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 DECEMBER 31, 2002.

                                       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|

     25,944,903 shares of common stock, $0.01 par value per share, were
outstanding as of February 10, 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.
                              THIRD QUARTER REPORT

                                TABLE OF CONTENTS

PART I    FINANCIAL INFORMATION
Item 1.   Financial Statements............................................... 3
          Consolidated Balance Sheets at December 31, 2002 and
             September 30, 2002 (unaudited).................................. 3
          Consolidated Statements of Operations for the three months ended
             December 31, 2002 and 2001 (unaudited).......................... 4
          Consolidated Statements of Cash Flows for the three months ended
             December 31, 2002 and 2001 (unaudited).......................... 5
          Notes to the Consolidated Financial Statements (unaudited)......... 6
Item 2.   Management's Discussion and Analysis of Financial Condition
             and Results of Operations...................................... 16
Item 3.   Quantitative and Qualitative Disclosures About Market Risk.........31
Item 4.   Controls and Procedures........................................... 32
PART II   OTHER INFORMATION................................................. 33
Item 1.   Legal Proceedings................................................. 33
Item 2.   Changes in Securities and Use of Proceeds......................... 33
Item 3.   Defaults Upon Senior Securities................................... 33
Item 4.   Submission of Matters to a Vote of Security Holders............... 33
Item 5.   Other Information................................................. 33
Item 6.   Exhibits and Reports on Form 8-K.................................. 45






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



                                                                                                     December 31,  September 30,
                                                                                                         2002          2002
                                                                                                         ----          ----
                                                                                                                
Assets
Current assets:

     Cash and cash equivalents..................................................................        $  3,010      $  32,475
     Accounts receivable, net of allowance for doubtful accounts of $11,455
       and $11,256, respectively................................................................          37,430         38,127
     Receivable from Sprint.....................................................................          42,334         44,953
     Inventories................................................................................           6,555          6,733
     Prepaid expenses...........................................................................          10,647          7,159
     Other current assets.......................................................................             293            326
                                                                                                            ----           ----
         Total current assets...................................................................         100,269        129,773
Property and equipment, net of accumulated depreciation of $133,262 and $112,913, respectively..         383,720        399,155
Financing costs.................................................................................           7,867          8,118
Intangible assets, net of accumulated amortization of $21,856 and $17,592, respectively.........          24,063         28,327
Direct subscriber activation costs..............................................................           8,341          8,409
Other assets....................................................................................           1,369            512
                                                                                                           -----          -----
       Total assets.............................................................................        $525,629       $574,294
                                                                                                        ========       ========

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
     Accounts payable...........................................................................        $  5,681      $  18,152
     Accrued expenses...........................................................................          18,575         20,950
     Payable to Sprint..........................................................................          82,011         88,360
     Deferred revenue...........................................................................          11,923         11,775
     Current maturities of long-term debt and capital lease obligations.........................          361,828       354,936
                                                                                                          -------       -------
         Total current liabilities..............................................................         480,018        494,173
Deferred subscriber activation fee revenue......................................................          15,200         14,973
Other long-term liabilities.....................................................................           3,565          3,267
Long-term debt and capital lease obligations, excluding current maturities......................         367,291        354,828
                                                                                                        --------       --------
         Total liabilities......................................................................         866,074        867,241
                                                                                                        --------       --------
           Commitments and contingencies........................................................              --             --
                                                                                                        --------       --------
Stockholders' equity (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; 25,836,520 and
        25,806,520 shares issued and outstanding at December 31, 2002 and September 30, 2002,                258            258
        respectively............................................................................
     Additional paid-in-capital.................................................................         924,030        924,008
     Unearned stock compensation................................................................            (875)        (1,029)
     Accumulated deficit........................................................................      (1,263,858)    (1,216,184)
                                                                                                      -----------    -----------
         Total stockholders' equity (deficit)...................................................        (340,445)      (292,947)
                                                                                                      -----------    -----------
         Total liabilities and stockholders' equity (deficit)...................................      $  525,629     $  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
                                                                              December 31,
                                                                    ----------------------------------
                                                                         2002               2001
                                                                    ---------------     --------------
                                                                                       
Revenues:

     Service revenues..........................................           $ 96,328           $ 55,849
     Roaming revenues..........................................             31,991             21,303
     Equipment revenues........................................              4,782              4,545
                                                                         ---------          ---------
           Total  revenues.....................................            133,101             81,697

Operating Expenses:
     Cost of services and roaming (exclusive
      of depreciation,  and amortization as shown separately
      below)...................................................            (88,006)           (57,757)
     Cost of equipment.........................................            (12,127)            (9,583)
     Selling and marketing.....................................            (28,903)           (29,845)
     General and administrative expenses.......................             (7,408)            (5,200)
     Non-cash stock compensation expense.......................               (176)              (231)
     Depreciation and amortization of property and equipment...            (20,626)           (11,266)
     Amortization of intangible assets.........................             (4,264)            (4,539)
                                                                         ----------         ----------
           Total operating expenses............................           (161,510)          (118,421)
                                                                         ----------         ----------
           Operating loss......................................            (28,409)           (36,724)
                                                                         ----------         ----------
Interest income................................................                 40                 99
Interest expense...............................................            (19,305)           (10,283)
Other expense..................................................                 --                (95)
                                                                         ----------         ----------
           Loss before income tax benefit......................            (47,674)           (47,003)
                                                                         ----------         ----------
           Income tax benefit..................................                 --             17,359

           Net loss............................................          $ (47,674)        $  (29,644)
                                                                        -----------        -----------
Basic and diluted net loss per share of common stock...........          $   (1.85)        $    (1.68)

Basic and diluted weighted-average outstanding common shares...         25,824,149         17,675,349



See accompanying notes to the unaudited consolidated financial statements.






                       AIRGATE PCS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                             (dollars in thousands)



                                                                                                           Three Months Ended
                                                                                                              December 31,
                                                                                                       ---------------------------

                                                                                                          2002            2001
                                                                                                                    

     Net loss......................................................................................        $ (47,674)     $(29,644)
     Adjustments to reconcile net loss to net cash used in operating activities:
      Depreciation and amortization of property and equipment......................................           20,626        11,266
      Amortization of intangible assets............................................................            4,264         4,539
      Amortization of financing costs into interest expense........................................              302           386
      Provision for doubtful accounts..............................................................            3,126         6,731
      Interest expense associated with accretion of discounts......................................           14,863         9,069
      Non-cash stock compensation..................................................................              176           231
      Deferred income tax benefit..................................................................               --       (17,359)
        Changes in assets and liabilities:
          Accounts receivable......................................................................           (2,103)       (9,540)
          Receivable from Sprint...................................................................            2,619           827
          Inventories..............................................................................                          1,066
                                                                                                                 178
          Prepaid expenses, other current and non-current assets...................................           (4,622)       (2,337)
          Accounts payable, accrued expenses and other long term liabilities.......................           (6,597)       (7,941)
          Payable to Sprint........................................................................           (6,349)       (1,841)
          Deferred revenue.........................................................................            1,282         3,426
                                                                                                          -----------    ----------
                     Net cash used in operating activities.........................................          (19,909)      (31,121)
                                                                                                          -----------    ----------

Cash flows from investing activities:
     Capital expenditures..........................................................................         (14,050)       (7,126)
     Cash acquired from iPCS, Inc..................................................................              --        24,401
     Purchase of business assets...................................................................              --        (5,880)
                                                                                                          ----------    -----------

                     Net cash (used in) provided by investing activities...........................         (14,050)       11,395
                                                                                                         -----------    -----------

Cash flows from financing activities:
     Proceeds from borrowings under senior credit facilities.......................................           5,000        30,000
     Payments for credit facility borrowings.......................................................            (506)           --
     Proceeds from exercise of employee stock options..............................................              --           585
                                                                                                         -----------    -----------
                     Net cash provided by financing activities.....................................           4,494        30,585
                                                                                                         -----------    -----------
                     Net (decrease) increase in cash and cash equivalents..........................         (29,465)       10,859
Cash and cash equivalents at beginning of period...................................................          32,475        14,290
                                                                                                         -----------   ------------
Cash and cash equivalents at end of period.........................................................     $     3,010    $   25,149
                                                                                                        ============   ============
Supplemental disclosure of cash flow information - cash paid for interest..........................     $     2,702    $    1,738
Supplemental disclosure for non-cash investing activities:
     Capitalized interest..........................................................................     $       522    $    1,317



See accompanying notes to the unaudited consolidated financial statements.






                       AIRGATE PCS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002
                                   (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 ended
December 31, 2002 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
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. All significant intercompany accounts and transactions have been
eliminated in consolidation.

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
quarter ended December 31, 2002 and the year ended September 30, 2002, the
Company's net loss amounted to $47.7 million and $996.6 million, including
goodwill and asset impairment charges of $817.4 million. As of December 31,
2002, the Company had a working capital deficit of $379.7 million, and AirGate
had available credit of $12.0 million under its $153.5 million senior secured
credit facility (the "AirGate credit facility"). The majority of the Company's
working capital deficit is attributable to the classification of iPCS' debt
described below totaling $359.8 million as current.

iPCS has ceased making interest payments on its $130.0 million senior secured
credit facility (the "iPCS credit facility") and is not in compliance with
certain provisions of the iPCS credit facility or the indenture under which its
$300.0 million senior subordinated discount notes (the "iPCS notes") were
issued. iPCS has no remaining credit availability under its credit facility. As
a result of these defaults, substantially all of iPCS' debt is classified as a
current liability. The lenders under the iPCS credit facility and the trustee
for the iPCS notes are entitled to accelerate the iPCS debt, subject to the
forbearance agreement described in Note 10.

iPCS has also incurred significant net losses during the quarter ended December
31, 2002 and the year ended September 30, 2002, which are included in the
accompanying consolidated financial statements. Because current conditions in
the capital markets make additional financing unlikely, iPCS has undertaken
efforts to restructure its relationship with its secured lenders, its public
noteholders and Sprint. To date, iPCS has been unable to restructure its debt or
secure additional financing necessary to fund its operations and, accordingly,
iPCS expects to file for reorganization and protection from its creditors under
Chapter 11 of the United States Bankruptcy Code in early 2003 either as part of
a consensual restructuring or in an effort to effect a court administered
reorganization.

Because iPCS is an unrestricted subsidiary, under AirGate's debt agreements
AirGate is generally unable to provide capital or other financial support to
iPCS. Further, iPCS lenders, noteholders and creditors do not have a lien on or
encumbrance on assets of AirGate. We believe AirGate operations will continue
independent of the outcome of the iPCS restructuring. However, it is likely that
AirGate's ownership interest in iPCS will have no value after the restructuring
is complete.

The carrying value of iPCS' long-lived assets in these consolidated financial
statements (principally property and equipment, goodwill and intangible assets)
was written down during the year ended September 30, 2002 to reflect impairment
charges as required by Statement of Financial Accounting Standards ("SFAS") No.
144 and SFAS No. 142.

While the ultimate and long-term affect on AirGate of iPCS' proposed 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, the Company has
invested large amounts to build-out its networks and for other capital assets.
For the quarter ended December 31, 2002 and the three years ended September 30,
2002, the Company invested $14.1 million and $320.7 million respectively to
purchase property and equipment. While much of the Company's networks are now
complete, and capital expenditures are expected to decrease significantly in the
future, such expenditures will continue to be necessary.

AirGate had only $12 million remaining available under the AirGate credit
facility as of December 31, 2002. AirGate currently has no additional sources of
working capital other than EBITDA. 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 if it is unable to maintain or comply with the restrictive 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 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. Such a
restriction or termination 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:

o    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;

o    the elimination of certain personnel positions;

o    a significant reduction in capital expenditures; and

o    a reduction in spending for advertising and promotions.

In addition to these steps, AirGate is initiating or investigating a number of
other actions that could further reduce operating expenses and capital needs.
These include additional reductions in staff; the outsourcing of certain
functions now performed by AirGate; further deferrals or reductions in capital
spending and 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 the end of calendar year 2003.

The following reflects condensed balance sheet information and statement of
operations information of AirGate and its unrestricted subsidiary, iPCS,
separately identifying the investment in iPCS including the effects of purchase
accounting as of December 31, 2002 and September 30, 2002 and the historical
equity basis loss of iPCS, the related effects of purchase accounting, and
income tax benefit for the quarters ended December 31, 2002 and 2001.




                                                                                   As of
                                                                   December 31, 2002    September 30, 2002
                                                                                           
Condensed Balance Sheet Information:

Cash and cash equivalents..................................               $     944             $   4,887
Other current assets.......................................                  63,650                62,819
                                                                            -------               -------
        Total current assets...............................                  64,594                67,706
Property and equipment, net................................                 203,644               213,777
Investment in iPCS ........................................                (169,789)             (141,543)
Other noncurrent assets....................................                  14,226                13,732
                                                                          ---------             ---------
                                                                          $ 112,675             $ 153,672
                                                                          =========             =========

Current liabilities........................................               $  76,036             $  82,175
Long-term debt.............................................                 366,728               354,264
Other long-term liabilities................................                  10,356                10,180
                                                                            -------               -------
      Total liabilities....................................                 453,120               446,619

Stockholders' deficit......................................                (340,445)             (292,947)
                                                                           ---------            ----------
                                                                          $ 112,675             $ 153,672
                                                                          =========             =========





                                                                        For the Three Months Ended
                                                                  December 31, 2002      December 31, 2001
                                                                                           
Condensed Statement of Operations Information:

Revenues...................................................             $    81,865             $  67,671
Costs of revenues..........................................                 (58,278)              (53,243)
Selling and marketing expenses.............................                 (16,798)              (25,089)
General and administrative expenses........................                  (4,077)               (3,976)
Depreciation and amortization..............................                 (11,619)               (9,023)
Other expense, net (principally interest)..................                 (10,521)               (8,935)
                                                                          ----------            ----------
      Total expenses.......................................                (101,293)             (100,266)
                                                                          ----------            ----------
Loss before equity in loss of iPCS and effects of purchase
    accounting, and income tax benefit.....................                 (19,428)              (32,595)
Historical equity basis loss of iPCS.......................                 (25,763)              (10,319)
Effects of purchase accounting.............................                  (2,483)               (4,089)


Income tax benefit.........................................                      --                17,359
                                                                         -----------           -----------
Net loss...................................................              $  (47,674)            $ (29,644)
                                                                         ===========            ==========


  (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 41,790 for the quarter ended December 31,
2002 and 704,876 for the quarter ended December 31, 2001 have been excluded from
the computation of dilutive net loss per share for the periods presented because
their effect would have been antidilutive.


(2)  New Accounting Pronouncements

In December 2002, the Financial  Accounting Standards Board ("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. The
Company currently does not anticipate adopting the provisions of SFAS No. 148.

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

The Interpretation 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 consolidated operating
lease disclosure commitment footnote included in the Company's Form 10-K/A.
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 sends the
handset to Sprint for repair. Sprint provides a credit to the Company equal to
the price of the refurbished handset, which is generally what is returned to the
customer. The Company will apply the recognition and measurement provisions for
all guarantees and warranties entered into or modified after December 31, 2002.

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 adoption of SFAS No. 146 by the
Company on October 1, 2002 is not expected to have a material impact on the
Company's financial position, results of operations, or cash flows as the
Company has not recorded any significant restructurings in the past periods, but
the adoption may impact the timing of charges in future periods. As discussed in
Note 6, during the three months ended December 31, 2002 the Company recorded
$0.7 million 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. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
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 provides 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 quarters ended December 31,
2002 and 2001 are as follows (dollars in thousands):







                                                                                 For the Three Months
                                                                                  Ended December 31,
                                                                                2002             2001
                                                                                           
Amounts included in the Consolidated Statement of Operations:

     AirGate roaming revenue...............................................   $  17,829       $  16,209
     AirGate cost of service and roaming:
          Roaming..........................................................   $  14,685       $  13,157
          Customer service.................................................      11,303           7,455
          Affiliation fee..................................................       4,836           3,386
          Long distance....................................................       2,785           3,310
          Other............................................................         494             498
                                                                              ----------       ---------

     AirGate cost of service and roaming:..................................   $  34,103       $  27,806
     AirGate purchased inventory...........................................   $   5,650       $   6,647
     AirGate selling and marketing.........................................   $   3,101       $   8,337
     iPCS roaming revenue..................................................   $  10,663       $   4,540
     iPCS cost of service and roaming
          Roaming..........................................................   $   8,362       $   3,647
          Customer service.................................................       7,526           1,290
          Affiliation fee..................................................       3,106             717
          Long distance....................................................       2,150             898
          Other............................................................       1,696             100
                                                                              ----------       ----------

     iPCS cost of service and roaming......................................   $  22,840       $   6,652
     iPCS purchased inventory..............................................   $   6,175       $   2,297
     iPCS selling and marketing............................................   $   3,014       $   3,534
Amounts included in the Consolidated Balance Sheet:


                                                                           As of
                                                  December 31,     September 30,
                                                      2002              2002
                                                   ---------         ---------
 Receivable from Sprint                           $  42,334          $  44,953
 Payable to Sprint                                  (82,011)           (88,360)

Because approximately 96% 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 open and outstanding from time to time. These include, but are
not limited to, the following items, all of which for accounting purposes have
been reserved or otherwise provided for:

o    Sprint PCS sought to recoup $4.9 million in long-distance access revenues
     previously paid by Sprint PCS to the Company, of which $3.9 million related
     to AirGate and $1.0 million related to iPCS. We have disputed these amounts
     (see Note 5).

o    Sprint charged the Company approximately $1.2 million with respect to
     calendar year 2002 to reimburse Sprint for certain 3G related development
     expenses. We have disputed Sprint's right to collect these fees.

o    In connection with the review of accounts receivable at September 30, 2002,
     the Company reclassified approximately $10.0 million of subscriber accounts
     receivable allowance for the fiscal year ended September 30, 2002 to a
     receivable from Sprint. We believe at least $10.0 million is payable from
     Sprint, but Sprint has acknowledged and paid only $5.1 million.

o    We continue to discuss with Sprint whether we owe software maintenance fees
     to Sprint of approximately $3.0 million, of which $1.6 million relates to
     AirGate and $1.4 million relates to iPCS through December 31, 2002.

o    Sprint asserted that iPCS owed $2.2 million in various fees, charges and
     revenue adjustments, which iPCS disputed. Sprint set-off $1.8 million with
     respect to these charges against other amounts owed to iPCS in the quarter
     ended December 31, 2002.

In addition, 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 costs 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 than the amounts paid by Sprint's network
partners, Sprint will debit the network partners for these amounts. Sprint
notified us that a credit would be issued to the Company in a net amount of $2.0
million ($1.3 million for AirGate and $0.7 million for iPCS). This amount has
been recorded as of December 31, 2002 as a reduction to the consolidated balance
for Receivable from Sprint and a reduction of operating loss.

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 December 31,
2002.

(4) Intangible Assets

The following table reflects the components of intangible assets at December 31,
2002:



                                                                          Gross                                         Net
                                                 Amortization            Carrying              Accumulated           Carrying
                                                    Period                Amount               Amortization            Amount
                                                 -------------         ------------         ----------------       ------------
                                                                                                            
Non-compete agreements, AirGate store               24 months          $    159               $    (146)             $     13
acquisitions
Acquired subscriber base                            30 months            45,760                 (21,710)               24,050
                                                                       --------               ----------             --------
     Total                                                             $ 45,919               $ (21,856)             $ 24,063
                                                                       ========               ==========             ========


(5) Litigation

On July 3, 2002 the Federal Communications Commission (the "FCC") issued an
order in Sprint PCS v. AT&T for declaratory judgment holding that PCS wireless
carriers could not unilaterally impose terminating long distance access charges
pursuant to FCC rules. This FCC order did not preclude a finding of a
contractual basis for these charges, nor did it rule whether or not Sprint PCS
had such a contract with carriers such as AT&T. AirGate and iPCS have previously
received $3.9 and $1.0 million, respectively, from Sprint PCS. This is comprised
of $4.3 and $1.1 million, respectively, of terminating long distance access
revenues, less $0.4 and $0.1 million, respectively, of associated affiliation
fees held by Sprint PCS, and Sprint PCS has asserted its right to recover these
revenues net of the affiliation fees. As a result of this ruling, and our
assessment of this contingency under SFAS No. 5, "Accounting for Contingencies,"
the Company recorded a charge to revenues during the quarter ended June 30, 2002
to accrue for these amounts. However, we have not paid such amounts and have
disputed the ability of Sprint PCS to recover these revenues.

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. On November 26, 2002,
the Court entered an Order requiring the Plaintiffs to provide additional
information in connection with their Motion for Appointment as Lead Plaintiff
and in December 2002, Plaintiffs submitted Declarations in Support of Motion for
Appointment of Lead Plaintiff. 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.

(6) Staff Reduction and Retail Store Closings

As discussed in Note 1, the Company has initiated a number of actions in an
attempt to lower its operating costs and capital needs. During the quarter ended
December 31, 2002 the Company decided to reduce its workforce and to close a
number of retail stores. Collectively, these actions, which took place in the
quarter ended December 31, 2002 and are expected to continue in the quarter that
will end on March 31, 2003, are referred to as the 2003 Plan.

During the quarter ended December 31, 2002, AirGate costs associated with
termination benefits and contract terminations were $0.5 million and $0.04
million, respectively, and were associated principally with involuntary employee
terminations and store closures. In the quarter that will end March 31, 2003,
AirGate expects additional termination benefits and contract terminations to be
at least $.05 million and $0.1 million, respectively. These charges are expected
to result from additional involuntary employee terminations and store closures.
Further charges may be necessary as AirGate services are terminated under the
services agreement with iPCS as described in Note 8.

During the quarter ended December 31, 2002, iPCS costs associated with
termination benefits were $0.1 million and were associated principally with
involuntary employee terminations. In the quarter that will end March 31, 2003,
iPCS expects additional termination benefits and contract terminations to be at
least $0.5 million and $0.7 million respectively. These charges are expected to
result from additional involuntary employee terminations and store closures (See
Note 10).

A summary of the aforementioned costs is as follows:


                                                            Contract
                                      Termination         Termination
                                       Benefits              Costs                 Total
                                     --------------      --------------         -----------
                                                                          
Liability at October 1, 2002         $      0             $     0             $      0
Total charges                             610                  43                  653
Cash paid                                 379                   0                  379
Liability at December 31, 2002            231                  43                  274



The  Company  determined  the  above  costs in  accordance  with  SFAS No.  146,
"Accounting for Cost Associated with Exit or Disposal Activities."

There were no asset impairment charges associated with the 2003 Plan. However,
during the fiscal year ended September 30, 2002, the Company reported impairment
charges for iPCS' assets of $460.9 million for goodwill, $44.4 million for
property and equipment, and $312.1 million for intangible assets.

(7)   Income Taxes

The Company recorded an income tax benefit of $17.4 million during the quarter
ended December 31, 2001. No such amounts were recorded in the quarter ended
December 31, 2002, nor will amounts be recognized in the future unless
management believes the recoverability of deferred tax assets is more likely
than not.

(8) 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 176
employees at December 31, 2002. Generally, the management personnel include the
corporate staff in the Company's principal corporate offices in Atlanta and the
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 ended December 31, 2002, iPCS recorded a net total of $1.0 million for
ServiceCo expenses.

To facilitate the orderly transition of management services, the boards of
AirGate and iPCS have authorized an amendment to the Services Agreement that
would allow individual services to be terminated by either party upon prior
notice. This amendment requires the consent of each of the administrative agents
for the AirGate and iPCS credit facilities and a request for these consents has
been made. This could result in a significant change in the allocation of
expense to AirGate and iPCS.

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.

(9) 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. ("Service Co") 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 to the iPCS notes or the iPCS
credit facility.




             Unaudited Condensed Balance Sheets of AirGate and iPCS
                             As of December 31, 2002

                                                                                               iPCS
                                               AirGate                                         Non-
                             AirGate PCS,     Guarantor                       AirGate        Guarantor                     AirGate
                                  Inc.      Subsidiaries   Eliminations   Consolidated(1)   Subsidiary    Eliminations  Consolidated
                            -------------  --------------  -------------  ---------------  -------------  ------------- ------------
                                                                                                      
Cash and cash
 equivalents............      $     954      $     (10)   $        --        $      944     $    2,066      $     --    $     3,010
Other current assets....        124,078            529        (60,957)           63,650         33,924          (315)        97,259
                            -------------    ------------ --------------   ------------  -------------       ---------  ------------
Total current assets....      $ 125,032            519        (60,957)           64,594         35,990          (315)       100,269
Property and equipment,
  net...................        159,941         43,703            --            203,644        180,076            --        383,720
Intangible assets, net..         (1,457)           --             --             (1,457)        25,520            --         24,063
Investment in
  subsidiaries..........       (217,631)           --          92,656          (124,975)          --         124,975           --

Other noncurrent assets.          5,705            --            --               5,705        11,872             --         17,577
                           --------------- -------------  -------------- --------------- -------------    -----------    -----------
Total assets............       $ 71,590      $ 44,222        $ 31,699         $ 147,511     $ 253,458       $124,660      $ 525,629
                           =============== =============  ============== =============== ==============  ============    ===========
Current liabilities.....         43,201       136,878         (60,957)          119,122       361,211           (315)       480,018
Long-term debt..........        366,728           --              --            366,728           563             --        367,291
Other long-term                   2,106           --              --              2,106        16,659             --         18,765
  liabilities...........
                           -------------- --------------  ------------- ---------------  --------------- -------------   -----------
 Total liabilities.......     $  412,035    $136,878        $(60,957)         $ 487,956     $ 378,433       $  (315)     $ 866,074
                           -------------- -------------  -------------- ---------------  --------------- -------------   -----------
 Stockholders' equity....       (340,445)    (92,656)         92,656           (340,445)     (124,975)      124,975       (340,445)
                           -------------- --------------  ------------- ---------------  --------------- -------------  ------------
Total liabilities and
  stockholders' equity
  (deficit)............      $   71,590    $ 44,222         $ 31,699          $ 147,511     $ 253,458      $124,660      $ 525,629
                           ============================== ============  ===============  ==============  ============   ============





       Unaudited Condensed Consolidating Balance Sheet of AirGate and iPCS
                            As of September 30, 2002



                                              AirGate
                                             Guarantor                                    iPCS
                            AirGate PCS,    Subsidiaries   Eliminations   AirGate(1)  Non-Guarantor                     AirGate
                                Inc.                                    Consolidated    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
Investment in
  subsidiaries..........    (183,718)           --           84,506     (99,212)                         99,212           --
Other noncurrent assets.       4,924            --               --       4,924           12,115             --         17,039
                           -------------- ---------------- ------------ ------------ --------------- -------------- --------------

Total assets............   $ 118,435       $ 46,261        $ 23,927     $188,623       $ 287,573        $ 98,098     $ 574,294
                           ============== ================ ============ ============ =============== ============== ==============

Current liabilities.....   $  55,535      $  60,579        $(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

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

Total liabilities.......     411,382         60,579         (60,579)    481,570          386,785         (1,114)      867,241
                           -------------- ---------------- ------------ ------------ --------------- -------------- ---------------


Stockholders' equity....    (292,947)       (14,318)         84,506    (292,947)         (99,212)        99,212      (292,947)
                           -------------- ---------------- ----------- ------------- --------------- -------------- ---------------

Total liabilities and
  stockholders' equity
  (deficit).............   $ 118,435       $ 46,261      $ 23,927     $188,623      $ 287,573        $ 98,098       $ 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 $43 million of debt and $1 million of net liabilities as of December
31, 2002, and $44 million of debt and $1 million of net assets as of September
30, 2002. The net loss of AirGate includes $2.5 million and $4.1 million of
expenses related to the effects of purchase accounting for iPCS for the quarters
ended December 31, 2002 and 2001, respectively. The quarter ended December 31,
2001 include a tax benefit of $17.4 million related to the iPCS acquisition.







  Unaudited Condensed Statement of Operations of AirGate and iPCS
                  For the Three Months Ended December 31, 2002


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


                                                                                                    
Total revenues..........    $  81,865    $  --          $  --         $  81,865       $  51,534       $  (298)       $  133,101
                               ------    -------       --------      -----------     -----------     ---------       -----------
Cost of revenues.........     (53,945)    (4,333)          --          (58,278)        (42,153)          298          (100,133)
Selling and marketing....     (16,040)     (758)           --          (16,798)        (12,105)           --           (28,903)
General and administrative.    (3,347)     (730)           --           (4,077)         (3,331)           --            (7,408)
Depreciation and
  amortization............    (12,041)    (2,443)          --           (14,484)        (10,406)           --           (24,890)
Other, net................    (10,253)       114           --           (10,139)         (9,302)           --           (19,441)
                           ------------ ---------------- ------------- ------------- --------------- -------------- ---------------

Total expenses............    (95,626)    (8,150)          --         (103,776)        (77,297)          298          (180,775)

Loss in subsidiaries......    (33,913)        --         8,150          (25,763)                       25,763
                                                                                             --                              --
Loss before income tax
  benefit.................    (47,674)    (8,150)        8,150          (47,674)        (25,763)       25,763           (47,674)

Income tax benefit........         --         --            --               --              --            --                --
                           ------------ --------------- -------------- ------------- --------------- -------------- ---------------
Net loss..................  $ (47,674)  $ (8,150)       $8,150        $ (47,674)      $ (25,763)     $ 25,763         $ (47,674)
                           ============================ ============== ============= =============== ============== ===============







  Unaudited Condensed Consolidating Statement of Operations of AirGate and iPCS
                  For the Three Months Ended December 31, 2001



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

                                                                                                          
Total revenues..........   $  67,671          $  --         $ --       $ 67,671       $ 14,026          $  --           $ 81,697
                           ------------- --------------- ------------- ------------- --------------- --------------- --------------
 Cost of revenues........     (49,498)      (3,745)              --      (53,243)        (14,097)           --            (67,340)
Selling and marketing...     (24,621)        (468)              --      (25,089)         (4,756)           --            (29,845)
General and                                                     --
  administrative........      (3,677)        (299)                       (3,976)         (1,224)           --             (5,200)
Depreciation and
  amortization..........     (11,941)      (1,541)              --      (13,482)         (2,323)           --           (15,805)
Other, net..............      (8,565)         --                --       (8,565)         (1,945)           --           (10,510)
                           ------------ --------------- -------------- ------------ --------------- --------------  --------------

Total expenses..........     (98,302)        (6,053)            --     (104,355)        (24,345)           --          (128,700)

Loss in subsidiaries......   (16,372)            --          6,053      (10,319)             --        10,319                --
Loss before income tax
  benefit...............     (47,003)        (6,053)         6,053      (47,003)        (10,319)       10,319           (47,003)
Income tax benefit......      17,359             --             --       17,359              --            --            17,359
                           ---------------- -------------- ------------ ----------- --------------- --------------- -------------

Net loss................   $ (29,644)       $ (6,053)      $ 6,053     $(29,644)      $ (10,319)       $10,319         $ (29,644)
                           ================ ============== ============ =========== =============== =============== =============







         Unaudited Condensed Statement of Cash Flow of AirGate and iPCS
                  For the Three Months Ended December 31, 2002


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

                                                                                                 
Operating activities,
 net...................    $ (2,683)      $  (128)        $  --       $ (2,811)    $ (17,098)          $  --          $ (19,909)

Investing activities,
  net..................      (5,626)           --            --         (5,626)       (8,424)                           (14,050)
Financing activities,
  net..................       4,494            --            --          4,494                            --              4,494
                          ------------- ---------------- ------------ ------------- --------------- --------------- --------------


Decrease in cash and
  cash equivalent......    $ (3,815)      $  (128)        $  --      $ (3,943)    $ (25,522)          $  --           $ (29,465)
Cash at beginning of
  period...............      4,769            118            --         4,887        27,588              --              32,475
                           ---------------- ------------- ----------- ------------ ---------------- ---------------- --------------

Cash at end of period...       954            (10)           --           944         2,066              --               3,010
                           ================ ============= =========== ============ ================ ================ ==============







            Unaudited Condensed Consolidating Statement of Cash Flows
                  For the Three Months Ended December 31, 2001



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

                                                                                                    
Operating activities,       $ (21,736)      $  1,193       $   --     $ (20,543)       $ (10,578)         $   --     $  (31,121)
  net................... Investing activities,
  net...................       16,335         (1,061)          --        15,274           (3,879)             --         11,395
Financing activities,
  net...................       30,585             --           --        30,585             --                --         30,585
                           ------------- ---------------- ------------ ------------- --------------- --------------- --------------


Increase in cash and
  cash equivalent.......      25,184            132            --        25,316         (14,457)                --      10,859
Cash at beginning of
  period................      14,447           (157)           --        14,290          24,401           (24,401)      14,290
                           ---------------- ------------- ------------ ------------- -------------- ---------------- --------------

Cash at end of period...   $  39,631        $   (25)         $ --     $  39,606        $  9,944         $ (24,401)   $  25,149
                           ================ ============= ============ ============= ============== ================ ==============




(10)  Subsequent Events

iPCS

iPCS has continued to work with its lenders and noteholders on a restructuring
and in connection with these efforts appointed Timothy M. Yager as the Chief
Restructuring Officer of iPCS. Mr. Yager will be responsible for leading
continued restructuring efforts and managing the day-to-day affairs of iPCS. Mr.
Yager was the president and chief executive officers of iPCS prior to its
acquisition by AirGate and was formerly a director of AirGate.

Since December 31, 2002, iPCS has (i) closed 16 retail locations and 6
administrative offices, reducing the number of retail locations from 27 to 11;
(ii) reconfigured support for national third party and local distributors,
reducing the total number of employees supporting these channels and (iii)
reduced support for the business-to-business channel. These actions resulted in
the termination of approximately 160 employees. Charges associated with these
actions are expected to be at least $1.2 million. Furthermore, additional
charges for iPCS are expected as iPCS restructures its business.

To facilitate the orderly transition of management services, the boards of
AirGate and iPCS have authorized an amendment to the Services Agreement that
would allow individual services to be terminated by either party upon 60 days
prior notice. This amendment requires the consent of each of the administrative
agents for the AirGate and iPCS credit facilities, and a request for these
consents has been made. This could result in a significant change in the
allocation of expense to AirGate and iPCS.

On January 23, 2003, Sprint set-off against required weekly payments of
collected revenues to iPCS $1.8 million in unrelated disputed fees and charges.

Due to its liquidity issues, iPCS has delayed payments to many of its vendors,
including Sprint. iPCS has delayed payments to Sprint of approximately $6.0
million.

On January 30, 2003, iPCS ceased paying interest on the iPCS credit facility. As
a result, the lenders under the iPCS credit facility are entitled to accelerate
payments due under the iPCS credit facility. The failure to pay interest on the
iPCS credit facility is also a default under the iPCS notes. iPCS has entered
into a forbearance agreement with its senior lenders under the terms of which
the senior lenders have agreed not to exercise their rights under the iPCS
credit facility, including the right to accelerate, until the earlier of (i)
March 15, 2003, (ii) a subsequent default by iPCS or (iii) the election of the
administrative agent after written notice to iPCS. Based on continuing
discussions with an ad hoc committee holding in excess of 50% of the iPCS notes,
iPCS expects to enter into a forbearance agreement with such committee shortly.

AirGate

On February 10, 2003, the Board of Directors approved new forms of severance
agreements for each of our executive officers. These agreements provide two
levels of severance benefits based upon whether the termination occurs in
connection with a change of control or not. If the executive terminates
employment for good reason or is terminated by the Company other than for cause
or disability, as such terms are defined in the agreements, in connection with a
change of control or for two years following a change of control, the Company
will pay the executive his or her unpaid base salary through the date of
termination, a pro rata payment of the executive's target bonus for the year in
which the termination occurs, any compensation previously deferred by the
executive and any accrued vacation pay. In addition, the Company will make a
severance payment to the executive equal to two times his or her annual base
salary and bonus at target, or 2.5 times in the case of the Chief Executive
Officer. The Company will also continue benefits for the executive for a period
after termination and provide limited outplacement services for a period of six
months to one year.

If the executive terminates employment for good reason or is terminated by the
Company other than for cause or disability and such termination is not in
connection with a change of control or within two years following a change of
control, the Company will pay the executive his or her unpaid base salary
through the date of termination, any compensation previously deferred by the
executive and any accrued vacation pay. In addition, the Company will make a
severance payment to the executive equal to six months annual base salary, plus
one month for each year of service. The Company will also continue benefits for
the executive for a period after termination and provide limited outplacement
services for the severance period.

The agreements provide that in consideration of the payments and promises in the
agreement, the executive releases the Company from all claims, liabilities,
contracts, contractual obligations, attorney's fees, demands and causes of
action, whether known or unknown, fixed or contingent. In addition, the
executive agrees not to directly or indirectly (1) perform services for a
competitor of the Company in our territory, (2) solicit our employees to
terminate their employment with us or solicit certain of our customers to
purchase competing products or (3) disclose or use the Company's confidential
information and trade secrets, for a period of from 6 months to two years after
termination of employment.

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:

o   the impact of an iPCS insolvency;
o   the competitiveness and impact of Sprint's pricing plans and PCS products
      and services;
o   subscriber credit quality;
o the potential to experience a continued high rate of subscriber turnover; o
the ability of Sprint to provide back office billing, subscriber care
      and other  services and the quality and costs of such services;
o   inaccuracies in data provided by Sprint;
o   new charges and fees, or increased charges and fees, charged by Sprint;
o   rates of penetration in the wireless industry;
o   our significant level of indebtedness;
o   adequacy of bad debt and other allowances;
o   the potential need for additional sources of liquidity;
o   anticipated future losses;
o   subscriber purchasing patterns;
o   potential fluctuations in quarterly results;
o   an adequate supply of subscriber equipment;
o   risks related to future growth and expansion; and
o   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. Additionally, iPCS
served 149,119 subscribers as of November 30, 2001. At December 31, 2002,
AirGate and iPCS provided Sprint PCS services to 352,809 and 236,628
subscribers, respectively. At December 31, 2002, AirGate had total network
coverage of approximately 5.9 million residents and iPCS had total network
coverage of approximately 5.6 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 entitled to buy network equipment and
subscriber handsets at the same discounted rates offered by vendors to Sprint
based on its large volume purchases. In exchange for these and other benefits,
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, each of
AirGate and iPCS conducts its business as a separate corporate entity 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:

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

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

o    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,

o    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,

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

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

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 three months ended December
31 was as follows:

Provision for Doubtful Accounts                                        Combined
    As % of Service Revenue            AirGate           iPCS          Company
    -----------------------            -------           ----          -------
              2002                        3.7%           2.6%             3.3%
              2001                       11.9%          13.0%            12.1%


The allowance for doubtful accounts as of December 31, 2002 and September 30,
2002 was $11.5 million and $11.3 million, respectively. At December 31, 2002,
$6.8 million and $4.7 million was attributable to AirGate and iPCS,
respectively. 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 and periodically changes its credit policies. As of December 31, 2002, 34%
of the combined Company's, 34% of AirGate's and 35% of iPCS' 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. As
described in our Annual Report on Form 10-K/A, the deposit was waived in the
iPCS markets during certain times in 2002. The Clear Pay II program and its
deposit requirements are currently in effect in most of AirGate's and iPCS'
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 all sub-prime customers in our markets.

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

The Company reserves a portion of its new subscribers and provides a reduction
in revenues from those subscribers that it anticipates will never pay a bill.
Using historical information of the percentage of subscribers whose service was
cancelled for non-payment without ever making a payment, the Company estimates
the number of new subscribers activated in the current period that will never
pay a bill. For these subscribers, the Company provides a reduction of revenue
and removes them from subscriber additions and churn. As a result, these
subscribers are not included in the churn statistics or subscriber count. The
Company records reserves for late payment fees and early cancellation fees based
on information about historical collection rates. The Company records the
reserves for late payment fees and early cancellation fees as reductions of
revenue.

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 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. For
industry competitive reasons, the Company sells wireless handsets at a loss.
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 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, first
payment default customers, 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)." 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 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 significant changes occurred since year end and thus
no additional write-offs have been made. Management will continue to monitor any
triggering events and perform re-evaluations, as necessary.

NEW ACCOUNTING PRONOUNCEMENTS

In December 2002, the Financial  Accounting Standards Board ("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. The
Company currently does not anticipate adopting the provisions of SFAS No. 148.

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

The Interpretation 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 consolidated operating
lease disclosure commitment footnoted included in the Company's Form 10-K/A.
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 sends the
handset to Sprint for repair. Sprint provides a credit to the Company equal to
the price of the refurbished handset, which is generally what is returned to the
customer. The Company will apply the recognition and measurement provisions for
all guarantees and warranties entered into or modified after December 31, 2002.

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 adoption of SFAS No. 146 by the
Company on October 1, 2002 is not expected to have a material impact on the
Company's financial position, results of operations, or cash flows as the
Company has not recorded any significant restructurings in the past periods, but
the adoption may impact the timing of charges in future periods. As discussed in
Note 6, during the quarter ended December 31, 2002 the Company recorded $0.7
million of costs related to staff reductions and retail location 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. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
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 and therefore iPCS' results
of operation for the quarter ended December 31, 2001 only include one month's
results.

Key Operating Metrics Defined

     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. Terms such as EBITDA are financial measures used by
many companies. None of these terms, including EBITDA, are measures of financial
performance under accounting principles generally accepted in the United States
("GAAP"). The Company believes that EBITDA serves as an important financial
analysis tool for measuring and comparing financial information such as
liquidity, operating performance and leverage. EBITDA should not, however, be
considered an alternative to, or more meaningful than, net income, cash flow or
operating loss as determined in accordance with GAAP. EBITDA and these other
terms as used by the Company may not be comparable to a similarly titled measure
of another company. We have included below a reconciliation of EBITDA to
operating loss.

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, which is net of an adjustment for first
payment default subscribers.

"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
and an adjustment for estimated first payment default subscribers, 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, reduced by a provision for first payment default subscribers.

For the three months ended December 31, 2002 compared to the three months ended
December 31, 2001:

iPCS was acquired on November 30, 2001. In accordance with purchase accounting,
iPCS' results of operations are included only for the month of December 2001.
The table below sets forth below key operating metrics for the Company for the
quarters ended December 31, 2002 and 2001.




                                                               Quarter Ended December 31,
                                                   2002                                           2001
                                 ------------------------------------------    --------------------------------------------
                                    AirGate            iPCS       Combined         AirGate           iPCS       Combined
                                    -------            ----       --------         -------           ----       --------
                                                                                               
Subscriber Gross Additions           55,621          45,299        100,920          83,012         17,681        100,693
Subscriber Net Additions             13,670          20,934         34,604          54,820         13,892         68,712
Total Subscribers                   352,809         236,628        589,437         289,844        163,514        453,358
ARPU                                    $58             $53            $56             $60            $55            $59
Churn (with subscriber reserve)       3.78%           3.18%          3.54%           3.19%          1.99%          2.24%
Churn (without subscriber             4.09%           3.62%          3.91%           4.40%          3.92%          3.24%
reserve)
CPGA                                   $369            $346           $359            $345           $365           $349
Cap Ex (from cash flow statement)$5,626,000      $8,424,000    $14,050,000      $3,246,000     $3,880,000     $7,126,000
EBITDA                           $2,536,000    $(6,055,000)    $(3,519,000)   $(14,868,000)   $(6,051,000)   $(20,919,000)



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




                                                                Quarter Ended December 31,
                                                   2002                                          2001
                                   --------------------------------------    ---------------------------------------------

                                  AirGate            iPCS        Combined        AirGate           iPCS        Combined
                                  -------            ----        --------        -------           ----        --------
                                                                                               
EBITDA                               $2,536         $(6,055)        $(3,519)      $(14,868)       $(6,051)      $(20,919)
  Depreciation                     (11,599)          (9,027)        (20,626)        (9,003)        (2,263)       (11,266)
  Amortization of intangible                                         (4,264)                                      (4,539)
  assets                            (2,885)          (1,379)                        (4,479)           (60)
                                 -----------     -----------    ------------    -----------     ----------    ------------
Operating Loss                    $(11,948)        $(16,461)       $(28,409)      $(28,350)       $(8,374)      $(36,724)
                                 ===========     ===========    ============    ===========     ==========    ============



Subscriber Net Additions

For AirGate, net subscriber additions are down for the quarter ended December
31, 2002, compared to the same quarter in 2001. This decline is due to the
re-institution of the deposit for sub-prime credit quality customers, actions
taken to reduce acquisition costs, the increased number of subscribers who churn
and slowing wireless subscriber growth in our markets. For iPCS, net subscriber
additions increased in the quarter ended December 31, 2002 compared to the same
quarter in 2001. This increase is due to the inclusion of only one month's
results for iPCS in the quarter ended December 31, 2001.

The Company does not include in its subscriber base an estimate of first payment
default subscribers. At December 31, 2002 and 2001, the estimated first payment
default subscribers were 7,597 and 10,055, respectively. Estimated first payment
default subscribers at December 31, 2002 for AirGate and iPCS were 4,187 and
3,410, respectively.

Subscriber Gross Additions

For AirGate, gross subscriber additions were down for the quarter ended December
31, 2002 compared to the same quarter in 2001. This decline is due to the
re-institution of the deposit for sub-prime credit quality customers, actions
taken to reduce costs and slowing wireless subscriber growth in our markets. For
iPCS, gross subscriber additions increased in the quarter ended December 31,
2002 compared to the same quarter in 2001. This increase is due to the inclusion
of only one month's results for iPCS in the quarter ended December 31, 2001.

EBITDA

EBITDA losses for the quarter ended December 31, 2002 have decreased from the
same period in 2001. This reduction in total losses is a result of a
substantially larger subscriber base over the period and increased net roaming
margin. On a standalone basis, AirGate had positive EBITDA in the quarter ended
December 31, 2002. While all financial transactions and estimates affect EBITDA,
EBITDA for AirGate was favorably impacted by $1.3 million in credits provided by
Sprint as a result of the final settlement of service fees as described in Note
3. The impact of this final settlement of service fees on EBITDA for iPCS was
approximately $700,000. The EBITDA loss for iPCS was adversely impacted by a
$1.4 million charge for disputed cash adjustments with Sprint associated with
iPCS' purchase of Cedar Rapids and Iowa City subscribers.

Average  Revenue Per User

The decrease in ARPU for the Company for the quarter ended December 31, 2002
compared to the same quarter for 2001 is primarily the result of the acquisition
of iPCS, cessation of recognizing terminating access revenue and declines in the
average monthly recurring revenue per user. Until March 2002, the Company
recorded terminating long-distance access revenues billed by Sprint PCS to long
distance carriers.

Churn

Churn increased for the quarter ended December 31, 2002 compared to the same
quarter in 2001 primarily as a result of increased competition among wireless
carriers in our markets and the greater number of sub-prime credit quality
subscribers in our subscriber base.

Cost Per Gross Addition

For AirGate, CPGA was higher for the quarter ended December 31, 2002 compared to
the same quarter in 2001. The increase is due to greater handset sales
incentives, rebates and marketing costs in 2002 than the prior year and fixed
costs being spread over a fewer number of gross additions. For iPCS, CPGA was
down for the quarter ended December 31, 2002, compared to the same quarter in
2001. This decrease is primarily attributable to fixed costs being spread over a
larger number of gross subscriber additions as a result of having three months
results included in the quarter ended December 31, 2002.

Revenues




                                                      Quarter Ended December 31,
                                              2002                                     2001
                             ---------------------------------------    ------------------------------------
                               AirGate        iPCS          Combined       AirGate       iPCS        Combined
                                                                                   
Service Revenue                 $59,933     $36,395          $96,328      $47,240       $8,609       $55,849
Roaming Revenue                  18,910*     13,379*          31,991       16,618        4,685        21,303
Equipment Revenue                 3,021       1,761            4,782        3,813          732         4,545
                              -----------  ----------       ----------    ---------  ----------     ----------
Total                           $81,864*    $51,535*        $133,101      $67,671      $14,026       $81,697


* 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.

     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.
     However, when handsets are returned to Sprint for refurbishing, the Company
     receives a credit from Sprint, which is less than the amount originally
     paid for the handset.

     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 89% of the roaming revenue recorded for the quarter ended
     December 31, 2002. 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 roam on the Company's network.

Service revenue and equipment revenue for the quarter ended December 31, 2002
increased over the same period in the prior year. The increase in service
revenue and equipment revenue for the combined Company reflect the substantially
higher average number of subscribers using the Company's network, including
subscribers acquired in the iPCS acquisition and the inclusion of only one
month's activity for iPCS for the quarter ended December 31, 2001.

Roaming revenue for the quarter ended December 31, 2002 increased over the same
period in the prior year. The increase is attributable to the larger wireless
subscriber base for Sprint and other Sprint PCS network partners, the additional
covered territory acquired with iPCS, increased roaming revenue to iPCS from
Verizon Wireless and increased roaming revenue from other third-party carriers,
and the inclusion of only one month's activity for iPCS for the quarter ended
December 31, 2001, partially offset by a lower average roaming rate. For the
quarter ended December 31, 2002, roaming revenue from Sprint and its PCS network
partners was $28.5 million, or 89% of the roaming revenue recorded. For the
quarter ended December 31, 2002, roaming revenue from Sprint and its PCS network
partners attributable to AirGate and iPCS was $17.8 million and $10.7 million,
respectively.

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 notified the Company that it intends to reduce
the reciprocal roaming rate to $0.058 per minute of use in calendar year 2003.
The Company is assessing its ability to dispute the reduction in this rate, but
its remedies may be limited.

Cost of Service and Roaming




                                                        Quarter Ended December 31,
                                              2002                                     2001
                             ---------------------------------------    ------------------------------------
                               AirGate       iPCS        Combined       AirGate       iPCS       Combined
                                                                                  
Roaming expense                $ 15,668*      $9,430*      $ 24,800     $ 14,414      $ 3,898      $18,312
Network operating costs          11,551       10,463         22,014       11,005        3,175       14,180
Bad debt expense                  2,186          940          3,126        5,613        1,117        6,730
Wireless handset upgrades
                                  1,583        1,047          2,630           --           --           --
Total cost of service and
roaming                        $ 51,431*    $ 36,874*        $88,006      $46,238      $11,519      $57,757


*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:

o    Roaming expense,

o    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),

o    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,

o    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 network,

o    bad debt related to estimated uncollectible accounts receivable, and

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

The cost of service and roaming increased for the quarter ended December 31,
2002 compared to the same period in 2001. The increase in the cost of service
and roaming is attributable to the increase in the number of subscribers due to
the acquisition of iPCS and additional subscriber growth and the inclusion of
only one month's costs for iPCS for the quarter ended December 31, 2001. Cost of
service was reduced by approximately $0.9 million ($0.5 million for AirGate and
$0.4 million for iPCS) for the quarter ended December 31, 2002 due to the final
settlement of service bureau fees with Sprint (See Note 3). Cost of service was
increased by $1.4 million for disputed cash adjustments with Sprint associated
with iPCS' purchase of Cedar Rapids and Iowa City subscribers.

Roaming expense increased for the quarter ended December 31, 2002 compared to
the same period in 2001 as a result of the substantial increase in the Company's
subscriber base, including the acquired iPCS subscriber base and an increase in
the average roaming minutes per month for each subscriber, partially offset by a
lower average rate per minute. 93% and 92% of the cost of roaming was
attributable to Sprint and its network partners for the quarter ended December
31, 2002 and 2001, 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
decreased beginning June 1, 2001 for AirGate and January 1, 2002 for iPCS.

Bad debt expense decreased by $1.6 million ($2.3 million decrease for AirGate
and $0.7 million increase for iPCS) in the quarter ended December 31, 2002
compared to the same period in 2001. This decrease in bad debt expense is
primarily attributable to improvements in the credit quality and payment profile
of our subscriber base since we re-imposed deposits in early 2002. This resulted
in a significant improvement in accounts receivable write-offs and corresponding
bad debt expense for the quarter.

For the quarter ended December 31, 2002 the network operating cost increased
compared to the same period in 2001 as a result of the acquisition of iPCS and
its subscriber base and network assets.

Cost of Equipment

We purchase handsets and accessories to resell to our subscribers for use in
connection with our services. Because we subsidize the sale of handsets to
remain competitive in the marketplace, the cost of handsets is higher than the
resale price to the subscriber. Cost of equipment was $12.1 million for the
quarter ended December 31, 2002, and $9.6 million for the quarter ended December
31, 2001, an increase of $2.5 million. This increase in cost of equipment is
primarily attributable to the increase in the number of subscribers that have
upgraded their equipment in our Company-owned retail stores. For the three
months ended December 31, 2002, cost of equipment attributable to AirGate and
iPCS was $6.8 million and $5.3 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 that Sprint originally incurred. The national retailers sell
Sprint wireless services under the Sprint brands and marks. The Company incurred
selling and marketing expenses of $28.9 million during the quarter ended
December 31, 2002, compared to $29.8 million in the quarter ended December 31,
2001. Selling and marketing expense is down $0.9 million for the quarter ended
December 31, 2002 compared to the same quarter in 2001. This reduction was
partially due to the final settlement of service bureau fees from Sprint PCS
($0.6 million for AirGate and $0.1 million for iPCS) (See Note 3) and equipment
rebates, net, of $0.25 million for the quarter ended December 31, 2002, offset
by staff reductions, predominately for AirGate, of $0.6 million. For the three
months ended December 31, 2002, selling and marketing expense attributable to
AirGate and iPCS was $16.8 million and $12.1 million, respectively.

General and Administrative

For the quarter ended December 31, 2002, the Company incurred general and
administrative expenses of $7.4 million, compared to $5.2 million for the
quarter ended December 31, 2001, an increase of $2.2 million. This increase
resulted from the growth in the number of employees and service providers
providing general and administrative services and the acquisition of iPCS.
Approximately 146 employees were performing corporate support functions at
December 31, 2002 compared to 88 employees at December 31, 2001. For the quarter
ended December 31, 2002, general and administrative expense attributable to
AirGate and iPCS was $4.1 million and $3.3 million, respectively.

Non-Cash Stock Compensation

Non-cash stock compensation expense was $0.2 million for the quarter ended
December 31, 2002, and $0.2 million for the quarter ended December 31, 2001. The
Company applies the provisions of APB Opinion No. 25 and related interpretations
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 in 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 December 31,
2002, depreciation increased to $20.6 million, compared to $11.3 million for the
quarter ended December 31, 2001, an increase of $9.3 million. The increase in
depreciation expense relates primarily to only one month's depreciation expense
being included for iPCS for the quarter ended December 31, 2001, additional
network assets placed in service in 2002, offset by impairment charge in fiscal
year 2002. For the quarter ended December 31, 2002, depreciation attributable to
AirGate and iPCS was $11.6 million and $9.0 million, respectively.

The Company incurred capital expenditures of $14.0 million in the quarter ended
December 31, 2002, which included approximately $0.5 million of capitalized
interest, compared to capital expenditures of $7.1 million and capitalized
interest of $1.3 million in the quarter ended December 31, 2001. Capital
expenditures incurred by AirGate and iPCS were $5.6 million and $8.4 million,
respectively, for the quarter ended December 31, 2002.

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 December 31, 2002 was approximately $4.3 million. With the
completion of the iPCS acquisition on November 30, 2001, amortization of the
intangible assets of $4.5 million represented only one month of expense during
the quarter ended December 31, 2001. The Company recorded an impairment charge
in fiscal year 2002 to write-down intangible assets in accordance with SFAS No.
144 and 142.

Interest Expense

For the quarter ended December 31, 2002, interest expense was $19.3 million,
compared to $10.3 million for the quarter ended December 31, 2001, an increase
of $9.0 million. The increase is primarily attributable to increased debt
related to accreted interest on the AirGate notes and the iPCS notes, increased
borrowings under the AirGate and iPCS credit facilities, and only one month's
expense included for iPCS for the quarter ended December 31, 2001, partially
offset by lower commitment fees on undrawn balances of the credit facilities,
and a lower interest rate on variable rate borrowings under the credit
facilities. The Company had borrowings of $729.1 million as of December 31,
2002, including debt of iPCS, compared to $556.4 million at December 31, 2001.
For the quarter ended December 31, 2002, interest expense attributable to
AirGate and iPCS was $10.0 million and $9.3 million, respectively.

Income Tax Benefit

No income tax benefit was recognized for the quarter ended December 31, 2002.
Income tax benefits of $17.4 million were recognized for the quarter ended
December 31, 2001. Income tax benefits will be recognized 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 December 31, 2002, the net loss was $47.7 million, an
increase of $18.1 million from a net loss of $29.6 million for the quarter ended
December 31, 2001. The increase was attributable to the results of operations of
iPCS, which had a reported net loss of $25.8 million. For the quarter ended
December 31, 2002, net loss attributable to AirGate and iPCS was $21.9 million
and $25.8 million, respectively. The net loss of AirGate included $2.5 million
of expenses for purchase accounting adjustments related to iPCS.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2002, the Company had $3.0 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 deficit was $379.7 million at December
31, 2002, compared to a working capital deficit of $364.4 million at September
30, 2002. The majority of the Company's working capital deficit as of December
31, 2002 was attributable to the classification of the iPCS credit facility and
notes totaling $359.8 million as current. As of December 31, 2002, iPCS was in
default of certain covenants in the iPCS credit facility and notes. Because of
iPCS' inability to cure such defaults, all amounts under the iPCS credit
facility and notes were classified as a current liability. As of December 31,
2002, cash and cash equivalents attributable to AirGate and iPCS was $0.9
million and $2.1 million, respectively. Working capital at December 31, 2002
attributable to AirGate and iPCS was $(54.5) million and ($325.2) million,
respectively.

Net Cash Used in Operating Activities

The $19.9 million of cash used in operating activities in the quarter ended
December 31, 2002 was the result of the Company's $47.7 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 $43.4 million. These non-cash items
were partially offset by negative net cash working capital changes of $15.6
million. The negative net working capital changes were driven primarily by an
increase in prepaid expenses along with decreases in payables due to Sprint,
trade accounts payable, accrued expenses and other long-term liabilities. The
$31.1 million of cash used in operating activities in the quarter ended December
31, 2001 was the result of the Company's $29.6 million net loss and negative
working capital changes of $16.3 million, which were partially offset by $14.8
million of depreciation, amortization of note discounts, provision for doubtful
accounts, amortization of financing costs and non-cash stock option
compensation. For the quarter ended December 31, 2002, cash used in operating
activities attributable to Airgate and iPCS was $2.8 million and $17.1 million,
respectively.

Net Cash Used in Investing Activities

The $14.0 million of cash used in investing activities during the quarter ended
December 31, 2002 represents $14.0 million for purchases of property and
equipment. Purchases of property and equipment during the quarter ended December
31, 2002 related to investments to upgrade the Company's network to 1XRTT,
expansion of switch capacity and expansion of service coverage in the Company's
territories. For the three months ended December 31, 2001, cash outlays of $11.4
million represented cash payments of $7.1 million made for purchases of
equipment and $5.9 million of cash acquisition costs related to the merger with
iPCS, offset by $24.4 million of cash acquired from iPCS. For the three months
ended December 31, 2002, cash used in investing activities attributable to
AirGate and iPCS was $5.6 million and $8.4 million, respectively.

Net Cash Provided by Financing Activities

The $4.5 million in cash provided by financing activities during the quarter
ended December 31, 2002, consisted of $5.0 million in borrowings under the
AirGate credit facility offset by $0.5 million for principal payments associated
with the AirGate credit facility. The $30.6 million of cash provided by
financing activities in the quarter ended December 31, 2001 consisted of $30.0
million borrowed under the AirGate credit facility and $0.6 million of proceeds
received from exercise of options. For the quarter ended December 31, 2002, cash
provided by financing activities attributable to AirGate and iPCS was $4.5
million and $0 million, respectively.

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 lower 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.

Despite cost cutting and other measures, liquidity is an issue for iPCS in the
near-term. In October, 2002, we retained Houlihan Lokey Howard & Zukin Capital
to review iPCS' revised long range business plan, the strategic alternatives
available to iPCS and to assist iPCS in developing and implementing a plan to
improve its capital structure. Because current conditions in the capital markets
make additional financing unlikely, iPCS has undertaken efforts to restructure
its relationship with its secured lenders, its public noteholders and Sprint. To
date, iPCS has been unable to restructure its debt or secure additional
financing necessary to fund its operations and, accordingly, iPCS expects to
file for reorganization and protection from its creditors under Chapter 11 of
the United States Bankruptcy Code in early 2003 either as part of a consensual
restructuring or in an effort to effect a court administered reorganization.

As of December 31, 2002, iPCS was in default under certain covenants contained
in its credit facility and the indenture governing its notes. In addition, on
January 30, 2003, iPCS ceased making interest payments under the iPCS credit
facility. As a result, the senior lenders have the ability to accelerate iPCS'
payment obligations under the iPCS credit facility and the holders of the iPCS
notes have the ability to accelerate iPCS' payment obligations under iPCS'
indenture. iPCS would not have sufficient resources to meet its payment
obligations in the event of any such acceleration. iPCS has entered into a
forbearance agreement with its senior lenders under the terms of which the
senior lenders have agreed not to exercise their rights under the iPCS credit
facility until the earlier of (i) March 15, 2003, (ii) a subsequent default by
iPCS or (iii) the election of the administrative agent after written notice to
iPCS. Based on continuing discussions with an ad hoc committee holding in excess
of 50% of the iPCS notes, iPCS expects to enter into a forbearance agreement
with such committee shortly.

Due to its liquidity issues, iPCS has delayed payments to many of its vendors,
including Sprint. iPCS has delayed payments to Sprint of approximately $6.0
million.

Because iPCS is an unrestricted subsidiary, AirGate is generally unable to
provide capital or other financial support to iPCS. Further, iPCS lenders,
noteholders and creditors do not have a lien on or encumbrance on assets of
AirGate. We believe AirGate's operations will continue independent of the
outcome of the iPCS restructuring.

While AirGate has also experienced a deterioration in its liquidity, it appears
that it is in a better position to address the issues discussed above. 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 the end of the calendar year 2003.

Capital Resources

At December 31, 2002, the Company had $3.0 million of cash and cash equivalents,
consisting of $0.9 million for AirGate and $2.1 million for iPCS.

As of December 31, 2002, $12.0 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 assets of iPCS and its
subsidiaries.

As of December 31, 2002, there was no remaining availability under the iPCS
credit facility, which was amended during November 2002 to reduce availability
by $10.0 million to $130.0 million. As described above under "Liquidity," iPCS
has ceased making interest payments on its credit facility and is currently in
default of certain covenants under its credit facility and indenture. As a
result, the lenders have the ability to accelerate iPCS' payment obligations
under the iPCS credit facility and the holders of its notes have the ability to
accelerate iPCS' payment obligations to them under the indenture governing such
notes. While iPCS has entered into a forbearance agreement with its senior
lenders, as referenced above, there can also be no assurance that the
noteholders will enter into the forbearance agreement referenced above, or that
the senior lenders or noteholders will enter into any additional forbearance
agreement if necessary. iPCS would not have sufficient resources to meet its
payment obligations in the event of any such acceleration. iPCS' obligations
under the iPCS credit facility are secured by all of iPCS' operating assets, but
not other assets of AirGate and its restricted 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, 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
future subscriber growth as well as other 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 $12 million remaining available under the AirGate credit
facility as of December 31, 2002. AirGate currently has no additional sources of
working capital other than EBITDA. 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 credit or
capital markets for additional capital.

AirGate's ability to borrow funds under the AirGate credit facility may be
terminated if it is unable to maintain or comply with the restrictive financial
and operating covenants contained in the agreements governing 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 to annualized EBITDA, as defined in the
credit facility. In accordance with the AirGate credit facility, EBITDA means,
consolidated net income (or loss) plus the sum of (a) income tax expense, (b)
interest expense, (c) depreciation and amortization expense, and (d)
extraordinary, unusual or non-recurring losses or charges and (e) any non-cash
losses or charges, minus (i) interest income, (ii) extraordinary, unusual or
non-recurring gains and any other non-cash gains and (iii) income attributable
to investments in any entity (other than consolidated Subsidiaries) except to
the extent AirGate or a wholly-owned subsidiary actually received such income in
the form of cash dividends or other similar cash distributions ("Credit Facility
EBITDA").

In order to satisfy the total debt to annualized Credit Facility EBITDA covenant
at March 31, 2003 and based on the amount anticipated to be outstanding under
the AirGate credit facility on that date, Credit Facility EBITDA must be at
least $10.4 million for the six months ending March 31, 2003. AirGate has taken
a number of actions to reduce costs to enable it to attain this level of Credit
Facility EBITDA, including instituting a $250 deposit requirement for sub-prime
credit customers, reducing advertising and marketing spending, cutting back on
retail store hours and cutting back on promotional activity. AirGate believes
these actions will be sufficient to enable it to meet the March 31, 2003 total
debt to annualized Credit Facility EBITDA covenant. However, there can be no
assurance that these measures will be sufficient or that other operating
metrics, including revenues, for the quarter will be as planned.

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. Such a
restriction or termination 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.

Variable interest rates may increase substantially.

At December 31, 2002, the Company had borrowed $141.0 million and 130.0 million
under the AirGate and iPCS credit facilities, respectively. The rate of interest
on those credit facilities 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 December 31, 2002, the weighted average
interest rate under variable rate borrowings were 5.5% under the AirGate credit
facility and 5.4% under the iPCS credit facility. The combined Company's
weighted average borrowing rate on variable rate borrowings at December 31, 2002
was 5.5%. If interest rates increase, the Company may not have the ability to
service the interest requirements on its credit facilities. Further, if AirGate
or iPCS were to default under their respective credit facility, such company's
rate of interest would increase by an additional 2%. The senior lenders have
agreed under the forbearance agreement to not increase the Company's rate of
interest for iPCS during the forbearance period.

The Company operates with negative working capital because of amounts owed to
Sprint.

Each month the Company 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. An
increase in such amounts may reduce cash available to the Company and decrease
the amount of cash for working capital purposes then the business plans
currently project.

Other factors

Other factors which could adversely affect our liquidity and capital resources
are described in this report at Risk Factors, including the following:

o    our revenues may be less than we anticipate,

o    our costs may be higher than we anticipate,

o    we may continue to experience a high rate of subscriber turnover,

o    our efforts to reduce costs may not succeed or may have adverse  affects on
     our business,

o    our  provision  for  doubtful  accounts  may  not be  sufficient  to  cover
     uncollectible accounts,

o    the restructuring of iPCS,

o    in the event of iPCS' bankruptcy or insolvency, 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,

o    there could be a significant change in the allocation of expense from
     AirGate to iPCS under the Services Agreement if services or the Services
     Agreement are terminated, and

o    risks related to our relationship with Sprint.

Contractual Obligations

The Company is obligated to make future payments under various contracts it has
entered into, including amounts pursuant to the AirGate and iPCS credit
facilities, the AirGate notes, the iPCS 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 December 31, 2002 are as follows (dollars in
thousands):



                                                                  Payments Due By Period

      Contractual Obligation           Total        2003        2004        2005       2006       2007      Thereafter
      ----------------------           -----        ----        ----        ----       ----       ----      ----------
                                                                                        
AirGate credit facility (1)           $ 140,993     $ 2,024      $15,863    $21,150    $26,920   $ 35,400       $39,636
AirGate notes                           300,000          --           --         --         --         --       300,000
AirGate operating leases (2)             75,284      19,096       18,313     13,711      8,768      5,766         9,630
                                    -----------  ----------      -------    -------    -------  ---------         -----
      AirGate subtotal                $ 516,277     $21,120     $ 34,176    $34,861    $35,688    $41,166      $349,266
                                      ---------     -------     --------    -------    -------    -------      --------
iPCS credit facility (1)(3)           $ 130,000       $  --     $ 13,000    $19,500    $32,500    $32,500       $32,500
iPCS notes (3)                          300,000          --           --         --         --         --       300,000
iPCS operating leases (2)                71,029      13,214       12,593     11,663      8,694      6,094        18,771

iPCS capital leases                       1,268          72           75         78         82         85           876
                                         -----      -------        -----    -------     ------    -------           ---
      iPCS subtotal                   $ 502,297     $13,286      $25,668    $31,241    $41,276    $38,679      $352,147
                                      ---------     -------      -------    -------    -------    -------      --------
      Total                          $1,018,574     $34,406      $59,844    $66,102    $76,964    $79,845      $701,413
                                     ==========     =======      =======    =======    =======    =======      ========
      Total after
reclassification(3)                  $1,018,574    $464,406      $46,844    $46,602    $44,464    $47,345      $368,913
                                     ==========    ========      =======    =======    =======    =======      ========


(1) Total repayments are based upon borrowings outstanding as of December 31,
2002, not projected borrowings under the respective credit facility. (2) Does
not include payments due under renewals to the original lease term. (3) Amounts
in this table do not reflect the current classification of the iPCS credit
facility and iPCS notes as a result of the event of default discussed above.

The $153.5 million AirGate credit facility provides for a $13.5 million senior
secured term loan, which matures on June 6, 2007, which is the first installment
of the loan, or tranche I. The second installment, or tranche II, under the
AirGate credit facility is for a $140.0 million senior secured term loan, 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. AirGate made its first quarterly
principal payment in the amount of $0.5 million on December 31, 2002. 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.

The iPCS credit facility provides for a $80.0 million senior secured term loan
which matures on December 31, 2008, which is the first installment of the loan,
or tranche A. The second installment, or tranche B, under the iPCS credit
facility is for a $50.0 million senior secured term loan, which also matures on
December 31, 2008. The iPCS credit facility requires quarterly payments of
principal beginning March 31, 2004, for tranche A and tranche B, initially in
the amount of 2.5% of the loan balance then outstanding and increasing
thereafter. The commitment fee on unused borrowings ranges from 1.00% to 1.50%,
payable quarterly. The iPCS notes will require cash payments of interest
beginning on January 15, 2006.

There are provisions in each of the agreements governing the credit facilities,
the AirGate notes and the iPCS notes providing for an acceleration of repayment
upon an event of default, as defined in the respective agreements. As discussed
previously, because of iPCS' defaults under its credit facility, iPCS' senior
lenders and noteholders have the ability to accelerate its payment obligations.
While iPCS has entered into a forbearance agreement with its senior lenders, as
referenced above, there can be no assurance that the administrative agent will
not exercise the rights to terminate the forbearance or that the senior lenders
will enter into any additional forbearance agreement if necessary. Further,
there can be no assurance that the noteholders will enter in the forbearance
agreement described above or any other forbearance agreement if nevessary.

As of February 12, 2003, two major credit rating agencies rate AirGate's and
iPCS' unsecured debt. The ratings were as follows:

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

On February 4, 2003 Standard & Poor's removed AirGate from credit watch as a
result of AirGate's filing of its Annual Report on Form 10-K.

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 provides 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 months ended December
31, 2002 and 2001 are as follows (dollars in thousands):










                                                                                   For the Three Months Ended
                                                                                          December 31,
                                                                                   ----------------------------

                                                                                          2002            2001
                                                                                                
Amounts included in the Consolidated Statement of Operations:

     AirGate roaming revenue................................................          $ 17,829        $ 16,209
     AirGate cost of service and roaming:
          Roaming...........................................................          $ 14,685        $ 13,157
          Customer service..................................................            11,303           7,455
          Affiliation fee...................................................             4,836           3,386
          Long distance.....................................................             2,785           3,310
          Other.............................................................               494             498
                                                                                     ---------      ----------

     AirGate cost of service and roaming:...................................          $ 34,103        $ 27,806
     AirGate purchased inventory............................................           $ 5,650         $ 6,647
     AirGate selling and marketing..........................................           $ 3,101         $ 8,337
     iPCS roaming revenue...................................................          $ 10,663         $ 4,540
     iPCS cost of service and roaming
          Roaming...........................................................           $ 8,362         $ 3,647
          Customer service..................................................             7,526           1,290
          Affiliation fee...................................................             3,106             717
          Long distance.....................................................             2,150             898
          Other.............................................................             1,696             100
                                                                                     ---------     -----------
     iPCS cost of service and roaming.......................................          $ 22,840         $ 6,652
     iPCS purchased inventory...............................................           $ 6,175         $ 2,297
     iPCS selling and marketing.............................................           $ 3,014         $ 3,534



                                                          As of
                                               December 31, September 30,
                                               2002                   2002
  Receivable from Sprint                   $   42,334            $   44,953
  Payable to Sprint                           (82,011)              (88,360)

Because approximately 96% 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 open and outstanding from time to time. These include, but are
not limited to, the following items, all of which for accounting purposes have
been reserved or otherwise provided for:

o    Sprint PCS sought to recoup $4.9 million in long-distance access revenues
     previously paid by Sprint PCS to the Company, of which $3.9 million related
     to AirGate and $1.0 million related to iPCS. We have disputed these
     amounts.

o    Sprint charged the Company approximately $1.2 million with respect to
     calendar year 2002 to reimburse Sprint for certain 3G related development
     expenses. We have disputed Sprint's right to collect these fees.

o    In connection with the review of accounts receivable at September 30, 2002,
     the Company reclassified approximately $10.0 million of subscriber accounts
     receivable for the fiscal year ended September 30, 2002 to a receivable
     from Sprint. We believe at least $10.0 million is payable from Sprint, but
     Sprint has acknowledged and paid only $5.1 million.

o    We continue to discuss with Sprint whether we owe software maintenance fees
     to Sprint of approximately $3.0 million, of which $1.6 million relates to
     AirGate and $1.4 million relates to iPCS through December 31, 2002.

o    Sprint asserted that iPCS owed $2.2 million in various fees, charges and
     revenue adjustments which iPCS disputed. Sprint set-off $1.8 million with
     respect to these charges against other amounts owed to iPCS in the quarter
     ended December 31, 2002.

In addition, 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 costs 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 than the amounts paid by Sprint's network
partners, Sprint will debit the network partners for these amounts. Sprint
notified us that a credit would be issued to the Company in a net amount of
approximately $2.0 million ($1.3 million for AirGate and $0.7 million for iPCS).
This amount has been recorded as of December 31, 2002 as a reduction to the
consolidated balance for Receivable from Sprint and a reduction of operating
loss.

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 176
employees at December 31, 2002. Generally, the management personnel include the
corporate staff in the Company's principal corporate offices in Atlanta and the
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 ended December 31, 2002, iPCS recorded a net total of $1.0 million for
ServiceCo expenses.

To facilitate the orderly transition of management services, the boards of
AirGate and iPCS have authorized an amendment to the Services Agreement that
would allow individual services to be terminated by either party upon prior
notice. This amendment requires the consent of each of the administrative agents
for the AirGate and iPCS credit facilities, and a request for these consents has
been made. This could result in a significant change in the allocation of
expense to AirGate and iPCS.

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. The Company's fixed rate debt consists primarily of the accreted
carrying value of the 1999 AirGate notes ($228.1 million at December 31, 2002)
and the 2000 iPCS notes ($229.8 million at December 31, 2002). Our variable rate
debt consists of borrowings made under the AirGate credit facility ($141.0
million at December 31, 2002) and the iPCS credit facility ($130.0 million at
December 31, 2002). For the three months ended December 31, 2002, the weighted
average interest rate under the AirGate credit facility was 5.5% and under the
iPCS credit facility was 5.4%. Our primary interest rate risk exposures relate
to (i) the interest rate on long-term borrowings; (ii) our ability to refinance
the AirGate and iPCS 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 and
iPCS notes and credit facilities based on projected levels of long-term
indebtedness:




                                                                          Years Ending September 30,
                                                 ------------------------------------------------------------------------------
                                                 ------------ ------------ ------------ ------------ ------------ -------------
                                                    2003         2004         2005         2006         2007       Thereafter
                                                    ----         ----         ----         ----         ----       ----------
                                                                            (Dollars in thousands)
                                                                                                      
AirGate notes                                      $228,813     $260,630     $297,191     $297,289     $297,587          --
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 (1)                            5.75%        5.75%        5.75%        5.75%        5.75%         5.75%
Principal payments                                  $ 2,025      $17,775      $23,700     $ 30,107      $39,893       $40,000

iPCS credit facility (2)                           $130,000     $120,250     $102,375     $ 73,125      $40,625          --
Variable interest rate (1)                            5.75%        5.75%        5.75%        5.75%        5.75%         5.75%
Principal payments                                     --        $ 9,750     $ 17,875     $ 29,250      $32,500       $40,625

iPCS notes (2)                                     $252,093     $285,118     $296,967     $297,165     $300,000          --
Fixed interest rate                                   14.0%        14.0%        14.0%        14.0%        14.0%         14.0%
Principal payments                                     --           --           --           --           --        $300,000



(1)  The interest rate on the credit facilities equals the London Interbank
     Offered Rate ("LIBOR") +3.75%. LIBOR is assumed to equal 2.0% for all
     periods presented, which is the current LIBOR rate. A 1% increase
     (decrease) in the variable interest rate would result in a $2.7 million
     increase (decrease) in the related interest expense on an annual basis.

(2)  Amounts in this table do not reflect the current classification of the iPCS
     credit facility and iPCS notes as a result of the events of default
     discussed elsewhere in this report.

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, December 31, 2002 (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

On July 3, 2002 the Federal Communications Commission (the "FCC") issued an
order in Sprint PCS v. AT&T for declaratory judgment holding that PCS wireless
carriers could not unilaterally impose terminating long distance access charges
pursuant to FCC rules. This FCC order did not preclude a finding of a
contractual basis for these charges, nor did it rule whether or not Sprint PCS
had such a contract with carriers such as AT&T. AirGate and iPCS have previously
received $3.9 and $1.0 million, respectively, from Sprint PCS. This is comprised
of $4.3 and $1.1 million, respectively, of terminating long distance access
revenues, less $0.4 and $0.1 million, respectively, of associated affiliation
fees from Sprint PCS, and Sprint PCS has asserted its right to recover these
revenues net of the affiliation fees. As a result of this ruling, and our
assessment of this contingency under SFAS No. 5, "Accounting for Contingencies",
the Company recorded a charge to revenues during the quarter ended June 30, 2002
to fully reserve for these amounts. However, we have not paid such amounts and
have disputed the ability of Sprint PCS to recover these revenues.

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. On November 26, 2002,
the Court entered an Order requiring the plaintiffs to provide additional
information in connection with their Motion for Appointment as Lead Plaintiff
and in December 2002, the plaintiffs submitted Declarations in Support of Motion
for Appointment of Lead Plaintiff. 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 January 30, 2003, iPCS failed to make a required interest payment under its
$130 million senior secured credit facility, which is an event of default under
the iPCS credit facility. The amount of this interest payment default was $0.1
million, and the total arrearage under the iPCS credit facility as of February
14, 2003 was $0.4 million.

In addition, iPCS failed to file its annual report on Form 10-K for the fiscal
year ended September 30, 2002 with the Securities and Exchange Commission, and
failed to deliver its financial statements or provide the required opinion of
its independent auditors on its financial statements. Each of these events are
defaults under the credit facility and the indenture governing iPCS' $300
million 14% senior subordinated discount notes due 2010. iPCS does not
anticipate being able to remedy these defaults.

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

None.

Item 5. OTHER INFORMATION

Investment Considerations  - 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, 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. Increased price competition may
lead to lower average monthly revenues per user than we anticipate. In addition,
the lower reciprocal roaming rate that Sprint intends to institute in 2003 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 has been driven higher over the past year due to the
NDASL and Clear Pay programs and the removal of deposit requirements as
described elsewhere in this report. Our business plan assumes that churn will
decline significantly over the course 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 may contribute to higher churn include:

o    inability or unwillingness of subscribers to pay which results in
     involuntary deactivations, which accounted for 62% of our deactivations in
     the three months ended December 31, 2002;

o    subscriber mix and credit class, particularly sub-prime credit subscribers
     which have accounted for approximately 50% of our gross subscriber
     additions since May 2001 and account for approximately 34% of our
     subscriber base as of December 31, 2002;

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

o    network performance and coverage relative to our competitors;

o    customer service;

o    increased prices; and

o    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 assumes that bad debt as a percentage of service
revenues will decline significantly during fiscal 2003. Our allowance for
doubtful accounts may underestimate actual unpaid receivables for various
reasons, including:

o    our churn rate may exceed our estimates;

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

o    adverse changes in the economy; or

o    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

The Company has been notified by Sprint that it intends to reduce the reciprocal
rate from $0.10 per minute to $0.058 per minute in 2003. While the Company
believes this reduction is not in accordance with its agreements with Sprint, it
is reviewing its options, and its recourse against Sprint for this reduction may
be limited. 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 the
quarter ended December 31, 2002 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
networks, 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 begin to 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. The Company does not have any
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 portion 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.

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.

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:

o    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;

o    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;

o    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; and

o    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 debt 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 December 31, 2002, AirGate had outstanding $141 million under its credit
facility. The remaining $12 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:

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

o    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

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

See "Liquidity and Capital Resources" for a discussion of certain covenants for
the quarter ending March 31, 2003. 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:

o    create liens;

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

o    consolidate, merge and sell assets;

o    engage in certain transactions with affiliates; and

o    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 is in default on its senior credit facility and notes

iPCS has ceased paying interest on its credit facility. In addition, it is an
event of default under iPCS' credit facility and the indenture governing its
notes if, among other things, iPCS fails to file its periodic reports with the
Securities and Exchange Commission, deliver its financial statements or provide
the required opinion of its independent auditors on its financial statements. At
December 30, 2002, iPCS failed to meet these requirements. The lenders have the
ability to accelerate iPCS' payment obligations under the iPCS credit facility
and the trustee for or the holders of its notes has the ability to accelerate
iPCS' payment obligations under the indenture governing such notes. iPCS does
not anticipate being able to remedy these defaults. iPCS would not have
sufficient resources to meet its payment obligations in the event of any such
acceleration. In addition, the senior lenders and noteholders could foreclose on
the collateral pledged to secure outstanding loans or institute an involuntary
bankruptcy proceeding against iPCS. While iPCS has entered into a forbearance
agreement with its senior lenders, as described herein under "Liquidity and
Capital Resources," there can be no assurance that the noteholders will enter
into a forbearance agreement. Further, there can be no assurance that the
administrative agent will not exercise the right to terminate the forbearance or
that the senior lenders or noteholders will enter into any additional
forbearance agreement if necessary.

The restructuring of iPCS 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 any restructuring of iPCS. Because the
amount of iPCS' obligations under its credit facility and its notes would be
greater than its existing cash and other assets if its payment obligations are
accelerated, there would 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 any restructuring.

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 restructuring 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. A restructuring of iPCS in or out of a bankruptcy
proceeding may adversely affect 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' restructuring. Some of these
persons may terminate their relationships with AirGate which would make it more
difficult for AirGate to conduct its business.

In the event of iPCS' bankruptcy or insolvency, 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 estimate that iPCS will 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, the boards of AirGate
and iPCS have authorized an amendment to the Services Agreement that would allow
individual services to be terminated by either party upon 60 days prior notice.
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 a restructuring of iPCS is implemented and there is a significant elimination
or reduction of iPCS' outstanding indebtedness, iPCS' net operating loss and
credit carryforwards 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 may make decisions that
adversely affect our business, such as the following:

o    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;

o    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;

o    Sprint could 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;

o    Sprint can seek to further reduce the reciprocal roaming rate charged when
     Sprint's or other Sprint network partners' PCS subscribers use our network;

o    Sprint could limit our ability to develop local and other promotional plans
     to enable us to attract sufficient subscribers;

o    Sprint could, subject to limitations under our Sprint agreements, alter its
     network and technical requirements or request that we build out additional
     areas within our territories, which could result in increased equipment and
     build-out costs;

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

o    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

Over the past year, our dependence on Sprint has interjected a greater degree of
uncertainty to our business and financial planning. During this time:

o    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;

o    Sprint PCS sought to recoup $4.9 million in long-distance access revenues
     previously paid by Sprint PCS to the Company, of which $3.9 million related
     to AirGate and $1.0 million related to iPCS (See "Legal Proceedings"
     herein);

o    Sprint has charged us $1.2 million to reimburse Sprint for certain 3G
     related development expenses with respect to calendar year 2002;

o    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;

o    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.

We have questioned whether certain of these charges and actions are appropriate
and authorized under our Sprint agreements. We plan to work with Sprint to
increase the predictability of fees, charges and revenues and to resolve open
issues. We expect that it will take time to resolve these issues, and the
ultimate outcome is uncertain. 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 96% of our
revenues to us. 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 and our ability
to satisfy covenants contained in AirGate's credit facility.

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 $40.4 million for AirGate and $19.7
million for iPCS for the year ended September 30, 2002. 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.

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.

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:

o    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;

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

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

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

o    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 and may reduce the "entire business value," as described in
our Sprint agreements.

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:

o    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;"

o    Sprint gives preference to other distribution channels;

o    we do not adequately project our need for handsets;

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

o    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.

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.

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. 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 resources and more extensive
coverage areas, and may market other services, such as landline telephone
service, cable television and Internet access, with their wireless
communications services. Furthermore, 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.

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. 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.

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.

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. As discussed elsewhere in this report, we do not believe
that iPCS' existing capital resources will be sufficient to maintain its current
and planned operations. 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, in the event of a 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:

o    quarterly variations in our operating results;

o    concerns about liquidity;

o    the potential de-listing of our common stock;

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

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

o    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;

o    changes in the Company's relationship with Sprint;

o    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;

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

o    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;

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

o    changes in law and regulation;

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

o    announcements   by  us  or  our   competitors  of  significant   contracts,
     acquisitions,   strategic   partnerships,   joint   ventures   or   capital
     commitments; and

o    general economic and competitive conditions.

Our business and the value of your securities may be adversely affected if the
Company fails to maintain its listing on Nasdaq

Since its initial public offering in September 1999, the Company's common stock
has been listed on the Nasdaq National Market. We received notice from the
Nasdaq National Market indicating that as of October 28, 2002, the closing bid
price of our common stock had fallen below $1.00 for 30 consecutive trading days
and that we would have 90 calendar days, or until January 27, 2003, to regain
compliance with a minimum bid price of $1.00 if the bid price of our common
stock closed at $1.00 per share or more for a minimum of 10 consecutive trading
days during this time. As of January 27, 2003, we did not regain compliance. On
January 28, 2003, the Company received a Nasdaq Staff Determination indicating
that because of the Company's failure to regain compliance with the minimum
$1.00 bid price per share requirement, its common stock would be subject to
delisting from the Nasdaq National Market at the opening of business on February
6, 2003, unless it appealed this determination. The letter also indicated that
Nasdaq had determined that the Company does not comply with the minimum $10
million stockholders' equity requirement under Maintenance Standard 1, as set
forth in Marketplace Rule 4450(a)(3), or the market value of publicly held
shares and minimum bid requirement under Maintenance Standard 2, as set forth in
Marketplace Rule 4450(b)(3) and (4), for continued listing on the Nasdaq
National Market.

Following procedures set forth in the Nasdaq Marketplace Rule 4800 Series, the
Company has filed an appeal and request for an oral hearing before a Nasdaq
Listing Qualifications Panel to review the Nasdaq Staff Determination. The
hearing has been scheduled for March 6, 2003. Until the Nasdaq Listing
Qualifications Panel reaches its decision, our common stock will remain listed
and will continue to trade on the Nasdaq National Market. There can be no
assurance, however, that the Nasdaq Listing Qualifications Panel will grant the
Company's request for continued listing on the Nasdaq National Market.

In the event that the Nasdaq Listing Qualifications Panel denies our request for
continued listing, Shares of our common stock would likely trade in the
over-the-counter market in the so-called "pink sheets" or the OTC Bulletin
Board. Selling our common stock would be more difficult because smaller
quantities of shares would likely be bought and sold and transactions could be
delayed. In addition, security analysts' and news media coverage of us may be
further reduced. These factors could result in lower prices and larger spreads
in the bid and ask prices for shares of our common stock. Such delisting from
the Nasdaq National Market or further declines in our stock price could also
greatly impair our ability to raise additional necessary capital through equity
or debt financing and may significant increase the dilution to stockholders
caused by issuing equity in financing or other transactions.

In addition, if our common stock is not listed on the Nasdaq National Market, we
may become subject to Rule 15g-9 under the Securities and Exchange Act of 1934
which imposes additional sales practice requirements on broker-dealers that sell
low-priced securities, referred to as "penny stocks," to persons other than
established subscribers and institutional accredited investors. A penny stock is
generally any equity security that has a market price or exercise price of less
than $5.00 per share, subject to certain exceptions, including listing on the
Nasdaq National Market or the Nasdaq SmallCap Market. For transactions covered
by these rules, broker-dealers must make a special suitability determination for
the purchase of such securities and must have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to the transaction, of a risk disclosure document mandated by
the SEC relating to the penny stock market. The broker-dealer is also subject to
additional sales practice requirements. Consequently, the penny stock rules may
restrict the ability of broker-dealers to sell our securities and may affect the
ability of holders to sell these securities in the secondary market and the
price at which such holders can sell any such 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. 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.

Item 6.  Exhibits and Reports on Form 8-K

(a)       Exhibits

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.

(b) Reports on 8-K

The following Current Reports on 8-K were filed by AirGate during the quarter
ended December 31, 2002:

On October 29, 2002, AirGate furnished a Current Report on Form 8-K with the
Securities and Exchange Commission under Item 9 - Regulation FD Disclosure
relating to the appointment of William H. Seippel as Chief Financial Officer of
AirGate.

On November 7, 2002, AirGate furnished a Current Report on Form 8-K with the
Securities and Exchange Commission under Item 9 - Regulation FD Disclosure
relating to the reinstatement by iPCS of the deposit requirement for sub-prime
subscribers, the reduction in the iPCS senior credit facility, the waiver of the
minimum subscriber covenant for December 31, 2002 and the elimination of the
minimum liquidity covenant, retaining a financial advisor to review iPCS'
strategic alternatives, and AirGate's receipt of notification from the Nasdaq
National Market of its noncompliance with the Nasdaq National Market listing
requirements.

On December 16, 2002, 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 AirGate's fourth quarter fiscal 2002 conference
call to review its fourth quarter and fiscal year ended September 30, 2002
financial and operating results.

On December 30, 2002, AirGate furnished a Current Report on Form 8-K with the
Securities and Exchange Commission under Item 9 - Regulation FD Disclosure
relating to the delayed filing of AirGate's Annual Report on Form 10-K and the
inability of iPCS to deliver its audited financial statements and audit opinion
as required by the iPCS credit facility and the indenture under which its notes
are issued.





                                   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





Exhibit 99.1


                        CERTIFICATION OF PERIODIC REPORT

I, Thomas M. Dougherty of AirGate PCS, Inc. (the "Company"),  certify,  pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)  the Quarterly Report on Form 10-Q/A of the Company for the quarterly period
     ended December 31, 2002 (the "Report") fully complies with the requirements
     of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
     78m or 78o(d)); and

(2)  to the best of my knowledge, the information contained in the Report fairly
     presents, in all material respects, the financial condition and results of
     operations of the Company.

Dated: January 15, 2004



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





Exhibit 99.2

                        CERTIFICATION OF PERIODIC REPORT

I,  William H.  Seippel,  Chief  Financial  Officer of AirGate  PCS,  Inc.  (the
"Company"),  certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350, that:

(1)  the Quarterly Report on Form 10-Q/A of the Company for the quarterly period
     ended December 31, 2002 (the "Report") fully complies with the requirements
     of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
     78m or 78o(d)); and

(2)  to the best of my knowledge, the information contained in the Report fairly
     presents, in all material respects, the financial condition and results of
     operations of the Company.

Dated: January 15, 2004


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