings before interest, taxes, depreciation and amortization) will be
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 expand our markets through start-up activities,
acquisitions of new businesses, and the introduction of new products, we expect
these lower operating margins to continue.

We have recently 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, Internet access, including dedicated,
high-speed DSL and dial-up services, high-speed data transmission and local
telephone services. Over the last twelve months, we completed the following:

.. acquisition of 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");

.. issuance and sale of $375 million of senior and subordinated notes;

.. closing of $325 million senior credit facility, with $150 million borrowed on
the date of the PrimeCo VA closing, $175 million outstanding at year-end and
$195 million outstanding at March 31, 2001;

.. payment of existing senior indebtedness and refinancing of the VA Alliance and
the WV Alliance debt obligations;

.. issuance and sale of $250 million of redeemable, convertible preferred stock;

.. acquisition of certain PCS licenses currently owned by AT&T that added a
population of 2.5 million in certain markets in Pennsylvania, in exchange for
WCS licenses that we own but which were not in service (final closing was in
April 2001);

.. redemption of the series A preferred membership interest in the VA Alliance
and conversion of the series B preferred membership interest into common
interest;

.. dispositions of RSA5 and the analog assets and operations of RSA6 in
connection with the PrimeCo VA acquisition;

.. disposition of our directory assistance operations; and,

.. closing of the merger agreement with R&B, an integrated communications
provider in a geographic market contiguous to ours and commensurate therewith,
consolidated the WV Alliance (Note 4).

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.

                                       14

<PAGE>



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 to the
end of the quarter. 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, significant goodwill, licenses and
other intangible amortization and the significant increases in interest related
costs.

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 including but
not limited to, 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; continuation of
economic growth and demand for wireless and wireline communications services;
rapid changes in technology; the competitive nature of the wireless telephone
and other communications services industries; the effects of inflation and price
changes not being greater than anticipated; adverse changes in the roaming rates
we charge and pay; the capital intensity of the wireless telephone 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. 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,
            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
            cost of sales;

                                       15

<PAGE>

         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),
equity income or loss from the VA Alliance (through July 25, 2000) and WV
Alliance (through February 13, 2001), gain on sale of investments and assets and
loss on write-down of investments.

         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 charitable
contributions and other tax deductible amounts.

Results of Operations

Three Months Ended March 31, 2001
Compared to Three Months Ended March 31, 2000

OVERVIEW
EBITDA decreased $3.2 million, or 45%, from $7.0 million for the three months
ended March 31, 2000 to $3.8 million for the three months ended March 31, 2001.
Operating income (loss) decreased $17.7 million from income of $3.7 million to a
$14.0 million loss for the three months ended March 31, 2000 and 2001,
respectively. Pro forma EBITDA (Note 9) improved $4.5 million, from a loss of
$.7 million to earnings of $3.8 million for the three months ended March 31,
2000 and 2001, respectively. Pro forma operating loss improved $2.0 million from
a loss of $17.0 million to a loss of $15.0 million for the three months ended
March 31, 2000 and 2001, respectively.

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 $27.0 million ($11.0 million on a pro forma
basis). Negative operating margins from early to 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 VA Alliance and WV Alliance further lowered
operating income in 2001 over the prior year comparable period.

Net loss applicable to common shares for the three months ended March 31, 2001
was $21.9 million, which included $18.2 million in interest expense, as well as
equity losses from the WV Alliance for the period prior to the consolidation of
$1.3 million.

Net income for the three months ended March 31, 2000 was $.1 million, which
included equity losses from the Alliances of $3.7 million.

                                       16

<PAGE>

OPERATING REVENUES
Operating revenues increased $27.0 million, or 131%, from $20.6 million for the
three months ended March 31, 2000 to $47.6 million for the three months ended
March 31, 2001.

WIRELESS COMMUNICATIONS REVENUES--Wireless communications revenues increased
$23.5 million from $1.8 million to $25.3 million for the three months ended
March 31, 2000 and 2001, respectively. This increase is primarily due to the
acquisition of PrimeCo VA and the consolidation of the VA Alliance (Note 4),
which occurred on July 26, 2000, and the consolidation of the WV Alliance (Note
4) on February 13, 2001. The acquisition of PrimeCo VA (now referred to as the
VA East market) and the consolidation of the VA Alliance accounted for $21.3
million, or 91% of the total increase. The consolidation of the WV PCS Alliance
in February 2001 also added $2.6 million to the year over year revenues. Revenue
from our core market, which is included in both the 2000 and 2001 results,
decreased $.4 million. Pro forma revenues increased $6.5 million from $21.2
million to $27.7 million for the three months ended March 31, 2000 and 2001,
respectively. The western Virginia and West Virginia markets increased $6.9
million, offset by a $.4 million (3%) decline in the Virginia East market.

Including PrimeCo VA, VA Alliance and WV Alliance, we increased PCS subscribers
by 130,900, from 55,200 as of March 31, 2000 to 186,100 as of March 31, 2001.
The revenue increase from additional subscribers and wholesale revenue of $1.8
million and $2.6 million, respectively, on a pro forma basis was partially
offset by a decrease in average revenue per unit ("ARPU") as ARPU declined by
11% to $40.49 by the end of the three months ended March 31, 2001. This
primarily resulted from competition and changes in the mix of prepay and postpay
customers and promotional introductory rates offered in the initial months of
certain postpay rate plans.

WIRELINE COMMUNICATIONS REVENUES--Wireline communications revenues increased
$6.4 million, or 48%, from $13.5 million to $19.9 million for the three months
ended March 31, 2000 and 2001, respectively. Wireline revenues increased $4.8
million, or 28%, from $17.6 million to $22.4 million on a pro forma basis, for
the three months ended March 31, 2000 and 2001, respectively.

.. Telephone Revenues. Telephone revenues, which include local service, access
and toll service, directory advertising and calling feature revenues from our
ILEC business increased $1.7 million, or 22%, from $8.0 million for the three
months ended March 31, 2000 to $9.7 million for the three months ended March 31,
2001. The consolidation of R&B Telephone in the first quarter of 2001 accounted
for $1.4 million of the increase over the first quarter of 2000. The remainder
of the increase is attributable to access line growth of 5% and an increase in
carrier access minutes of 21% in the first quarter of 2001 over the first
quarter of 2000. These increases were partially offset by slight decreases in
toll and access rates, a shift in the composition of the classification of
access minutes and decreases in other telephone revenues.

.. Fiber Optic Network Usage Revenues. Revenues from fiber optic network usage
operations increased $.9 million, or 104%, from $.9 million for the three months
ended March 31, 2000 to $1.8 million for the three months ended March 31, 2001.
Of this increase, $.7 million is attributable to the consolidation of R&B
Network in February 2001.

.. CLEC Revenues. CLEC revenues increased $2.7 million, from $1.6 million for the
three months ended March 31, 2000 to $4.3 million for the three months ended
March 31, 2001. Of this increase, $.5 million is attributable to the
consolidation of R&B CLEC in February 2001 and $.5 million is due to increased
revenues from NA Communications, which was reclassified in both periods from the
Internet segment to provide uniform reporting within the organization. Excluding
the increase attributable to R&B, the increase is due to an increase of 7,900
CLEC access lines, or 88.5%, in the first quarter of 2001 over the first quarter
of 2000 and a $.7 million increase in reciprocal compensation which increased
from $.5 million to $1.2 million for the first quarter of 2000 and 2001,
respectively.

.. Internet Revenues. Revenues from Internet services increased $1.1 million, or
36.7%, from $3.0 million to $4.1 million for the three months ended March 31,
2000 and 2001, respectively. The consolidation of R&B Internet in February 2001
accounted for $.1 million of the total increase. Internet subscribers increased
8,000 or 15%, in first quarter 2001 over first quarter 2000, with DSL customer
additions accounting for 1,100 of this total, from 800 customers at March 31,
2000 to 1,900 customers at March 31, 2001.

                                       17

<PAGE>

OTHER COMMUNICATIONS SERVICES REVENUES--Other communications services revenues,
including other R&B, decreased $3.0 million, or 55%, from $5.4 million to $2.4
million for the three month periods ended March 31, 2000 and 2001, respectively.

.. Other Wireless Revenues. Other wireless revenues consist of revenues from
analog cellular, paging and voicemail. These revenues decreased $2.9 million, or
83%, from $3.5 million for the three months ended March 31, 2000 to $.6 million
for the three months ended March 31, 2001. This decrease reflects the absence of
analog cellular revenue in the first quarter of 2001, as the business was sold
in July 2000 in connection with the acquisition of VA East. In the first quarter
of 2000, analog cellular revenue was $2.7 million. Voicemail and paging revenue
decreased $.2 million, or 23%, from $.8 million for the three months ended March
31, 2000 to $.6 million for the three months ended March 31, 2001.

.. Cable and other Revenues. Wireless cable revenues decreased $.1 million, or
16%, from $.6 million for the three months ended March 31, 2000 to $.5 million
for the three months ended March 31, 2001. Wireline cable revenues remained
relatively constant in the first quarter of 2001 as compared to the first
quarter of 2000. Revenues from all other sources remained constant at $.9
million for the comparative periods.

OPERATING EXPENSES

TOTAL OPERATING EXPENSES--Total operating expenses increased $44.6 million from
$16.9 million to $61.5 million for the three months ended March 31, 2000 and
2001, respectively. The consolidation of the VA Alliance and the acquisition of
VA East in July 2000, and the consolidation of the WV Alliance and R&B merger in
February 2001 accounted for $41.7 million, or 93%, of the total increase. The
exclusion of analog cellular in 2001 due to its disposition in July 2000 offset
the overall increase by $1.5 million. Operating expenses, excluding depreciation
and amortization increased $30.1 million, from $13.6 million for the three
months ended March 31, 2000 to $43.7 million for the three months ended March
31, 2001. Wireline operating expenses, excluding depreciation and amortization,
increased $3.2 million from $8.0 million to $11.2 million for the three months
ended March 31, 2000 and 2001, respectively. Wireless operating expenses,
excluding depreciation and amortization, increased $28.6 million from $2.4
million for the three months ended March 31, 2000 to $31.0 million for the three
months ended March 31, 2001. Within the wireline business, $1.4 million of the
increase is from the inclusion of R&B, $1.1 million is from the CLEC segment
(excluding R&B CLEC) and the remainder came primarily from the Internet segment.
Other than the increase from the VA Alliance and WV Alliance consolidations and
the acquisition of VA East, other changes within the wireless businesses netted
to a decrease of $.2 million. Operating expenses, excluding depreciation and
amortization, from the other communication service businesses decreased $1.7
million due primarily to the disposition of the analog cellular business in July
2000.

On a proforma basis, operating expenses, excluding depreciation and
amortization, increased $6.4 million, or 15%, in the three months ended March
31, 2001 as compared to the three months ended March 31, 2000 and increased $2.3
million, or 5%, as compared to the fourth quarter of 2000. During these same
comparative periods, revenues increased by 26% and 14%, respectively.

COST OF SALES--Cost of sales increased $7.8 million, from $2.4 million for the
three months ended March 31, 2000 to $10.2 million for the three months ended
March 31, 2001. Cost of sales as a percent of wireless sales remained constant
at just over 40% for both periods.

MAINTENANCE AND SUPPORT EXPENSES--Maintenance and support expenses increased
$8.3 million, or 151%, from $5.5 million to $13.8 million for the three months
ended March 31, 2000 and 2001, respectively. This increase was primarily
attributable to the explosive growth by acquisition in the wireless segment, as
this accounted for $6.4 million of the total. In addition, CLEC accounted for
$1.4 million and the other remaining increase was spread 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.

DEPRECIATION AND AMORTIZATION EXPENSES--Depreciation and amortization expenses
increased $14.6

                                       18

<PAGE>

million from $3.3 million for the three months ended March 31, 2000 to $17.9
million for the three months ended March 31, 2001. The digital PCS acquisitions
accounted for $13.5 million of the total increase, with $2.6 million coming from
goodwill and other intangible asset amortization and $2.8 million coming from
the PCS license amortization. Also, the addition of R&B operations accounted for
$1.0 million, most of which was in the ILEC and CLEC segments. Other
depreciation increases, primarily in Internet, were offset by the exclusion of
depreciation from the analog cellular assets, disposed of in July 2000.

CUSTOMER OPERATIONS EXPENSES--Customer operations expenses increased $11.2
million, from $3.6 million in the first quarter of 2000 to $14.8 million in the
first quarter of 2001. Of this total increase, $10.3 million occurred in the
wireless segment from the VA Alliance, WV Alliance, and VA East acquisitions.
The total customer operations increase relates primarily to marketing and sales
activities and customer care costs primarily associated with adding new
customers.

CORPORATE OPERATIONS EXPENSES--Corporate operations expenses increased $2.8
million, or 132%, from $2.1 million to $4.9 million for the three months ended
March 31, 2000 and 2001, respectively. This was due to the growth in the
infrastructure needed to support the acquired PCS businesses ($2.6 million) and
other geographic expansion in the markets which the CLEC and Internet businesses
served by the end of March 2001.

OTHER INCOME (EXPENSES)
Total other income (expenses) increased $12.4 million,from a net other expense
of $4.1 million for the three months ended March 31, 2000 to a net other expense
amount of $16.5 million for the three months ended March 31, 2001. This is
primarily due to interest associated with debt of between $556 million and $586
million during the first quarter of 2001 as compared to debt of less than $45
million during the first quarter of 2000.

Interest expense increased $17.7 million from $.5 million for the three months
ended March 31, 2000 to $18.2 million for the three months ended March 31, 2001.
As noted above, 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). Interest
income increased $2.8 million, from $.2 million to $3.0 million for the three
months ended March 31, 2000 and 2001, respectively. This increase is due to the
interest earned on restricted cash during the first quarter of 2001.

Our share of losses from the VA Alliance was $1.5 million in the first quarter
of 2000. The VA Alliance was consolidated in July 2000; therefore, no such line
item exists in our 2001 income statement. Our share of losses from the WV
Alliance, which commenced being consolidated on February 13, 2001 concurrent
with our merger with R&B, decreased $.8 million, or 40.0%, from $2.1 million in
the first quarter of 2000 to $1.3 million in 2001; therefore, the equity method
of reporting was used for only a partial period. The WV Alliance losses over
these comparative quarters went from $4.8 million in 2000 to $5.9 million in
2001 due primarily to the high cost of customer acquisition associated with
record growth in the current quarter. 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 $11.2 million from a tax benefit of $.2 million
for the three months ended March 31, 2000 to a tax benefit of $11.4 million for
the three months ended March 31, 2001. This increase was due to the change in
the pre-tax income for the comparable periods. The effective tax rate for 2001
is anticipated to be adversely impacted due to non-deductible amortization
resulting 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. At March 31, 2001, we had $130 million in unused borrowings
available under our senior credit facility. We borrowed an additional $20
million against our senior credit facility in the first quarter of 2001.

OPERATING CASH FLOWS
During the first quarter of 2001, net cash used in operating activities was $2.3
million, with $3.8 million used in operations offset by net positive changes in
operating assets and liabilities totaling $1.5 million. Principle changes in

                                       19

<PAGE>

operating assets and liabilities were as follows: accounts receivable increased
$4.0 million in total, which was a result primarily from the increase in
revenues of $9.6 million from the fourth quarter of 2000; inventories and
supplies decreased $4.6 million due to year end inventory stock build up being
sold through the first quarter busy sales season; income taxes went from a
receivable at the 2000 year end of $2.9 million to a $.2 million payable
position at March 31, 2001 due to the receipt of the year end receivable and the
state minimum tax payable at March 31, 2001; and, accounts payable and other
liabilities (excluding additional payables from R&B and the WV Alliance)
decreased by $1.3 million with accrued interest decreasing by $14.9 million due
to the $20 million February semi-annual interest payment, offset by increases in
accounts payable and accrued liabilities due to capital expenditure activity and
growth in operations.

During the first quarter of 2000, net cash provided by operating activities was
$6.5 million, with $3.4 million provided by operations and $2.3 million provided
by the net positive changes in operating assets and liabilities and $.8 million
provided by discontinued operations. Principal changes in operating assets and
liabilities were as follows: income taxes went from a $2.0 million asset at
December 31, 1999 to a $1.3 million liability on March 31, 2000; and accounts
payable decreased $1.3 million due to the timing of payments.

Our cash flows used in investing activities for the first quarter of 2001
aggregated $13.3 million and include the following:

.. $25.5 million for the purchase of property and equipment;

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

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

.. $3.6 million of net advances to and investment in the WV Alliance prior to the
February 13, 2001 transaction date (Note 4), after which these entire amounts
were included in the WV Alliance acquisition and were eliminated in
consolidation;

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

.. $1.1 million received from the sale of four towers in West Virginia.

During the first quarter of 2000, our investing activities included:

.. the investment of $8.4 million in property and equipment;

.. $2.0 million in net advances to the Alliances; and

.. $3.2 million in proceeds from the sale of 10 towers.

Net cash provided by financing activities for the first quarter of 2001
aggregated $18.4 million, which includes the following:

.. $20 million in additional draws against the senior credit facility; and,

.. $1.7 million in other debt payments, primarily on capital leases.

During the first quarter of 2000, net cash provided by financing activities
aggregated $5.6 million, which included $1.5 million used to pay dividends on
common shares, $12.7 million for payment on senior debt, and a net of $19.4
million of borrowings against the line of credit outstanding during this period.

Under restrictions related to the new debt financing (see Note 6 in our 2000
Annual Report), we discontinued payment of dividends to common shareholders
effective for the quarter ending June 30, 2000. This was done to allow us to
retain future earnings, if any, to fund the development and growth of our
businesses and to service our debt obligations.

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<PAGE>

As a result of the Transactions, our liquidity needs will be influenced by
numerous factors including:

.. 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;

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

.. 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;

.. 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;

.. future acquisitions; and

.. significantly increased interest expense.

As a result of the Transactions, our liquidity sources include:

.. cash flows from operations, if any;

.. approximately $52.8 million at March 31, 2001 held in the escrow account to
fund the next three semi-annual interest payments on the senior notes, the first
of which occurred in February 2001;

.. $130 million available under our new credit facility subject to certain
conditions;

.. public and private debt and equity markets; and,

  disposition of additional non-core businesses and assets, such as additional
cell towers owned in VA East, wireline cable operations and investments.

We expect capital expenditures for the remainder of 2001 to be between $60
million and $80 million. We expect these capital expenditures to be used to:

.. support the continued expansion of VA East, VA Alliance and WV Alliance
operations;

.. support continued expansion of PCS, CLEC and Internet access services; and,

.. add office space and furnishings to support employee additions commensurate
with the growth in digital PCS, Internet and CLEC customers.

Based on our assumptions about the future of our operating results, our capital
expenditure needs, many of which are discretionary, and the availability of
borrowings under our new credit facility and our other sources of liquidity, we
believe that we will have sufficient capital resources until we begin generating
significant positive EBITDA. However, if any of our assumptions prove incorrect
or if we make additional acquisitions, we may not have sufficient capital
resources. If so, we may have to delay or abandon some of our anticipated
capital expenditures and our ability to make interest and principal payments on
the notes will be significantly impaired.


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Item 3.  Quantitative and qualitative disclosures about market risk

The Company's senior credit facility of $325 million, $195 million of which was
outstanding at March 31, 2001, bear 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 $34.4 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 notes agreement, 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 5.08% as of March 31, 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 March 31, 2001,
the Company had no exposure to credit loss on interest rate swaps. At March 31,
2001, the swap agreements had a fair value $10.3 million below their face value.
The effects of a 1% change in LIBOR rates would change the fair value of the
swap agreements by $6.5 million for a 1% increase in the rate (to $3.8 million
below face value) and $6.8 million for a 1% decrease in the rate (to $17.1
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 March 31, 2001, fair value of the Company's financial assets approximates
their related carrying amounts.

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                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Waynesboro, Commonwealth of Virginia, on March 14, 2002.

                                                NTELOS Inc.
                                                a Virginia corporation
                                                (Registrant)



                                                By: /s/ James S. Quarforth
                                                    ---------------------------
                                                        James S. Quarforth
                                                        Chief Executive Officer


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