<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                    FORM 10-Q


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


For the quarter ended      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>

                                   NTELOS Inc.


                                    I N D E X



                                                                           Page
                                                                          Number
                                                                          ------

PART I. FINANCIAL INFORMATION

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


         Condensed Consolidated Statements of Operations, Three Months
         Ended March 31, 2001 and 2000                                       5


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


         Condensed Consolidated Statements of Shareholders' Equity, Three
         Months Ended March 31, 2001 and 2000                                7


         Notes to Condensed Consolidated Financial Statements               8-11


         Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                         12-19


PART II. OTHER INFORMATION                                                 20-21


SIGNATURES                                                                 22-23


                                       2
<PAGE>

<TABLE>
                                                          NTELOS Inc.

                                             Condensed Consolidated Balance Sheets
<CAPTION>
                                                                                       March 31,
                                                                                         2001                December 31,
(In thousands)                                                                        (Unaudited)                2000
------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S>                                                                               <C>                    <C>
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                                                                 362,281                285,489
  Furniture, fixtures, and other equipment                                                     44,041                 39,539
  Radio spectrum licenses                                                                     446,401                428,317
------------------------------------------------------------------------------------------------------------------------------
     Total in service                                                                         894,813                780,333
  Under construction                                                                           63,673                 47,072
------------------------------------------------------------------------------------------------------------------------------

                                                                                              958,486                827,405
  Less accumulated depreciation                                                                95,360                 81,612
------------------------------------------------------------------------------------------------------------------------------

                                                                                              863,126                745,793
------------------------------------------------------------------------------------------------------------------------------

Other Assets
  Cost in excess of net assets of business acquired, less accumulated
     amortization of $5,441 ($4,253 in 2000)                                                   99,004                 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                                                        9,895                  7,874
------------------------------------------------------------------------------------------------------------------------------

                                                                                              174,874                124,364
------------------------------------------------------------------------------------------------------------------------------

                                                                                  $         1,174,496    $         1,076,205
==============================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements

                                                               3
<PAGE>

<TABLE>
                                                      NTELOS Inc.

                                         Condensed Consolidated Balance Sheets
<CAPTION>

                                                                        March 31, 2001               December 31,
(In thousands)                                                            (Unaudited)                    2000
----------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
<S>                                                                 <C>                          <C>
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                                                           19,997                    36,380
   Retirement benefits                                                             15,006                    12,017
   Other                                                                           40,108                    13,750
----------------------------------------------------------------------------------------------------------------------

                                                                                   75,111                    62,147
----------------------------------------------------------------------------------------------------------------------

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

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

Commitments

Shareholders' Equity
   Preferred stock                                                                      -                         -
   Common stock                                                                   129,268                    45,272
   Stock warrants                                                                  22,874                    22,874
   Retained earnings                                                               36,722                    57,668
   Unrealized gain on securities available for sale, net                              625                     8,458
----------------------------------------------------------------------------------------------------------------------

                                                                                  189,489                   134,272
----------------------------------------------------------------------------------------------------------------------

                                                                    $           1,174,496        $        1,076,205
======================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                           4
<PAGE>

<TABLE>

                                                      NTELOS Inc.

                                    Condensed Consolidated Statements Of Operations
                                                      (Unaudited)
<CAPTION>

                                                                                          Three Months Ended
-----------------------------------------------------------------------------------------------------------------------
                                                                                     March 31,         March 31,
(In thousands except per share amounts)                                                2001               2000
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>               <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 sales                                                                           10,184              2,367
  Maintenance and support                                                                 13,828              5,506
  Depreciation and amortization                                                           16,199              3,343
  Customer operations                                                                     14,791              3,597
  Corporate operations                                                                     4,877              2,101
-----------------------------------------------------------------------------------------------------------------------

                                                                                          59,879             16,914
-----------------------------------------------------------------------------------------------------------------------

Operating Income (Loss)                                                                  (12,315)             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
-----------------------------------------------------------------------------------------------------------------------

                                                                                         (28,770)              (390)

Income Tax Benefits                                                                      (10,764)              (172)
-----------------------------------------------------------------------------------------------------------------------

                                                                                         (18,006)              (218)

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

Loss from continuing operations                                                          (16,259)              (291)

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

Net Income (Loss)                                                                        (16,259)                48

Dividend requirements on preferred stock                                                   4,687                  -
-----------------------------------------------------------------------------------------------------------------------
Income (Loss) applicable to common shares                                         $      (20,946)   $            48
=======================================================================================================================

Loss from continuing operations per common share - basic and diluted              $       (1.39)    $         (0.02)
Income from discontinued operations per common share - basic and diluted                      -                0.02
Net income (loss) per common share - basic and diluted                            $       (1.39)    $            -

Average shares outstanding - basic                                                        15,075             13,066
Average shares outstanding - diluted                                                      15,426             13,296
-----------------------------------------------------------------------------------------------------------------------

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

See Notes to Condensed Consolidated Financial Statements.

                                                           5
<PAGE>

<TABLE>
                                                             NTELOS Inc.

                                           Condensed Consolidated Statements of Cash Flows
                                                             (unaudited)
<CAPTION>
                                                                                                 Three Months Ended
---------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                     March 31, 2001             March 31, 2000
---------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                            <C>                        <C>
Net income (loss)                                                              $            (16,259)      $                48
Deduct income from discontinued operations                                                        -                      (339)
---------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations                                                             (16,259)                     (291)
Adjustments to reconcile net income to net cash provided by operating
   activities:
   Depreciation                                                                              13,791                     2,882
   Amortization                                                                               2,408                       461
   Deferred taxes                                                                           (10,571)                   (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.

                                                                6
<PAGE>

                                  NTELOS Inc.

                Consolidated Statements of Shareholders' Equity


<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                                                                 (2,409)
  available for sale, net of
  $1,533 of deferred tax benefit
 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        $ 57,668      $   8,458           $   134,272
Comprehensive income:
 Net loss                                                                      (16,259)
 Cash flow hedge:
 Cumulative effect of the                                                                      (3,900)
  adoption of SFAS No. 133, net
  of $2,489 of deferred tax benefit
 Derivative losses, net of $1,523                                                              (2,402)
  of deferred tax benefit
 Unrealized loss on securities                                                                 (1,531)
  available for sale, net of $979
  of deferred tax benefit
 Comprehensive loss                                                                                                 (24,092)
Common stock issuance pursuant to    3,716        83,851                                                             83,851
 R&B Merger
Dividends on preferred shares                                                   (4,687)                              (4,687)
Shares issued through Employee
 Stock Purchase Plan                     7           145                                                                145
-----------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001             16,855      $129,268       $22,874        $ 36,722      $     625           $   189,489
=============================================================================================================================
</TABLE>

   See Notes to Consolidated Financial Statements.

<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   with
        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.

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  operations,  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.




                                       8
<PAGE>

                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued

<TABLE>

                           Telephone     Network      CLEC       Internet   Wireless PCS     Analog        Other          Total
(in thousands)                                                                              Cellular
------------------------------------------------------------------------------------------------------------------------------------
As of and for the three months ended March 31, 2001
---------------------------------------------------
<S>                      <C>           <C>         <C>         <C>          <C>           <C>          <C>           <C>
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             1,367            300         502         987       12,068            -             975          16,199

Total Segment Assets        74,320         25,292      31,175      19,316      787,646            -          35,658         973,407
Corporate assets                                                                                                            201,089
                                                                                                                       -------------
Total Assets                                                                                                         $    1,174,496

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 $83.9  million.  The
        purchase  price in excess of the net assets  acquired  is  approximately
        $52.0  million and has been  classified  as goodwill  and is included in
        corporate  assets in the segment table in Note 2, pending the completion
        of  asset   valuations   and  other  purchase   accounting   issues  and
        adjustments,.



                                       9
<PAGE>

                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued


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

        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 $3.3 million.
        Additionally,   the  Company's  net  operating  loss   carryforward  was
        approximately  $22 million at December  31, 2000 and, at March 31, 2001,
        is estimated to be  approximately  $50 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.



                                       10
<PAGE>

                                   NTELOS Inc.
              Notes to Condensed Consolidated Financial Statements
                                    Continued


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:
<TABLE>
<CAPTION>
                                                                                Three Months Ended March 31,
         (In thousands, except per share data)                                    2001                  2000
         ----------------------------------------------------------------------------------------------------------
         <S>                                                              <C>                   <C>
         Operating revenues                                               $       52,731        $       41,682
         Operating expenses, before depreciation and amortization                 48,950                42,414
         EBITDA                                                                    3,781                  (732)
         Operating income                                                         13,333                17,015
         Net loss                                                                (16,639)              (24,320)
         Dividend requirements on preferred stock                                  4,849                 4,563
         Loss applicable to common shares                                        (21,488)              (28,883)
         Net loss per common share:
            Basic and diluted                                             $       (1.29)        $       (1.72)
</TABLE>


                                       11
<PAGE>

                                 NTELOS Inc.

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

Overview

         We are a leading regional integrated communications provider 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:

o    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");

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

o    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;;

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

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

o    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);

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

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

o    disposition of our directory assistance operations; and,

o    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.

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.



                                       12
<PAGE>

                                   NTELOS Inc.

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


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;

          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.



                                       13
<PAGE>

                                   NTELOS Inc.

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


         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 $16.0 million from income of $3.7 million to a
$12.3  million  loss for the  three  months  ended  March  31,  2000  and  2001,
respectively.  Pro forma EBITDA (Note 7) 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 $3.7 million,
from a loss of $17.0  million to a loss of $13.3  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 $20.9 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.

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.



                                       14
<PAGE>

                                   NTELOS Inc.

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


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.

o 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.

o 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.

o 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.

o 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.

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.

o 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.

o 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 $43.0 million, from
$16.9  million to $59.9  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 97%, of the total  increase.  The


                                       15
<PAGE>

                                   NTELOS Inc.

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


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  $12.9  million from $3.3 million for the three months ended March 31,
2000 to $16.2 million for the three months ended March 31, 2001. The digital PCS
acquisitions  accounted  for  $12.1  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 $.8  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.



                                       16
<PAGE>

                                   NTELOS Inc.

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


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 $10.6 million,  from a tax benefit of $.2 million
for the three months ended March 31, 2000 to a tax benefit of $10.8  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). The effective tax rates in 2000
were greatly impacted by favorable tax treatment of certain items which had a
significant effect on the effective tax rate as the pre-tax income was
relatively low.

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 provided by 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 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:

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

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

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

o    $3.6 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;

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

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



                                       17
<PAGE>

                                   NTELOS Inc.

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


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

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

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

o    $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:

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

o    $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.

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

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

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

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

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

o    future acquisitions; and

o    significantly increased interest expense.

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

o    cash flows from operations, if any;

o    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;

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

o    public and private debt and equity markets; and,

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



                                       18
<PAGE>

                                   NTELOS Inc.

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


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:

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

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

o    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.

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.


                                       19
<PAGE>

                                  NTELOS, Inc.

                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

         For a description of Legal  Proceeding,  see the Form 10-Q filed by the
         Company for the quarter ended March 31, 2000.

Item 2.  Changes In Securities

         Not applicable

Item 3.  Defaults Upon Senior Securities

         Not applicable

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

         Not applicable


Item 5.  Other Information

         Not applicable

Item 6.  Exhibits and Reports on Form 8-K

(A)      Exhibits

         Not applicable

(B)      Reports on Form 8-K

             Form  8-K  dated  January  24,  2001,  updating  certain  financial
             information  and attaching  the  unaudited  pro forma  consolidated
             financial   information  of  the  Company,  the  unaudited  interim
             condensed  consolidated financial statements of R&B Communications,
             Inc. and the unaudited  interim condensed  financial  statements of
             West Virginia PCS Alliance, L.C.

             Form 8-K dated February 1, 2001,  pertaining to presentations to be
             made by Mr.  James  S.  Quarforth,  Chairman  and  Chief  Executive
             Officer, and Mr. Michael B. Moneymaker, Chief Financial Officer, at
             investor  meetings,  providing  an  overview  of NTELOS'  strategy,
             transactions and performance through the fourth quarter of 2000.

             Form 8-K dated February 13, 2001,  pertaining to the closing of the
             agreement   and  plan  of  merger   between  the  Company  and  R&B
             Communications, Inc.

             Form 8-K dated March 6, 2001,  pertaining  to  presentations  to be
             made by Mr. James S. Quarforth,  Chief Executive  Officer,  and Mr.
             Michael  B.  Moneymaker,   Chief  Financial  Officer,  at  investor
             meetings,  providing an overview of NTELOS' strategy,  transactions
             and performance through the fourth quarter of 2000.



                                       20
<PAGE>

             Form 8-K dated March 16, 2001,  pertaining to  presentations  to be
             made by Mr. James S. Quarforth,  Chief Executive  Officer,  and Mr.
             Michael  B.  Moneymaker,   Chief  Financial  Officer,  at  investor
             meetings,  providing an overview of NTELOS' strategy,  transactions
             and  performance  through  the fourth  quarter of 2000 and  certain
             guidance for 2001.




                                       21
<PAGE>

                                   SIGNATURES


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



                           NTELOS Inc.

May 15, 2001               /s/J. S. Quarforth
                           -----------------------------------------------------
                           J. S. Quarforth, Chairman and Chief Executive Officer








May 15, 2001               /s/M. B. Moneymaker
                           -----------------------------------------------------
                           M. B. Moneymaker, Senior Vice President and
                           Chief Financial Officer, Treasurer, and Secretary