SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                 Amendment No.1

                                   (Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003.

                                       OR

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

                         Commission File Number: 027455

                                AirGate PCS, Inc.
             (Exact name of registrant as specified in its charter)


                   Delaware                                    58-2422929
                   ---------                                   ----------
        (State or other jurisdiction of                     (I.R.S. Employer
         incorporation or organization)                  Identification Number)

Harris Tower, 233 Peachtree St. NE, Suite 1700,
               Atlanta, Georgia                                  30303
    (Address of principal executive offices)                   (Zip code)

                                 (404) 525-7272
              (Registrant's telephone number, including area code)

     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  and 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 |_|

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|

     25,939,836  shares  of common  stock,  $0.01  par  value  per  share,  were
outstanding as of May 7, 2003.





 EXPLANATORY NOTE

This Form  10-Q/A is being  amended  solely  for the  purpose  of  amending  and
restating  in its  entirety  Part I Item 4 of this Form  10-Q/A,  to delete  all
references to Cash Cost Per User (or CCPU), and to update the signature page and
the  certifications  required by the  Sarbanes-Oxley  Act of 2002 in Item 15 and
Exhibits 99.1 and 99.2. This Form 10-Q/A does not reflect events occurring after
the  filing of the  original  Form  10-Q,  or modify or update  the  disclosures
therein in any way other than as required to reflect these changes.





                                AIRGATE PCS, INC.
                              SECOND QUARTER REPORT

                                TABLE OF CONTENTS

PART I     FINANCIAL INFORMATION
Item 1.    Financial Statements..............................................  3
           Consolidated Balance Sheets at March 31, 2003 (unaudited) and
              September 30, 2002.............................................  3
           Consolidated Statements of Operations for the three months
              and six months ended March 31, 2003 and 2002
           (unaudited).......................................................  4
           Consolidated Statements of Cash Flows for the six months
              ended March 31, 2003 and 2002 (unaudited)......................  5
           Notes to the Consolidated Financial Statements (unaudited)........  6
Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations............................ 17
Item 3.    Quantitative and Qualitative Disclosures About Market Risk........ 38
Item 4.    Controls and Procedures........................................... 38
PART II    OTHER INFORMATION................................................. 40
Item 1.    Legal Proceedings................................................. 40
Item 2.    Changes in Securities and Use of Proceeds......................... 40
Item 3.    Defaults Upon Senior Securities................................... 40
Item 4.    Submission of Matters to a Vote of Security Holders............... 40
Item 5.    Other Information................................................. 40
Item 6.    Exhibits and Reports on Form 8-K.................................. 54






                        PART I. FINANCIAL INFORMATION
                         Item 1. -- FINANCIAL STATEMENTS
                       AIRGATE PCS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
           (dollars in thousands, except share and per share amounts)


                                                                                                      March 31,    September 30,
                                                                                                         2003          2002
                                                                                                         ----          ----


Assets                                                                                               (unaudited)
Current assets:
                                                                                                                
     Cash and cash equivalents..................................................................       $  20,905      $  32,475
     Accounts receivable, net of allowance for doubtful accounts of $4,469 and $11,256,                   21,943         38,127
     respectively...............................................................................
     Receivable from Sprint.....................................................................          11,615         44,953
     Receivable from iPCS.......................................................................             336             --
     Inventories................................................................................           2,162          6,733
     Prepaid expenses...........................................................................           5,769          7,159
     Other current assets.......................................................................           1,582            326
                                                                                                          --------       ------
            Total current assets..................................................................        64,312        129,773
Property and equipment, net of accumulated depreciation of $106,821 and $112,913, respectively..         192,363        399,155
Financing costs.................................................................................           7,287          8,118
Intangible assets, net of accumulated amortization of $0 and $39,378, respectively..............              --         28,327
Direct subscriber activation costs..............................................................           4,941          8,409
Other assets....................................................................................           1,444            512
                                                                                                        --------       --------
       Total assets.............................................................................       $ 270,347   $    574,294
                                                                                                       =========   ============


Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
     Accounts payable...........................................................................        $  1,661      $  18,152
     Accrued expenses...........................................................................           8,241         20,950
     Payable to Sprint..........................................................................          40,570         88,360
     Deferred revenue...........................................................................           7,671         11,775
     Current maturities of long-term debt and capital lease obligations.........................           2,024        354,936
                                                                                                        --------       --------
         Total current liabilities..............................................................          60,167        494,173
Deferred subscriber activation fee revenue......................................................           8,654         14,973
Other long-term liabilities.....................................................................           1,453          3,267
Long-term debt and capital lease obligations, excluding current maturities......................         377,192        354,828
Investment in iPCS..............................................................................         184,115             --
                                                                                                         -------       --------
        Total liabilities......................................................................          631,581        867,241





Stockholders' deficit:
     Preferred stock, par value, $.01 per share;
         5,000,000 shares authorized; no shares issued and outstanding..........................              --             --
     Common stock, par value, $.01 per share; 150,000,000 shares authorized; 25,939,836 and
      25,806,520 shares issued and outstanding at March 31, 2003 and September 30, 2002,
  respectively...................................................................................            260             258
     Additional paid-in-capital..................................................................        924,086         924,008
     Unearned stock compensation.................................................................           (700)         (1,029)

     Accumulated deficit.........................................................................     (1,284,880)     (1,216,184)
                                                                                                       ----------    -----------
         Total stockholders' deficit............................................................        (361,234)       (292,947)
                                                                                                       ----------    -----------
             Total liabilities and stockholders' deficit........................................        $270,347       $ 574,294
                                                                                                       ==========    ===========


     See accompanying notes to the unaudited consolidated financial statements.






                       AIRGATE PCS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
           (dollars in thousands, except share and per share amounts)

                                                                          Three Months Ended                 Six Months Ended
                                                                              March 31,                        March 31,
                                                                       ---------------------------     -----------------------------
                                                                       ---------       -----------     ----------        -----------
                                                                         2003             2002           2003               2002
                                                                       ---------       -----------     ----------        -----------
Revenues:
                                                                                                              
     Service revenues..........................................        $ 81,664        $ 87,354        $ 177,993        $ 143,203
     Roaming revenues..........................................          19,264          21,951           51,256           43,254
     Equipment revenues........................................           3,505           5,388            8,286            9,933
                                                                          -----     -----------        ----------     -----------
                  Total revenues...............................         104,433         114,693          237,535          196,390

Operating Expenses:
     Cost of services and roaming (exclusive of depreciation and
      amortization as shown separately below)..................         (59,910)       (76,336)         (147,917)        (134,093)
     Cost of equipment.........................................          (5,304)       (10,681)          (17,431)         (20,264)
     Selling and marketing.....................................         (15,674)       (27,592)          (44,576)         (57,437)
     General and administrative expenses.......................          (9,278)        (6,869)          (16,687)         (12,069)
     Non-cash stock compensation expense.......................            (177)          (183)             (353)            (414)
    Depreciation and amortization of property and equipment....         (16,754)       (17,098)          (37,380)         (28,364)
     Amortization of intangible assets.........................          (2,591)       (13,578)                           (18,117)
                                                                                                          (6,855)
     Goodwill impairment.......................................               --        (261,212)             --         (261,212)
                                                                    ------------        ---------      ------------      ---------

           Total operating expenses............................        (109,688)        (413,549)       (271,199)        (531,970)
                                                                      ---------         ---------      ------------      ---------
           Operating loss......................................          (5,255)        (298,856)        (33,664)        (335,580)

Interest income................................................              27              117              67              216
Interest expense...............................................         (15,794)         (14,648)        (35,099)         (24,931)
Other..........................................................              --               75              --              (20)
                                                                     -----------       ---------      -------------    ----------

           Loss before income tax benefit......................         (21,022)       (313,312)         (68,696)        (360,315)
                                                                        --------        ---------       ------------    ----------
           Income tax benefit..................................             --            11,402              --           28,761
           Net loss............................................       $ (21,022)       $(301,910)       $(68,696)      $ (331,554)
                                                                      ==========       ==========       ==========     ===========
Basic and diluted net loss per share of common stock...........        $  (0.81)        $ (11.71)        $  (2.65)      $  (15.29)

Basic and diluted weighted-average outstanding common shares...       25,929,437      25,790,151       25,876,204      21,688,158


See accompanying notes to the unaudited consolidated financial statements.






                       AIRGATE PCS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                             (dollars in thousands)
                                                                                                                Six Months Ended
                                                                                                                   March 31,
                                                                                                           -----------------------
                                                                                                            2003           2002
                                                                                                            ----           ----
                                                                                                                     
     Net loss......................................................................................      $ (68,696)    $ (331,554)
     Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
      Goodwill impairment..........................................................................              --       261,212
      Depreciation and amortization of property and equipment......................................          37,380        28,364
      Amortization of intangible assets............................................................           6,855        18,117
      Amortization of financing costs into interest expense........................................             605           849
      Provision for doubtful accounts..............................................................           3,848        14,849
      Interest expense associated with accretion of discounts......................................          27,207        22,476
      Non-cash stock compensation..................................................................             353           414
      Deferred income tax benefit..................................................................              --       (28,761)
        Changes in assets and liabilities:
          Accounts receivable......................................................................             (62)      (22,490)
          Receivable from Sprint...................................................................          18,871           862
          Inventories..............................................................................           3,338         3,897

          Prepaid expenses, other current and non-current assets...................................          (4,459)       (2,919)
          Accounts payable, accrued expenses and other long term liabilities.......................          (7,209)      (13,376)
          Payable to Sprint........................................................................         (12,346)        2,956
          Deferred revenue.........................................................................             856         7,229
                                                                                                       ------------    -----------
                     Net cash provided by (used in) operating activities...........................           6,541       (37,875)
                                                                                                       ------------    -----------

Cash flows from investing activities:
     Capital expenditures..........................................................................        (15,123)       (48,523)
     Cash acquired from iPCS.......................................................................             --         24,402
     Deconsolidation of iPCS.......................................................................        (10,031)            --
     Acquisition of iPCS...........................................................................             --         (5,955)
                                                                                                       ------------    -----------
                     Net cash used in investing activities.........................................        (25,154)       (30,076)
                                                                                                       ------------    -----------


Cash flows from financing activities:
     Proceeds from borrowings under senior credit facilities.......................................           8,000        78,200
     Payments for credit facility borrowings.......................................................          (1,012)           --
     Payments for capital lease borrowings.........................................................              (2)           (3)
     Stock issued to employee stock purchase plan..................................................              57           567
     Proceeds from exercise of employee stock options..............................................              --           685
                                                                                                       ------------    -----------

                     Net cash provided by financing activities.....................................           7,043        79,449
                                                                                                       ------------    -----------

                     Net (decrease) increase in cash and cash equivalents..........................         (11,570)       11,498
Cash and cash equivalents at beginning of period...................................................          32,475        14,290
                                                                                                       ------------    -----------

Cash and cash equivalents at end of period.........................................................       $  20,905     $  25,788
                                                                                                       ============    ===========


Supplemental disclosure of cash flow information:
     Cash paid for interest........................................................................         $ 5,151       $ 4,052
Supplemental disclosure for non-cash investing activities:
     Capitalized interest..........................................................................          $  366       $ 3,831
     iPCS acquisition:
           Stock issued............................................................................              --      (706,645)
           Value of common stock options and warrants assumed......................................              --       (47,727)
            Liabilities assumed....................................................................              --      (282,714)
            Assets acquired........................................................................              --       315,029
     Capital lease obligation......................................................................              --           191

     See accompanying notes to the unaudited consolidated financial statements.





                       AIRGATE PCS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2003
                                   (unaudited)

(1)   Business, Basis of Presentation and Liquidity

      (a)      Business and Basis of Presentation

The accompanying  unaudited quarterly financial  statements of AirGate PCS, Inc.
(the  "Company") are presented in accordance  with the rules and  regulations of
the  Securities  and Exchange  Commission  ("SEC") and do not include all of the
disclosures normally required by accounting principles generally accepted in the
United States of America. In the opinion of management, these statements reflect
all adjustments, including recurring adjustments, which are necessary for a fair
presentation of the consolidated  financial  statements for the interim periods.
The  consolidated  financial  statements  should be read in conjunction with the
audited  consolidated  financial  statements and notes thereto  contained in the
Company's  Annual Report on Form 10-K/A for the fiscal year ended  September 30,
2002,  which is filed  with the SEC and may be  accessed  via EDGAR on the SEC's
website at http://www.sec.gov. The results of operations for the quarter and six
months ended March 31, 2003 are not  necessarily  indicative of the results that
can be expected for the entire fiscal year ending  September  30, 2003.  Certain
prior year  amounts  have been  reclassified  to conform to the  current  year's
presentation.  Management  of the  Company  has made a number of  estimates  and
assumptions  relating  to the  reporting  of  assets  and  liabilities  and  the
disclosure of contingent  liabilities at the dates of the  consolidated  balance
sheets and revenues and expenses  during the reporting  periods to prepare these
consolidated  financial  statements in  conformity  with  accounting  principles
generally accepted in the United States of America.  Actual results could differ
significantly from those estimates.

AirGate PCS, Inc. and its restricted and unrestricted  subsidiaries were created
for the purpose of providing wireless Personal  Communication  Services ("PCS").
AirGate PCS, Inc. and its restricted subsidiaries ("AirGate") collectively are a
network  partner of Sprint with the exclusive right to market and provide Sprint
PCS products and services in a defined network territory. AirGate is licensed to
use  the  Sprint  brand  names  in  its  original  21  markets  located  in  the
southeastern United States.

On  November  30,  2001,   AirGate  acquired  iPCS,  Inc.   (together  with  its
subsidiaries,  "iPCS"),  a network  partner  of Sprint  with 37  markets  in the
midwestern United States.  The accompanying  consolidated  financial  statements
include the  accounts  of AirGate  PCS,  Inc.  and its  wholly-owned  restricted
subsidiaries,  AGW Leasing Company,  Inc.,  AirGate Service  Company,  Inc., and
AirGate Network  Services,  LLC, and its unrestricted  subsidiary iPCS since its
acquisition through the date it filed for bankruptcy. On February 23, 2003, iPCS
filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for
the   Northern   District   of  Georgia   for  the   purpose  of   effecting   a
court-administered  reorganization.  In accordance  with  Statement of Financial
Accounting   Standards  (SFAS)  No.  94  "Consolidation  of  All  Majority-Owned
Subsidiaries"  and  Accounting  Research  Bulletin  (ARB) No.  51  "Consolidated
Financial Statements," when control of a majority-owned subsidiary does not rest
with the majority  owners (as, for  instance,  where the  subsidiary is in legal
reorganization  or in  bankruptcy),  ARB No. 51 precludes  consolidation  of the
majority-owned subsidiary. As a result, subsequent to February 23, 2003, AirGate
no longer  consolidates  the accounts and results of  operations of iPCS and the
accounts  of iPCS  are  recorded  as an  investment  using  the cost  method  of
accounting. Accordingly, the accompanying consolidated balance sheet as of March
31, 2003 does not include the  consolidated  accounts of iPCS;  it does however,
include the Company's  investment  at cost in iPCS as of February 23, 2003.  The
accompanying consolidated statement of operations for the period ended March 31,
2003 includes the  consolidated  results of operations of iPCS through  February
23, 2003.  When AirGate no longer has an ownership  interest in iPCS,  which may
occur upon  emergence of iPCS from  bankruptcy,  the  investment in iPCS will be
reduced proportionately to the remaining ownership percentage,  if any, retained
by AirGate.

The PCS  market  is  characterized  by  significant  risks as a result  of rapid
changes in technology,  intense  competition  and the costs  associated with the
build-out of a PCS network. The Company's operations are dependent upon Sprint's
ability to perform its obligations under the agreements  between the Company and
Sprint (see Note 3) under which the Company has agreed to  construct  and manage
its Sprint PCS networks (the "Sprint Agreements").  Additionally,  the Company's
ability to attract and maintain a subscriber  base of sufficient size and credit
quality is  critical  to  achieving  sufficient  positive  cash flow to meet its
financial  covenants  under  its  credit  agreements.   Changes  in  technology,
increased  competition,  economic  conditions or inability to achieve sufficient
positive cash flow to meet its financial  covenants under its credit agreements,
among other  factors,  could have an adverse  effect on the Company's  financial
position, results of operations, and liquidity.

(b)      Liquidity

The Company has generated  significant net losses since  inception.  For the six
months ended March 31, 2003 and the year ended September 30, 2002, the Company's
net loss amounted to $68.7 million and $996.6  million  (including  goodwill and
asset impairment charges of $817.4 million), respectively. As of March 31, 2003,
AirGate had working capital of $4.1 million and available credit of $9.0 million
under its $153.5 million senior  secured  credit  facility (the "AirGate  credit
facility").

On February 23, 2003 iPCS, Inc. and its  subsidiaries,  iPCS Wireless,  Inc. and
iPCS  Equipment,  Inc.,  filed a Chapter 11  bankruptcy  petition  in the United
States  Bankruptcy Court for the Northern District of Georgia for the purpose of
effecting  a  court-administered  reorganization.  Immediately  prior  to  iPCS'
bankruptcy filing, the lenders under the iPCS credit facility  accelerated iPCS'
payment  obligations  as a result of  existing  defaults  under  that  facility.
Concurrent  with its  bankruptcy  filing,  iPCS  brought an  adversarial  action
against  Sprint  alleging,  among other things,  that Sprint had failed to remit
certain  amounts  owed to iPCS under its  agreements  with Sprint and seeking to
exercise its put rights under its  agreements  with Sprint.  As an  unrestricted
subsidiary,  iPCS is a  separate  corporate  entity  from  AirGate  with its own
independent   financing  sources,  debt  obligations  and  sources  of  revenue.
Furthermore,  iPCS  lenders,  noteholders  and  creditors  do not have a lien or
encumbrance on assets of AirGate,  and AirGate  cannot provide  capital or other
financial support to iPCS. The Company believes AirGate operations will continue
independent of the outcome of the iPCS  bankruptcy.  However,  it is likely that
AirGate's  ownership interest in iPCS will have no value after the restructuring
is complete.

While  the  ultimate  and  long-term  effect  on  AirGate  of  iPCS'  bankruptcy
proceedings  cannot be  determined,  management  believes  that  AirGate and its
restricted  subsidiaries  will  continue  to operate  and that iPCS'  bankruptcy
proceedings,  and related  outcomes,  will not have a material adverse effect on
the liquidity of AirGate.

In  addition  to its  capital  needs  to  fund  operating  losses,  AirGate  has
historically  invested  large  amounts to  build-out  its networks and for other
capital  assets.  For the six months  ended  March 31,  2003 and the three years
ended  September  30, 2002,  AirGate  invested  $6.7 million and $265.1  million
respectively to purchase property and equipment. While much of AirGate's network
is now complete, such expenditures will continue to be necessary.

AirGate had only $9.0  million  remaining  available  under the  AirGate  credit
facility as of March 31, 2003.  AirGate  currently has no additional  sources of
working  capital other than cash on hand and  operating  cash flow. If AirGate's
actual  revenues are less than  expected or operating or capital  costs are more
than  expected,  AirGate's  financial  condition and liquidity may be materially
adversely  affected.  In such event,  there is substantial risk that the Company
could not access the credit or capital markets for additional capital.

AirGate's  ability to borrow  funds under the  AirGate  credit  facility  may be
terminated  and its payment  obligations  may be  accelerated if it is unable to
maintain or comply with the financial and operating  covenants  contained in the
AirGate  credit  facility.   The  AirGate  credit  facility  contains  covenants
specifying  the  maintenance  of  certain  financial  ratios,  reaching  defined
subscriber  growth  and  network  covered  population  goals,   minimum  service
revenues, maximum capital expenditures,  and the maintenance of a ratio of total
debt and senior debt to  annualized  EBITDA,  as defined in the  AirGate  credit
facility.

If the Company is unable to operate the AirGate  business  within the  covenants
specified  in the  AirGate  credit  facility,  and is unable  to  obtain  future
amendments to such covenants,  AirGate's ability to make borrowings  required to
operate the AirGate  business  could be restricted or terminated and its payment
obligations accelerated.  Such a restriction,  termination or acceleration would
have a material adverse affect on AirGate's liquidity and capital resources.

AirGate has initiated a number of action steps to lower its operating  costs and
capital needs. The following are some of the more significant steps:

* a plan to improve the credit quality of new subscribers and its
  subscriber base and reduce churn by restricting availability of
  programs for sub-prime subscribers;

* the elimination of certain personnel positions;

* a significant reduction in capital expenditures; and

* a reduction in spending for advertising and promotions.

In addition to these steps,  AirGate  continues to review potential actions that
could further reduce AirGate operating expenses and capital needs. These include
changes to employee  benefit  plans,  seeking to reduce lease expenses and, over
the long-term, seeking ways to lower fees and charges from services now provided
by Sprint. Although there can be no assurances, AirGate management believes that
existing  cash,  expected  results of  operations  and cash  flows,  and amounts
available under the AirGate credit facility will provide sufficient resources to
fund AirGate's activities through at least March 31, 2004.

The  following  reflects  condensed  balance sheet  information  for AirGate and
statement of operations information for AirGate and its unrestricted subsidiary,
iPCS,  separately  identifying  the  investment in iPCS including the effects of
purchase  accounting  as of  March  31,  2003  and  September  30,  2002 and the
historical  equity  basis loss of iPCS through  February  23, 2003,  the related
effects of purchase accounting,  and income tax benefit for the three months and
six months ended March 31, 2003 and 2002 (dollar amounts in thousands):









                                                                                      As of
                                                                           March 31,        September 30,
                                                                              2003               2002
                                                                              ----               ----
Condensed Balance Sheet Information:
                                                                                          
Cash and cash equivalents..................................                 $  20,905           $   4,887
Other current assets.......................................                    43,407              62,819
                                                                               ------            --------
        Total current assets...............................                    64,312              67,706
Property and equipment, net................................                   192,363             213,777
Other noncurrent assets....................................                    13,672              13,732
                                                                              -------            --------
                                                                           $  270,347          $  295,215
                                                                            =========           =========

Current liabilities........................................                 $  60,167         $    82,175
Long-term debt.............................................                   377,192             354,264
Other long-term liabilities................................                    10,107              10,180

Investment in iPCS ........................................                   184,115             141,543
                                                                              -------            --------
      Total liabilities....................................                   631,581             588,162

Stockholders' deficit......................................                  (361,234)           (292,947)
                                                                             ---------          ----------
                                                                           $  270,347            $ 295,215
                                                                           ===========           =========





                                                                  For the Three Months Ended          For the Six Months Ended
                                                                  March 31,       March 31,         March 31,         March 31,
                                                                     2003            2002              2003              2002
                                                                     ----            ----              ----              ----
Condensed Statement of Operations Information:
                                                                                                          
Revenues...................................................         $76,980        $ 76,439           $158,845        $ 144,110
Costs of revenues..........................................         (44,423)        (53,502)          (102,701)        (106,745)
Selling and marketing expenses.............................         (11,362)        (18,199)           (28,159)         (43,288)
General and administrative expenses........................          (5,728)         (3,636)            (9,806)          (7,612)
Depreciation and amortization..............................         (11,627)         (9,308)           (23,246)         (18,333)
Other expense, net (principally interest)..................         (10,537)         (9,433)           (21,058)         (18,368)
                                                                 -----------      ----------        -----------      -----------
      Total expenses.......................................         (83,677)        (94,078)          (184,970)        (194,346)
                                                                 -----------      ----------        -----------      -----------
Loss before equity in loss of iPCS and effects of purchase
    accounting, and income tax benefit.....................          (6,697)        (17,639)           (26,125)         (50,236)
Historical equity basis loss of iPCS.......................         (11,221)        (22,353)           (36,984)         (32,672)
Effects of purchase accounting.............................          (3,104)       (273,320)            (5,587)        (277,407)


Income tax benefit.........................................             --           11,402                 --           28,761
                                                                 -----------     -----------        -----------      ----------
Net loss...................................................      $  (21,022)     $ (301,910)        $  (68,696)      $ (331,554)
                                                                 ===========     ===========        ===========      ===========



(c)  Basic and Diluted Net Loss Per Share

Basic  net  loss  per  share  is   computed   by   dividing   net  loss  by  the
weighted-average   number  of  common  shares  outstanding  during  the  period.
Potentially  dilutive  securities of 57,323,  56,927,  45,953 and 52,195 for the
quarters  and six months ended March 31, 2003 and 2002,  respectively  have been
excluded  from the  computation  of dilutive  net loss per share for the periods
presented  because the Company had a net loss and their  effect  would have been
antidilutive.

(d) Stock-based Compensation Plans

We have elected to continue to account for our  stock-based  compensation  plans
under APB Opinion No. 25, Accounting for Stock Issued to Employees, and disclose
pro forma  effects of the plans on net income and earnings per share as provided
by SFAS No. 123, Accounting for Stock-Based Compensation.  Accordingly,  because
the fair market value on the date of grant was equal to the exercise  price,  we
did not recognize any compensation  cost. Had compensation  cost for these plans
been determined  based on the fair value at the grant dates during the three and
six months  ended  March 31,  2003 and 2002 under the plan  consistent  with the
method of SFAS No.  123,  the pro forma net loss and loss per share  would  have
been as follows (in thousands, except per share data):








                                             Three Months Ended March 31,         Six Months Ended March 31,
                                               2003              2002              2003              2002
                                               ----              ----              ----              ----
                                                                                      
      Net loss, as reported                  $(21,022)        $(301,910)         $(68,696)        $(331,554)

      Add:  stock based                           177               183               353               414
      compensation expense included
      in determination of net loss

      Less:  stock-based                       (2,426)           (2,284)           (4,852)           (4,569)
      compensation expense
      determined under the fair
      value based method

      Pro forma net loss                      (23,271)         (304,011)          (73,195)         (335,709)

      Basic and diluted loss per share:
           As reported                         $(0.81)          $(11.71)           $(2.65)          $(15.29)
           Pro forma                           $(0.90)          $(11.79)           $(2.83)          $(15.48)



(2)     New Accounting Pronouncements

In February 2003, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 149,  "Accounting for Certain Financial  Instruments with Characteristics of
Liabilities  and  Equity",  which is  effective  at the  beginning  of the first
interim  period  beginning  after  March  15,  2003.  SFAS No.  149  establishes
standards  for the  Company's  classification  of  liabilities  in the financial
statements that have  characteristics  of both  liabilities  and equity.  We are
currently evaluating the impact of this statement on our financial statements.

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable   Interest   Entities,   and   interpretation  of  ARB  No.  51."  This
interpretation  addresses the consolidation by business  enterprises of variable
interest entities as defined in the Interpretation.  This interpretation applies
immediately to variable  interests in variable  interest  entities created after
January 31,  2003,  and to variable  interests  in  variable  interest  entities
obtained after January 31, 2003. The application of this  Interpretation  is not
expected  to  have  a  material  adverse  effect  on  the  Company's   financial
statements.

In  December  2002,  the FASB issued SFAS No. 148  "Accounting  for  Stock-Based
Compensation--Transition  and  Disclosure--an  amendment of FASB  Statement  No.
123." SFAS No. 148 provides  alternative  methods of transition  for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation from the intrinsic  value-based method of accounting  prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to  Employees."  As allowed by SFAS No. 123, the Company has elected to continue
to apply the intrinsic  value-based  method of  accounting,  and has adopted the
disclosure requirements of SFAS No. 123.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of  Others",  which  addresses  the  disclosure  to be  made  by a
guarantor in its interim and annual  financial  statements about its obligations
under  guarantees.  This  interpretation  also  requires  the  recognition  of a
liability by a guarantor at the inception of certain guarantees.

Interpretation  No. 45 requires the  guarantor to recognize a liability  for the
non-contingent  component of the  guarantee,  which is the  obligation  to stand
ready to perform in the event that  specified  triggering  events or  conditions
occur.  The  initial  measurement  of this  liability  is the fair  value of the
guarantee at inception.  The recognition of the liability is required even if it
is not probable  that  payments  will be required  under the guarantee or if the
guarantee  was issued with a premium  payment or as part of a  transaction  with
multiple elements.

The Company guarantees certain lease commitments of its restricted subsidiaries.
The maximum  amount of these  guarantees  is included  in the  Company's  Annual
Report on Form 10-K/A for the fiscal year ended  September 30, 2002.  Also,  the
handsets  sold by the Company are under a one-year  warranty  from Sprint.  If a
customer  returns a handset for  warranty,  the Company  generally  provides the
customer with a refurbished handset and sends the warranty handset to Sprint for
repair. Sprint provides a credit to the Company equal to the retail price of the
refurbished  handset.  The Company will apply the  recognition  and  measurement
provisions for all guarantees entered into or modified after December 31, 2002.

In November  2002,  the Emerging  Issues Task Force (EITF) of the FASB reached a
consensus on EITF No. 00-21,  "Accounting for Revenue Arrangements with Multiple
Element  Deliverables".  This guidance addresses how to account for arrangements
that may involve multiple revenue-generating  activities,  i.e., the delivery or
performance  of multiple  products,  services,  and/or rights to use assets.  In
applying this guidance,  separate contracts with the same party, entered into at
or near the same time, will be presumed to be a package,  and the  consideration
will be measured and  allocated to the  separate  units based on their  relative
fair values.  This consensus  guidance will be applicable to agreements  entered
into in quarters  beginning  after June 15,  2003.  AirGate  will adopt this new
accounting  effective  July 1, 2003.  The Company is  currently  evaluating  the
impact of this change.

In July 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities."  SFAS No. 146  provides  new guidance on the
recognition of costs associated with exit or disposal  activities.  The standard
requires   companies  to  recognize  costs  associated  with  exit  or  disposal
activities  when they are incurred  rather than at the date of  commitment to an
exit or disposal plan.  SFAS No. 146  supercedes  previous  accounting  guidance
provided by the EITF Issue No. 94-3 "Liability  Recognition for Certain Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring)." EITF Issue No. 94-3 required recognition of
costs at the date of commitment to an exit or disposal plan.  SFAS No. 146 is to
be applied prospectively to exit or disposal activities initiated after December
31, 2002.  Early  application is permitted.  The Company adopted SFAS No. 146 on
October 1, 2002.  As  discussed in Note 5, during the six months ended March 31,
2003 the Company recorded $1.1 million and $0.2 million,  respectively, of costs
related to staff reductions and retail store closings.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
Among other things,  this statement  rescinds FASB  Statement No. 4,  "Reporting
Gains and Losses  from  Extinguishment  of Debt"  which  required  all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an  extraordinary  item, net of related income tax effect.  As a result,  the
criteria  in APB  Opinion  No.  30,  "Reporting  the  Results of  Operations  --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify those gains and losses.  The adoption of SFAS No. 145 by the Company on
October  1,  2002 did not have a  material  impact  on the  Company's  financial
position, results of operations, or cash flows.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations."  SFAS No. 143 requires the fair value of a liability  for an asset
retirement  obligation  to be  recognized in the period that it is incurred if a
reasonable  estimate of fair value can be made.  SFAS No. 143 is  effective  for
fiscal years  beginning after June 15, 2002. The adoption of SFAS No. 143 by the
Company  on  October  1, 2002 did not have a  material  impact on the  Company's
financial position, results of operations or cash flows.

(3)    Sprint Agreements

Under the  Sprint  Agreements,  Sprint  is  obligated  to  provide  the  Company
significant  support  services  such as  billing,  collections,  long  distance,
customer care, network operations support,  inventory logistics support,  use of
Sprint brand names,  national  advertising,  national  distribution  and product
development.  Additionally,  the Company derives substantial roaming revenue and
expenses when Sprint's and Sprint's network partners' wireless subscribers incur
minutes of use in the Company's  territories and when the Company's  subscribers
incur  minutes  of  use  in  Sprint  and  other  Sprint  network  partners'  PCS
territories. These transactions are recorded in roaming revenue, cost of service
and roaming,  cost of equipment,  and selling and marketing  expense captions in
the  accompanying  consolidated  statements of  operations.  Cost of service and
roaming  transactions  include the 8%  affiliation  fee, long distance  charges,
roaming expense and the costs of services such as billing, collections, customer
service and  pass-through  expenses.  Cost of equipment  transactions  relate to
inventory  purchased  by the Company  from Sprint  under the Sprint  agreements.
Selling and marketing  transactions  relate to subsidized  costs on handsets and
commissions paid by the Company under Sprint's national  distribution  programs.
Amounts recorded  relating to the Sprint agreements for the three and six months
ended March 31, 2003 and 2002 are as follows (dollar amounts in thousands):








                                                                             For the Three Months                For the Six Months
                                                                                Ended March 31,                    Ended March 31,
                                                                                ---------------                    ---------------
                                                                              2003          2002                2003          2002
                                                                              ----          ----                ----          ----
Amounts included in the Consolidated Statement of Operations:
                                                                                                                 
     AirGate roaming revenue............................................    $ 12,972      $ 13,838            $ 30,801      $ 30,047
     AirGate cost of service and roaming:
          Roaming.......................................................    $ 10,777      $ 11,730            $ 25,462      $ 24,888
          Customer service..............................................       9,927         8,947              21,727        16,761
          Affiliation fee...............................................       4,708         3,886               9,545         7,274
          Long distance.................................................       3,259         3,750               6,044         7,059
          Other.........................................................         514           720                 990         1,217
                                                                           ---------     ---------           ---------     ---------
                                                                           ---------     ---------           ---------     ---------
     AirGate cost of service and roaming................................    $ 29,185      $ 29,033            $ 63,768      $ 57,199
     AirGate purchased inventory........................................    $  2,695      $  3,924            $  8,221      $  9,441
     AirGate selling and marketing......................................    $  2,412      $  5,964            $  6,111      $ 14,301
     iPCS roaming revenue...............................................    $  4,061      $  7,327            $ 14,724      $ 11,867
     iPCS cost of service and roaming:
          Roaming.......................................................    $  3,796      $  6,308            $ 12,158      $  9,955
          Customer service..............................................       3,853         4,507              11,760         6,042
          Affiliation fee...............................................       1,805         2,223               4,911         2,941
          Long distance.................................................       1,153         2,693               3,281         3,554
          Other.........................................................         168           215                 461           260
                                                                           ---------     ---------           ---------     ---------
                                                                           ---------     ---------           ---------     ---------
     iPCS cost of service and roaming:..................................    $ 10,775      $ 15,946            $ 32,571      $ 22,752
     iPCS purchased inventory...........................................    $    108      $  1,813            $  6,124      $  4,111
     iPCS selling and marketing.........................................    $  1,240      $  3,289            $  3,138      $  4,645

Amounts included in the Consolidated Balance Sheets:



                                          As of
                                 March 31,    September 30,
                                  2003            2002
                                  ----            ----

Receivable from Sprint         $ 11,615      $  44,953

Payable to Sprint               (40,570)       (88,360)


Because  approximately  97% of our revenues  are  collected by Sprint and 65% of
costs of service and roaming in our financial  statements  are derived from fees
and charges,  including  pass-through charges, from Sprint, we have a variety of
settlement  issues and other contract disputes open and outstanding from time to
time.  The amounts  Sprint has asserted we owe is  approximately  $4.7  million.
These  include,  but are not limited to, the following  items,  all of which for
accounting purposes have been reserved or otherwise provided for:

*    In fiscal year 2003,  Sprint PCS  asserted it has the right to recoup up to
     $3.9 million in long-distance access revenues previously paid by Sprint PCS
     to  AirGate,  for which  Sprint  PCS has  invoiced  $1.2  million.  We have
     disputed these amounts.

*    Sprint invoiced AirGate approximately $0.8 million with respect to calendar
     year 2002 to reimburse Sprint for certain 3G related development  expenses.
     We are disputing  Sprint's right to charge 3G fees in 2002 and beyond,  and
     we estimate such fees will be $2.5 million in fiscal year 2003.

*    We  continue  to  discuss  with  Sprint   whether   AirGate  owes  software
     maintenance fees to Sprint of approximately  $1.7 million for 2002 and $1.8
     million  for  calendar  year  2003.  Our  position  is that  Sprint  is not
     authorized  to  charge  these  fees  to  AirGate  under  the  terms  of our
     agreements.

*    Sprint billed AirGate $0.6 million for information technology (IT) expenses
     including the  reimbursement  of amortization  of IT projects  completed by
     Sprint. The Company has disputed Sprint's right to collect these fees.

The  approximately  $4.7  million  Sprint has  asserted  we owe does not include
ongoing 3G  service  fees for future  periods or $2.7  million in long  distance
access revenues Sprint has not invoiced.

In  addition to these  disputes,  we have other  outstanding  issues with Sprint
which could result in set-offs to the items  described  above or in payments due
from Sprint.  For example,  we believe  Sprint has failed to calculate,  pay and
report on collected  revenues in  accordance  with our  agreements  with Sprint,
which,  together with other cash remittance  issues,  resulted in a shortfall in
cash  payments to AirGate of at least $10  million.  As a result of these issues
and in connection with our review of accounts  receivable at September 30, 2002,
we  reclassified  approximately  $10.0  million of AirGate  subscriber  accounts
receivable  for the fiscal year ended  September  30, 2002 to a receivable  from
Sprint.  During this fiscal  year,  Sprint has  acknowledged  and paid only $8.7
million  of this  receivable  for  amounts  that were  previously  not  properly
remitted to AirGate.  The $8.7 million paid by Sprint  included  $4.1 million of
previously  unapplied  customer  deposits,  $4.0  million of revenue for AirGate
subscribers whose bills are paid through national accounts,  and $0.6 million of
subscriber  payments  resulting  from a  change  in the  method  of  calculating
collected revenues. We are reviewing additional information received from Sprint
and have  retained a consultant  to verify the accuracy of this  information  to
determine whether additional amounts are due to AirGate.  We continue to discuss
with Sprint the proper method for calculating, paying and reporting on collected
revenues  and other  matters.  During the three  months  ended  March 31,  2003,
AirGate  recorded  $3.6 million in credits from Sprint as a reduction in cost of
services.

On January 23, 2003, Sprint notified us that service fees,  excluding historical
3G expenses,  were  increased  from $7.27 per  subscriber per month to $7.77 per
subscriber per month.

Monthly Sprint service charges are set by Sprint at the beginning of each
calendar year. Sprint takes the position that at the end of each year, it can
determine its actual costs to provide these services to its network partners and
require a final settlement against the charges actually paid. If the cost to
provide these services are less than the amounts paid by Sprint's network
partners, Sprint will issue a credit for these amounts. If the costs to provide
the services are more that the amounts paid by Sprint's network partners, Sprint
will debit the network partners for these amounts. Sprint credited to the
Company a net amount of $2.0 million ($1.3 million for AirGate and $0.7 million
for iPCS). These credits were recorded as a reduction of cost of service in the
quarter ended December 31, 2002.

The Sprint  Agreements  require the Company to maintain  certain minimum network
performance standards and to meet other performance requirements. AirGate was in
compliance in all material respects with these requirements at March 31, 2003.

(4) Litigation

In May, 2002,  putative class action  complaints were filed in the United States
District Court for the Northern  District of Georgia  against AirGate PCS, Inc.,
Thomas M.  Dougherty,  Barbara L. Blackford,  Alan B.  Catherall,  Credit Suisse
First Boston, Lehman Brothers, UBS Warburg LLC, William Blair & Company,  Thomas
Wiesel  Partners LLC and TD Securities.  The complaints do not specify an amount
or range of damages that the plaintiffs are seeking.  The complaints  seek class
certification  and  allege  that  the  prospectus  used in  connection  with the
secondary  offering  of Company  stock by certain  former iPCS  shareholders  on
December 18, 2001  contained  materially  false and  misleading  statements  and
omitted material information  necessary to make the statements in the prospectus
not false and misleading. The alleged omissions included (i) failure to disclose
that in order to complete an  effective  integration  of iPCS,  drastic  changes
would have to be made to the Company's  distribution  channels,  (ii) failure to
disclose  that the  sales  force in the  acquired  iPCS  markets  would  require
extensive  restructuring  and (iii)  failure  to  disclose  that the  "churn" or
"turnover" rate for subscribers would increase as a result of an increase in the
amount of sub-prime credit quality subscribers the Company added from its merger
with iPCS. On July 15, 2002, certain plaintiffs and their counsel filed a motion
seeking appointment as lead plaintiffs and lead counsel. Subsequently, the Court
denied that motion  without  prejudice  and two of the  plaintiffs  have filed a
renewed motion.  The Defendants  responded to the renewed motion,  but the Court
has not yet entered a ruling.  The Company  believes the plaintiffs'  claims are
without merit and intends to vigorously defend against these claims. However, no
assurance can be given as to the outcome of the litigation.

(5) Staff Reduction and Retail Store Closings

As discussed  in Note 1,  AirGate has  identified  additional  opportunities  to
reduce its cost structure and streamline its  operations.  The Company adopted a
restructuring  plan in  accordance  with  SFAS  No.  146,  "Accounting  for Cost
Associated  with Exit or Disposal  Activities"  to reduce its  workforce  and to
close a number of retail stores which resulted in restructuring  charges of $0.7
million and $0.7 million  during the three  months  ended  December 31, 2002 and
March 31,  2003,  respectively.  Collectively,  these  actions  are  expected to
continue  through the quarter that will end on June 30, 2003 and are referred to
as the 2003 Plan.

During the quarter ended December 31, 2002, the  restructuring  charge  included
provisions  for severance of  approximately  65 management  and operating  staff
($0.6 million) as well as 3 retail store closures  ($0.05  million).  During the
quarter ended March 31, 2003, the restructuring  charge included  provisions for
severance of approximately  154 management and operating staff ($0.5 million) as
well as 16 retail store closures and 10  administrative  offices ($0.2 million),
primarily for iPCS. In the quarter that will end June 30, 2003,  AirGate expects
charges for additional  severance and store closings to be at least $0.6 million
and $0.1  million,  respectively.  Further  charges may be  necessary as AirGate
services are terminated under the services agreement with iPCS described in Note
7.

The  following  summarizes  the  activity and  balances  through  March 31, 2003
(dollar amounts in thousands):



                                                                             Facilities
                                                     Severance                 Closure                 Total
                                                   --------------           --------------          ---------------
                                                                                          
Balance - October 1, 2002                          $        0               $        0              $       0
      Restructuring charges                             1,081                      229                  1,310
      Payments                                           (763)                     (23)                  (786)
                                                   --------------           --------------          ---------------

Balance - March 31, 2003                           $      318               $      206              $     524
                                                   ==============           ==============          ===============



(6)   Income Taxes

The Company  realized an income tax benefit of $11.4  million and $28.8  million
during the quarter and six months  ended March 31, 2002,  respectively.  No such
amounts were  realized in the quarter and six months  ended March 31, 2003,  nor
will  amounts  be  realized  in  the  future  unless  management   believes  the
recoverability of deferred tax assets is more likely than not.

(7)   Transactions Between AirGate and iPCS

The Company  formed  AirGate  Service  Company,  Inc.  ("ServiceCo")  to provide
management  services  to both  AirGate  and iPCS.  ServiceCo  is a  wholly-owned
restricted  subsidiary  of AirGate.  Personnel  who provide  general  management
services to AirGate and iPCS have been leased to ServiceCo,  which  includes 148
employees at March 31, 2003. Generally, the management personnel include AirGate
staff in the  Company's  principal  corporate  offices in  Atlanta  and the iPCS
accounting staff in Geneseo, Illinois.  ServiceCo expenses are allocated between
AirGate and iPCS based on the  percentage  of  subscribers  they  contribute  as
compared  to  the  total   number  of  Company   subscribers   (the   "ServiceCo
Allocation"),  which is currently 60% AirGate and 40% iPCS. Expenses that relate
to one company are allocated to that company.  Expenses that relate to ServiceCo
or both companies are allocated in accordance with the ServiceCo Allocation. For
the quarter and six months ended March 31, 2003,  iPCS  recorded a net total for
ServiceCo expenses of $0.8 million and $1.8 million, respectively.

On January 27, 2003, iPCS retained Timothy M. Yager, former CEO of iPCS prior to
the merger of AirGate and a former director of AirGate  following the merger, as
chief restructuring  officer to oversee the restructuring of iPCS and manage the
day-to-day   operations  of  iPCS.  To  facilitate  the  orderly  transition  of
management services to Mr. Yager, AirGate and iPCS have executed an amendment to
the Services Agreement that would allow individual  services to be terminated by
either  party  upon 30 days prior  notice,  subject to  exceptions  for  certain
services for which longer notice is required.

The  amendment  also  terminated  certain  services  provided  by  AirGate,  and
effective May 1, 2003,  iPCS terminated  certain other services.  As a result of
the termination of services by iPCS, AirGate received $0.3 million less payments
from iPCS for the quarter  ended March 31,  2003.  We  anticipate  that prior to
September 1, 2003,  substantially all management  services provided by ServiceCo
to iPCS will be terminated.

AirGate  has  completed  transactions  at  arms-length  in the normal  course of
business with its unrestricted subsidiary iPCS. These transactions are comprised
of roaming  revenue and  expenses,  inventory  sales and  purchases and sales of
network operating equipment.

(8) Condensed Consolidating Financial Statements

AGW Leasing  Company,  Inc. ("AGW") is a wholly-owned  restricted  subsidiary of
AirGate. AGW has fully and unconditionally  guaranteed the AirGate notes and the
AirGate credit  facility.  AGW was formed to hold the real estate  interests for
the Company's PCS network and retail operations. AGW also was a registrant under
the Company's  registration  statement  declared effective by the Securities and
Exchange Commission on September 27, 1999.

AirGate  Network  Services LLC ("ANS") was created as a wholly-owned  restricted
subsidiary of AirGate. ANS has fully and unconditionally  guaranteed the AirGate
notes and  AirGate  credit  facility.  ANS was  formed to  provide  construction
management services for AirGate's PCS network.

AirGate  Service  Company,  Inc.  is a  wholly-owned  restricted  subsidiary  of
AirGate.  Service Co has fully and unconditionally  guaranteed the AirGate notes
and the AirGate  credit  facility.  Service Co was formed to provide  management
services to AirGate and iPCS.

iPCS is a  wholly-owned  unrestricted  subsidiary  of AirGate and  operates as a
separate business. As an unrestricted subsidiary,  iPCS provides no guarantee to
either the AirGate  notes or the  AirGate  credit  facility  and AirGate and its
restricted   subsidiaries  provide  no  guarantee  with  respect  to  iPCS  debt
obligations.  On February 23, 2003, iPCS filed a Chapter 11 bankruptcy  petition
in the United States  Bankruptcy Court for the Northern  District of Georgia for
the purpose of  effecting a  court-administered  reorganization.  The results of
iPCS have been included in the consolidated  results of AirGate through February
23, 2003.  Subsequent to February 23, 2003,  AirGate PCS no longer  consolidates
the accounts and results of operations of its unrestricted  subsidiary iPCS. The
accounts  of iPCS  are  recorded  as an  investment  using  the cost  method  of
accounting.

The following shows the unaudited condensed  consolidation  financial statements
for AirGate and its subsidiaries as of March 31, 2003 and September 30, 2002 and
for the three  months  and six  months  ended  March 31,  2003 and 2002  (dollar
amounts in thousands):



                Unaudited Condensed Consolidating Balance Sheets
                              As of March 31, 2003


                                              AirGate
                                             Guarantor
                            AirGate PCS,   Subsidiaries   Eliminations    AirGate
                                Inc.                                    Consolidated
                           ------------------------------------------------------------
                                                                 

Cash and cash                  $  20,920        $   (15)       $    --      $  20,905
  equivalents...........
Other current assets....         104,126            529        (61,248)        43,407
                           ------------------------------ ----------------------------
Total current assets....        125,046             514        (61,248)        64,312
Property and equipment,
  net...................        150,891          41,472            --         192,363
Other noncurrent assets..        13,672              --            --          13,672
                           ------------------------------ ----------------------------
Total assets............     $   289,609       $  41,986   $  (61,248)     $  270,347
                           ============================== ============================

Current liabilities.....     $  (21,844)       $ 143,259    $ (61,248)      $  60,167
Long-term debt..........        377,192         --              --            377,192
Other long-term
  liabilities...........         10,107         --              --             10,107
Investment in
subsidiaries............        285,388         --           (101,273)        184,115

                           ------------------------------ ----------------------------

Total liabilities.......      $ 650,843        $ 143,259   $ (162,521)     $  631,581
                           ------------------------------ ----------------------------
Stockholders' equity
  (deficit)..............      (361,234)        (101,273)     101,273        (361,234)
                           ------------------------------ ----------------------------
Total liabilities and
  stockholders' equity
  (deficit)..............     $ 289,609        $  41,986   $  (61,248)     $  270,347
                           ============================== ============================






                     Condensed Consolidating Balance Sheets
                            As of September 30, 2002


                                              AirGate
                                             Guarantor                                     iPCS
                            AirGate PCS,   Subsidiaries   Eliminations    AirGate       Non-Guarantor                    AirGate
                                Inc.                                    Consolidated(1) Subsidiary       Eliminations  Consolidated
                           ------------------------------ -----------------------------------------------------------------------

                                                                                                    

Cash and cash                 $  4,769       $   118         $   --     $  4,887     $  27,588            $  --        $  32,475
  equivalents...........
Other current assets....       122,869           529        (60,579)      62,819        35,593           (1,114)          97,298
                           ------------------------------ -----------------------------------------------------------------------

Total current assets....       127,638           647        (60,579)      67,706        63,181            (1,114)        129,773
Property and equipment,
  net...................       168,163        45,614            --       213,777       185,378               --          399,155
Intangible assets, net..         1,428            --            --         1,428        26,899               --           28,327
Other noncurrent assets.         4,924            --            --         4,924        12,115               --           17,039
                           ------------------------------ -----------------------------------------------------------------------

Total assets............     $ 302,153     $  46,261      $ (60,579)    $ 287,835     $ 287,573         $ (1,114)       $ 574,294
                           ============================== =======================================================================


Current liabilities.....     $  55,535     $ 130,767      $ (60,579)    $ 125,723     $ 369,564       $ (1,114)    $ 494,173
Long-term debt..........       354,264            --             --       354,264           564             --       354,828
Other long-term
  liabilities...........         1,583            --             --         1,583        16,657             --        18,240
Investment in                  183,718            --        (84,506)       99,212            --        (99,212)           --
  subsidiaries..........

                           ------------------------------ -----------------------------------------------------------------------
Total liabilities.......     $ 595,100     $ 130,767      $(145,085)     $580,782     $ 386,785     $ (100,326)    $ 867,241
                           ------------------------------ -----------------------------------------------------------------------

Stockholders' equity
  (deficit).............      (292,947)      (84,506)        84,506      (292,947)      (99,212)        99,212      (292,947)
                           ------------------------------ -----------------------------------------------------------------------
Total liabilities and
  stockholders' equity
  (deficit).............     $ 302,153     $  46,261      $ (60,579)     $287,835      $ 287,573      $ (1,114)    $ 574,294
                           ============================== =======================================================================



     (1) Amounts in the column for AirGate  consolidated  include the effects of
purchase  accounting related to the iPCS acquisition.  Balance sheet information
includes  $44 million of debt and $1 million of net assets as of  September  30,
2002.  The net loss of  AirGate  includes  expenses  related  to the  effects of
purchase accounting for iPCS of $3.1 million,  $273.3 million,  $5.6 million and
$277.4  million  for the three and six  months  ended  March 31,  2003 and 2002,
respectively. The three months and six months ended March 31, 2002 include a tax
benefit  related to the iPCS  acquisition  of $11.4  million and $28.8  million,
respectively. Subsequent to February 23, 2003 AirGate PCS no longer consolidates
the accounts and results of operations of its unrestricted  subsidiary iPCS. The
accounts of iPCS are recorded as an investment using the cost method of
accounting.







            Unaudited Condensed Consolidating Statement of Operations
                    For the Three Months Ended March 31, 2003


                                              AirGate                                   iPCS
                                             Guarantor                   AirGate      Non-Guarantor                   AirGate
                              AirGate PCS, Subsidiaries   Eliminations  Consolidated   Subsidiary     Eliminations Consolidated
                                      Inc.
                           ------------------------------ -----------------------------------------------------------------------

                                                                                                  

Total revenues..........    $  76,980         $   --         $   --     $  76,980     $  27,829      $   (376)     $  104,433
                           ------------------------------ -----------------------------------------------------------------------

Cost of revenues........      (39,819)        (4,604)            --      (44,423)      (21,167)            376    (65,214)
Selling and marketing...      (10,173)        (1,189)            --       11,362)       (4,312)             --    (15,674)
General and
  administrative........       (5,219)          (509)            --       (5,728)       (3,550)             --     (9,278)
Depreciation and
  amortization..........      (12,721)        (2,353)            --      (15,074)       (4,271)             --    (19,345)
Other, net (principally
  interest).............      (10,233)            39             --      (10,194)       (5,750)             --    (15,944)
                           ------------------------------ -----------------------------------------------------------------------

Total expenses..........      (78,165)        (8,616)             --     (86,781)      (39,050)            376   (125,455)

Loss in subsidiaries....      (19,837)            --           8,616     (11,221)           --          11,221         --
Loss before income tax
  benefit...............      (21,022)        (8,616)          8,616     (21,022)      (11,221)         11,221    (21,022)
Income tax benefit......           --             --              --          --            --              --         --
                           ------------------------------ -----------------------------------------------------------------------


Net loss................   $  (21,022)      $ (8,616)       $  8,616   $ (21,022)    $ (11,221)     $   11,221  $ (21,022)
                           ============================== =======================================================================








            Unaudited Condensed Consolidating Statement of Operations
                    For the Three Months Ended March 31, 2002

                                              AirGate                                   iPCS
                                             Guarantor                   AirGate      Non-Guarantor                   AirGate
                              AirGate PCS, Subsidiaries   Eliminations  Consolidated   Subsidiary     Eliminations Consolidated
                                      Inc.


                           ---------------- -------------- ------------ -------------- -------------- ------------- -------------
                                                                                                   

Total revenues..........   $  76,439            $  --        $  76,439    $  38,458      $ (204)        $ 114,693


                           ---------------- -------------- ------------ -------------- -------------- ------------- -------------
Cost of revenues........     (49,737)          (3,765)           --         (53,502)       (33,719)           204      (87,017)
Selling and marketing...     (17,168)          (1,031)           --         (18,199)        (9,393)            --      (27,592)
General and
  administrative........      (3,614)             (22)           --          (3,636)        (3,233)            --       (6,869)
Depreciation and
  amortization..........     (19,532)          (2,622)           --         (22,154)        (8,522)            --      (30,676)
Other, net (principally                                          --
  interest).............      (9,963)           1,268                        (8,695)        (5,944)            --      (14,639)
Goodwill impairment.....    (261,212)              --            --        (261,212)            --             --     (261,212)
                           ---------------- -------------- ------------ -------------- -------------- ------------- -------------

Total expenses..........    (361,226)          (6,172)           --        (367,398)       (60,811)           204     (428,005)


Loss in subsidiaries         (28,525)              --         6,172         (22,353)            --         22,353           --
Loss before income tax
  benefit...............    (313,312)          (6,172)        6,172        (313,312)       (22,353)        22,353     (313,312)
Income tax benefit......      11,402               --            --          11,402             --             --       11,402
                           ---------------- -------------- ------------ -------------- -------------- ------------- -------------
Net loss................   $(301,910)         $ (6,172)     $ 6,172       $(301,910)     $ (22,353)      $ 22,353   $ (301,910)
                           ================ ============== ============ ============== ============== ============= =============







            Unaudited Condensed Consolidating Statement of Operations
                     For the Six Months Ended March 31, 2003


                                              AirGate                                   iPCS
                                             Guarantor                   AirGate      Non-Guarantor                   AirGate
                              AirGate PCS, Subsidiaries   Eliminations  Consolidated   Subsidiary     Eliminations Consolidated
                                      Inc.
                            ------------------------------------------- -------------- -------------- ------------- -------------

                                                                                                    

Total revenues...........      $  158,845        $   --      $  --   $  158,845      $  79,364     $   (674)    $  237,535
                            ------------------------------------------- -------------- -------------- ------------- -------------

Cost of revenues.........         (93,764)       (8,937)            --     (102,701)       (63,321)           674     (165,348)
Selling and marketing....         (26,212)       (1,947)            --      (28,159)       (16,417)            --      (44,576)
General and
  administrative.........          (8,567)       (1,239)            --       (9,806)        (6,881)            --      (16,687)
Depreciation and
  amortization...........         (24,762)       (4,796)            --      (29,558)       (14,677)            --      (44,235)
Other, net (principally
  interest)..............         (20,486)          153             --       (20,333)      (15,052)            --      (35,385)
                            ------------------------------------------- -------------- -------------- ------------- -------------

Total expenses...........        (173,791)      (16,766)            --      (190,557)     (116,348)           674     (306,231)

Loss in subsidiaries.....        ( 53,750)           --         16,766       (36,984)           --         36,984           --
Loss before income tax
  benefit................         (68,696)      (16,766)        16,766       (68,696)       36,984        (68,696)     (36,984)
Income tax benefit.......              --            --             --            --            --             --           --
                            ------------------------------------------- -------------- -------------- ------------- -------------


Net loss.................      $ (68,696)     $ (16,766)      $ 16,766     $ (68,696)     $ (36,984)     $  36,984    $ (68,696)
                            =========================================== ============== ============== ============= =============






            Unaudited Condensed Consolidating Statement of Operations
                     For the Six Months Ended March 31, 2002


                                              AirGate                                   iPCS
                                             Guarantor                   AirGate      Non-Guarantor                   AirGate
                              AirGate PCS, Subsidiaries   Eliminations  Consolidated   Subsidiary     Eliminations Consolidated
                                      Inc.
                            --------------- -------------- ------------ -------------- -------------- ------------- -------------

                                                                                                     

Total revenues...........   $ 144,110          $   --         $  --        $ 144,110      $  52,484       $ (204)     $ 196,390
                            --------------- -------------- ------------ -------------- -------------- ------------- -------------

Cost of revenues.........     (99,235)         (7,510)           --         (106,745)       (47,816)           204     (154,357)
Selling and marketing....     (41,789)         (1,499)           --          (43,288)       (14,149)            --      (57,437)
General and
  administrative.........      (7,291)           (321)           --           (7,612)        (4,457)            --      (12,069)

Depreciation and
  amortization...........     (31,473)         (4,163)           --          (35,636)       (10,845)            --      (46,481)

Other, net (principally
  interest)..............     (18,528)          1,268            --          (17,260)        (7,889)            --      (25,149)
Goodwill impairment......    (261,212)             --            --         (261,212)            --             --     (261,212)
                            --------------- -------------- ------------ -------------- -------------- ------------- -------------

Total expenses...........    (459,528)        (12,225)           --         (471,753)       (85,156)            --     (556,705)


Loss in subsidiaries          (44,897)             --         12,225         (32,672)            --         32,672           --
Loss before income tax
  benefit................    (360,315)        (12,225)        12,225        (360,315)        32,672        (32,672)    (360,315)
Income tax benefit.......      28,761              --             --          28,761             --             --        28,761
                            --------------- -------------- ------------ -------------- -------------- ------------- -------------


Net loss.................   $(331,554)      $ (12,225)      $ 12,225      $ (331,554)     $ (32,672)       $32,672    $(331,554)
                            =============== ============== ============ ============== ============== ============= =============







            Unaudited Condensed Consolidating Statement of Cash Flows
                     For the Six Months Ended March 31, 2003

                                              AirGate                                   iPCS
                                             Guarantor                   AirGate      Non-Guarantor                   AirGate
                              AirGate PCS, Subsidiaries   Eliminations  Consolidated   Subsidiary     Eliminations Consolidated
                                      Inc.
                           ---------------- ------------- -----------------------------------------------------------------------

                                                                                                 

Operating activities,
  net...................  $  15,760      $  (133)         $   --     $  15,627     $ (9,086)         $   --     $   6,541
Investing activities,
  net...................     (6,654)          --              --        (6,654)      (18,500)            --       (25,154)
Financing activities,
  net...................      7,045           --              --         7,045            (2)            --         7,043
                           ---------------- ------------- -----------------------------------------------------------------------
                           ---------------- ------------- -----------------------------------------------------------------------

Increase (decrease) in
  cash and cash
  equivalent............     16,151         (133)             --        16,018       (27,588)            --       (11,570)
Cash at beginning of
  period................      4,769          118              --         4,887        27,588             --        32,475
                           ---------------- ------------- -----------------------------------------------------------------------

Cash at end of period...   $ 20,920         $(15)         $   --     $  20,905        $   --         $   --     $  20,905
                           ================ ============= =======================================================================






            Unaudited Condensed Consolidating Statement of Cash Flows
                     For the Six Months Ended March 31, 2002


                                              AirGate                                   iPCS
                                             Guarantor                   AirGate      Non-Guarantor                   AirGate
                              AirGate PCS, Subsidiaries   Eliminations  Consolidated   Subsidiary     Eliminations Consolidated
                                      Inc.
                           ---------------- ------------- -------------------------------------------------------------------------

                                                                                                 

Operating activities,
  net................... $  (21,012)     $   2,891         $   --   $  (18,121)   $  (19,754)         $   --     $  (37,875)
Investing activities,
  net...................        151         (2,743)            --       (2,592)      (27,484)             --        (30,076)
Financing activities,
  net...................     49,452             --             --       49,452        29,997              --         79,449
                           ---------------- ------------- -------------------------------------------------------------------------


Increase (decrease) in
  cash and cash
  equivalent............     28,591           148              --       28,739       (17,241)              --        11,498
Cash at beginning of
  period................     (9,954)         (157)             --      (10,111)       24,401               --        14,290
                           ---------------- ------------- -------------------------------------------------------------------------

Cash at end of period...   $ 18,637         $  (9)         $   --    $  18,628     $   7,160           $   --     $  25,788
                           ================ ============= =========================================================================



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

This Management's Discussion and Analysis of Results of Operations and Financial
Condition ("MD&A") contains forward looking statements that are based on current
expectations,   estimates,  forecasts  and  projections  about  us,  our  future
performance,  our liquidity, the wireless industry, our beliefs and management's
assumptions.  In addition,  other written and oral  statements  that  constitute
forward-looking  statements  may be made by us or on our  behalf.  Such  forward
looking statements  include statements  regarding expected financial results and
other planned events, including but not limited to, anticipated liquidity, churn
rates,  ARPU and CPGA (all as defined  in the Key  Operating  Metrics),  roaming
rates,  EBITDA  (as  defined  in  the  Key  Operating   Metrics),   and  capital
expenditures.  Words  such as  "anticipate,"  "assume,"  "believe,"  "estimate,"
"expect," "intend," "plan," "seek",  "project,"  "target," "goal," variations of
such words and similar expressions are intended to identify such forward-looking
statements.  These  statements  are not  guarantees  of future  performance  and
involve  certain  risks,  uncertainties  and  assumptions  that are difficult to
predict.  Therefore,  actual future events or results may differ materially from
these statements. These risks and uncertainties include:

* the impact and outcome of the iPCS bankruptcy filing and related proceedings;
* the competitiveness and impact of Sprint's pricing plans and PCS products and
   services;
* subscriber credit quality;
* the potential to experience a continued high rate of subscriber turnover;
* the ability of Sprint to provide back office  billing,  subscriber  care and
   other  services and the quality and costs of such services;
* inaccuracies in financial information provided by Sprint;
* new charges and fees, or increased charges and fees, charged by Sprint;
* the impact and outcome of disputes with Sprint;
* rates of penetration in the wireless industry;
* our significant level of indebtedness;
* adequacy of bad debt and other allowances;
* the potential need for additional sources of liquidity;
* anticipated future losses;
* subscriber purchasing patterns;
* potential fluctuations in quarterly results;
* an adequate supply of subscriber equipment;
* risks related to future growth and expansion; and
* the volatility of the market price of AirGate's common stock.

These and other  applicable  risks and  uncertainties  are summarized  under the
captions "Future Trends That May Affect Operating Results, Liquidity and Capital
Resources"  included in this "Item 2.  Management's  Discussion  and Analysis of
Financial  Condition and Results of Operations" of this quarterly report on Form
10-Q and "Risk Factors"  included in Part II under "Item 5 - Other  Information"
of this quarterly report on Form 10-Q and elsewhere in this report.

For a further list of and description of such risks and  uncertainties,  see the
reports filed by us with the SEC.  Except as required  under federal  securities
law and the rules and  regulations  of the SEC, we do not have any  intention or
obligation to update publicly any forward looking  statements after distribution
of this report,  whether as a result of new information,  future events, changes
in assumptions or otherwise.

Overview

On July 22, 1998,  AirGate entered into  management and related  agreements with
Sprint whereby it became the network partner of Sprint with the right to provide
100% digital PCS products and services under the Sprint brand names in AirGate's
original  territory in the southeastern  United States. In January 2000, AirGate
began commercial operations with the launch of four markets covering 2.2 million
residents in AirGate's  territory.  By September 30, 2000,  AirGate had launched
commercial  PCS  service in all of the 21 basic  trading  areas,  referred to as
markets,  which comprise  AirGate's  original  territory.  On November 30, 2001,
AirGate  acquired  iPCS,  a network  partner  of Sprint  with 37  markets in the
midwestern states of Michigan,  Illinois,  Iowa and Nebraska. The acquisition of
iPCS  increased the total  resident  population  in the  Company's  markets from
approximately  7.1 million to  approximately  14.5  million.  At March 31, 2003,
AirGate had total network  coverage of approximately  5.9 million  residents and
iPCS had total network coverage of approximately 5.7 million  residents,  of the
7.1 million and 7.4 million residents in its respective territory.

Under  AirGate's  and iPCS'  long-term  agreements  with  Sprint,  we manage our
networks  on  Sprint's  licensed  spectrum  and have the right to use the Sprint
brand names  royalty-free  during the respective  company's PCS affiliation with
Sprint.  We  also  have  access  to  Sprint's  national  marketing  support  and
distribution  programs and are generally  required to buy network  equipment and
subscriber handsets from vendors approved by Sprint or from Sprint directly. The
agreements with Sprint generally  provide that these purchases are to be made at
the same discounted rates offered by vendors to Sprint based on its large volume
purchases.  AirGate  and iPCS  each pay an  affiliation  fee of 8% of  collected
revenues to Sprint. We are entitled to 100% of revenues  collected from the sale
of handsets and accessories and on roaming  revenues  received when customers of
Sprint and  Sprint's  other  network  partners  make a wireless  call on our PCS
network.

iPCS is a wholly-owned,  unrestricted  subsidiary of AirGate. As required by the
terms of AirGate's and iPCS' respective  outstanding  indebtedness,  AirGate and
iPCS  conduct  its  business  as  separate  corporate  entities  from the other.
AirGate's  notes  require  subsidiaries  of AirGate to be  classified  as either
"restricted   subsidiaries"   or  "unrestricted   subsidiaries".   A  restricted
subsidiary is defined  generally as any subsidiary  that is not an  unrestricted
subsidiary. An unrestricted subsidiary includes any subsidiary which:

*    has been  designated  an  unrestricted  subsidiary  by the AirGate board of
     directors,

*    has no  indebtedness  which  provides  recourse  to  AirGate  or any of its
     restricted subsidiaries,

*    is not  party  to  any  agreement  with  AirGate  or any of its  restricted
     subsidiaries,  unless the terms of the agreement  are no less  favorable to
     AirGate or such  restricted  subsidiary  than those that might be  obtained
     from persons unaffiliated with AirGate,

*    is a  subsidiary  with  respect  to which  neither  AirGate  nor any of its
     restricted  subsidiaries  has any  obligation to subscribe  for  additional
     equity  interests,   maintain  or  preserve  such  subsidiary's   financial
     condition or cause such subsidiary to achieve certain operating results,

*    has  not   guaranteed  or  otherwise   provided   credit  support  for  any
     indebtedness of AirGate or any of its restricted subsidiaries, and

*    has at least one director and one executive  officer that are not directors
     or executive officers of AirGate or any of its restricted subsidiaries.

On February 23, 2003, iPCS filed a Chapter 11 bankruptcy  petition in the United
States  Bankruptcy Court for the Northern District of Georgia for the purpose of
effecting a court-administered  reorganization.  In accordance with Statement of
Financial   Accounting   Standards   (SFAS)   No.  94   "Consolidation   of  All
Majority-Owned  Subsidiaries"  and  Accounting  Research  Bulletin  (ARB) No. 51
"Consolidated Financial Statements," when control of a majority-owned subsidiary
does not rest with the majority  owners (as, for instance,  where the subsidiary
is in legal reorganization or in bankruptcy), ARB No. 51 precludes consolidation
of the majority-owned  subsidiary. As a result, subsequent to February 23, 2003,
AirGate no longer  consolidates  the accounts and results of  operations of iPCS
and the accounts of iPCS are recorded as an investment  using the cost method of
accounting.

AirGate's notes impose certain affirmative and restrictive  covenants on AirGate
and its restricted  subsidiaries  and also include as events of default  certain
events,   circumstances  or  conditions  involving  AirGate  or  its  restricted
subsidiaries.  Because iPCS is an  unrestricted  subsidiary,  the  covenants and
events of default under AirGate's notes do not apply to iPCS.

AirGate's  credit  facility also imposes  certain  restrictions  on, and applies
certain  events of default to events,  circumstances  or  conditions  involving,
AirGate  and  its  subsidiaries.  AirGate's  senior  credit  facility,  however,
expressly  excludes iPCS from the definition of "subsidiary."  Therefore,  these
restrictions and events of default applicable to AirGate and its subsidiaries do
not generally apply to iPCS.

CRITICAL ACCOUNTING POLICIES

The Company relies on the use of estimates and makes assumptions that impact its
financial  condition and results.  These  estimates and assumptions are based on
historical results and trends as well as the Company's forecasts as to how these
might change in the future.  Several of the most  critical  accounting  policies
that materially impact the Company's results of operations include:

Allowance for Doubtful Accounts

Estimates are used in  determining  the allowance for doubtful  accounts and are
based on historical collection and write-off experience,  current trends, credit
policies  and  accounts  receivable  by aging  category.  In  determining  these
estimates,  the  Company  compares  historical  write-offs  in  relation  to the
estimated period in which the subscriber was originally billed. The Company also
looks at the average  length of time that elapses  between the original  billing
date and the date of write-off in determining  the adequacy of the allowance for
doubtful accounts by aging category. From this information, the Company provides
specific amounts to the aging categories.  The Company provides an allowance for
substantially  all  receivables  over 90 days old.  The  provision  for doubtful
accounts as a percentage  of service  revenues for the six months ended March 31
was as follows:

                                              Provision for Doubtful
                                                     Accounts
                                 Year          As % of Service Revenue
                                 ----        --------------------------
                                 2003                  2.2%
                                 2002                 10.4%

The allowance for doubtful  accounts was $4.5 million (AirGate only) as of March
31,  2003,  and $11.3  million  ($6.8  million for AirGate and $4.5  million for
iPCS),  respectively,  as of September  30, 2002.  If the allowance for doubtful
accounts  is not  adequate,  it could  have a  material  adverse  affect  on our
liquidity, financial position and results of operations.

The Company also reviews  current trends in the credit quality of its subscriber
base.  As of March 31,  2003,  33% of  AirGate's  subscriber  base  consisted of
sub-prime credit quality subscribers.  Sprint has a program in which subscribers
with lower quality credit or limited credit history may nonetheless  sign up for
service subject to certain account  spending  limits,  if the subscriber makes a
deposit ranging from $125 to $250. In May 2001, Sprint introduced the no-deposit
account  spending limit  program,  in which the deposit  requirement  was waived
except in very limited  circumstances  (the "NDASL program").  The NDASL program
was  replaced  in late 2001 with the Clear Pay  program.  The Clear Pay  program
re-instituted the deposit for the lowest credit quality  subscribers.  The NDASL
and Clear  Pay  programs  and  their  associated  lack of  deposit  requirements
increased the number of the Company's sub-prime credit  subscribers.  At the end
of February 2002,  Sprint allowed its network partners to re-institute  deposits
in a program  called the Clear Pay II program.  The Clear Pay II program and its
deposit requirements are currently in effect in most of AirGate's markets, which
reinstates a deposit  requirement of $125 for most sub-prime credit subscribers.
In early February 2003, management began implementing a higher deposit threshold
of $250 for sub-prime customers in our markets.

Reserve for Late Payment Fees, Early Cancellation Fees and First Payment Default
Subscribers

The Company  provides a  reduction  in revenues  for those  subscribers  that it
anticipates  will not pay late  payment fees and early  cancellation  fees using
historical information. The reserve for late payment fees and early cancellation
fees are included in the allowance for doubtful accounts balance.

The Company had previously  reserved for subscribers  that it anticipated  would
never pay a bill.  During the three  months  ended March 31,  2003,  the Company
experienced a significant  improvement  in customer  payment  behavior for these
customers  as well as a  significant  improvement  in the credit  quality of new
subscribers to the Company.  As a result,  the Company has  determined  that the
first payment default reserve was no longer necessary.  At March 31, 2003, first
payment default reserve was $0. This resulted in the addition of 4,187 and 2,252
net subscriber additions for AirGate and iPCS at March 31, 2003.

Revenue Recognition

The Company  recognizes  revenues  when  persuasive  evidence of an  arrangement
exists,  services have been rendered or products have been delivered,  the price
to the  buyer  is fixed  and  determinable,  and  collectibility  is  reasonably
assured.  The Company's  revenue  recognition  polices are  consistent  with the
guidance in Staff Accounting  Bulletin ("SAB") No. 101, "Revenue  Recognition in
Financial Statements" promulgated by the Securities and Exchange Commission.

The Company records  equipment revenue from the sale of handsets and accessories
to subscribers in its retail stores and to local distributors in its territories
upon  delivery.  The Company does not record  equipment  revenue on handsets and
accessories purchased by subscribers from national third-party retailers such as
Radio Shack,  Best Buy and Circuit City, or directly from Sprint by  subscribers
in its territories.  The Company believes the equipment revenue and related cost
of equipment  associated with the sale of wireless handsets and accessories is a
separate  earnings  process from the sale of wireless  services to  subscribers.
Because  such  arrangements  do not  require  a  customer  to  subscribe  to the
Company's  wireless  services and because the Company sells wireless handsets to
existing  customers  at  a  loss,  the  Company  currently  accounts  for  these
transactions separately from agreements to provide customers wireless service.

The  Company's  subscribers  pay an  activation  fee to the  Company  when  they
initiate  service.  The Company  defers  activation fee revenue over the average
life of its  subscribers,  which  is  estimated  to be 30  months.  The  Company
recognizes  service  revenue from its  subscribers as they use the service.  The
Company provides a reduction of recorded revenue for billing  adjustments,  late
payment fees, and early  cancellation  fees.  The Company also reduces  recorded
revenue for rebates and discounts given to subscribers on wireless handset sales
in  accordance   with  Emerging  Issues  Task  Force  ("EITF")  Issue  No.  01-9
"Accounting  for  Consideration  Given by a Vendor to a Subscriber  (Including a
Reseller of the Vendor's  Products)."  For  industry  competitive  reasons,  the
Company  sells  wireless  handsets at a loss.  The Company  participates  in the
Sprint national and regional  distribution  programs in which national retailers
such as Radio  Shack,  Best Buy and Circuit  City sell Sprint PCS  products  and
services.  In order to facilitate  the sale of Sprint PCS products and services,
national retailers purchase wireless handsets from Sprint for resale and receive
compensation from Sprint for Sprint PCS products and services sold. For industry
competitive  reasons,  Sprint  subsidizes the price of these handsets by selling
the handsets at a price below cost. Under the Company's Sprint agreements,  when
a national retailer sells a handset purchased from Sprint to a subscriber in the
Company's  territories,  the Company is obligated  to  reimburse  Sprint for the
handset  subsidy.  The Company  does not receive any  revenues  from the sale of
handsets and  accessories  by such national  retailers.  The Company  classifies
these  handset  subsidy  charges as a selling  and  marketing  expense for a new
subscriber  handset sale and classifies these subsidies as a cost of service and
roaming for a handset upgrade to an existing subscriber.

Sprint retains 8% of collected  service revenues from  subscribers  based in the
Company's  markets and from  non-Sprint  subscribers who roam onto the Company's
network.  The amount of affiliation  fees retained by Sprint is recorded as cost
of  service  and  roaming.  Revenues  derived  from  the  sale of  handsets  and
accessories by the Company and from certain roaming services  (outbound  roaming
and roaming  revenues from Sprint PCS and its PCS network  partner  subscribers)
are not subject to the 8% affiliation fee from Sprint.

The  Company  defers  direct  subscriber  activation  costs  when  incurred  and
amortizes these costs using the  straight-line  method over 30 months,  which is
the estimated average life of a subscriber.  Direct subscriber  activation costs
also  include  credit  check fees and loyalty  welcome  call fees charged to the
Company  by Sprint and costs  incurred  by the  Company to operate a  subscriber
activation center.

Impairment of Long-Lived Assets and Goodwill

The Company  accounts for long-lived  assets and goodwill in accordance with the
provisions  of  Statement of Financial  Accounting  Standards  ("SFAS") No. 144,
"Accounting  for the  Impairment or Disposal of Long-Lived  Assets" and SFAS No.
142,  "Goodwill  and  Other  Intangible  Assets."  SFAS No.  144  requires  that
long-lived  assets  and  certain   identifiable   intangibles  be  reviewed  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable.  Recoverability of assets to
be held and used is measured by a comparison of the carrying  amount of an asset
to future net cash flows  expected to be generated by the asset.  If such assets
are  considered to be impaired,  the  impairment to be recognized is measured by
the amount by which the carrying  amount of the assets exceeds the fair value of
the assets.  Assets to be disposed of are  reported at the lower of the carrying
amount or fair value less costs to sell.  SFAS No. 142 requires annual tests for
impairment of goodwill and intangible  assets that have indefinite  useful lives
and  interim  tests when an event has  occurred  that more  likely  than not has
reduced the fair value of such  assets.  As of September  30, 2002,  the Company
recorded  substantial  write-offs of long lived assets and goodwill.  Management
does not believe that any additional  write-offs  are required  since  year-end.
Management   will  continue  to  monitor  any  triggering   events  and  perform
re-evaluations, as necessary.

NEW ACCOUNTING PRONOUNCEMENTS

In  February  2003,  the FASB  issued  SFAS No.  149,  "Accounting  for  Certain
Financial Instruments with Characteristics of Liabilities and Equity",  which is
effective at the beginning of the first interim period beginning after March 15,
2003. SFAS No. 149  establishes  standards for the Company's  classification  of
liabilities  in the  financial  statements  that  have  characteristics  of both
liabilities and equity. We are currently evaluating the impact of this statement
on our financial statements.

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable   Interest   Entities,   and   interpretation  of  ARB  No.  51."  This
interpretation  addresses the consolidation by business  enterprises of variable
interest entities as defined in the Interpretation.  The Interpretation  applies
immediately to variable  interests in variable  interest  entities created after
January 31,  2003,  and to variable  interests  in  variable  interest  entities
obtained after January 31, 2003. The application of this  Interpretation  is not
expected  to  have  a  material  adverse  effect  on  the  Company's   financial
statements.

In  December  2002,  the FASB issued SFAS No. 148  "Accounting  for  Stock-Based
Compensation--Transition  and  Disclosure--an  amendment of FASB  Statement  No.
123." SFAS No. 148 provides  alternative  methods of transition  for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation from the intrinsic  value-based method of accounting  prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to  Employees."  As allowed by SFAS No. 123, the Company has elected to continue
to apply the intrinsic  value-based  method of  accounting,  and has adopted the
disclosure requirements of SFAS No. 123.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of  Others",  which  addresses  the  disclosure  to be  made  by a
guarantor in its interim and annual  financial  statements about its obligations
under  guarantees.  This  interpretation  also  requires  the  recognition  of a
liability by a guarantor at the inception of certain guarantees.

Interpretation  No. 45 requires the  guarantor to recognize a liability  for the
non-contingent  component of the  guarantee,  which is the  obligation  to stand
ready to perform in the event that  specified  triggering  events or  conditions
occur.  The  initial  measurement  of this  liability  is the fair  value of the
guarantee at inception.  The recognition of the liability is required even if it
is not probable  that  payments  will be required  under the guarantee or if the
guarantee  was issued with a premium  payment or as part of a  transaction  with
multiple elements.

The Company guarantees certain lease commitments of its restricted subsidiaries.
The maximum  amount of these  guarantees  is included  in the  Company's  Annual
Report on Form 10-K/A for the fiscal year ended  September 30, 2002.  Also,  the
handsets  sold by the Company are under a one-year  warranty  from Sprint.  If a
customer  returns a handset for  warranty,  the Company  generally  provides the
customer with a refurbished handset and sends the warranty handset to Sprint for
repair. Sprint provides a credit to the Company equal to the retail price of the
refurbished  handset.  The Company will apply the  recognition  and  measurement
provisions for all guarantees entered into or modified after December 31, 2002.

In November  2002,  the Emerging  Issues Task Force (EITF) of the FASB reached a
consensus on EITF No. 00-21,  "Accounting for Revenue Arrangements with Multiple
Element  Deliverables".  This guidance addresses how to account for arrangements
that may involve multiple revenue-generating  activities,  i.e., the delivery or
performance  of multiple  products,  services,  and/or rights to use assets.  In
applying this guidance,  separate contracts with the same party, entered into at
or near the same time, will be presumed to be a package,  and the  consideration
will be measured and  allocated to the  separate  units based on their  relative
fair values.  This consensus  guidance will be applicable to agreements  entered
into in quarters  beginning  after June 15,  2003.  AirGate  will adopt this new
accounting  effective  July 1, 2003.  The Company is  currently  evaluating  the
impact of this change.

In July 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities."  SFAS No. 146  provides  new guidance on the
recognition of costs associated with exit or disposal  activities.  The standard
requires   companies  to  recognize  costs  associated  with  exit  or  disposal
activities  when they are incurred  rather than at the date of  commitment to an
exit or disposal plan.  SFAS No. 146  supercedes  previous  accounting  guidance
provided by the EITF Issue No. 94-3 "Liability  Recognition for Certain Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring)." EITF Issue No. 94-3 required recognition of
costs at the date of commitment to an exit or disposal plan.  SFAS No. 146 is to
be applied prospectively to exit or disposal activities initiated after December
31, 2002.  Early  application is permitted.  The Company adopted SFAS No. 146 on
October 1, 2002.  As  discussed in Note 5, during the six months ended March 31,
2003 the Company recorded $1.1 million and $0.2 million,  respectively, of costs
related to staff reductions and retail store closings.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
Among other things,  this statement  rescinds FASB  Statement No. 4,  "Reporting
Gains and Losses  from  Extinguishment  of Debt"  which  required  all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an  extraordinary  item, net of related income tax effect.  As a result,  the
criteria  in APB  Opinion  No.  30,  "Reporting  the  Results of  Operations  --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify those gains and losses.  The adoption of SFAS No. 145 by the Company on
October  1,  2002 did not have a  material  impact  on the  Company's  financial
position, results of operations, or cash flows.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations."  SFAS No. 143 requires the fair value of a liability  for an asset
retirement  obligation  to be  recognized in the period that it is incurred if a
reasonable  estimate of fair value can be made.  SFAS No. 143 is  effective  for
fiscal years  beginning after June 15, 2002. The adoption of SFAS No. 143 by the
Company  on  October  1, 2002 did not have a  material  impact on the  Company's
financial position, results of operations or cash flows.

RESULTS OF OPERATIONS

The following  discussion  of the results of operations  includes the results of
operations of iPCS subsequent to November 30, 2001, its date of acquisition, but
as a result of iPCS' Chapter 11 bankruptcy filing,  does not include the results
of operations of iPCS subsequent to February 23, 2003. iPCS filed for Chapter 11
bankruptcy on February 23, 2003. In accordance  with SFAS No. 94 and ARB No. 51,
iPCS'  results  of  operations  are  not  consolidated  with  AirGate's  results
subsequent  to  February  23, 2003 and the  accounts of iPCS are  recorded as an
investment  using the cost method of accounting.  AirGate  stand-a-lone  results
includes the effects of purchase  accounting related to the iPCS acquisition and
the results do not include the historical equity basis loss of iPCS.

Financial Measures and Key Operating Metrics

We use certain  operating  and  financial  measures  that are not  calculated in
accordance with accounting  principles  generally accepted in the United States,
or GAAP.  A non-GAAP  financial  measure is defined as a numerical  measure of a
company's  financial  performance  that (i) excludes  amounts,  or is subject to
adjustments that have the effect of excluding amounts,  that are included in the
comparable  measure  calculated  and  presented in  accordance  with GAAP in the
statement of income or statement of cash flows; or (ii) includes amounts,  or is
subject to  adjustments  that have the  effect of  including  amounts,  that are
excluded from the comparable measure so calculated and presented.

Terms such as subscriber net additions, average revenue per user, churn and cost
per  gross  addition  are  important  operating  metrics  used  in the  wireless
telecommunications  industry. These metrics are important to compare us to other
wireless service  providers.  ARPU also assists management in forecasting future
service revenue and CPGA assists management in quantifying the incremental costs
to acquire a new  subscriber.  Except for churn and net subscriber  additions we
have included a reconciliation of these metrics to the most directly  comparable
GAAP  financial  measure.  Churn and  subscriber  net  additions  are  operating
statistics  with no  comparable  GAAP  financial  measure.  ARPU  and  CPGA  are
supplements  to GAAP  financial  information  and  should not be  considered  an
alternative  to, or more  meaningful  than,  revenues,  expenses  or net loss as
determined in accordance with GAAP.

EBITDA is a  performance  metric  we use and  which is used by other  companies.
Management  believes  that  EBITDA  is a useful  adjunct  to net loss and  other
measurements  under GAAP  because  it is a  meaningful  measure  of a  company's
performance,   as  interest,  taxes,  depreciation  and  amortization  can  vary
significantly  between  companies  due in  part  to  differences  in  accounting
policies,  tax strategies,  levels of indebtedness,  and interest rates. We have
included  below a  presentation  of the GAAP  financial  measure  most  directly
comparable to EBITDA,  which is net loss, as well as a reconciliation  of EBITDA
to net loss.  We have also  provided a  reconciliation  to net cash  provided by
(used  in)  operating  activities  as  supplemental  information.  EBITDA  is  a
supplement  to GAAP  financial  information  and  should  not be  considered  an
alternative to, or more  meaningful  than, net loss, cash flow or operating loss
as determined in accordance with GAAP.

EBITDA,  ARPU, churn and CPGA as used by the Company may not be comparable
to a similarly titled measure of another company.

The following terms used in this report have the following meanings:

"EBITDA" means earnings before interest, taxes, depreciation and amortization.

"ARPU"  summarizes  the average  monthly  service  revenue  per user,  excluding
roaming revenue.  ARPU is computed by dividing service revenue for the period by
the average subscribers for the period.

"Churn" is the monthly rate of  subscriber  turnover that both  voluntarily  and
involuntarily  discontinued service during the month,  expressed as a percentage
of the total  subscriber  base.  Churn is  computed  by  dividing  the number of
subscribers that  discontinued  service during the month, net of 30-day returns,
by the average total subscriber base for the period.

"CPGA" summarizes the average cost to acquire new subscribers during the period.
CPGA is  computed  by adding  the income  statement  components  of selling  and
marketing,  cost of  equipment  and  activation  costs  (which are included as a
component of cost of service) and reducing that amount by the equipment  revenue
recorded.  That net amount is then divided by the total new subscribers acquired
during the period.

For the three  months  ended March 31, 2003  compared to the three  months ended
March 31, 2002:

The table  below  sets  forth key  operating  metrics  for the  Company  for the
quarters ended March 31, 2003 and 2002.




                                                                    Quarter Ended March 31,
                                                                    -----------------------
                                                    2003                                            2002
                                  -----------------------------------------     ----------------------------------------------
                                    AirGate            iPCS       Combined          AirGate           iPCS         Combined
                                    -------            ----       --------          -------           ----         --------
                                                                                                  
Subscriber Gross Additions           43,003          14,105         57,108           68,404         32,145          100,549
Subscriber Net Additions              5,755          (6,732)          (977)          36,055         16,954           53,009
Total Subscribers                   358,564         229,893        588,457          325,899        180,468          506,367
ARPU                                 $56.40          $51.21         $54.93           $63.11         $55.78           $60.48
Churn (with subscriber reserve)        3.30%           4.74%          3.70%            3.18%          2.61%            2.97%
Churn (without subscriber reserve)     3.69%           5.28%          4.14%            3.86%          3.29%            3.65%
CPGA                                   $298            $405           $324             $321           $367             $336
Capital Expenditures (cash)      $1,028,000         $45,000     $1,073,000      $14,890,000    $23,604,000      $41,397,000
EBITDA                           $15,290,000   $(1,200,000)    $14,090,000    $(260,293,000)   $(7,812,000)   $(268,105,000)




The  reconciliation  of  EBITDA  to net cash  provided  by (used  in)  operating
activities, as determined in accordance with GAAP, is as follows (dollar amounts
in thousands):



                                                                     Quarter Ended March 31,
                                                         2003                                          2002
                                       ------------------------------------------    -----------------------------------------
                                            AirGate         iPCS        Combined         AirGate           iPCS        Combined
                                                                                                  
Net cash provided by (used in)
operating activities                      $ 18,439        $ 8,011       $ 26,450        $ 2,423       $ (9,177)     $  (6,754)
    Change in operating assets and
      liabilites                           (5,121)         (9,461)       (14,582)         3,476          3,876          7,352
    Interest expense                       10,042           5,752         15,794          8,573          6,075         14,648
    Accretion of interest                  (7,810)         (4,534)       (12,344)        (6,963)        (6,444)       (13,407)
    Goodwill impairment                        --              --             --       (261,212)            --       (261,212)
    Interest and other income                 (25)             (2)           (27)            --           (192)          (192)
    Provision for doubtful accounts            31            (753)          (722)        (6,044)        (1,926)        (7,970)
    Other expense                            (266)           (213)          (479)          (546)           (24)          (570)
                                             -----         --------       -------     ----------      ---------      ----------
EBITDA                                   $ 15,290        $ (1,200)      $ 14,090      $(260,293)      $ (7,812)     $(268,105)
                                          ========       =========       ========     ==========      =========      ==========



The  reconciliation  of  EBITDA  to our  reported  net loss,  as  determined  in
accordance with GAAP, is as follows (dollar amounts in thousands):


                                                                       Quarter Ended March 31,
                                                                       -----------------------
                                                           2003                                          2002
                                          ---------------------------------------     -------------------------------------------
                                          AirGate         iPCS         Combined          AirGate          iPCS          Combined
                                          -------         ----         --------          -------          ----          --------
                                                                                                     
Net Loss                                  $ (9,801)      $(11,221)       $(21,022)       $(279,557)     $ (22,353)      $ (301,910)
     Depreciation and amortization          15,074          4,271          19,345           22,154          8,522           30,676
     Interest income                           (25)            (2)            (27)             (61)           (56)            (117)
     Interest expense                       10,042          5,752          15,794            8,573          6,075           14,648
     Income tax benefit                         --             --             --           (11,402)             --         (11,402)
                                           -------      ----------       --------        ----------      ---------      -----------
     EBITDA                                $15,290      $  (1,200)       $ 14,090        $(260,293)      $ (7,812)      $ (268,105)
                                           =======       =========       ========        ==========      =========      ===========



The reconciliation of ARPU to service revenue,  as determined in accordance with
GAAP, is as follows (dollar amounts in thousands):



                                                                          Quarter Ended March 31,
                                                                          -----------------------
                                                           2003                                          2002
                                          ---------------------------------------     -------------------------------------------
                                          AirGate         iPCS         Combined          AirGate          iPCS          Combined
                                          -------         ----         --------          -------          ----          --------
                                                                                                         
Average Revenue per User (ARPU):
Service revenue                           $ 60,163       $ 21,501         $81,664          $58,425        $28,929          $87,354
Average subscribers                        355,589        233,259        495,544           308,581        172,868          481,449
  ARPU                                      $56.40         $51.21         $54.93            $63.11         $55.78           $60.48


Notes:  For 2003, iPCS average  subscribers is for the period between January 1,
2003 and February 23, 2003. For 2003, average subscribers for combined entity is
a weighted average.


The  reconciliation  of CPGA to selling and  marketing  expense as determined in
accordance with GAAP, is calculated as follows (dollar amounts in thousands):



                                                                       Quarter Ended March 31,
                                                                       -----------------------
                                                           2003                                          2002
                                          ---------------------------------------     -------------------------------------------
                                          AirGate         iPCS         Combined          AirGate          iPCS          Combined
                                          -------         ----         --------          -------          ----          --------
                                                                                                         
Cost per Gross Add (CPGA):
Sales and marketing expense                $11,362         $4,312       $15,674         $18,199         $9,393          $27,592
Plus: Activation expense                      $668           $372        $1,040            $565           $312             $877
Plus: Cost of equipment                     $3,687*        $1,849*       $5,304          $6,835         $3,847          $10,682
Less: Equipment revenue                    $(2,923)*        $(814)*     $(3,505)        $(3,640)       $(1,748)         $(5,388)
     Total acquisition costs               $12,794         $5,719       $18,513         $21,959        $11,804          $33,763
Gross Additions                             43,003         14,105        57,108          68,404         32,145          100,549
     CPGA                                     $298           $405          $324            $321           $367             $336

*Amounts are reflected prior to the elimination of intercompany transactions

Subscriber Net Additions

For AirGate and iPCS,  subscriber net additions  decreased for the quarter ended
March 31, 2003, compared to the same quarter in 2002. This decline is due to the
decrease in subscriber  gross additions,  re-institution  of and increase in the
deposit for  sub-prime  credit  quality  customers  and actions  taken to reduce
acquisition costs. For iPCS, subscriber net additions subsequent to February 23,
2003 are no longer  consolidated  with the  results  of  AirGate.  Reported  net
additions during the three months ended March 31, 2003 were positively  impacted
by the  Company's  elimination  of its  subscriber  reserve.  The impact of this
change for the quarter  ended March 31, 2003 is an increase in net  additions of
4,187 and 2,252 for AirGate and iPCS, respectively.

Subscriber Gross Additions

For AirGate and iPCS, subscriber gross additions decreased for the quarter ended
March 31, 2003 compared to the same quarter in 2002.  This decline is due to the
re-institution  of and  increase  in the deposit for  sub-prime  credit  quality
customers and actions taken to reduce  acquisition  costs. For iPCS,  subscriber
gross additions  subsequent to February 23, 2003 are no longer consolidated with
the results of AirGate.

EBITDA

EBITDA for the quarter ended March 31, 2003 has  increased  from the same period
in  2002.  This  increase  is a  result  of an  overall  decrease  in  spending,
particularly  in cost of  services  and selling  and  marketing.  EBITDA for the
quarter ended March 31, 2002 included  $261.2  million for Goodwill  impairment.
EBITDA for AirGate was favorably impacted by $3.6 million in credits provided by
Sprint as described in Note 3 of the consolidated financial statements.  Average
Revenue Per User


The  decrease  in ARPU for the  Company  for the  quarter  ended  March 31, 2003
compared  to the same  quarter  for 2002 is  primarily  a result  of an  overall
reduction in revenue from customers using minutes in excess of their  subscribed
usage plan. The Company is currently  evaluating  this decrease and  determining
the extent this trend may or may not  continue.  This decrease also reflects the
cessation of recognizing  terminating  long-distance access revenue. Until March
31, 2002, the Company recorded terminating  long-distance access revenues billed
by Sprint PCS to long distance carriers.

Churn

For the Company,  churn  increased for the quarter ended March 31, 2003 compared
to the same  quarter  in 2002  primarily  from the  effects  of adding a greater
number of sub-prime credit quality subscribers during certain periods of 2002.

Cost Per Gross Addition

For AirGate, CPGA decreased for the quarter ended March 31, 2003 compared to the
same quarter in 2002. The decrease is due primarily to reduced  promotional  and
advertising  spending.  For iPCS, CPGA increased for the quarter ended March 31,
2003,  compared  to the  same  quarter  in  2002.  This  increase  is  primarily
attributable  to fixed costs being  spread over a smaller  number of  subscriber
gross  additions  as well as  restructuring  costs  resulting  from cost cutting
programs including store closures and reductions in force.


Revenues




                                                                      Quarter Ended March 31,
                                                                      -----------------------
                                                         2003                                               2002
                                     ---------------------------------------------      --------------------------------------------
                                       AirGate             iPCS          Combined          AirGate             iPCS         Combined
                                       -------             ----          --------          -------             ----         --------
                                                                                                          
Service Revenue                        $ 60,163         $ 21,501        $  81,664          $58,425         $ 28,929         $ 87,354
Roaming Revenue                          13,895*           5,514*          19,264           14,374*           7,781*          21,951
Equipment Revenue                         2,922*             814*           3,505            3,640            1,748            5,388
                                       --------         --------        ---------          -------         ---------        --------
Total                                  $ 76,980*        $ 27,829*       $ 104,433          $76,439*        $ 38,458*        $114,693

* Amounts are reflected prior to the elimination of intercompany transactions


We derive our revenue from the following sources:

          Service.  We  sell  wireless  personal  communications  services.  The
          various   types  of   service   revenue   associated   with   wireless
          communications  services include monthly  recurring access and feature
          charges and monthly  non-recurring  charges for local,  wireless  long
          distance and roaming  airtime usage in excess of the subscribed  usage
          plan.

          Roaming.  The Company  receives  roaming  revenue at a per-minute rate
          from  Sprint and other  Sprint PCS  network  partners  when Sprint PCS
          subscribers from outside of the Company's  territory use the Company's
          network,  which  accounted  for $17.1  million  or 89% of the  roaming
          revenue  recorded for the quarter  ended March 31,  2003.  The Company
          pays  the same  reciprocal  roaming  rate  when  subscribers  from our
          territories  use the  network  of  Sprint  or its  other  PCS  network
          partners.  The Company also receives  non-Sprint  roaming revenue when
          subscribers  of other  wireless  service  providers  who have  roaming
          agreements with Sprint and roam on the Company's network.

          Equipment.  We sell  wireless  personal  communications  handsets  and
          accessories  that are used by our  subscribers in connection  with our
          wireless  services.  Equipment  revenue  is  derived  from the sale of
          handsets and  accessories  from  Company  owned  stores,  net of sales
          incentives,  rebates  and an  allowance  for  returns.  The  Company's
          handset return policy allows  subscribers to return their handsets for
          a full refund  within 14 days of purchase.  When handsets are returned
          to the  Company,  the Company  may be able to reissue the  handsets to
          subscribers at little  additional  cost. When handsets are returned to
          Sprint for  refurbishing,  the Company  receives a credit from Sprint,
          which is  approximately  equal to the retail price of the  refurbished
          handset.

For AirGate, service revenue for the quarter ended March 31, 2003 increased over
the same period in the prior year.  The increase in service  revenue for AirGate
reflects  the higher  average  number of  subscribers  using its  network.  This
increase is partially  offset by an overall  reduction in revenue from customers
using minutes in excess of their  subscribed  usage plan. For iPCS, the decrease
reflects the fact that  subsequent  to February 23, 2003 the results of iPCS are
no longer consolidated with the results of AirGate, which is partially offset by
the higher revenues related to its increased subscriber base.

For both AirGate and iPCS,  roaming revenue for the quarter ended March 31, 2003
decreased over the same period in the prior year.  The decrease is  attributable
to the lower  reciprocal  roaming rate charged  among Sprint and its PCS network
partners,  partially offset by increased volume in inbound roaming traffic.  The
reciprocal roaming rate among Sprint and its PCS network partners, including the
Company,  has declined over time, from $0.20 per minute of use (prior to June 1,
2001 for  AirGate or  January  1, 2002 for iPCS),  to $0.10 per minute of use in
calendar year 2002. Sprint has reduced the reciprocal roaming rate to $0.058 per
minute of use in calendar year 2003. The Company believes that this reduction is
in violation of our agreements with Sprint.  For iPCS, the decrease reflects the
fact that  subsequent  to  February  23,  2003 the results of iPCS are no longer
consolidated with the results of AirGate.  For the quarter ended March 31, 2003,
roaming revenue from Sprint and its PCS network  partners was $17.1 million,  or
89% of the roaming  revenue  recorded (see above  table).  For the quarter ended
March 31,  2003,  roaming  revenue  from  Sprint  and its PCS  network  partners
attributable   to  AirGate  and  iPCS  was  $13.0   million  and  $4.1  million,
respectively.

For both  AirGate and iPCS,  equipment  revenue for the quarter  ended March 31,
2003  decreased  over the same  period  in the  prior  year.  This  decrease  is
primarily  due to the lower  number of gross  additions as compared to the prior
year for both companies.

Cost of Service and Roaming



                                                                   Quarter Ended March 31,
                                                                   -----------------------
                                                      2003                                              2002
                                   --------------------------------------------     ---------------------------------------------
                                     AirGate             iPCS         Combined          AirGate            iPCS         Combined
                                     -------             ----         --------          -------            ----         --------
                                                                                                      
Roaming expense                   $ 11,468*            $ 4,243*       $ 15,566         $ 12,996*        $ 7,084*        $ 19,876
Network operating costs             10,270               5,707          15,977           10,639         10,884            21,523
Bad debt expense                       (31)                754             723            6,045          1,925             7,970
Wireless handset upgrades              736                 741           1,477               --             --                --
Total cost of service and
  roaming                         $ 40,737*           $ 19,318*       $ 59,910         $ 46,668*       $ 29,872*        $ 76,336


*Amounts are reflected prior to the elimination of intercompany transactions

Cost of  service  and  roaming  principally  consists  of costs to  support  the
Company's subscriber base including:

*    roaming expense;

*    network operating costs (including salaries, cell site lease payments, fees
     related to the connection of the Company's  switches to the cell sites that
     they  support,  inter-connect  fees and other  expenses  related to network
     operations);

*    back office services provided by Sprint such as customer care,  billing and
     activation;  41 the 8% of collected service revenue representing the Sprint
     affiliation fee;

*    long distance expense relating to inbound roaming revenue and the Company's
     own  subscriber's  long distance usage and roaming expense when subscribers
     from the  Company's  territory  place  calls  on  Sprint's  or its  network
     partners' network;

*    bad debt related to estimated uncollectible accounts receivable; and

*    wireless handset subsidies on existing subscriber upgrades through national
     third-party retailers.

Roaming  expense  decreased for the quarter ended March 31, 2003 compared to the
same period in 2002 as a result of the decrease in the  reciprocal  roaming rate
charged  among  Sprint  and its  network  partners.  94% and 91% of the  cost of
roaming  was  attributable  to Sprint and its network  partners  for the quarter
ended  March  31,  2003 and  2002,  respectively,  prior to the  elimination  of
intercompany  transactions.  As discussed above, the per-minute rate the Company
pays Sprint when subscribers  from the Company's  territory roam onto the Sprint
network has decreased  over time  beginning June 1, 2001 for AirGate and January
1, 2002 for iPCS.  For iPCS the decrease also reflects the fact that  subsequent
to February 23, 2003,  the results of iPCS are no longer  consolidated  with the
results of AirGate.

Bad debt expense  decreased by $7.2 million  ($6.0  million for AirGate and $1.2
million  for iPCS) in the  quarter  ended March 31, 2003 as compared to the same
period in 2002.  This  decrease in bad debt  expense  for  AirGate is  primarily
attributable  to  improvements  in the credit quality and payment profile of our
subscriber base since we re-imposed deposits in early 2002 and increased them in
February 2003. This resulted in a significant improvement in accounts receivable
write-offs and corresponding  bad debt expense for the quarter.  For the quarter
ended March 31, 2003,  the decrease  also  reflects the fact that  subsequent to
February  23,  2003 the  results  of iPCS are no  longer  consolidated  with the
results of AirGate.

Cost of Equipment

We are currently  required to purchase handsets and accessories to resell to our
subscribers  for use in connection with our services.  To remain  competitive in
the marketplace, we must subsidize handset sales so that the cost of handsets is
higher  than the resale  price to the  subscriber.  Cost of  equipment  was $5.3
million for the quarter ended March 31, 2003,  and $10.7 million for the quarter
ended March 31,  2002,  a decrease  of $5.4  million.  This  decrease in cost of
equipment is primarily  attributable to the decrease in the number of subscriber
gross  additions.  For the  quarter  ended March 31,  2003,  the  decrease  also
reflects the fact that  subsequent  to February 23, 2003 the results of iPCS are
no longer  consolidated with the results of AirGate.  For the three months ended
March 31,  2003,  cost of  equipment  attributable  to AirGate and iPCS was $3.5
million and $1.8 million, respectively.

Selling and Marketing

Selling and marketing  expenses  include retail store costs such as salaries and
rent in addition to promotion,  advertising  and commission  costs,  and handset
subsidies on units sold by national third-party  retailers for which the Company
does not record revenue.  Under the management  agreements  with Sprint,  when a
national retailer sells a handset purchased from Sprint to a subscriber from the
Company's  territories,  the Company is obligated  to  reimburse  Sprint for the
handset subsidy and commissions that Sprint  originally  incurred.  The national
retailers sell Sprint wireless  services under the Sprint brands and trademarks.
The Company incurred selling and marketing  expenses of $15.7 million during the
quarter  ended March 31, 2003 as compared to $27.6  million in the quarter ended
March 31, 2002, a decrease of $11.9 million. The decrease reflects the effect of
reduced  gross  additions,   staff   reductions  and  store  closings,   reduced
advertising and promotion, and the fact that subsequent to February 23, 2003 the
results of iPCS are no longer consolidated with the results of AirGate.  For the
three months ended March 31, 2003, selling and marketing expense attributable to
AirGate and iPCS was $11.4 million and $4.3 million, respectively.

General and Administrative

For the  quarter  ended  March  31,  2003,  the  Company  incurred  general  and
administrative  expenses  of $9.3  million,  compared  to $6.9  million  for the
quarter  ended March 31,  2002,  an increase of $2.4  million.  For AirGate this
increase from $3.6 million to $5.7 million reflects  increased  relocation costs
and increased spending for outside consultants  providing services to AirGate to
identify cost saving  opportunities.  For iPCS, general and administrative costs
increased from $3.2 million to $3.6 million, primarily related to losses on sale
of assets for store  closures  during the quarter ended March 31, 2003 and costs
related to its bankruptcy  filing,  partially offset by the fact that subsequent
to February  23, 2003 the  results of iPCS are no longer  consolidated  with the
results of AirGate  and the  termination  of certain  management  services  from
AirGate.  Approximately 78 employees were performing corporate support functions
at March 31, 2003  compared to 88 employees  at March 31, 2002.  For the quarter
ended March 31, 2003, general and administrative expense attributable to AirGate
and iPCS was $5.7 million and $3.6 million, respectively.

Non-Cash Stock Compensation

Non-cash stock compensation expense was $0.2 million for the quarter ended March
31,  2003,  and $0.2 million for the quarter  ended March 31, 2002.  The Company
applies the  provisions  of APB Opinion No. 25  "Accounting  for Stock Issued to
Employees" in accounting for its stock option plans. Unearned stock compensation
is recorded for the  difference  between the exercise  price and the fair market
value of the Company's  common stock and  restricted  stock at the date of grant
and is recognized as non-cash stock compensation expense in the period for which
the related services are rendered.

Depreciation

We capitalize  network  development  costs incurred to ready our network for use
and costs to build-out our retail stores and office space. Depreciation of these
costs  begins when the  equipment is ready for its intended use and is amortized
over the  estimated  useful life of the asset.  For the quarter  ended March 31,
2003,  depreciation  decreased to $16.8 million as compared to $17.1 million for
the quarter  ended March 31, 2002, a decrease of $0.3  million.  The decrease in
depreciation  expense  relates  primarily to impairment  charges taken in fiscal
year 2002 with  respect to iPCS.  For iPCS the decrease  also  reflects the fact
that  subsequent  to  February  23,  2003  the  results  of iPCS  are no  longer
consolidated with the results of AirGate, partially offset by additional network
assets  placed in  service  in 2002.  For the  quarter  ended  March  31,  2003,
depreciation  attributable  to  AirGate  and iPCS  was  $11.7  million  and $5.1
million, respectively.

The Company incurred  capital  expenditures of $1.1 million in the quarter ended
March 31,  2003,  which  included  approximately  $0.04  million of  capitalized
interest,  compared to capital  expenditures  of $41.4  million and  capitalized
interest  of  $2.5  million  in  the  quarter  ended  March  31,  2002.  Capital
expenditures  incurred by AirGate and iPCS were $1.0  million and $0.1  million,
respectively, for the quarter ended March 31, 2003.

Amortization of Intangible Assets

Amortization of intangible  assets relates to the amounts recorded from the iPCS
acquisition for the acquired subscriber base,  non-competition  agreements,  and
the right to provide service under iPCS' Sprint agreements. Amortization for the
quarter ended March 31, 2003 and 2002 was  approximately  $2.6 million and $13.6
million, respectively. The Company recorded an impairment charge of $312 million
in fiscal year 2002 to write-down  intangible assets in accordance with SFAS No.
144 and 142. Subsequent to February 23, 2003 the intangible assets attributed to
the AirGate  purchase of iPCS are no longer  consolidated  with the  accounts of
AirGate  and  amortization  expense of iPCS'  intangible  assets  subsequent  to
February 23, 2003 is not included in the results of AirGate.

Goodwill Impairment

The wireless telecommunications industry has experienced significant declines in
market capitalization.  These significant declines in market capitalization were
the result of  concerns  surrounding  anticipated  weakness  in future  customer
growth,  anticipated  future lower  average  revenue per customer and  liquidity
concerns.   As  a  result  of  this  industry  trend,  the  Company  experienced
significant  declines in its market  capitalization.  Recent  wireless  industry
acquisitions  subsequent to the  acquisition  of iPCS were valued  substantially
lower on a price per  population  and price per customer  basis.  As a result of
these recent  transactions and industry trends, the Company believed it was more
likely than not that the value of iPCS and the carrying  value of the associated
goodwill  had been  reduced.  Accordingly,  the  Company  engaged  a  nationally
recognized  valuation  expert to perform a fair value assessment of the recently
acquired  iPCS  reporting  unit of the  Company.  The  valuation  expert  used a
combination of the market value  approach and the discounted  cash flow approach
for  determining the fair value of iPCS. The market value approach used a sample
of recent wireless service  provider  transactions on a price per population and
price per customer  basis.  The  discounted  cash flow method used the projected
discounted  cash flows and residual value to be generated by the assets of iPCS.
From this valuation,  it was determined the fair value of iPCS was less than its
recorded  carrying  value at March 31, 2002.  The valuation  expert  performed a
purchase  price  allocation  based on this implied fair value at March 31, 2002.
Based on the purchase  price  allocation  of the implied fair value at March 31,
2002, the Company recorded a goodwill impairment of $261.2 million.

Interest Expense

For the  quarter  ended March 31,  2003,  interest  expense  was $15.8  million,
compared to $14.6  million for the quarter  ended March 31, 2002, an increase of
$1.2 million.  The increase is primarily  attributable to increased debt related
to  accreted  interest  on the  AirGate  notes and the iPCS notes and  increased
borrowings  under the AirGate  and iPCS  credit  facilities.  The  increase  was
partially  offset by the fact that subsequent to February 23, 2003 iPCS interest
expense is no longer consolidated with AirGate, lower commitment fees on undrawn
balances of the credit  facilities,  and a lower  interest rate on variable rate
borrowings under the credit facilities. AirGate had borrowings of $379.2 million
as of March 31,  2003,  compared to $328.4  million at March 31,  2002.  For the
quarter ended March 31, 2003, interest expense  attributable to AirGate and iPCS
was $10.0 million and $5.8 million, respectively.

Income Tax Benefit

No income tax benefit was realized for the quarter ended March 31, 2003.  Income
tax  benefits of $11.4  million were  realized  for the quarter  ended March 31,
2002.  Income tax  benefits  will be  realized  in the future only to the extent
management  believes  recoverability  of deferred tax assets is more likely than
not.

Net Loss

For the quarter ended March 31, 2003, the net loss was $21.0 million as compared
to a net loss of $301.9  million for the quarter  ended March 31, 2002.  For the
quarter ended March 31, 2003, net loss attributable to AirGate and iPCS was $9.8
million  and $11.2  million,  respectively.  The  quarter  ended  March 31, 2002
included $261.2 million related to goodwill impairment.  The net loss of AirGate
included  $3.1  million of expenses for purchase  accounting  basis  adjustments
related to its investment in iPCS.

For the six months  ended March 31, 2003  compared to the six months ended March
31, 2002:

The table  below sets forth key  operating  metrics  for the Company for the six
months ended March 31, 2003 and 2002.



                                                                 Six Months Ended March 31,
                                                                 --------------------------
                                                   2003                                             2002
                                 ------------------------------------------    ------------------------------------------------
                                    AirGate            iPCS       Combined          AirGate           iPCS          Combined
                                    -------            ----       --------          -------           ----          --------
                                                                                                   
Subscriber Gross Additions           98,624          59,403        158,027          151,416         49,826           201,242
Subscriber Net Additions             19,425          14,199         33,624           90,876         30,846           121,722
Total Subscribers                   358,564         229,893        588,457          325,899        180,468           506,367
ARPU                                 $57.17          $53.40         $56.10           $61.80         $56.39            $60.47
Churn (with subscriber reserve)        3.53%           4.03%          3.72%            3.18%          2.50%             3.00%
Churn (without subscriber reserve)     3.89%           4.56%          4.15%            4.06%          3.48%             3.90%
CPGA                                   $338            $359           $344             $334           $371              $343
Capital Expenditures (cash)      $6,654,000      $8,469,000    $15,123,000      $21,039,000    $27,484,000       $48,523,000
EBITDA                          $17,826,000     ($7,255,000)   $10,571,000    ($275,161,000)  ($13,958,000)    ($289,119,000)





The  reconciliation  of  EBITDA  to net cash  provided  by (used  in)  operating
activities, as determined in accordance with GAAP, is as follows (dollar amounts
in thousands):



                                                                     Six Months Ended March 31,
                                                                     --------------------------
                                                        2003                                        2002
                                       ---------------------------------------    ------------------------------------------
                                         AirGate          iPCS       Combined          AirGate           iPCS       Combined
                                                                                                
  operating activities                    $15,627     $ (9,086)        $6,541       $ (18,121)      $($19,754)    $ (37,875)
    Change in operating assets and
       liabilites                             469          541          1,010          13,839           9,856        23,695
     Interest expense                      20,005       15,094         35,099          16,979           7,952        24,931
     Accretion of interest                (15,618)     (11,589)       (27,207)        (13,788)         (8,688)      (22,476)
     Goodwill impairment                       --           --             --        (261,212)             --      (261,212)
     Interest and other income                (65)          (2)           (67)           (132)            (84)         (216)
     Provision for doubtful accounts       (2,155)      (1,693)        (3,848)        (11,659)         (3,044)      (14,703)
     Other expense                           (437)        (520)          (957)         (1,067)           (196)       (1,263)
EBITDA                                    $17,826      $(7,255)       $10,571      $ (275,161)      $ (13,958)   $ (289,119)



The  reconciliation  of  EBITDA  to our  reported  net loss,  as  determined  in
accordance with GAAP, is as follows (dollar amounts in thousands):




                                                                    Six Months Ended March 31,
                                                                    --------------------------
                                                        2003                                          2002
                                        --------------------------------------    ---------------------------------------------
                                         AirGate          iPCS       Combined           AirGate           iPCS         Combined
                                         -------          ----       --------           -------           ----         --------
                                                                                                  
Net Loss                               $ (31,712)    $ (36,984)      $(68,696)      $ (298,882)     $ (32,672)      $ (331,554)
     Depreciation and amortization        29,558        14,677         44,235           35,636         10,845           46,481
     Interest income                         (25)          (42)           (67)            (133)           (83)            (216)
     Interest expense                     20,005        15,094         35,099           16,979          7,952           24,931
     Income tax benefit                       --            --            --           (28,761)            --          (28,761)
                                        --------       --------      ---------       -----------     ---------     ------------
     EBITDA                             $ 17,826       $(7,255)      $ 10,571       $ (275,161)     $ (13,958)      $ (289,119)
                                        ========      =========      =========      ============    ==========      ===========



The reconciliation of ARPU to service revenue,  as determined in accordance with
GAAP, is as follows (dollar amounts in thousands):



                                                                       Six Months Ended March 31,
                                                                       --------------------------
                                                           2003                                          2002
                                          ---------------------------------------     -------------------------------------------
                                          AirGate         iPCS         Combined          AirGate          iPCS          Combined
                                          -------         ----         --------          -------          ----          --------
                                                                                                        
Average Revenue per User (ARPU):
Service revenue                         $120,097        $57,896        $177,993          $105,665        $37,538         $143,203
Average subscribers                      350,102        222,793         528,826           284,965        165,045          394,693
  ARPU                                    $57.17         $53.40          $56.10            $61.80         $56.39           $60.47


Notes: For 2003, iPCS average subscribers  represents the period between October
1, 2002 and February 23, 2003. For 2003, average subscribers for combined entity
is a weighted average. For 2002, iPCS average subscribers  represents the period
between December 1, 2002 and March 31, 2002. For 2002,  average  subscribers for
combined entity is a weighted average.


The  reconciliation  of CPGA to selling and  marketing  expense as determined in
accordance with GAAP, is calculated as follows (dollar amounts in thousands):



                                                                        Six Months Ended March 31,
                                                                        --------------------------
                                                           2003                                          2002
                                          ---------------------------------------     -------------------------------------------
                                          AirGate         iPCS         Combined          AirGate          iPCS          Combined
                                          -------         ----         --------          -------          ----          --------
                                                                                                       
Cost per Gross Add (CPGA):
Sales and marketing expense              $28,159        $16,417         $44,576          $43,288        $14,149          $57,437
Plus: Activation expense                    $414           $194            $608             $923           $380           $1,303
Plus: Cost of equipment                  $10,533*        $7,130*        $17,663          $13,840         $6,424          $20,264
Less: Equipment revenue                  $(5,943)*      $(2,575)*       $(8,518)         $(7,453)       $(2,480)         $(9,933)
     Total acquisition costs             $33,163        $21,166         $54,329          $50,598        $18,473          $69,071
Gross Additions                           98,624         59,403         158,027          151,416         49,826          201,242
     CPGA                                   $336           $356            $344             $334           $371             $343


Subscriber Net Additions

For AirGate and iPCS,  subscriber  net  additions  decreased  for the six months
ended March 31, 2003,  compared to the same period in 2002.  This decline is due
to the decrease in subscriber gross additions, re-institution of and increase in
the deposit for  sub-prime  credit  quality  customers,  actions taken to reduce
acquisition  costs and the increased  number of subscribers who churn. For iPCS,
the decrease  also  reflects the fact that  subsequent  to February 23, 2003 the
results of iPCS are no longer consolidated with the results of AirGate. Reported
net  additions  during  the six  months  ended  March 31,  2003 were  positively
impacted by the Company's  elimination of its subscriber reserve. The net impact
of this  change for the six months  ending  March 31, 2003 is an increase in net
additions of 3,717 and 2,251 for AirGate and iPCS, respectively.

Subscriber Gross Additions

For AirGate, subscriber gross additions decreased for the six months ended March
31,  2003  compared  to the same  period  in 2002.  This  decline  is due to the
re-institution  of and  increase  in the deposit for  sub-prime  credit  quality
customers and actions taken to reduce  acquisition  costs. For iPCS,  subscriber
gross  additions  increased  for the six months ended March 31, 2003 compared to
the same  period in 2002.  The  increase  reflects  the effect of not  including
October and November 2001 iPCS results (iPCS  acquisition  date was November 30,
2001),  partially  offset by the fact that  subsequent  to February 23, 2003 the
results of iPCS are no longer consolidated with the results of AirGate.


EBITDA

EBITDA for the six months ended March 31, 2003 increased from the same period in
2002. This increase is a result of an overall decrease in spending, particularly
in cost of services and selling and marketing.  EBITDA for AirGate was favorably
impacted by $4.9 million in credits provided by Sprint.

Average Revenue Per User

The  decrease in ARPU for the  Company  for the six months  ended March 31, 2003
compared to the same period in 2002 is primarily  the result of the  acquisition
of iPCS and an overall  reduction in revenue  from  customers  using  minutes in
excess of their subscriber usage plans. The decrease also reflects the cessation
of recognizing  terminating  long-distance access revenue. Until March 31, 2002,
the Company recorded terminating  long-distance access revenues billed by Sprint
PCS to long distance carriers.

Churn

Churn  increased  for the six months  ended March 31, 2003  compared to the same
period in 2002 as a result  of an  improved  customer  base  resulting  from the
re-institution of the deposit for sub-prime credit quality customers.

Cost Per Gross Addition

For AirGate,  CPGA increased for the six months ended March 31, 2003 compared to
the  same  period  in  2002.  The  increase  is due to  fewer  subscriber  gross
additions,  partially  offset by  reduced  acquisition  costs.  For  iPCS,  CPGA
decreased  for the six months ended March 31, 2003,  compared to the same period
in 2002 due to  leveraging  fixed  acquisition  costs over and a large number of
subscriber gross additions.


Revenues



                                                                 Six Months Ended March 31,
                                                                 --------------------------
                                                     2003                                                2002
                                ------------------------------------------------     ---------------------------------------------
                                  AirGate            iPCS            Combined           AirGate           iPCS          Combined
                                  -------            ----            --------           -------           ----          --------
                                                                                                       
Service Revenue                 $ 120,097          $57,896           $ 177,993        $ 105,665          $37,538       $ 143,203
Roaming Revenue                    32,805*          18,893*             51,256           30,992*          12,466*         43,254
Equipment Revenue                   5,943*           2,575*              8,286            7,453            2,480           9,933
                                ----------         --------          ---------        ----------         --------      ---------
Total                           $ 158,845*         $79,364*          $ 237,535        $ 144,110*         $52,484*      $ 196,390


*Amounts are reflected prior to the elimination of intercompany transactions.


For AirGate and iPCS,  service  revenue for the six months  ended March 31, 2003
increased  over the same  period in the prior  year.  The  increase  in  service
revenue reflects the  substantially  higher average number of subscribers  using
the Company's network. This increase is partially offset by an overall reduction
in revenue from  customers  using  minutes in excess of their  subscribed  usage
plans.  For  iPCS,  the  increase  is also  partially  offset  by the fact  that
subsequent  to February 23, 2003 the results of iPCS are no longer  consolidated
with the results of AirGate.

Roaming  revenue for the six months ended March 31, 2003 increased over the same
period in the  prior  year.  The  increase  is  attributable  to  higher  volume
partially offset by the lower  reciprocal  roaming rate charged among Sprint and
its PCS  network  partners.  For the six months  ended March 31,  2003,  roaming
revenue from Sprint and its PCS network partners was $46 million,  or 89% of the
roaming  revenue  recorded.  For the six months  ended March 31,  2003,  roaming
revenue  from Sprint and its PCS network  partners  attributable  to AirGate and
iPCS was $31.0 million and $15.0 million or 94% and 79%, respectively.

For AirGate, equipment revenue for the six months ended March 31, 2003 decreased
over the same period in the prior year.  This  decrease is primarily  due to the
lower  number  of gross  additions  as  compared  to the prior  year.  For iPCS,
equipment  revenue for the six months  ended March 31, 2003  increased  over the
same period in the prior year.  This  increase  is  primarily  due to the higher
number of gross additions as compared to the prior year.

Cost of Service and Roaming




                                                                         Six Months Ended March 31,
                                                                         --------------------------
                                                             2003                                          2002
                                           -----------------------------------------     -----------------------------------------
                                            AirGate           iPCS        Combined        AirGate          iPCS        Combined
                                            -------           ----        --------        -------          ----        --------
                                                                                                        
Roaming expense                            $27,136*        $13,673*        $40,366       $27,410*       $10,982*        $38,188
Network operating costs                     21,821          16,170          37,991        21,644         14,059          35,703
Bad debt expense                             2,154           1,694           3,848        11,658          3,191          14,849
Wireless handset upgrades                    2,319           1,788           4,107            --             --              --
Total cost of service and roaming          $92,168*       $ 56,191*      $ 147,917       $92,906*       $41,391*      $ 134,093



*Amounts are reflected prior to the elimination of intercompany transactions.

AirGate  roaming  expense was relatively flat for the six months ended March 31,
2003  compared to the same  period in 2002  primarily  as a result of  increased
roaming usage by our  subscribers,  which was largely  offset by the decrease in
the reciprocal  roaming rate charged among Sprint and its network partners.  For
iPCS,  roaming expense increased by $2.7 million for the six month period ending
March 31, 2003 compared to the same period in 2002. This increase is primarily a
result of not  including  October and November 2001 results in the prior period,
partially  offset by the  decrease in the  reciprocal  roaming rate and the fact
that  subsequent  to  February  23,  2003  the  results  of iPCS  are no  longer
consolidated with the results of AirGate. 93% and 91% of the cost of roaming was
attributable  to Sprint and its network  partners for the six months ended March
31,  2003 and  2002,  respectively,  prior to the  elimination  of  intercompany
transactions.

Bad debt expense  decreased by $11.1  million ($9.5 million for AirGate and $1.6
million for iPCS) in the six months ended March 31, 2003 as compared to the same
period in 2002. This decrease in bad debt expense is  attributable  primarily to
improvements  in the credit quality and payment  profile of our subscriber  base
since we re-imposed  deposits in early 2002 and increased them in February 2003.
This resulted in a significant improvement in accounts receivable write-offs and
corresponding  bad debt  expense for the six months  ended March 31,  2003.  For
iPCS,  the decrease also reflects the fact that  subsequent to February 23, 2003
the results of iPCS are no longer consolidated with the results of AirGate.

Cost of Equipment

Cost of  equipment  was $17.4  million for the six months  ended March 31, 2003,
compared to $20.3 million for the six months ended March 31, 2002, a decrease of
$2.9 million.  This decrease in cost of equipment is  attributable  primarily to
the decrease in the number of  subscriber  gross  additions.  For the six months
ended March 31, 2003, for iPCS the decrease reflects the fact that subsequent to
February  23,  2003 the  results  of iPCS are no  longer  consolidated  with the
results of AirGate.  For the six months ended March 31, 2003,  cost of equipment
attributable   to  AirGate  and  iPCS  was  $10.3   million  and  $7.1  million,
respectively.

Selling and Marketing

The Company incurred selling and marketing  expenses of $44.6 million during the
six months  ended March 31,  2003,  compared to $57.4  million in the six months
ended March 31, 2002,  a decrease of $12.8  million.  The decrease  reflects the
effect of reduced gross additions,  staff reductions and store closings, reduced
advertising  and promotions  during the six months ended March 31, 2003, and for
iPCS,  the decrease also reflects the fact that  subsequent to February 23, 2003
the results of iPCS are no longer consolidated with the results of AirGate.  For
the six months ended March 31, 2003, selling and marketing expense  attributable
to AirGate and iPCS was $28.2 million and $16.4 million, respectively.

General and Administrative

For the six months  ended  March 31,  2003,  the  Company  incurred  general and
administrative expenses of $16.7 million, compared to $12.1 million for the same
period  ended  March 31,  2002,  an increase  of $4.6  million.  For AirGate the
increase  from $7.6  million  for the six months  ended  March 31,  2002 to $9.8
million in the same period on 2003 reflects  increased  spending for  relocation
costs and spending for outside  consultants  providing services to AirGate as it
relates  to  identifying  cost  saving  opportunities.  For  iPCS,  general  and
administrative  increased  from $4.5  million for the six months ended March 31,
2002 to $6.9 million for the same period in 2003.  This increase  reflects costs
incurred  related  to the  bankruptcy  filing  and the  effect of not  including
October and  November  2001 offset by the fact that  subsequent  to February 23,
2003 the results of iPCS are no longer  consolidated with the results of AirGate
and termination of certain management services from AirGate.  For the six months
ended March 31, 2003, general and administrative expense attributable to AirGate
and iPCS was $9.8 million and $6.9 million, respectively.

Non-Cash Stock Compensation

Non-cash  stock  compensation  expense was $0.4 million for the six months ended
March 31, 2003, and $0.4 million for the same period ended March 31, 2002.

Depreciation

For the six  months  ended  March  31,  2003,  depreciation  increased  to $37.4
million,  compared to $28.4  million for the six months ended March 31, 2002, an
increase of $9.0 million. The increase in depreciation expense relates primarily
to additional  network  assets placed in service in fiscal year 2002,  partially
offset by  decreased  property  values as a result of the  impairment  charge in
fiscal  year  2002.  For the six  months  ended  March  31,  2003,  depreciation
attributable   to  AirGate  and  iPCS  was  $23.2  million  and  $14.2  million,
respectively.

The Company  incurred  capital  expenditures  of $15.1 million in the six months
ended March 31, 2003, which included  approximately  $0.4 million of capitalized
interest,  compared to capital  expenditures  of $48.5  million and  capitalized
interest  of $3.8  million  in the six  months  ended  March 31,  2002.  Capital
expenditures  incurred by AirGate and iPCS were $6.6  million and $8.5  million,
respectively, for the six months ended March 31, 2003.

Amortization of Intangible Assets

Amortization  of  intangible  assets for the six months ended March 31, 2003 and
2002 was approximately $6.9 million and $18.1 million, respectively. The Company
recorded an impairment  charge of $312 million in fiscal year 2002 to write-down
intangible  assets  in  accordance  with  SFAS No.  144 and 142.  Subsequent  to
February  23,  2003 the  intangible  assets  attributed  to iPCS  are no  longer
consolidated with the accounts of AirGate and as a result  amortization  expense
of  intangible  assets  subsequent  to February  23, 2003 is not included in the
results of AirGate.

Goodwill Impairment

As previously  discussed,  the Company recorded a goodwill  impairment of $261.2
million at March 31, 2002.

Interest Expense

For the six months ended March 31,  2003,  interest  expense was $35.1  million,
compared to $24.9  million for the six months ended March 31, 2002,  an increase
of $10.2  million.  The increase is  primarily  attributable  to increased  debt
related  to  accreted  interest  on the  AirGate  notes  and the iPCS  notes and
increased borrowings under the AirGate and iPCS credit facilities. This increase
is  partially  offset  by the fact  that  iPCS  interest  expense  is no  longer
consolidated with AirGate subsequent to February 23, 2003, lower commitment fees
on undrawn  balances  of the credit  facilities,  and a lower  interest  rate on
variable rate borrowings under the credit  facilities.  For the six months ended
March 31,  2003,  interest  expense  attributable  to AirGate and iPCS was $20.0
million and $15.1 million, respectively.

Income Tax Benefit

No income tax  benefit was  realized  for the six months  ended March 31,  2003.
Income tax  benefits of $28.8  million  were  realized  for the six months ended
March 31, 2002.

Net Loss

For the six  months  ended  March  31,  2003,  the net loss was  $68.7  million,
compared to a net loss of $331.6  million  for the same period in 2002.  For the
six months ended March 31, 2003, net loss  attributable  to AirGate and iPCS was
$31.7 million and $37.0  million,  respectively.  The six months ended March 31,
2002 included  $261.2 million  related to goodwill  impairment.  The net loss of
AirGate  included  $5.6  million  of  expenses  for  purchase  accounting  basis
adjustments related to the investment in iPCS.

LIQUIDITY AND CAPITAL RESOURCES

As of  March  31,  2003,  the  Company  had  $20.9  million  in  cash  and  cash
equivalents, compared to $32.5 million in cash and cash equivalents at September
30, 2002. The Company's  working  capital  balance was $4.1 million at March 31,
2003,  compared to a working  capital deficit of $364.4 million at September 30,
2002. The majority of this improvement in the Company's working capital position
was due to the deconsolidation of iPCS' working capital components subsequent to
February 23, 2003.

Net Cash Provided By (Used In) Operating Activities

The $6.5  million of cash  provided by  operating  activities  in the six months
ended  March 31,  2003 was the result of the  Company's  $68.7  million net loss
offset by non-cash items including depreciation, amortization of note discounts,
financing costs,  amortization of intangibles,  provision for doubtful accounts,
and non-cash stock  compensation  totaling  $76.2 million.  These non-cash items
were partially  offset by net cash working capital changes of $1.0 million.  The
net working  capital  changes  were driven  primarily  by an increase in prepaid
expenses along with decreases in payables due to Sprint,  trade accounts payable
and accrued expenses.  The $37.9 million of cash used in operating activities in
the six  months  ended  March 31,  2002 was the result of the  Company's  $331.6
million net loss offset by $317.5 million of goodwill impairment,  depreciation,
amortization of note discounts,  financing  costs,  amortization of intangibles,
deferred tax benefit,  provision for doubtful accounts and non-cash stock option
compensation,  that was  partially  offset by negative net cash working  capital
changes of $23.8 million.

Net Cash Used in Investing Activities

The $25.2  million of cash used in  investing  activities  during the six months
ended March 31, 2003  represents  $15.1  million for  purchases  of property and
equipment. Purchases of property and equipment during the six months ended March
31,  2003  related to  investments  for the  expansion  of switch  capacity  and
expansion  of  service   coverage.   In  addition,   $10  million  of  cash  was
deconsolidated  subsequent to February 23, 2003 relating to the iPCS bankruptcy.
For the six  months  ended  March  31,  2002,  cash  outlays  of  $30.1  million
represented  cash  payments of $48.5 million made for purchases of equipment and
$6.0 million of cash acquisition  costs related to the merger with iPCS,  offset
by $24.4 million of cash acquired from iPCS.  For the six months ended March 31,
2003,  cash used in investing  activities  attributable  to AirGate and iPCS was
$6.7 million and $18.5 million, respectively.

Net Cash Provided by Financing Activities

The $7.0 million in cash provided by financing  activities during the six months
ended March 31, 2003,  consisted of $8.0 million in borrowings under the AirGate
credit  facility offset by $1.0 million for principal  payments  associated with
the AirGate  credit  facility.  The $79.4  million of cash provided by financing
activities  in the six months ended March 31, 2002  consisted  of $48.2  million
borrowed  under the AirGate  credit  facility and $30.0  million  under the iPCS
senior credit facility,  and $0.7 million of proceeds  received from exercise of
options and warrants and $0.6 million received from stock issued to the employee
stock  purchase  plan. For the six months ended March 31, 2003, the $7.0 million
in cash provided by financing activities was attributable solely to AirGate.

Liquidity

Due to the factors  described in the Company's  Annual Report on Form 10-K/A for
the  year  ended  September  30,  2002,  management  has  made  changes  to  the
assumptions underlying the long-range business plans for AirGate and iPCS. These
changes included fewer new subscribers,  lower ARPU,  higher  subscriber  churn,
increased  service and pass through costs from Sprint in the near-term and lower
roaming margins from Sprint.

On February 23, 2003 iPCS, Inc. and its  subsidiaries,  iPCS Wireless,  Inc. and
iPCS  Equipment,  Inc.,  filed a Chapter 11  bankruptcy  petition  in the United
States  Bankruptcy Court for the Northern District of Georgia for the purpose of
effecting  a  court-administered  reorganization.  Immediately  prior  to  iPCS'
bankruptcy filing, the lenders under the iPCS credit facility  accelerated iPCS'
payment obligations as a result of existing defaults under that facility.

While AirGate has also experienced a deterioration in its liquidity,  it appears
that it is in a better  position to address  the  deterioration  in  anticipated
operating  results.  It  has a  larger  subscriber  base  than  iPCS  and,  as a
stand-alone operation, AirGate's business is more mature. Although no assurances
can be made, based upon its current business plan, which continues to be revised
and  evaluated in light of evolving  circumstances,  we expect that AirGate will
have  sufficient  funds from  operations and amounts  available under its credit
facility to satisfy its working capital  requirements,  capital expenditures and
other liquidity requirements through at least March 31, 2004.

AirGate Capital Resources

At March 31, 2003, AirGate had $20.9 million of cash and cash equivalents. As of
March 31, 2003, $9.0 million remained  available for borrowing under the AirGate
credit facility. The Company's obligations under the AirGate credit facility are
secured  by all of  AirGate's  assets,  but  not  the  assets  of  iPCS  and its
subsidiaries.

Future Trends That May Affect Operating Results, Liquidity and Capital Resources

Our business plan and estimated future operating  results are based on estimates
of key operating metrics, including subscriber growth, subscriber churn, capital
expenditures,   ARPU,   losses  on  sales  of  handsets  and  other   subscriber
acquisitions  costs,  and other  operating  costs.  The unsettled  nature of the
wireless market,  the current economic  slowdown,  increased  competition in the
wireless  telecommunications  industry,  the problems in our  relationship  with
Sprint, new service offerings of increasingly large bundles of minutes of use at
lower  prices by some major  carriers,  and other  issues  facing  the  wireless
telecommunications  industry in general have created a level of uncertainty that
may adversely affect our ability to predict key operating metrics.

Certain  other  factors that may affect our  operating  results,  liquidity  and
capital resources include the following:

AirGate has limited  funding  options  and the ability to draw  remaining  funds
under the AirGate credit facility may be terminated.

AirGate had only $9.0  million  remaining  available  under the  AirGate  credit
facility as of March 31, 2003.  AirGate  currently has no additional  sources of
working  capital other than cash on hand and operating  cash flow. If our actual
revenues are less than we expect or operating or capital  costs are more than we
expect,  our financial  condition  and  liquidity  may be  materially  adversely
affected.  In such event,  there is substantial  risk that the Company could not
access the capital or credit markets for additional capital.

AirGate's  ability to borrow  funds under the  AirGate  credit  facility  may be
terminated  and its payment  obligations  may be  accelerated if it is unable to
maintain or comply with the financial and operating  covenants  contained in the
AirGate  credit  facility.   The  AirGate  credit  facility  contains  covenants
specifying  the  maintenance  of  certain  financial  ratios,  reaching  defined
subscriber  growth  and  network  covered  population  goals,   minimum  service
revenues, maximum capital expenditures,  and the maintenance of a ratio of total
and senior debt to annualized EBITDA, as defined in the credit facility ("Credit
Facility  EBITDA").  The covenant related to debt to annualized  Credit Facility
EBITDA requires that for the six months ending March 31, 2004, AirGate must have
Credit  Facility  EBITDA  of at  least  $20.6  million  (based  upon  borrowings
outstanding  as of  March  31,  2003)  and  $22.0  million  (assuming  remaining
available  funds are drawn by September  30,  2003).  The  definition  of Credit
Facility EBITDA is not the same as EBITDA used by the Company in this report.

If the Company is unable to operate the AirGate  business  within the  covenants
specified in the AirGate credit facility,  AirGate's  ability to make borrowings
required to operate the AirGate  business  could be restricted or terminated and
its payment obligations may be accelerated.  Such a restriction,  termination or
acceleration  would have a material  adverse  affect on AirGate's  liquidity and
capital  resources.  There  can  be  no  assurance  that  AirGate  could  obtain
amendments  to such  covenants if  necessary.  The Company  believes  that it is
currently  in  compliance  in  all-material  respects  with  all  financial  and
operational covenants relating to the AirGate credit facility.

Risks Related to Sprint.

Sprint has sought to collect charges that were  unanticipated.  Further,  Sprint
continues to seek to increase  service fees charged to its network  partners and
has imposed other requirements that adversely effect our financial  performance.
Increased  fees and charges from Sprint and  unanticipated  fees and charges can
adversely affect our operating results, liquidity and capital resources. We have
disputed all of the approximately $4.7 million of amounts Sprint has asserted we
owe.  Additionally,  although we have adequately  reserved for disputed  amounts
with  Sprint,  if we lose all of these  disputes,  payment of such  amounts  can
adversely affect our operating results, liquidity and capital resources.

Variable interest rates may increase substantially.

At March 31, 2003,  the Company had borrowed  $143.5  million  under the AirGate
credit  facility.  The rate of  interest  on the credit  facility  is based on a
margin  above  either the  alternate  bank rate (the prime  lending  rate in the
United States) or the London Interbank Offer Rate (LIBOR). For the quarter ended
March  31,  2003,  the  weighted  average  interest  rate  under  variable  rate
borrowings  was 5.37%  under the AirGate  credit  facility.  If  interest  rates
increase,  the  Company  may not  have  the  ability  to  service  the  interest
requirements on the AirGate credit facility. Further, if AirGate were to default
in its payments under its credit  facility,  its rate of interest would increase
by 2.5% over the alternate bank rate.

AirGate operates with little working capital because of amounts owed to Sprint.

Each month  AirGate  pays Sprint  expenses  described  in greater  detail  under
"Related  Party  Transactions  and  Transactions  between  AirGate  and iPCS." A
reduction  in the amounts the Company owes Sprint may result in a greater use of
cash for working capital purposes than the business plans currently  project.  A
reduction in such amounts may reduce cash  available to the Company and decrease
the amount of cash  available  for working  capital  purposes  than the business
plans currently  project.  Sprint has notified us that it intends to set-off all
undisputed amounts when due beginning May 14, 2003, which reflects a change from
the current  policy not to set-off  unpaid,  undisputed  amounts for at least 30
days after the invoice date.

Effect of iPCS Bankruptcy.

As an unrestricted subsidiary,  iPCS is a separate corporate entity from AirGate
with its own  independent  financing  sources,  debt  obligations and sources of
revenue. Furthermore, iPCS lenders, noteholders and creditors do not have a lien
or encumbrance on assets of AirGate, and AirGate cannot provide capital or other
financial support to iPCS. The Company believes AirGate operations will continue
independent of the outcome of the iPCS  bankruptcy.  However,  it is likely that
AirGate's  ownership interest in iPCS will have no value after the restructuring
is complete. On April 22, 2003, the trustee for the AirGate notes gave notice to
the AirGate noteholders of the iPCS bankruptcy filing and that in the opinion of
the  Company  and its outside  counsel,  such filing is not a default  under the
AirGate  notes.  If  the  Company  were  determined  by  a  court  of  competent
jurisdiction  to be in  default  under the  AirGate  notes  and the  notes  were
accelerated, the Company would have insufficient funds to pay the AirGate notes.

Other factors.

Other  factors  which could  adversely  affect  AirGate's  liquidity and capital
resources are  described in this report as Item 5, Risk  Factors,  including the
following:

*    our revenues may be less than we anticipate;

*    our costs may be higher than we anticipate;

*    ARPU may continue to decline;

*    we may continue to experience a high rate of subscriber turnover;

*    our efforts to reduce costs may not succeed or may have adverse  affects on
     our business; and

*    our  provision  for  doubtful  accounts  may  not be  sufficient  to  cover
     uncollectible accounts.

Contractual Obligations

The Company is obligated to make future payments under various  contracts it has
entered into,  including  amounts pursuant to the AirGate credit  facility,  the
AirGate notes, capital leases and non-cancelable  operating lease agreements for
office space, cell sites, vehicles and office equipment. Future expected minimum
contractual  cash  obligations  for the next five years and in the  aggregate at
March 31, 2003 are as follows (dollar amounts in thousands):




                                                                      Payments Due By Period
                                                                     Year Ending September 30,


        Contractual Obligation               Total       2003         2004       2005       2006       2007     Thereafter
        ----------------------               -----       ----         ----       ----       ----       ----     ----------
                                                                                               
AirGate credit facility (1)                $ 143,488    $ 1,012      $16,763    $22,350    $28,420   $ 37,515       $37,428
AirGate notes                                300,000         --           --         --         --         --       300,000
AirGate operating leases (2)                  75,284     19,096       18,313     13,711      8,768      5,766         9,630
                                           ---------    -------     --------    -------    -------    -------      --------
      Total                                $ 518,772    $20,108     $ 35,076    $36,061    $37,188    $43,281      $347,058
                                           ---------    -------     --------    -------    -------    -------      --------


(1)  Total  repayments  are based upon  borrowings  outstanding  as of March 31,
     2003, not projected borrowings under the AirGate credit facility.

(2)  Does not include payments due under renewals to the original lease term.



The AirGate credit facility is comprised of two senior secured loan  commitments
("tranches")  totaling  $153.5  million.  Tranche 1 provides for a $13.5 million
senior secured term loan commitment (of which $12.5 million is outstanding as of
March 31, 2003), which matures on June 6, 2007. Tranche II provides for a $140.0
million  senior  secured  term loan  commitment  (of  which  $131.0  million  is
outstanding  as of March 31, 2003),  which  matures on September  30, 2008.  The
AirGate  credit  facility  requires  quarterly  payments of principal  beginning
December 31, 2002, for tranche I, and March 31, 2004, for tranche II,  initially
in the  amount of 3.75% of the loan  balance  then  outstanding  and  increasing
thereafter.  As of March 31, 2003,  AirGate has had cumulative  borrowings under
the credit facility  totaling  $144.5 million and has made cumulative  quarterly
principal repayments in the amount of $1.0 million. The commitment fee on unused
borrowings  is 1.50%,  payable  quarterly.  The AirGate  notes will require cash
payments of interest beginning on April 1, 2005.

There are provisions in the agreements governing the AirGate credit facility and
the AirGate notes  providing for an  acceleration  of repayment upon an event of
default,  as defined in the  respective  agreements.  AirGate  is  currently  in
material compliance with its obligations under these agreements.

As of April 30, 2003, two major credit rating agencies rate AirGate's  unsecured
debt. The ratings were as follows:

           Type of facility                  Moody's           S&P
           ----------------                  -------           ---
           AirGate notes                      Caa2             CC

The Company has no off-balance  sheet  arrangements and has not entered into any
transactions  involving  unconsolidated,  limited purpose  entities or commodity
contracts.

Seasonality

The Company's  business is subject to seasonality  because the wireless industry
historically  has been heavily  dependent on fourth  calendar  quarter  results.
Among other  things,  the industry  relies on  significantly  higher  subscriber
additions  and handset sales in the fourth  calendar  quarter as compared to the
other three  calendar  quarters.  A number of factors  contribute to this trend,
including: the increasing use of retail distribution, which is heavily dependent
upon the year-end holiday shopping season; the timing of new product and service
announcements and introductions;  competitive pricing pressures;  and aggressive
marketing and promotions. The increased level of activity requires a greater use
of available  financial resources during this period. We expect,  however,  that
fourth quarter seasonality will have less impact in the future.

RELATED PARTY TRANSACTIONS AND TRANSACTIONS BETWEEN AIRGATE AND IPCS

Transactions with Sprint

Under the  Sprint  Agreements,  Sprint  is  obligated  to  provide  the  Company
significant  support  services  such as  billing,  collections,  long  distance,
customer care, network operations support,  inventory logistics support,  use of
Sprint brand names,  national  advertising,  national  distribution  and product
development.  Additionally,  the Company derives substantial roaming revenue and
expenses when Sprint's and Sprint's network partners' wireless subscribers incur
minutes of use in the Company's  territories and when the Company's  subscribers
incur  minutes  of  use  in  Sprint  and  other  Sprint  network  partners'  PCS
territories. These transactions are recorded in roaming revenue, cost of service
and roaming, cost of equipment and selling and marketing expense captions in the
accompanying consolidated statements of operations.  Cost of service and roaming
transactions  include the 8%  affiliation  fee, long distance  charges,  roaming
expense and the costs of services such as billing, collections, customer service
and pass-through  expenses.  Cost of equipment  transactions relate to inventory
purchased by the Company from Sprint  under the Sprint  agreements.  Selling and
marketing  transactions  relate to subsidized  costs on handsets and commissions
paid by the Company  under  Sprint's  national  distribution  programs.  Amounts
recorded  relating to the Sprint  agreements  for the three and six months ended
March 31, 2003 and 2002 are as follows (dollar amounts in thousands):




                                                                            For the Three Months             For the Six Months
                                                                              Ended March 31,                 Ended March 31,
                                                                            ---------------------           ---------------------
                                                                              2003          2002             2003          2002
Amounts included in the Consolidated Statement of Operations:
                                                                                                              
     AirGate roaming revenue............................................     $ 12,972      $ 13,838         $ 30,801      $ 30,047
     AirGate cost of service and roaming:
          Roaming.......................................................     $ 10,777      $ 11,730         $ 25,462      $ 24,888
          Customer service..............................................        9,927         8,947           21,727        16,761
          Affiliation fee...............................................        4,708         3,886            9,545         7,274
          Long distance.................................................        3,259         3,750            6,044         7,059
          Other.........................................................          514           720              990         1,217
                                                                            ---------     ---------        ---------     ---------

     AirGate cost of service and roaming:...............................     $ 29,185      $ 29,033         $ 63,768      $ 57,199
     AirGate purchased inventory........................................     $  2,695      $  3,924         $  8,221      $  9,441
     AirGate selling and marketing......................................     $  2,412      $  5,964         $  6,111      $ 14,301
     iPCS roaming revenue...............................................     $  4,061      $  7,327         $ 14,724      $ 11,867
     iPCS cost of service and roaming
          Roaming.......................................................     $  3,796      $  6,308         $ 12,158       $ 9,955
          Customer service..............................................        3,853         4,507           11,760         6,042
          Affiliation fee...............................................        1,805         2,223            4,911         2,941
          Long distance.................................................        1,153         2,693            3,281         3,554
          Other.........................................................          168           215              461           260
                                                                            ---------     ---------        ---------     ---------

     iPCS cost of service and roaming...................................     $ 10,775      $ 15,946         $ 32,571      $ 22,752
     iPCS purchased inventory...........................................     $    108      $  1,813         $  6,124      $  4,111
     iPCS selling and marketing.........................................     $  1,240      $  3,289         $  3,138      $  4,645
Amounts included in the Consolidated Balance Sheets:




                                                     As of
                                             March 31, September 30,
                                            2003                2002
                                            ----                ----
Receivable from Sprint                 $  11,615           $  44,953
Payable to Sprint                        (40,570)            (88,360)

Because  approximately  97% of our revenues  are  collected by Sprint and 65% of
costs of service and roaming in our financial  statements  are derived from fees
and charges,  including  pass-through charges, from Sprint, we have a variety of
settlement  issues and other contract disputes open and outstanding from time to
time.  The amounts  Sprint has asserted we owe is  approximately  $4.7  million.
These  include,  but are not  limited  to the  following  items all of which for
accounting purposes have been reserved or otherwise provided for:

*    In fiscal year 2003,  Sprint PCS  asserted it has the right to recoup up to
     $3.9 million in long-distance access revenues previously paid by Sprint PCS
     to  AirGate,  for which  Sprint  PCS has  invoiced  $1.2  million.  We have
     disputed these amounts.

*    Sprint invoiced AirGate approximately $0.8 million with respect to calendar
     year 2002 to reimburse Sprint for certain 3G related development  expenses.
     We are disputing  Sprint's right to charge 3G fees in 2002 and beyond,  and
     we estimate such fees will be $2.5 million in calendar year 2003.

*    We  continue  to  discuss  with  Sprint   whether   AirGate  owes  software
     maintenance fees to Sprint of approximately $1.7 million for 2002, and $1.8
     million  for  calendar  year  2003.  Our  position  is that  Sprint  is not
     authorized  to  charge  these  fees  to  AirGate  under  the  terms  of our
     agreements.

*    Sprint billed AirGate $0.6 million for information technology (IT) expenses
     including the  reimbursement  of amortization  of IT projects  completed by
     Sprint. The Company has disputed Sprint's right to collect these fees.

The  approximately  $4.7  million  Sprint has  asserted  we owe does not include
ongoing 3G  service  fees for future  periods or $2.7  million in long  distance
access revenues Sprint has not invoiced.

In  addition to these  disputes,  we have other  outstanding  issues with Sprint
which could result in set-offs to the items  described  above or in payments due
from Sprint.  For example,  we believe  Sprint has failed to calculate,  pay and
report on collected  revenues in  accordance  with our  agreements  with Sprint,
which,  together with other cash remittance  issues,  resulted in a shortfall in
cash  payments to AirGate of at least $10  million.  As a result of these issues
and in connection with our review of accounts  receivable at September 30, 2002,
we  reclassified  approximately  $10.0  million of AirGate  subscriber  accounts
receivable  for the fiscal year ended  September  30, 2002 to a receivable  from
Sprint.  During this fiscal  year,  Sprint has  acknowledged  and paid only $8.7
million  of this  receivable  for  amounts  that were  previously  not  properly
remitted to AirGate.  The $8.7 million paid by Sprint  included  $4.1 million of
previously  unapplied  customer  deposits,  $4.0  million of revenue for AirGate
subscribers whose bills are paid through national accounts,  and $0.6 million of
subscriber  payments  resulting  from a  change  in the  method  of  calculating
collected revenues. We are reviewing additional information received from Sprint
and have  retained a consultant  to verify the accuracy of this  information  to
determine whether additional amounts are due to AirGate.  We continue to discuss
with Sprint the proper method for calculating, paying and reporting on collected
revenues and other matters.

On January 23, 2003, Sprint notified us that service fees,  excluding historical
3G expenses,  were  increased  from $7.27 per  subscriber per month to $7.77 per
subscriber per month.

Monthly  Sprint  service  charges  are set by  Sprint at the  beginning  of each
calendar  year.  Sprint takes the position  that at the end of each year, it can
determine its actual costs to provide these services to its network partners and
require a final  settlement  against the charges  actually  paid. If the cost to
provide  these  services  are less than the  amounts  paid by  Sprint's  network
partners,  Sprint will issue a credit for these amounts. If the costs to provide
the services are more that the amounts paid by Sprint's network partners, Sprint
will debit the  network  partners  for these  amounts.  Sprint  credited  to the
Company in a net amount of $2.0  million  ($1.3  million  for  AirGate  and $0.7
million for iPCS). These credits were recorded as a reduction of cost of service
in the quarter ended December 31, 2002.

The Sprint  Agreements  require the Company to maintain  certain minimum network
performance standards and to meet other performance requirements. AirGate was in
compliance in all material respects with these requirements at March 31, 2003.

Transactions between AirGate and iPCS

The Company  formed  AirGate  Service  Company,  Inc.  ("ServiceCo")  to provide
management  services  to both  AirGate  and iPCS.  ServiceCo  is a  wholly-owned
restricted  subsidiary  of AirGate.  Personnel  who provide  general  management
services to AirGate and iPCS have been leased to ServiceCo,  which  includes 148
employees at March 31, 2003. Generally, the management personnel include AirGate
staff in the  Company's  principal  corporate  offices in  Atlanta  and the iPCS
accounting staff in Geneseo, Illinois.  ServiceCo expenses are allocated between
AirGate and iPCS based on the percentage of subscribers  they  contribute to the
total  number of Company  subscribers  (the  "ServiceCo  Allocation"),  which is
currently 60% AirGate and 40% iPCS. Expenses that are related to one company are
allocated  to that  company.  Expenses  that are  related to  ServiceCo  or both
companies  are allocated in accordance  with the ServiceCo  Allocation.  For the
quarter and six months ended March 31, 2003,  iPCS  recorded a net total of $0.8
million and $1.8 million, respectively.

On January 27, 2003, iPCS retained Timothy M. Yager, former CEO of iPCS prior to
the merger of AirGate and a former director of AirGate  following the merger, as
chief restructuring  officer to oversee the restructuring of iPCS and manage the
day-to-day   operations  of  iPCS.  To  facilitate  the  orderly  transition  of
management services to Mr. Yager, AirGate and iPCS have executed an amendment to
the Services Agreement that would allow individual  services to be terminated by
either  party upon 30 days prior  notice,  subject  to  certain  exceptions  for
services for which longer notice is required.

The  amendment  also  terminated  certain  services  provided  by  AirGate,  and
effective May 1, 2003,  iPCS terminated  certain other services.  As a result of
the termination of services by iPCS, AirGate received $0.3 million less payments
from iPCS for the quarter  ended March 31,  2003.  We  anticipate  that prior to
September 1, 2003,  substantially all management  services provided by ServiceCo
to iPCS will be terminated.

AirGate  has  completed  transactions  at  arms-length  in the normal  course of
business with its unrestricted subsidiary iPCS. These transactions are comprised
of roaming  revenue and  expenses,  inventory  sales and  purchases and sales of
network operating equipment.

Item 3.    Quantitative And Qualitative Disclosure About Market Risk

In the normal  course of  business,  the  Company's  operations  are  exposed to
interest  rate  risk  on  its  credit   facilities  and  any  future   financing
requirements.  AirGate's  fixed rate debt  consists  primarily  of the  accreted
carrying  value of the 1999  AirGate  notes  ($236  million at March 31,  2003).
AirGate's  variable  rate debt  consists  of  borrowings  made under the AirGate
credit facility  ($143.5 million at March 31, 2003).  For the three months ended
March 31, 2003,  the weighted  average  interest  rate under the AirGate  credit
facility was 5.37%.  Our primary  interest rate risk exposures relate to (i) the
interest rate on long-term borrowings; (ii) our ability to refinance the AirGate
notes at  maturity  at  market  rates;  and (iii) the  impact of  interest  rate
movements on our ability to meet  interest  expense  requirements  and financial
covenants under our debt instruments.

The  following  table  presents the  estimated  future  balances of  outstanding
long-term  debt projected at the end of each period and future  required  annual
principal  payments for each period then ended associated with the AirGate notes
and credit facility based on projected levels of long-term indebtedness:




                                                                          Years Ending September 30,
                                                 ------------------------------------------------------------------------------
                                                    2003         2004         2005         2006         2007       Thereafter
                                                    ----         ----         ----         ----         ----       ----------
                                                                           (Dollars in thousands)
                                                                                                    
AirGate notes  (1)                                 $260,630     $297,191     $297,289     $297,587     $298,115           --
Fixed interest rate                                    13.5%        13.5%        13.5%        13.5%        13.5%         13.5%
Principal payments                                      --           --           --           --           --       $300,000

AirGate credit facility                            $151,475     $133,700     $110,000      $79,893      $40,000          --
Variable interest rate (2)                             5.06%        5.06%        5.06%        5.06%        5.06%         5.06%
Principal payments                                  $ 2,025      $17,775      $23,700     $ 30,107      $39,893       $40,000


(1)  The  information  in this table was also  provided in our Annual  Report on
     Form 10-K (Item 7a) for the fiscal year ended September 30, 2002 and in our
     Quarterly  Report on Form 10-Q (Item 3) for the quarter ended  December 31,
     2002.  The table  included  in these  reports  displayed  estimated  future
     balances under the incorrect year, which had the effect of understating the
     accreted value of the notes in 2004 and thereafter.

(2)  The  interest  rate  on the  AirGate  credit  facility  equals  the  London
     Interbank  Offered Rate ("LIBOR")  +3.75%.  LIBOR is assumed to equal 1.31%
     for all periods presented,  which is the LIBOR rate as of April 28, 2003. A
     1% increase (decrease) in the variable interest rate would result in a $1.4
     million  increase  (decrease) in the related  interest expense on an annual
     basis (based upon borrowings outstanding as of March 31, 2003).


Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain  disclosure controls and procedures that are designed to ensure that
information  required to be  disclosed  in our Exchange Act reports is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Commission's  rules and forms,  and that such  information  is  accumulated  and
communicated to our management,  including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.

As of the end of the  period  covered  by  this  report,  March  31,  2003  (the
"Evaluation Date"), we carried out an evaluation, under the supervision and with
the  participation  of the Company's  management,  including our Chief Executive
Officer and Chief  Financial  Officer,  of the  effectiveness  of the design and
operation of our disclosure controls and procedures. Based upon this evaluation,
the  President  and Chief  Executive  Officer  and the Chief  Financial  Officer
concluded that our disclosure  controls and procedures  were effective as of the
Evaluation Date.

         Our Relationship with Sprint

Under our  long-term  (up to 50 year)  agreements  with  Sprint,  we market  PCS
products and  services  under the Sprint  brand names in our  territory  and our
business  currently  consists solely of Sprint  wireless  products and services.
Under our agreements,  Sprint exercises  extensive control over our business and
our relationship with Sprint is unique in many ways. For example:

     o    Our  network  must  interface  seamlessly  with  the  national  Sprint
          wireless network.

     o    Our network must be built, maintained and upgraded to include Sprint's
          most current technology in accordance with  Sprint-approved  plans and
          using Sprint-approved equipment.

     o    Under our management agreement with Sprint, we are required to provide
          services such as customer care,  billing and collections in accordance
          with program requirements established by Sprint in accordance with the
          management  agreement.  Any third  party  vendor must  receive  Sprint
          approval,  comply with Sprint's program  requirements  with respect to
          these services and interface with Sprint's systems.

     o    Sprint must approve our marketing and sales materials.

     o    Sprint develops products and services that we are required to offer in
          our  territory  and it must approve all products and services we offer
          in our territory, subject to certain limitations.

     o    Our stores must conform to Sprint's requirements for retail stores and
          are identical to Sprint retail stores in Sprint's markets.

     o    Sprint  develops and  implements  pricing and credit plans that we are
          required to offer in our territory.

     o    We are required to absorb the cost of promotional  plans  developed by
          Sprint,  which  we must  offer  in our  territory  (e.g.,  rebates  or
          discounts to customers for handset purchases).

     o    Our subscribers call Sprint customer care.

     o    Our subscribers receive bills from, and make payments to, Sprint.


Under our agreements with Sprint, Sprint provides us with billing,  collections,
customer care and other back office services. As a result,  approximately 95% of
our revenues are paid through Sprint. In addition,  approximately 65% of cost of
service and roaming in our consolidated  financial  statements relate to charges
by or through  Sprint for its  affiliation  fee,  charges for services  provided
under our agreements with Sprint such as billing, collections and customer care,
roaming  expense,  long-distance,  and pass-through and other fees and expenses.
Under our  agreements,  Sprint is  responsible  to keep and  maintain  books and
records  to  support  and  document  any  fees,  costs or other  charges  due in
connection  with the  agreements  and to  provide  a monthly  true-up  report of
amounts  required  to be  remitted  to the  Company  with  respect to  collected
revenues. Due to this relationship,  the Company necessarily relies on Sprint to
provide accurate,  timely and sufficient data and information to properly record
our revenues,  expenses and accounts  receivable,  which  underlie a substantial
portion of our periodic  financial  statements and other financial  disclosures.
Nevertheless, the Company continues to dedicate significant Company resources to
ensure its disclosure  controls and procedures,  as integrated with Sprint,  are
effective.

Information  provided  by  Sprint  includes  reports  regarding  our  subscriber
accounts receivable. Sprint provides us monthly accounts receivable, billing and
cash receipts, expense detail and settlements information.  Under our agreements
with  Sprint,  we are  entitled to only a portion of the cash  receipts,  net of
items such as taxes,  government  surcharges and the 8% Sprint  affiliation fee.
Sprint has  developed  and used a tool called the "revenue  profile" to estimate
the payments due to us. We regularly  review and reconcile these various reports
to identify discrepancies or errors and address those issues with Sprint.

         Our Disclosure Controls and Procedures - Fiscal 2002

Because of our reliance on Sprint for financial information, we depend on Sprint
to design adequate internal  controls with respect to the processes  established
to provide this data and  information  to the Company and Sprint's other network
partners.  As part of this  control  process,  Sprint  engages  its  independent
auditors to perform a periodic  evaluation  of these  controls  and to provide a
"Report on Controls Placed in Operation and Tests of Operating Effectiveness for
Affiliates"  under guidance  provided in Statement of Auditing  Standards No. 70
("Type II SAS 70 reports"). The Type II SAS 70 report is provided to us annually
and covers our entire fiscal year.

In addition, at least annually, we review the prior year's Type II SAS 70 report
in light of events that have occurred during the year. We also provide  comments
to Sprint and its  independent  auditors  regarding  issues and  information the
report  should  address  that may not have been  addressed  in the prior  year's
report.

During the fourth quarter of fiscal 2002, it became apparent that  discrepancies
between  various  accounts  receivable  reports  provided  by Sprint  had become
significant.  To address these issues,  we conducted a lengthy  inquiry into the
causes of the discrepancies. Among other things, we had numerous discussions and
meetings with Sprint's  accounting staff,  requested and received additional and
more detailed reports and demanded reconciliations with our records.

In connection with our review of the accounts  receivable issue at September 30,
2002 for  purposes of  finalizing  our  financial  statements,  we  reclassified
approximately  $10.0 million of AirGate subscriber  accounts  receivable for the
fiscal year ended September 30, 2002 to a receivable from Sprint. We provided an
allowance  to reflect  the  receivable  at its net  realizable  value,  which we
collected from Sprint subsequent to September 30, 2002.

At  September  30,  2002,  we and our  independent  auditors  believed  that the
accounts  receivable issue resulted from a reportable  condition in our internal
controls.  Reportable  conditions are significant  deficiencies in the design or
operation of internal  controls which could adversely  affect an  organization's
ability to record, process,  summarize and report financial data consistent with
the  assertions  of  management  in  the  consolidated   financial   statements.
Nonetheless,  we concluded  that our  disclosure  controls and  procedures  were
effective as of September 30, 2002. We came to this conclusion for the following
reasons:

     o    The controls  and  procedures  in place  during  fiscal year 2002 were
          effective in detecting the accounts receivable issue.

     o    Even with the accounts receivable issue, we believed it was reasonable
          to rely on the reports and information we received from Sprint. Sprint
          is a public reporting company that certifies its financial information
          and its controls and procedures.  In addition,  compared to any single
          Sprint  affiliate,  Sprint has  significantly  greater  resources  and
          efficiencies,  both  financially  and with respect to personnel,  with
          which to gather, analyze and control its information.

     o    We  relied  on the  Type  II SAS 70  report  discussed  above  and the
          controls discussed in the report.

     o    During the entire  fiscal  year 2002,  the  Company  used a program to
          automate a portion of the  process  utilized  to record the  Company's
          revenues and accounts  receivable from the files received from Sprint.
          The program  summarizes  the files  received from Sprint to mirror the
          Company's   general   ledger   accounts.   The   Company   performs  a
          reasonableness  check prior to recording  the amounts in the Company's
          general  ledger.  The Company  relies on the program and the  inherent
          system   controls  and  the   reasonableness   checks  to  ensure  the
          consistency  of  the  information  downloaded  from  Sprint  with  the
          information reflected in the Company's general ledger.

     o    During  the  entire  fiscal  year  2002,  Company  personnel  reviewed
          financial  information  and data  provided by Sprint.  The Company has
          performed and  continues to perform  reasonableness  checks  regarding
          information provided by Sprint on a monthly basis by evaluating trends
          in key  performance  indicators  to  detect  trending  anomalies.  The
          Company's  finance and operations groups evaluate these trends and the
          Company  relies on this  process as a  compensating  control to detect
          errors in the data  provided  by Sprint.  The  Company's  finance  and
          operations groups work closely with the Company's  accounting group to
          reconcile  differences  and make necessary  corrections  and follow up
          with Sprint as necessary.

     o    During  the  entire  fiscal  year  2002,  the  Company   reviewed  and
          reconciled   certain   information   provided   by  Sprint  to  detect
          inconsistencies in the data.

     o    In July 2002, we established a disclosure control committee made up of
          senior members of management and key employees.  The committee assists
          the Company's senior officers in fulfilling their  responsibility  for
          oversight of the accuracy and  timeliness of the  disclosures  made by
          the  Company.   The  committee,   among  other  things,   designs  and
          establishes   controls  and  procedures  regarding  the  accuracy  and
          dissemination of information, monitors the integrity and effectiveness
          of the  Company's  disclosure  controls,  reviews and  supervises  the
          preparation  of filings  and  announcements  made by the  Company  and
          evaluates the effectiveness of the Company's disclosure controls.  The
          committee  includes members who have information  pertaining to Sprint
          to ensure that appropriate disclosures are made pertaining to Sprint.

     o    During December 2002, prior to the issuance of our annual report,  the
          Company   worked  with   Sprint  to   identify   the  sources  of  the
          discrepancies.  The Company then developed a reconciliation process of
          the  accounts  receivable  aging  report  provided  by Sprint with the
          Company's  accounts   receivable   account.   The  reconciliation  was
          developed to identify the nature of the  differences  and quantify the
          amount of the error in the Company's accounts receivable account.  The
          Company  continues  to use and refine this  reconciliation  process to
          detect errors on a timely basis.

Given the controls  described  above,  and the  discrete  nature of the accounts
receivable  issue, we concluded,  at the time our  certifications  of disclosure
controls were made, that our disclosure controls and procedures were effective.

         Our Disclosure Controls and Procedures - Fiscal 2003

Although we concluded that our disclosure controls and procedures were effective
at the end of  fiscal  2002  and in each  interim  period  of  fiscal  2003,  we
recognized   that  further   improvements   were  necessary  to  better  address
information  provided  by Sprint.  During  fiscal  2003,  we focused  additional
resources on reviewing and analyzing  information  provided by Sprint and worked
with Sprint to identify  other  information  and reports that would assist us in
this review and analysis,  particularly as it relates to accounts receivable and
the application of cash.

During  2003,  in order to more  timely and better  monitor,  verify and analyze
information provided by Sprint, we took the following actions to further enhance
our disclosure controls and procedures. While we believe that, in the aggregate,
these actions improved our overall internal controls, we do not believe that any
individual action was a material change to our internal controls.

     o    We  reconcile  accounts  receivable  aging  reports from Sprint to our
          general ledger on a quarterly basis.

     o    In   January,   2003,   the   Company   engaged  a   consultant   with
          telecommunications  settlement  experience  to  develop  a plan  for a
          Sprint settlements department, to analyze and interface with Sprint to
          resolve  financial  disputes  with  Sprint,  to review  the  method of
          calculating the revenue  profile and to review the Sprint  settlements
          processes and  facilitate  the  transition of Sprint  settlements  and
          review processes from the accounting  department in Geneseo,  Illinois
          to the new settlements department in Atlanta, Georgia. In May 2003, we
          internally  staffed and broadened role of the settlements  department.
          The  department has two full-time  employees  (hired in May and August
          2003) and one contract person (hired in June 2003). The manager of the
          settlements   group  serves  as  the  primary  interface  with  Sprint
          regarding all issues related to the Sprint  settlements  process.  The
          settlements  group  reviews and analyzes  financial  data  provided by
          Sprint,  including the  components of the revenue  profile that Sprint
          uses to  determine  the amount of collected  revenues  paid to us. The
          settlements group assists us in verifying amounts charged by Sprint as
          well as revenues and other amounts settled with Sprint.

     o    During the fourth  quarter of fiscal  2003,  we  completed an in-depth
          review of the  procedures  undertaken  in prior Type II SAS 70 reports
          and we requested and Sprint  agreed to provide and include  additional
          procedures in 2003 and future Type II SAS 70 Reports.

     o    In September 2003, we requested  additional  "agreed upon  procedures"
          pertaining   to  accounts   receivable   from   Sprint's   independent
          accountants.   Sprint's   independent   accountants   performed   such
          procedures during October 2003.

     o    Beginning  in  the  fourth   quarter  of  fiscal  2003,  we  analyzed,
          documented  and  implemented  file audit and  assurance  processes for
          certain Sprint files used in recording financial information.

     o    We obtained for the first time from Sprint an account  level detail of
          subscriber  accounts receivable as of September 30, 2003. In September
          2003,  we requested  this detail on at least a quarterly  basis in the
          future.

     o    In September 2003, Sprint agreed to provide semi-annual SAS 70 reports
          beginning in 2004.

     o    In  September  2003,  Sprint  informed us that it will  request SAS 70
          reports from key service providers, including the third-party provider
          of its billing systems and services.

Although we refined  and  improved  our  internal  controls in 2002,  we and our
independent  auditors believe that a reportable  condition (as defined above) in
internal controls relating to accounts receivable  continued during 2003 because
most of the  procedures  described  above were not in place until the end of the
fiscal year.  As a result of the improved  processes  and  procedures  described
above, the Company believes no reportable condition in internal controls existed
by the end of the fiscal year,  September 30, 2003 but our independent  auditors
have not made that finding.

Because the procedures  outlined under "Our Disclosure Controls and Procedures -
Fiscal 2002"  continued  during  2003,  we believe our  disclosure  controls and
procedures were effective throughout 2003, including as of September 30, 2003.

In order to avoid a reportable condition in the future, the Company will need to
continue  the  processes  described  above and continue to obtain or perform the
following:

     o    Obtain  from  Sprint  access  to  a  detailed  listing  of  subscriber
          receivables at the account level on a quarterly basis and validate its
          integrity.

     o    Perform a full reconciliation of the subscriber  receivables detail to
          the general ledger balance,  including a complete understanding of all
          reconciling items.

     o    Perform a rollforward  of the accounts  receivable  information  to be
          provided by Sprint and  compare  these  amounts to our general  ledger
          accounts.

The Company  will  continue to monitor and  evaluate  the  effectiveness  of its
improvements in controls related to information  provided by Sprint and continue
to improve these processes.

In preparation  for the  requirements  imposed under Section 404 of the Sarbanes
Oxley Act of 2002, we are retaining an outside  accounting  firm to assist us in
reviewing and improving our internal control processes,  including the processes
to verify data provided by Sprint.

Changes in Internal Control over Financial Reporting

We refer you to the information discussed above in Evaluation of Disclosure
Controls and Procedures.





PART II. OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

In May, 2002,  putative class action  complaints were filed in the United States
District Court for the Northern  District of Georgia  against AirGate PCS, Inc.,
Thomas M.  Dougherty,  Barbara L. Blackford,  Alan B.  Catherall,  Credit Suisse
First Boston, Lehman Brothers, UBS Warburg LLC, William Blair & Company,  Thomas
Wiesel  Partners LLC and TD Securities.  The complaints do not specify an amount
or range of damages that the plaintiffs are seeking.  The complaints  seek class
certification  and  allege  that  the  prospectus  used in  connection  with the
secondary  offering  of Company  stock by certain  former iPCS  shareholders  on
December 18, 2001  contained  materially  false and  misleading  statements  and
omitted material information  necessary to make the statements in the prospectus
not false and misleading. The alleged omissions included (i) failure to disclose
that in order to complete an  effective  integration  of iPCS,  drastic  changes
would have to be made to the Company's  distribution  channels,  (ii) failure to
disclose  that the  sales  force in the  acquired  iPCS  markets  would  require
extensive  restructuring  and (iii)  failure  to  disclose  that the  "churn" or
"turnover" rate for subscribers would increase as a result of an increase in the
amount of sub-prime credit quality subscribers the Company added from its merger
with iPCS. On July 15, 2002, certain plaintiffs and their counsel filed a motion
seeking appointment as lead plaintiffs and lead counsel. Subsequently, the Court
denied that motion  without  prejudice  and two of the  plaintiffs  have filed a
renewed motion.  The Defendants  responded to the renewed motion,  but the Court
has not yet entered a ruling.  The Company  believes the plaintiffs'  claims are
without merit and intends to vigorously defend against these claims. However, no
assurance can be given as to the outcome of the litigation.

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

On February 23, 2003, iPCS and its  subsidiaries  filed a petition under Chapter
11 of the  Bankruptcy  Code,  in the  United  States  Bankruptcy  Court  for the
Northern District of Georgia.  Immediately prior to iPCS' bankruptcy filing, the
lenders under the iPCS credit facility  accelerated iPCS' payment obligations as
a result of existing  defaults under that  facility.  This filing for Chapter 11
represented an event of default under iPCS' credit  facility and the iPCS notes.
Under  bankruptcy  law,  iPCS is not permitted to make  scheduled  principal and
interest  payments  unless  specifically   ordered  by  the  Court.   Additional
information  regarding  iPCS'  Chapter 11 filing is set forth  elsewhere in this
Form  10-Q,  including  Note  1 to the  Consolidated  Financial  Statements  and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company  submitted to a vote of its stockholders of record as of January 13,
2003,  through a  solicitation  by proxy,  the  election of two  directors.  The
matters were  submitted for a vote at our Annual Meeting of Shareowners on March
4, 2003. A total of 18,384,158  shares were represented by proxy at the meeting,
representing  70.86% of the 25,944,863  shares eligible to vote. With respect to
the election of two directors, of the shares represented, 15,517,135 shares were
voted in favor of the election of Barry J.  Schiffman to serve as director for a
new three year term, with 2,867,023 shares withheld,  and 18,186,436 shares were
voted in favor of the  election of Stephen R. Stetz to serve as  director  for a
three year term, with 186,541 shares withheld.

Item 5. OTHER INFORMATION

Subsequent Events

Barry J.  Schiffman  resigned as a director and chairman of the Board  effective
May 2, 2003.

Risk Factors

Our business and our  prospects are subject to many risks.  The following  items
are representative of the risks, uncertainties and assumptions that could affect
our  business,  our future  performance,  our  liquidity  and the outcome of the
forward-looking  statements  we make.  In  addition,  our  business,  our future
performance,  our liquidity and forward-looking  statements could be affected by
general  industry and market  conditions and growth rates,  general economic and
political  conditions,  including  the global  economy and other future  events,
including those  described BELOW AND elsewhere in this QUARTERLY  report on Form
10-Q.

Risks Related to Our Business, Strategy and Operations

The  unsettled  nature of the wireless  market may limit the  visibility  of key
operating metrics

Our business plan and estimated future operating  results are based on estimates
of key operating metrics, including subscriber growth, subscriber churn, average
monthly revenue per subscriber, losses on sales of handsets and other subscriber
acquisitions  costs and  other  operating  costs.  The  unsettled  nature of the
wireless market,  our relationship with Sprint,  the current economic  slowdown,
increased competition in the wireless  telecommunications  industry, new service
offerings  of  increasingly  large  bundles of minutes of use at lower prices by
some major  carriers,  and other issues  facing the wireless  telecommunications
industry  in general  have  created a level of  uncertainty  that may  adversely
affect our ability to predict these key operating metrics.

Our revenues may be less than we  anticipate  which could  materially  adversely
affect our liquidity, financial condition and results of operations

Revenue  growth  is  primarily  dependent  on the size of our  subscriber  base,
average  monthly  revenues per user and roaming  revenue.  During the year ended
September  30, 2002,  we  experienced  slower net  subscriber  growth rates than
planned,  which we believe is due in large part to  increased  churn,  declining
rates of wireless  subscriber  growth in general,  the re-imposition of deposits
for most  sub-prime  credit  subscribers  during the last half of the year,  the
current economic  slowdown and increased  competition.  Other carriers also have
reported slower subscriber growth rates compared to prior periods.  We have seen
a  continuation  of  competitive  pressures in the  wireless  telecommunications
market  causing  some major  carriers  to offer  plans with  increasingly  large
bundles of minutes of use at lower  prices  which may  compete  with the calling
plans we  offer,  including  the  Sprint  calling  plans we  support.  While our
business plan anticipates  lower subscriber  growth,  it assumes average monthly
revenues  per user will  remain  relatively  stable  after  factoring  in recent
declines. Increased price competition may lead to lower average monthly revenues
per user than we anticipate. In addition, the lower reciprocal roaming rate that
Sprint has implemented will reduce our roaming revenue,  which may not be offset
by the  reduction  in our  roaming  expense.  If our  revenues  are less than we
anticipate,  it could  materially  adversely  affect  our  liquidity,  financial
condition and results of operation.

Our costs may be higher  than we  anticipate  which could  materially  adversely
affect our liquidity, financial condition and results of operations

Our business  plan  anticipates  that we will be able to lower our operating and
capital  costs,  including  costs  per  gross  addition.
Increased  competition may lead to higher promotional costs,  losses on sales of
handset and other costs to acquire  subscribers.  Further,  as  described  below
under "Risks Related to Our Relationship With Sprint," a substantial  portion of
costs of service and roaming are  attributable to fees and charges we pay Sprint
for billing and collections,  customer care and other back-office  support.  Our
ability to manage costs charged by Sprint is limited. If our costs are more than
we anticipate, the actual amount of funds to implement our strategy and business
plan may exceed our estimates, which could have a material adverse affect on our
liquidity, financial condition and results of operations.

We may continue to  experience a high rate of subscriber  turnover,  which would
adversely affect our financial performance

The wireless personal communications services industry in general, and Sprint
and its network partners in particular, have experienced a higher rate of
subscriber turnover, commonly known as churn, as compared to cellular industry
averages. This churn rate was driven higher in 2002 due to the NDASL and Clear
Pay programs required by Sprint and the removal of deposit requirements as
described elsewhere in this report. Our business plan assumes that churn will be
relatively constant over the remainder of fiscal 2003. Due to significant
competition in our industry and general economic conditions, among other things,
this decline may not occur and our future rate of subscriber turnover may be
higher than our historical rate. Factors that may contribute to higher churn
include:

*    inability  or   unwillingness  of  subscribers  to  pay  which  results  in
     involuntary deactivations,  which accounted for 63% of our deactivations in
     the six months ended March 31, 2003;

*    subscriber mix and credit class,  particularly sub-prime credit subscribers
     which accounted for  approximately  50% of our gross  subscriber  additions
     since May 2001 and account for  approximately 33% of our subscriber base as
     of March 31, 2003;

*    Sprint's announced billing system conversion;

*    the mandate by the FCC that  wireless  carriers  provide  for local  number
     portability  by November 24, 2003,  which would allow  subscribers  to keep
     their wireless phone number when switching to a different service provider;

*    the attractiveness of our competitors' products, services and pricing;

*    network performance and coverage relative to our competitors;

*    quality of customer service;

*    increased prices; and

*    any future changes by us in the products and services we offer,  especially
     to the Clear Pay Program.

A high rate of  subscriber  turnover  could  adversely  affect  our  competitive
position, liquidity, financial position, results of operations and our costs of,
or  losses  incurred  in,  obtaining  new  subscribers,  especially  because  we
subsidize some of the costs of initial purchases of handsets by subscribers.

Our allowance for doubtful accounts may not be sufficient to cover uncollectible
accounts

On an ongoing basis,  we estimate the amount of subscriber  receivables  that we
will not collect to reflect the  expected  loss on such  accounts in the current
period.  Our business  plan  assumed  that bad debt as a  percentage  of service
revenue would decline significantly during fiscal 2003, which is consistent with
current results.  Our allowance for doubtful accounts may  underestimate  actual
unpaid receivables for various reasons, including:

*    our churn rate may exceed our estimates;

*    bad debt as a percentage  of service  revenues may not decline as we assume
     in our business plan;

*    adverse changes in the economy; or

*    unanticipated changes in Sprint's PCS products and services.

If our allowance for doubtful  accounts is  insufficient  to cover losses on our
receivables,  it could  materially  adversely  affect our  liquidity,  financial
condition and results of operations.

Roaming revenue could be less than anticipated, which could adversely affect our
liquidity, financial condition and results of operations

Sprint has reduced the  reciprocal  roaming rate from $0.10 per minute to $0.058
per minute beginning January 1, 2003. Based upon 2002 historical roaming data, a
reduction in the roaming  rate to $0.058 per minute  would have reduced  roaming
revenue by  approximately  $36 million  ($23 million for AirGate and $13 million
for iPCS) and would have reduced  roaming expense by  approximately  $26 million
($16 million for AirGate and $10 million for iPCS). The ratio of roaming revenue
to expense for AirGate for the quarter ended March 31, 2003 was 1.3 to one.

The amount of roaming  revenue we receive  also depends on the minutes of use of
our network by PCS  subscribers  of Sprint and Sprint PCS network  partners.  If
actual usage is less than we anticipate,  our roaming  revenue would be less and
our liquidity, financial condition and results of operations could be materially
adversely affected.

Our efforts to reduce costs may have adverse affects on our business

As a result  of the  current  business  environment,  AirGate  has  revised  its
business  plan and is  seeking  to manage  expenses  to  improve  its  liquidity
position.  AirGate has significantly  reduced  projected  capital  expenditures,
advertising  and promotion  costs and other  operating  costs.  Reduced  capital
expenditures  could,  among other things,  force us to delay improvements to our
network, which could adversely affect the quality of service to our subscribers.
These actions could reduce our subscriber growth and increase churn, which could
materially adversely affect our financial condition and results of operation.

The Company may incur  significantly  higher wireless handset subsidy costs than
we anticipate for existing subscribers who upgrade to a new handset

As the Company's subscriber base matures,  and technological  innovations occur,
more existing  subscribers  will upgrade to new wireless  handsets.  The Company
subsidizes  a  portion  of the  price of  wireless  handsets  and  incurs  sales
commissions, even for handset upgrades. Excluding sales commissions, the Company
experienced  approximately $4.8 million associated with wireless handset upgrade
costs for the year ended  September 30, 2002 and $4.1 million for the six months
ended March 31, 2003. The Company has limited  historical  experience  regarding
the adoption rate for wireless handset upgrades.  If more subscribers upgrade to
new wireless handsets than the Company projects, our results of operations would
be adversely affected.

The loss of the officers and skilled employees who we depend upon to operate our
business could materially adversely affect our results of operations

Our business is managed by a small number of executive officers. We believe that
our future  success  depends  in part on our  continued  ability to attract  and
retain  highly  qualified  technical  and  management  personnel.  We may not be
successful in retaining our key personnel or in attracting  and retaining  other
highly qualified technical and management personnel.  Our ability to attract and
retain such persons may be negatively  impacted if our  liquidity  position does
not improve.  In addition,  we grant stock options as a method of attracting and
retaining  employees,  to motivate  performance  and to align the  interests  of
management  with those of our  stockholders.  Due to the  decline in the trading
price of our common stock,  a substantial  majority of the stock options held by
employees have an exercise  price that is higher than the current  trading price
of our common stock,  and therefore  these stock options may not be effective in
helping  us to  retain  valuable  employees.  We  currently  have "key man" life
insurance for our Chief Executive Officer.  The loss of our officers and skilled
employees could materially adversely affect our results of operation.

Parts of our territories  have limited amounts of licensed  spectrum,  which may
adversely affect the quality of our service and our results of operations

Sprint has licenses  covering 10 MHz of spectrum in AirGate's  territory.  While
Sprint  has  licenses  covering  30 MHz of  spectrum  throughout  most of  iPCS'
territory,  it has licenses covering only 10 MHz or 20 MHz in parts of Illinois.
As the number of subscribers in our territories increase, this limited amount of
licensed spectrum may not be able to accommodate  increases in call volume,  may
lead to increased  dropped and blocked  calls and may limit our ability to offer
enhanced services,  all of which could result in increased  subscriber  turnover
and adversely affect our financial condition and results of operations.

Further,  in  January  2003,  the FCC rules  imposing  limits  on the  amount of
spectrum  that can be held by one  provider  in a specific  market  was  lifted.
Competition  may  increase  to the extent that  licenses  are  transferred  from
smaller  stand-alone   operators  to  larger,   better  capitalized,   and  more
experienced   wireless   communications   operators.   These   larger   wireless
communications  operators may be able to offer  customers  network  features not
offered  by  AirGate.  The  actions  of  these  larger  wireless  communications
operators could negatively affect our churn, ability to attract new subscribers,
ARPU, cost to acquire subscribers and operating costs per subscriber.

There is a high  concentration  of ownership of the wireless towers we lease and
if we lose the right to install our equipment on certain  wireless towers or are
unable  to renew  expiring  leases,  our  financial  condition  and  results  of
operations could be adversely impacted

Many of our cell sites are co-located on leased tower facilities shared with one
or more  wireless  providers.  A large  portion of these  leased tower sites are
owned by a few  tower  companies.  Approximately  75% of the  towers  leased  by
AirGate are owned by four tower companies (and their affiliates).  Approximately
60% of the towers  leased by iPCS are owned by four tower  companies  (and their
affiliates), with one company owning approximately 29% of the combined Company's
leased  towers.  If a master  co-location  agreement  with  one of  these  tower
companies were to terminate,  or if one of these tower  companies were unable to
support our use of its tower sites, we would have to find new sites or we may be
required to rebuild that portion of our  network.  In addition,  because of this
concentration  of  ownership  of our cell sites,  our  financial  condition  and
results of  operations  could be  materially  and  adversely  affected if we are
unable to renew expiring leases with such tower companies on favorable terms, or
in the event of a disruption in any of their business operations.

Certain wireless providers are seeking to reduce access to their networks

The Company  relies on  Sprint's  roaming  agreements  with its  competitors  to
provide automatic roaming  capabilities to the Company's  subscribers in many of
the areas of the United  States not covered by  Sprint's  PCS  network.  Certain
competitors  may be able to offer  coverage in areas not served by Sprint's  PCS
network or may be able to offer  roaming rates that are lower than those offered
by Sprint.  Certain of these  competitors  are seeking to reduce access to their
networks  through  actions  pending with the FCC.  Moreover,  AT&T  Wireless has
sought  reconsideration of an FCC ruling in order to expedite elimination of the
engineering  standard  (AMPS) for the dominant air  interface on which  Sprint's
subscribers  roam. If AT&T Wireless is successful  and the FCC  eliminated  this
standard  before  Sprint can  transition  its handsets to  different  standards,
customers  of Sprint  could be unable to roam in those  markets  where  cellular
operators cease to offer their AMPS network for roaming.

Risks Particular to AirGate's Indebtedness

AirGate has  substantial  debt that it may not be able to service;  a failure to
service  such  debt may  result  in the  lenders  under  such  debt  controlling
AirGate's assets

The substantial  debt of AirGate has a number of important  consequences for our
operations and our investors, including the following:

*    AirGate will have to dedicate a  substantial  portion of any cash flow from
     its  operations  to the payment of interest on, and principal of, its debt,
     which will reduce funds available for other purposes;

*    AirGate may not be able to obtain  additional  financing if the assumptions
     underlying the business plan are not correct and existing sources of funds,
     together with cash flow, are insufficient for capital requirements, working
     capital requirements and other corporate purposes;

*    increased  vulnerability  to adverse  economic  conditions  or increases in
     prevailing  interest rates, as some of AirGate's debt,  including financing
     under AirGate's  credit facility,  is at variable rates of interest,  which
     could result in higher interest expense in the event of increases in market
     interest rates;

*    AirGate  may be more highly  leveraged  than our  competitors,  which could
     potentially decrease our ability to compete in our industry; and

*    due to the liens on  substantially  all of AirGate's assets and the pledges
     of stock of AirGate's  existing  and future  restricted  subsidiaries  that
     secure  AirGate's  credit  facility  and notes,  lenders or holders of such
     notes may  exercise  remedies  giving  them the right to control  AirGate's
     assets or the assets of the  subsidiaries  of AirGate,  other than iPCS, in
     the event of a default.

The ability of AirGate to make  payments on its debt will depend upon its future
operating  performance  which is  subject to general  economic  and  competitive
conditions and to financial,  business and other factors,  many of which AirGate
cannot  control.  If the  cash  flow  from  AirGate's  operating  activities  is
insufficient,  it may take actions, such as further delaying or reducing capital
expenditures, attempting to restructure or refinance its debt, selling assets or
operations or seeking additional equity capital. Any or all of these actions may
not be  sufficient to allow  AirGate to service its debt  obligations.  Further,
AirGate may be unable to take any of these actions on  satisfactory  terms, in a
timely manner or at all. The AirGate  credit  facility and  indenture  governing
AirGate's notes limit our ability to take several of these actions.

If  AirGate  does not meet  all of the  conditions  required  under  its  credit
facility,  it may not be  able to draw  down  all of the  funds  it  anticipates
receiving  from its senior lenders and AirGate may not be able to fund operating
losses and working capital needs

As of March 31, 2003,  AirGate had  outstanding  $143.5 million under its credit
facility.  The remaining $9 million available under AirGate's credit facility is
subject to AirGate  meeting all of the  conditions  specified  in its  financing
documents.  Additional  borrowings  are subject to specific  conditions  on each
funding date, including the following:

*    that the  representations and warranties in the loan documents are true and
     correct;

*    that certain financial  covenant tests are satisfied,  including  leverage,
     debt  coverage and  operating  performance  covenants,  minimum  subscriber
     revenues, maximum capital expenditures,  and covenants relating to earnings
     before interest, taxes, depreciation and amortization; and

*    the  absence of a default  under the loan  documents  and  agreements  with
     Sprint.

See "Liquidity and Capital Resources". If AirGate does not meet these conditions
at each  funding  date,  its  senior  lenders  may not  lend  some or all of the
remaining  amounts under its credit facility.  If other sources of funds are not
available, AirGate may not be in a position to meet its operating and other cash
needs.

The AirGate  indenture and credit facility  contain  provisions and requirements
that could limit AirGate's ability to pursue borrowing opportunities

The restrictions  contained in the indenture governing the AirGate notes and the
restrictions contained in AirGate's credit facility, may limit AirGate's ability
to implement its business plans, finance future operations,  respond to changing
business and economic conditions,  secure additional  financing,  if needed, and
engage in opportunistic transactions. The AirGate credit facility and notes also
restricts  the  ability of AirGate and the  ability of  AirGate's  subsidiaries,
other than iPCS, and its future subsidiaries to do the following:

*    create liens;

*    make certain payments, including payments of dividends and distributions in
     respect of capital stock;

*    consolidate, merge and sell assets;

*    engage in certain transactions with affiliates; and

*    fundamentally change its business.

If  AirGate  fails to pay the debt  under its  credit  facility,  Sprint has the
option of purchasing AirGate's loans, giving Sprint certain rights of a creditor
to foreclose on AirGate's assets

Sprint has contractual  rights,  triggered by an acceleration of the maturity of
the debt under AirGate's credit facility,  pursuant to which Sprint may purchase
AirGate's  obligations  to its senior  lenders and obtain the rights of a senior
lender. To the extent Sprint purchases these obligations,  Sprint's interests as
a creditor could conflict with AirGate's interests.  Sprint's rights as a senior
lender would enable it to exercise  rights with respect to AirGate's  assets and
continuing  relationship  with Sprint in a manner not otherwise  permitted under
its Sprint agreements.

Risks Related to iPCS

iPCS has declared  bankruptcy,  which may cause the value of AirGate's ownership
interest in iPCS to be worthless

There is a  substantial  risk  that  AirGate  will  lose all of the value of its
investment in iPCS in connection with the bankruptcy of iPCS. Because the amount
of iPCS'  obligations  under its credit  facility and its notes are greater than
its existing cash and other assets when its payment obligations were accelerated
by the iPCS lenders,  there will likely be no assets  available for distribution
to  AirGate as iPCS'  sole  stockholder.  While  AirGate  may  request an equity
participation  in a  restructuring  of iPCS, it is likely that AirGate will lose
all of the value of its investment in iPCS in connection with iPCS' bankruptcy.

AirGate cannot provide funding to iPCS

In order to assure continued  compliance with the indenture  governing AirGate's
notes, AirGate has designated iPCS as an "unrestricted subsidiary." As a result,
for  purposes  of their  respective  public  debt  indentures,  AirGate and iPCS
operate  as  separate  business  entities.  Due  to  restrictions  in  AirGate's
indenture, AirGate is generally unable to provide funding, or direct or indirect
credit or  financial  support to iPCS and may not  maintain  or  preserve  iPCS'
financial  condition  or cause iPCS to achieve a  specified  level of  operating
results.

If iPCS fails to pay the debt under its credit  facility,  Sprint has the option
of  purchasing  iPCS'  loans,  giving  Sprint  certain  rights of a creditor  to
foreclose on iPCS' assets

Sprint has contractual  rights,  triggered by an acceleration of the maturity of
the debt under iPCS'  credit  facility,  pursuant to which  Sprint may  purchase
iPCS'  obligations  to its  senior  lenders  and  obtain  the rights of a senior
lender. To the extent Sprint purchases these obligations,  Sprint's interests as
a creditor  could  conflict  with the  interests of iPCS.  Sprint's  rights as a
senior  lender would  enable it to exercise  rights with respect to iPCS' assets
and its continuing  relationship  with iPCS in a manner not otherwise  permitted
under its Sprint agreements.

The bankruptcy of iPCS may have adverse affects on AirGate

AirGate  has  agreements  and  relationships   with  third  parties,   including
suppliers,  subscribers  and  vendors,  that  are  integral  to  conducting  its
day-to-day operations.  iPCS' bankruptcy could have a material adverse affect on
the perception of AirGate and the AirGate business and its prospects in the eyes
of subscribers,  employees,  suppliers, creditors and vendors. These persons may
perceive that there is increased risk in doing business with AirGate as a result
of iPCS'  bankruptcy.  Some of these persons may terminate  their  relationships
with  AirGate  which  would make it more  difficult  for  AirGate to conduct its
business.

As a result of iPCS'  bankruptcy,  AirGate may not be able to reduce its general
and administrative costs in an amount sufficient to subsidize the portion of the
combined Company's costs currently borne by iPCS

On a net basis,  we budgeted that iPCS would pay  approximately  $4.6 million of
the combined  Company's  general and  administrative  costs in fiscal  2003.  To
facilitate  the orderly  transition  of  management  services,  AirGate and iPCS
entered into an amendment to the Services  Agreement that would allow individual
services to be terminated by either party upon 30 days prior notice,  subject to
certain  exceptions.  iPCS has terminated  services and we anticipate  that most
services  provided  by AirGate  will be  terminated  by  September  1, 2003.  As
services  are  terminated,  AirGate  will be  required  to reduce  its costs and
expenses to meet its  business  plan.  A failure to reduce  these  expenses in a
timely manner could adversely affect AirGate's  liquidity,  financial  condition
and results of operations.

iPCS' net operating loss and credit  carryforwards may be significantly  reduced
in the event of a restructuring

If  there  is a  significant  elimination  or  reduction  of  iPCS'  outstanding
indebtedness in connection with iPCS'  bankruptcy,  iPCS' net operating loss and
credit  carry  forwards  and the tax bases of its  assets  may be  significantly
reduced.

Risks Related to Our Relationship with Sprint

The  termination  of AirGate's or iPCS'  affiliation  with Sprint would severely
restrict our ability to conduct our business

Neither AirGate nor iPCS own the licenses to operate their wireless network. The
ability of  AirGate  and iPCS to offer  Sprint PCS  products  and  services  and
operate a PCS network is  dependent  on their  Sprint  agreements  remaining  in
effect and not being  terminated.  All of our subscribers  have purchased Sprint
PCS products and services to date,  and we do not  anticipate  any change in the
future.  The management  agreements  between Sprint and each of AirGate and iPCS
are not perpetual.  Sprint can choose not to renew iPCS' management agreement at
the  expiration  of the  20-year  initial  term or any  ten-year  renewal  term.
AirGate's  management  agreement  automatically  renews at the expiration of the
20-year  initial term for an  additional  10-year  period  unless  AirGate is in
material default.  Sprint can choose not to renew AirGate's management agreement
at the  expiration  of the  ten-year  renewal  term or any  subsequent  ten-year
renewal term. In any event,  AirGate's and iPCS' management agreements terminate
in 50 years.

In  addition,  each of these  agreements  can be  terminated  for  breach of any
material term, including, among others, failure to pay, marketing, build-out and
network  operational  requirements.  Many of these  requirements  are  extremely
technical and detailed in nature. In addition, many of these requirements can be
changed  by Sprint  with  little  notice.  As a result,  we may not always be in
compliance with all requirements of the Sprint agreements.  For example,  Sprint
conducts  periodic  audits of  compliance  with  various  aspects of its program
guidelines and identifies issues it believes needs to be addressed. There may be
substantial costs associated with remedying any  non-compliance,  and such costs
may  adversely  affect  our  liquidity,   financial  condition  and  results  of
operations.

AirGate  and iPCS  also  are  dependent  on  Sprint's  ability  to  perform  its
obligations under the Sprint  agreements.  The non-renewal or termination of any
of the Sprint  agreements  or the failure of Sprint to perform  its  obligations
under the Sprint  agreements  would  severely  restrict  our  ability to conduct
business.

Sprint may make business decisions that are not in our best interests, which may
adversely affect our relationships  with subscribers in our territory,  increase
our expenses and/or decrease our revenues

Sprint,  under the Sprint  agreements,  has a substantial amount of control over
the conduct of our business. Accordingly, Sprint has made and, in the future may
make, decisions that adversely affect our business, such as the following:

*    Sprint could price its national plans based on its own objectives and could
     set price levels or other terms that may not be economically sufficient for
     our business;

*    Sprint could develop  products and services,  such as a one-rate plan where
     subscribers are not required to pay roaming  charges,  or establish  credit
     policies,  such as the NDASL  program,  which  could  adversely  affect our
     results of operations;

*    Sprint  introduced  a payment  method  for  subscribers  to pay the cost of
     service with us. This payment  method  initially  may not have had adequate
     controls or limitations,  and we may discover that some fraudulent payments
     were  made  to  accounts  using  this  payment  method.  The  controls  and
     limitations have now been strengthened.  If the other types of fraud become
     widespread,  it could  have a  material  adverse  impact on our  results of
     operations and financial condition;

*    Sprint  has raised and could  continue  to raise the costs to perform  back
     office services or maintain the costs above those  expected,  reduce levels
     of services or expenses or  otherwise  seek to increase  expenses and other
     amounts charged;

*    Sprint may elect with little or no notification,  to upgrade or convert its
     financial  reporting,  billing or inventory  software or change third party
     service organizations that can adversely affect our ability to determine or
     report  our  operating  results,  adversely  affect  our  ability to obtain
     handsets or adversely  affect our  subscriber  relationships;  * Sprint can
     seek to further reduce the reciprocal roaming rate charged when Sprint's or
     other Sprint network  partners' PCS subscribers  use our network;  * Sprint
     could limit our  ability to develop  local and other  promotional  plans to
     enable us to attract sufficient subscribers;

*    Sprint could, subject to limitations under our Sprint agreements, alter its
     network and technical requirements;

*    Sprint could make decisions which could  adversely  affect the Sprint brand
     names, products or services; and

*    Sprint  could  decide  not to renew the Sprint  agreements  or to no longer
     perform its  obligations,  which  would  severely  restrict  our ability to
     conduct business.

The occurrence of any of the foregoing could adversely  affect our  relationship
with subscribers in our  territories,  increase our expenses and/or decrease our
revenues  and  have  a  material  adverse  affect  on our  liquidity,  financial
condition and results of operation.

Our  dependence  on Sprint for services  may limit our ability to reduce  costs,
which could materially  adversely affect our financial  condition and results of
operation

Approximately  65% of cost of service  and roaming in our  financial  statements
relate to charges from Sprint. As a result, a substantial portion of our cost of
service and  roaming is outside  our  control.  There can be no  assurance  that
Sprint will lower its  operating  costs,  or, if these costs are  lowered,  that
Sprint will pass along savings to its PCS network  partners.  If these costs are
more than we anticipate  in our business  plan,  it could  materially  adversely
affect our liquidity, financial condition and results of operations and as noted
below, our ability to replace Sprint with lower cost providers may be limited.

Our dependence on Sprint may adversely affect our ability to predict our results
of operations

In 2002, our dependence on Sprint interjected a greater degree of uncertainty to
our business and financial planning. During this time:

*    we agreed to a new $4 logistics fee for each 3G enabled  handset to avoid a
     prolonged   dispute   over  certain   charges  for  which   Sprint   sought
     reimbursement;

*    Sprint PCS sought to recoup $3.9 million in  long-distance  access revenues
     previously  paid by Sprint PCS to AirGate  and has  invoiced  AirGate  $1.2
     million of this amount;

*    Sprint has  charged  us $0.8  million to  reimburse  Sprint for  certain 3G
     related development expenses with respect to calendar year 2002;

*    Sprint informed the Company on December 23, 2002 that it had  miscalculated
     software  maintenance fees for 2002 and future years, which would result in
     an annualized increase of $2.0 million if owed by the Company;

*    Sprint  notified  the  Company  that it intends  to reduce  the  reciprocal
     roaming  rate  charged by Sprint and its  network  partners  for use of our
     respective  networks  from  $0.10 per minute of use to $0.058 per minute of
     use in 2003.

The amount Sprint has asserted we owe is  approximately  $4.7  million.  We have
questioned  whether  certain of these  charges and actions are  appropriate  and
authorized  under our  Sprint  agreements.  We expect  that it will take time to
resolve these issues,  the ultimate  outcome is uncertain and  litigation may be
required to resolve  these  issues.  Unanticipated  expenses and  reductions  in
revenue have had and, if they occur in the future,  will have a negative  impact
on our  liquidity  and make it more  difficult to predict with  reliability  our
future performance.

Inaccuracies  in data  provided  by Sprint  could  understate  our  expenses  or
overstate  our  revenues  and  result  in  out-of-period  adjustments  that  may
materially adversely affect our financial results

Approximately  65% of cost of service  and roaming in our  financial  statements
relate to charges from Sprint. In addition,  because Sprint provides billing and
collection  services for the Company,  Sprint  remits  approximately  97% of our
revenues  to us.  The data  provided  by Sprint is the  primary  source  for our
recognition  of service  revenue  and a  significant  portion of our selling and
marketing and cost of service and operating expenses. In certain cases, the data
is  provided  at a level of detail  that is not  adequate  for us to verify  for
accuracy  back to the  originating  source.  As a  result,  we rely on Sprint to
provide accurate,  timely and sufficient data and information to properly record
our revenues,  expenses and accounts  receivables  which  underlie a substantial
portion of our periodic financial statements and other financial disclosures.

The Company and Sprint have discovered billing and other errors or inaccuracies,
which,  while not material to Sprint,  could be material to the Company.  If the
Company is required in the future to make additional adjustments or charges as a
result  of  errors  or  inaccuracies  in data  provided  to us by  Sprint,  such
adjustments  or charges  may have a  material  adverse  affect on our  financial
results in the period that the  adjustments  or charges are made, on our ability
to satisfy covenants contained in AirGate's credit facility,  and on our ability
to make fully informed business decisions.

The  inability of Sprint to provide high  quality back office  services,  or our
inability to use Sprint's  back office  services and  third-party  vendors' back
office  systems,  could lead to subscriber  dissatisfaction,  increased churn or
otherwise increase our costs

We rely on Sprint's internal support systems,  including  customer care, billing
and back office support.  Our operations  could be disrupted if Sprint is unable
to provide internal support systems in a high quality manner,  or to efficiently
outsource those services and systems through third-party vendors. Cost pressures
are expected to continue to pose a  significant  challenge to Sprint's  internal
support  systems.  Additionally,  Sprint  has made  reductions  in its  customer
service  support  structure  and may continue to do so in the future,  which may
have an  adverse  effect  on our  churn  rate.  Further,  Sprint  has  relied on
third-party  vendors  for  a  significant  number  of  important  functions  and
components  of its  internal  support  systems and may continue to rely on these
vendors in the future.  We depend on Sprint's  willingness  to continue to offer
these  services and to provide these  services  effectively  and at  competitive
costs.  These  costs were  approximately  $24.4  million  for  AirGate and $16.0
million for iPCS for the six months ended March 31, 2003. Our Sprint  agreements
provide  that,  upon nine  months  prior  written  notice,  Sprint  may elect to
terminate any of these services. The inability of Sprint to provide high quality
back office  services,  or our inability to use Sprint back office  services and
third-party   vendors'   back   office   systems,   could  lead  to   subscriber
dissatisfaction, increase churn or otherwise increase our costs.

Sprint has become aware of customer  dissatisfaction  with its customer  service
and in that regard has recently announced that it is undertaking  initiatives to
improve customer service. If Sprint elects to significantly  increase the amount
it charges us for any of these services,  our operating  expenses will increase,
and our  operating  income and  available  cash would be reduced.  Further,  our
ability to replace  Sprint in  providing  back office  services  may be limited.
While the services  agreements  allow the Company to use third-party  vendors to
provide certain of these services instead of Sprint,  the high startup costs and
necessary  cooperation  associated  with  interfacing  with Sprint's  system may
significantly  limit our ability to use back office services  provided by anyone
other than Sprint. This could limit our ability to lower our operating costs.

Changes in Sprint PCS products and  services  may reduce  subscriber  additions,
increase subscriber turnover and decrease subscriber credit quality

The  competitiveness  of Sprint PCS products and services is a key factor in our
ability to attract  and retain  subscribers,  and we believe was a factor in the
slowing subscriber growth in the last two quarters of fiscal 2002.

Certain  Sprint  pricing  plans,  promotions  and  programs may result in higher
levels of subscriber  turnover and reduce the credit  quality of our  subscriber
base. For example,  we believe that the NDASL and Clear Pay Program  resulted in
increased churn and an increase in sub-prime credit subscribers.

AirGate's disputes with Sprint may adversely affect its relationship with Sprint

AirGate's  disputes with Sprint may have a material  adverse affect on AirGate's
relationship with Sprint,  which could materially and adversely affect AirGate's
business.

Sprint's roaming arrangements may not be competitive with other wireless service
providers,  which may restrict our ability to attract and retain subscribers and
create other risks for us

We rely on Sprint's roaming  arrangements  with other wireless service providers
for coverage in some areas where Sprint service is not yet available.  The risks
related to these arrangements include:

*    the roaming arrangements are negotiated by Sprint and may not benefit us in
     the same manner that they benefit Sprint;

*    the quality of the service  provided by another  provider  during a roaming
     call may not approximate the quality of the service  provided by the Sprint
     PCS  network;

*    the price of a roaming  call off our  network may not be  competitive  with
     prices of other wireless companies for roaming calls;

*    customers may have to use a more expensive dual-band/dual mode handset with
     diminished standby and talk time capacities;

*    subscribers  must end a call in  progress  and  initiate  a new  call  when
     leaving the Sprint PCS network and entering another wireless network;

*    Sprint customers may not be able to use Sprint's advanced features, such as
     voicemail notification, while roaming; and

*    Sprint or the carriers  providing the service may not be able to provide us
     with accurate billing information on a timely basis.

If Sprint  customers are not able to roam  instantaneously  or efficiently  onto
other wireless  networks,  we may lose current Sprint subscribers and our Sprint
PCS services will be less attractive to new subscribers.

Certain  provisions of the Sprint agreements may diminish the value of AirGate's
common stock and restrict the sale of our business

Under limited circumstances and without further stockholder approval, Sprint may
purchase  the  operating  assets of AirGate or iPCS at a discount.  In addition,
Sprint must  approve any change of control of the  ownership  of AirGate or iPCS
and must consent to any assignment of their Sprint agreements. Sprint also has a
right of first refusal if AirGate or iPCS decide to sell its operating assets to
a  third-party.  Each of  AirGate  and  iPCS  are also  subject  to a number  of
restrictions  on the transfer of its business,  including a  prohibition  on the
sale of  AirGate or iPCS or their  operating  assets to  competitors  of Sprint.
These  restrictions and other  restrictions  contained in the Sprint  agreements
could  adversely  affect  the value of  AirGate's  common  stock,  may limit our
ability to sell our  business,  may reduce the value a buyer would be willing to
pay for our business,  may reduce the "entire  business  value," as described in
our Sprint  agreements,  and may limit our ability to obtain new  investment  or
support from any source.

We may have difficulty in obtaining an adequate supply of certain  handsets from
Sprint, which could adversely affect our results of operations

We depend on our relationship with Sprint to obtain handsets, and we have agreed
to purchase all of our 3G capable  handsets  from Sprint or a Sprint  authorized
distributor  through the  earlier of December  31, 2004 or the date on which the
cumulative 3G handset fees received by Sprint from all Sprint  network  partners
equal $25,000,000.  Sprint orders handsets from various manufacturers.  We could
have difficulty obtaining specific types of handsets in a timely manner if:

*    Sprint does not  adequately  project the need for handsets for itself,  its
     network  partners  and  its  other   third-party   distribution   channels,
     particularly  in  transition to new  technologies,  such as "one time radio
     transmission technology," or "1XRTT;"

*    Sprint  gives  preference  to other  distribution  channels,  which it does
     periodically;

*    we do not adequately project our need for handsets;

*    Sprint  modifies its handset  logistics  and delivery plan in a manner that
     restricts or delays our access to handsets; or

*    there is an adverse development in the relationship  between Sprint and its
     suppliers or vendors.

The  occurrence of any of the foregoing  could  disrupt our  subscriber  service
and/or result in a decrease in our subscribers, which could adversely affect our
results of operations.

If Sprint does not complete the  construction of its nationwide PCS network,  we
may not be able to attract and retain subscribers

Sprint currently intends to cover a significant portion of the population of the
United States,  Puerto Rico and the U.S. Virgin Islands by creating a nationwide
PCS  network  through  its own  construction  efforts  and those of its  network
partners. Sprint is still constructing its nationwide network and does not offer
PCS services,  either on its own network or through its roaming  agreements,  in
every city in the United States.  Sprint has entered into management  agreements
similar  to ours  with  companies  in other  markets  under its  nationwide  PCS
build-out strategy. Our results of operations are dependent on Sprint's national
network  and, to a lesser  extent,  on the  networks of Sprint's  other  network
partners.  Sprint's PCS network may not provide nationwide  coverage to the same
extent as its  competitors,  which could adversely affect our ability to attract
and retain subscribers.

If other Sprint  network  partners have financial  difficulties,  the Sprint PCS
network could be disrupted

Sprint's national network is a combination of networks.  The large  metropolitan
areas are owned and operated by Sprint,  and the areas in between them are owned
and operated by Sprint network partners,  all of which are independent companies
like we are. We believe that most, if not all, of these  companies have incurred
substantial debt to pay the large cost of building out their networks.

If other  network  partners  experience  financial  difficulties,  Sprint's  PCS
network could be disrupted.  If Sprint's  agreements with those network partners
are like ours, Sprint would have the right to step in and operate the network in
the affected  territory,  subject to the rights of their lenders. In such event,
there can be no assurance that Sprint could  transition in a timely and seamless
manner or that lenders would permit Sprint to do so.

If Sprint does not succeed our business may not succeed

If Sprint has a significant disruption to its business plan or network, fails to
operate its business in an efficient manner, or suffers a weakening of its brand
name, our operations and profitability would likely be negatively impacted.

If  Sprint  were to file  for  bankruptcy,  Sprint  may be  able to  reject  its
agreements  with us  under  Section  365 of the  federal  bankruptcy  code.  The
agreements  provide us remedies,  including  purchase and put rights,  though we
cannot predict if or to what extent our remedies would be enforceable.

Non-renewal or revocation by the Federal  Communications  Commission of Sprint's
PCS licenses would significantly harm our business

PCS licenses are subject to renewal and revocation by the Federal Communications
Commission referred to as the FCC. Sprint licenses in our territories will begin
to expire in 2007 but may be renewed for additional ten-year terms. There may be
opposition  to renewal of  Sprint's  PCS  licenses  upon their  expiration,  and
Sprint's PCS licenses may not be renewed. The FCC has adopted specific standards
to apply to PCS  license  renewals.  Any  failure by Sprint or us to comply with
these  standards  could cause  revocation or forfeiture of Sprint's PCS licenses
for our  territories.  If Sprint loses any of its licenses in our territory,  we
would be severely restricted in our ability to conduct business.

If Sprint does not  maintain  control  over its  licensed  spectrum,  the Sprint
agreements  may be  terminated,  which would result in our  inability to provide
service

The FCC requires that licensees like Sprint  maintain  control of their licensed
spectrum and not delegate control to third-party operators or managers. Although
the Sprint  agreements  with  AirGate and iPCS reflect an  arrangement  that the
parties  believe  meets the FCC  requirements  for licensee  control of licensed
spectrum,  we  cannot  assure  you that the FCC will  agree.  If the FCC were to
determine that the Sprint  agreements  need to be modified to increase the level
of licensee control,  AirGate and iPCS have agreed with Sprint to use their best
efforts to modify the Sprint  agreements  to comply with  applicable  law. If we
cannot  agree  with  Sprint  to  modify  the  Sprint  agreements,  they  may  be
terminated.  If the Sprint  agreements are  terminated,  we would no longer be a
part of the Sprint PCS network and would be severely  restricted  in our ability
to conduct business.

If AirGate  loses its right to use the Sprint brand and logo under its trademark
and  service  mark  license  agreements,   AirGate  would  lose  the  advantages
associated with marketing efforts conducted by Sprint.

The Sprint brand and logo is highly recognizable. If AirGate loses the rights to
use this brand and logo or the value of the brand and logo decreases,  customers
may not recognize its brand readily and AirGate may have to spend  significantly
more money on advertising to create brand recognition.

Risks Particular to Our Industry

Significant  competition in the wireless  communications  services  industry may
result in our competitors  offering new or better products and services or lower
prices, which could prevent us from operating profitably

Competition  in the wireless  communications  industry is intense.  According to
information  it has filed with the SEC,  Sprint  believes  that the  traditional
dividing lines between long distance, local, wireless, and Internet services are
increasingly  becoming blurred.  Through mergers and various service integration
strategies,   major  providers,   including  Sprint,  are  striving  to  provide
integrated solutions both within and across all geographical  markets. We do not
offer services  other than wireless  services and may not be able to effectively
compete against competitors with integrated solutions.

Competition  has caused,  and we anticipate  that  competition  will continue to
cause, the market prices for two-way  wireless  products and services to decline
in the future.  Our ability to compete will depend,  in part,  on our ability to
anticipate   and  respond  to  various   competitive   factors   affecting   the
telecommunications  industry.  Our  dependence on Sprint to develop  competitive
products and services and the  requirement  that we obtain  Sprint's  consent to
sell local pricing plans and non-Sprint approved equipment may limit our ability
to keep pace with competitors on the introduction of new products,  services and
equipment. Many of our competitors are larger than us, possess greater financial
and  technical  resources  and may  market  other  services,  such  as  landline
telephone  service,  cable television and Internet  access,  with their wireless
communications  services.  Some of our  competitors  also have  well-established
infrastructures,  marketing  programs and brand names. In addition,  some of our
competitors  may be able to offer  regional  coverage in areas not served by the
Sprint network or, because of their calling volumes or relationships  with other
wireless  providers,  may be able to offer regional roaming rates that are lower
than those we offer.  Additionally,  we expect that existing cellular  providers
will continue to upgrade their systems to provide digital wireless communication
services competitive with Sprint. Our success, therefore, is, to a large extent,
dependent  on  Sprint's  ability  to  distinguish  itself  from  competitors  by
marketing  and  anticipating  and  responding  to  various  competitive  factors
affecting the wireless industry,  including new services that may be introduced,
changes in consumer  preferences,  demographic  trends,  economic conditions and
discount  pricing  strategies by  competitors.  To the extent that Sprint is not
able to keep pace with  technological  advances  or fails to  respond  timely to
changes in competitive  factors in the wireless  industry,  it could cause us to
lose market share or experience a decline in revenue.

There has been a recent trend in the wireless  communications  industry  towards
consolidation   of  wireless   service   providers   through   joint   ventures,
reorganizations and acquisitions. We expect this consolidation to lead to larger
competitors  over time.  We may be unable to compete  successfully  with  larger
companies that have substantially  greater resources or that offer more services
than we do. In addition, we may be at a competitive disadvantage since we may be
more highly leveraged than many of our competitors.

If the demand for wireless  data  services does not grow, or if AirGate fails to
capitalize  on such  demand,  it could  have an  adverse  effect  on our  growth
potential

AirGate has  committed  significant  resources to wireless data services and our
business plan assumes  increasing  uptake in such services.  That demand may not
materialize.  Even if such demand does develop,  AirGate's ability to deploy and
deliver  wireless data services relies,  in many instances,  on new and unproven
technology.  Existing technology may not perform as expected. We may not be able
to obtain new technology to effectively and economically deliver these services.
The success of wireless data services is substantially  dependent on the ability
of Sprint and others to develop  applications  for wireless  data devices and to
develop and  manufacture  devices  that  support  wireless  applications.  These
applications  or  devices  may  not be  developed  or  developed  in  sufficient
quantities to support the deployment of wireless data  services.  These services
may  not be  widely  introduced  and  fully  implemented  at all or in a  timely
fashion.  These  services  may not be  successful  when they are in  place,  and
customers  may not purchase the services  offered.  Consumer  needs for wireless
data services may be met by technologies such as 802.11,  known as wi-fi,  which
does not rely on FCC  regulated  spectrum.  The lack of  standardization  across
wireless data handsets may  contribute to customer  confusion,  which could slow
acceptance of wireless data services,  or increase  customer care costs.  Either
could  adversely  affect our ability to provide these  services  profitably.  If
these services are not successful or costs  associated with  implementation  and
completion  of the  rollout of these  services  materially  exceed  our  current
estimates,  our financial  condition and prospects cold be materially  adversely
affected.

Market saturation could limit or decrease our rate of new subscriber additions

Intense competition in the wireless  communications  industry could cause prices
for wireless products and services to continue to decline.  If prices drop, then
our rate of net  subscriber  additions  will  take on  greater  significance  in
improving our financial condition and results of operations. However, as our and
our competitor's  penetration  rates in our markets increase over time, our rate
of adding net subscribers  could decrease.  If this decrease were to happen,  it
could materially adversely affect our liquidity, financial condition and results
of operations.

Alternative  technologies  and current  uncertainties in the wireless market may
reduce demand for PCS

The wireless communications industry is experiencing  significant  technological
change,  as evidenced  by the  increasing  pace of digital  upgrades in existing
analog wireless systems,  evolving industry standards,  ongoing  improvements in
the capacity and quality of digital  technology,  shorter development cycles for
new  products  and  enhancements  and  changes  in  end-user   requirements  and
preferences.  Technological  advances  and  industry  changes  could  cause  the
technology  used on our  network  to  become  obsolete.  We rely on  Sprint  for
research  and  development  efforts with respect to the products and services of
Sprint and with respect to the technology used on our network. Sprint may not be
able to respond to such changes and implement new  technology on a timely basis,
or at an acceptable cost.

If Sprint is unable to keep pace with these technological  changes or changes in
the wireless  communications  market based on the effects of consolidation  from
the  Telecommunications Act of 1996 or from the uncertainty of future government
regulation,  the  technology  used on our network or our  business  strategy may
become obsolete.

We are a  consumer  business  and a  recession  in the United  States  involving
significantly lowered spending could negatively affect our results of operations

Our  subscriber  base  is  primarily   individual  consumers  and  our  accounts
receivable  represent unsecured credit. We believe the economic downturn has had
an adverse  affect on our  operations.  In the event that the economic  downturn
that the United States and our  territories  have recently  experienced  becomes
more  pronounced  or lasts  longer  than  currently  expected  and  spending  by
individual consumers drops significantly, our business may be further negatively
affected.

According  to  Sprint,  a number  of its  suppliers  have  recently  experienced
financial challenges.  If these suppliers cannot meet their commitments,  Sprint
states  that it would have to use  different  vendors  and this could  result in
delays,  interruptions,  or additional  expenses associated with the upgrade and
expansion of Sprint's networks and the offering of its products and services.

Regulation by government and taxing agencies may increase our costs of providing
service or require us to change our  services,  either of which could impair our
financial performance

Our  operations  and  those of Sprint  may be  subject  to  varying  degrees  of
regulation  by the FCC,  the Federal  Trade  Commission,  the  Federal  Aviation
Administration, the Environmental Protection Agency, the Occupational Safety and
Health  Administration  and state and local regulatory  agencies and legislative
bodies.  Adverse  decisions  or  regulation  of these  regulatory  bodies  could
negatively  impact our operations and our costs of doing business.  For example,
changes  in tax laws or the  interpretation  of  existing  tax laws by state and
local authorities could subject us to increased income, sales, gross receipts or
other tax costs or require us to alter the structure of our current relationship
with Sprint.

Use of hand-held phones may pose health risks, which could result in the reduced
use of wireless services or liability for personal injury claims

Media  reports  have  suggested  that certain  radio  frequency  emissions  from
wireless  handsets may be linked to various health problems,  including  cancer,
and may interfere with various  electronic  medical devices,  including  hearing
aids and pacemakers.  Concerns over radio frequency emissions may discourage use
of  wireless  handsets  or  expose us to  potential  litigation.  Any  resulting
decrease in demand for  wireless  services,  or costs of  litigation  and damage
awards, could impair our ability to achieve and sustain profitability.

Regulation by government or potential litigation relating to the use of wireless
phones while driving could adversely affect our results of operations

Some studies have  indicated  that some aspects of using  wireless  phones while
driving may impair drivers' attention in certain circumstances, making accidents
more likely.  These  concerns  could lead to  litigation  relating to accidents,
deaths or serious  bodily  injuries,  or to new  restrictions  or regulations on
wireless phone use, any of which also could have material adverse effects on our
results  of  operations.  A number  of U.S.  states  and local  governments  are
considering or have recently enacted legislation that would restrict or prohibit
the use of a wireless handset while driving a vehicle or, alternatively, require
the use of a hands-free telephone.  Legislation of this sort, if enacted,  would
require wireless service providers to provide hands-free enhanced services, such
as voice activated dialing and hands-free  speaker phones and headsets,  so that
they can keep generating revenue from their subscribers,  who make many of their
calls while on the road.  If we are unable to provide  hands-free  services  and
products to our  subscribers  in a timely and  adequate  fashion,  the volume of
wireless phone usage would likely decrease, and our ability to generate revenues
would suffer.

Unauthorized  use of, or  interference  with,  the PCS  network of Sprint  could
disrupt our service and increase our costs

We may incur costs  associated with the  unauthorized  use of the PCS network of
Sprint,  including  administrative  and capital costs associated with detecting,
monitoring  and  reducing  the  incidence  of fraud.  Fraudulent  use of the PCS
network  of  Sprint   may  impact   interconnection   costs,   capacity   costs,
administrative  costs, fraud prevention costs and payments to other carriers for
fraudulent roaming.

Equipment  failure and natural  disasters or terrorist acts may adversely affect
our operations

A major  equipment  failure or a natural  disaster or terrorist act that affects
our mobile telephone switching offices, microwave links, third-party owned local
and long distance  networks on which we rely, our cell sites or other  equipment
or the networks of other  providers on which our  subscribers  roam could have a
material adverse effect on our operations.  While we have insurance coverage for
some of these events,  our  inability to operate our wireless  system even for a
limited time period may result in a loss of subscribers or impair our ability to
attract  new  subscribers,  which  would have a material  adverse  effect on our
business, results of operations and financial condition.

Risks Related to Our Common Stock

We may not achieve or sustain  operating  profitability  or positive cash flows,
which may adversely affect AirGate's stock price

AirGate and iPCS have limited  operating  histories.  Our ability to achieve and
sustain  operating  profitability  will depend upon many factors,  including our
ability to market  Sprint PCS  products  and  services,  manage  churn,  sustain
monthly average revenues per user, and reduce capital expenditures and operating
expenses. We have experienced slowing net subscriber growth, increased churn and
increased costs to acquire new  subscribers and as a result,  have had to revise
our business plans. If AirGate does not achieve and maintain positive cash flows
from  operations  when  projected,  AirGate's  stock  price  may  be  materially
adversely  affected.  In  addition,  as a  result  of the  bankruptcy  of  iPCS,
AirGate's investment in iPCS is likely to be worthless,  and such bankruptcy may
materially adversely affect AirGate's stock price.

Our stock price has suffered significant declines,  remains volatile and you may
not be able to sell your shares at the price you paid for them

The market price of AirGate common stock has been and may continue to be subject
to wide fluctuations in response to factors such as the following, some of which
are beyond our control:

*    quarterly variations in our operating results;

*    concerns about liquidity;

*    the de-listing of our common stock;

*    operating  results that vary from the  expectations of securities  analysts
     and investors;

*    changes in expectations as to our future financial  performance,  including
     financial estimates by securities analysts and investors;

*    changes  in the  market  perception  about the  prospects  and  results  of
     operations   and   market    valuations   of   other   companies   in   the
     telecommunications  industry  in  general  and  the  wireless  industry  in
     particular,   including  Sprint  and  its  PCS  network  partners  and  our
     competitors;

*    changes in the Company's relationship with Sprint;

*    announcements by Sprint concerning developments or changes in its business,
     financial condition or results of operations,  or in its expectations as to
     future financial performance;

*    actual or potential defaults by us under any of our agreements;

*    actual or  potential  defaults  in bank  covenants  by Sprint or Sprint PCS
     network  partners,  which may result in a perception that AirGate is unable
     to comply with its bank covenants;

*    announcements  by Sprint or our competitors of  technological  innovations,
     new products and services or changes to existing products and services;

*    changes in law and regulation;

*    announcements by third parties of significant claims or proceedings against
     us;

*    announcements   by  us  or  our   competitors  of  significant   contracts,
     acquisitions,   strategic   partnerships,   joint   ventures   or   capital
     commitments; and * general economic and competitive conditions.

AirGate's common stock was delisted from Nasdaq. Accordingly,  our stockholders'
ability to sell our common stock may be adversely  effected.  Additionally,  the
market for so-called  "penny  stocks" has suffered in recent years from patterns
of fraud and abuse.

AirGate was notified by the Nasdaq Stock Market, Inc. that because it had failed
to regain  compliance with the minimum $1.00 bid price per share requirement and
also failed to comply with the minimum  stockholders'  equity,  market  value of
publicly held shares and minimum bid requirements  for continued  listing on the
Nasdaq National Market,  the Nasdaq Stock Market,  Inc. was delisting  AirGate's
stock from the Nasdaq National Market. This delisting occurred on April 8, 2003.
In addition,  AirGate did not meet the listing requirements to be transferred to
the Nasdaq  Small Cap Market.  AirGate's  common stock  currently  trades on the
OTCBB maintained by The Nasdaq Stock Market,  Inc., under the symbol "PCSA", and
is subject to a Securities  and Exchange  Commission  rule that imposes  special
sales practice  requirements upon  broker-dealers who sell such OTCBB securities
to  persons  other than  established  customers  or  accredited  investors.  For
purposes of the rule, the phrase "accredited investors" means, in general terms,
institutions  with assets in excess of $5,000,000,  or individuals  having a net
worth in excess of $1,000,000  or having an annual income that exceeds  $200,000
(or  that,  when  combined  with  a  spouse's  income,  exceeds  $300,000).  For
transactions  covered  by the  rule,  the  broker-dealer  must  make  a  special
suitability  determination for the purchaser and receive the purchaser's written
agreement  to the  transaction  prior to the  sale.  Consequently,  the rule may
affect the ability of broker-dealers to sell AirGate's common stock and also may
affect the ability of our current  stockholders to sell their  securities in any
market that might develop.  In addition,  the Securities and Exchange Commission
has adopted a number of rules to regulate  "penny  stocks."  Such rules  include
Rules 3a51-1,  15-g1,  15-g2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under
the  Securities  Exchange  Act of 1934 as amended.  AirGate's  common  stock may
constitute  "penny  stocks"  within the  meaning of the rules.  These  rules may
further  affect  the  ability  of owners  of  AirGate  common  stock to sell our
securities in any market that might develop for them.

Shareholders  should also be aware that,  according to  Securities  and Exchange
Commission,  the  market  for penny  stocks has  suffered  in recent  years from
patterns  of fraud and  abuse.  We are aware of the  abuses  that have  occurred
historically  in the penny  stock  market.  Although we do not expect to be in a
position  to  dictate  the  behavior  of the  market  or of  broker-dealers  who
participate  in the  market,  management  will  strive  within the  confines  of
practical  limitations to prevent the described  patterns from being established
with respect to AirGate's securities.

Future sales of shares of our common stock,  including sales of shares following
the expiration of `lock-up" arrangements, may negatively affect our stock price

As a result  of the  acquisition  of iPCS,  the  former  iPCS  security  holders
received  approximately  12.4 million shares of our common stock and options and
warrants to purchase  approximately  1.1 million shares of our common stock. The
shares of common stock issued in  connection  with the  acquisition  represented
approximately  47.5%  of  our  common  stock,   assuming  the  exercise  of  all
outstanding warrants and options.

In connection with the merger,  holders of substantially  all of the outstanding
shares of iPCS common and preferred stock entered into "lock-up" agreements with
the Company.  The lock-up agreements imposed restrictions on the ability of such
stockholders to sell or otherwise dispose of the shares of our common stock that
they received in the merger.  As of September 26, 2002,  all of such shares were
released from the lock-up.

We entered into a  registration  rights  agreement at the effective  time of the
merger  with  some of the  former  iPCS  stockholders.  Under  the  terms of the
registration  rights agreement,  Blackstone  Communications  Partners I L.P. and
certain of its affiliates  ("Blackstone") has a demand registration right, which
became  exercisable after November 30, 2002, subject to the requirement that the
offering exceed size  requirements.  In addition,  the former iPCS stockholders,
including Blackstone, have incidental registration rights pursuant to which they
can,  in  general,  include  their  shares  of our  common  stock in any  public
registration we initiate, whether or not for sale for our own account.

Sales  of  substantial  amounts  of  shares  of our  common  stock,  or even the
potential  for such sales,  could lower the market price of our common stock and
impair its ability to raise capital through the sale of equity securities.

We do not intend to pay dividends in the foreseeable future

We do not  anticipate  paying  any cash  dividends  on our  common  stock in the
foreseeable  future. We intend to retain any future earnings to fund our growth,
debt service requirements and other corporate needs.  Accordingly,  you will not
receive a return on your  investment  in our common stock through the payment of
dividends  in the  foreseeable  future  and may not  realize  a  return  on your
investment even if you sell your shares.  Any future payment of dividends to our
stockholders  will  depend  on  decisions  that  will be made  by our  board  of
directors and will depend on then existing  conditions,  including our financial
condition,   contractual   restrictions,   capital   requirements  and  business
prospects.

Our  certificate  of  incorporation  and  bylaws  include  provisions  that  may
discourage  a change of control  transaction  or make  removal of members of the
board of directors more difficult

Some  provisions of our certificate of  incorporation  and bylaws could have the
effect of  delaying,  discouraging  or  preventing  a change in control of us or
making  removal of  members  of the board of  directors  more  difficult.  These
provisions include the following:

*    a classified board, with each board member serving a three-year term;

*    no authorization for stockholders to call a special meeting;

*    no ability of stockholders to remove directors without cause;

*    prohibition of action by written consent of stockholders; and

*    advance notice for nomination of directors and for stockholder proposals.

These  provisions,  among others,  may have the effect of  discouraging  a third
party from making a tender offer or otherwise  attempting  to obtain  control of
us, even though a change in ownership might be economically beneficial to us and
our stockholders.

Item 6.  Exhibits and Reports on Form 8-K

(a)       Exhibits

10.1 * First  Amendment  to Services  Agreement  dated  February 21, 2003 by and
     among AirGate Service Company, Inc., AirGate PCS, Inc., iPCS Wireless, Inc.
     and iPCS, Inc.

10.2 * AirGate PCS, Inc. Amended and Restated Non-Employee Director Compensation
     Plan dated January 22, 2003.

99.1 Certification  of  Thomas  M.  Dougherty  pursuant  to  Section  906 of the
     Sarbanes-Oxley Act of 2002, 18 U.S.C.ss.1350.

99.2 Certification  of  William  H.  Seippel  pursuant  to  Section  906  of the
     Sarbanes-Oxley Act of 2002, 18 U.S.C.ss.1350.
___________
*Previously Filed.


(b) Reports on 8-K

The following  Current  Reports on 8-K were filed by AirGate  during the quarter
ended March 31, 2003:

On January 17,  2003,  AirGate  furnished a Current  Report on Form 8-K with the
Securities  and  Exchange  Commission  under Item 9 - Regulation  FD  Disclosure
relating to its  financial  and  operating  results  for its fourth  quarter and
fiscal year ended  September  30, 2002,  and the filing of its Annual  Report on
Form 10-K.

On February  5, 2003,  AirGate  furnished a Current  Report on Form 8-K with the
Securities  and  Exchange  Commission  under Item 9 - Regulation  FD  Disclosure
relating to a Nasdaq Staff  Determination  letter indicating that because of the
Company's  failure to regain  compliance  with the  minimum  $1.00 bid price per
share, its securities were subject to delisting from the Nasdaq National Market.

On February 21, 2003,  AirGate  furnished a Current  Report on Form 8-K with the
Securities  and  Exchange  Commission  under Item 9 - Regulation  FD  Disclosure
relating to the scheduling of its first quarter fiscal 2003  conference call and
its financial and operating results for the first quarter of fiscal year 2003.

On February 26, 2003,  AirGate  furnished a Current  Report on Form 8-K with the
Securities  and  Exchange  Commission  under Item 9 - Regulation  FD  Disclosure
relating to the filing of a Chapter 11 bankruptcy  petition in the United States
Bankruptcy  Court for the  Northern  District  of  Georgia  for the  purpose  of
effecting a court-administered  reorganization by its wholly-owned  unrestricted
subsidiary,  iPCS,  Inc.  and its  subsidiaries,  iPCS  Wireless,  Inc. and iPCS
Equipment, Inc.





                                   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 officer thereunto duly authorized.


            AIRGATE PCS, INC.

       By:  /s/ William H. Seippel
            __________________________________________
                William H. Seippel
                Title:     Chief Financial Officer
                            (Duly Authorized Officer, Principal Financial
                            and Chief Accounting Officer)

Date:  January 15, 2004





                                 CERTIFICATION

I, Thomas M. Dougherty, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of AirGate PCS, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: January 15, 2004

/s/ Thomas M. Dougherty
------------------------
Thomas M. Dougherty
Chief Executive Officer



                                 CERTIFICATION


I, William H. Seippel, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of AirGate PCS, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: January 15, 2004

/s/ William H. Seippel
------------------------
William H. Seippel
Chief Financial Officer