VOICESTREAM WIRELESS CORP /DE, 10-K405, 2000-03-23

VOICESTREAM WIRELESS CORP /DE
10-K405, 2000-03-23
BLANK CHECKS

Previous: VOICESTREAM WIRELESS CORP /DE, 8-K, 2000-03-23

Next: VOICESTREAM WIRELESS CORP /DE, S-4, 2000-03-23

<PAGE> 1

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

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________ .

COMMISSION FILE NUMBER 000-29667

VOICESTREAM WIRELESS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 91-1983600
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>

<TABLE>
<S> <C>
3650 131ST AVENUE S.E. 98006
BELLEVUE, WASHINGTON (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>

(425)653-4600
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting stock held by nonaffiliates of the
registrant, computed by reference to the last sale of such stock as of the close
of trading on March 13, 2000, was $8,358,749,778.

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

<TABLE>
<CAPTION>
TITLE SHARES OUTSTANDING AS OF MARCH 13, 2000
----- ---------------------------------------
<S> <C>
Common Stock, par value $.001 per share 159,849,010
</TABLE>

DOCUMENTS INCORPORATED BY REFERENCE

- - Our Current Report on Form 8-K dated March 22, 2000.

- - Omnipoint Corporation Annual Report on Form 10-K for the Year Ended December
31, 1999 (audited financial statements and footnotes thereto only).

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

VOICESTREAM WIRELESS CORPORATION

FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1999

TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
PART I
Item 1. Business.................................................... 3
Item 2. Properties.................................................. 34
Item 3. Legal Proceedings........................................... 35
Item 4. Submission of Matters to a Vote of Security Holders......... 35

PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters......................................... 36
Item 6. Selected Consolidated Financial Data........................ 38
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 39
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 62
Item 8. Financial Statements and Supplementary Data................. 62
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 62

PART III
Item 10. Directors and Executive Officers of the Registrant.......... 63
Item 11. Executive Compensation...................................... 66
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 69
Item 13. Certain Relationships and Related Transactions.............. 72

PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports on
Form 8-K.................................................... 74
</TABLE>
<PAGE> 3

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE LITIGATION REFORM ACT OF 1995. Statements contained or incorporated by
reference herein that are not based on historical fact, including without
limitation, statements containing the words "believes," "may," "will,"
"estimate," "continue," "anticipates," "intends," "expects" and words of similar
import, constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, events or developments to be materially different
from any future results, events or developments expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions, both nationally and in the regions in
which we operate; technology changes; competition; changes in business strategy
or development plans; our high leverage; the ability to attract and retain
qualified personnel; existing governmental regulations and changes in, or the
failure to comply with, governmental regulations; liability and other claims
asserted against us; and other factors referenced in our filings with the
Securities and Exchange Commission.

GIVEN THESE UNCERTAINTIES, READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. VoiceStream Wireless Corporation
disclaims any obligation to update any such factors or to publicly announce the
result of any revisions to any of the forward-looking statements contained
herein to reflect future results, events or developments.

Unless the context requires otherwise, "VoiceStream", "we", "our" and "us"
include us and our predecessors and subsidiaries.

PART I

ITEM 1. BUSINESS

INTRODUCTION

We provide wireless communications services in urban markets in the United
States using the Global System for Mobile Communications, or GSM, technology. We
were incorporated in June 1999 as a Delaware corporation to act as the parent
company for business combinations involving our predecessor, now named VS
Washington Corporation. On February 25, 2000, as a result of a reorganization of
VS Washington, we, as a holding company, became the parent of VS Washington and
of Omnipoint Corporation. Our current business activities consist of the
combined businesses of VS Washington and Omnipoint.

Prior to May 3, 1999, VS Washington was an 80.1% owned subsidiary of
Western Wireless Corporation. The remaining 19.9% was owned by Hutchison
Telecommunications PCS (USA) Limited, a subsidiary of Hutchison Whampoa Limited,
a Hong Kong company. On May 3, 1999, VS Washington was formally separated in a
spin-off transaction from Western Wireless' other operations.

On February 24, 2000, the stockholders of VS Washington and Aerial
Communications, Inc. approved our acquisition by merger of Aerial. The closing
of the Aerial merger is contingent upon, among other things, FCC approval and is
expected to be completed early in the second quarter of this year. Assuming the
Aerial merger is completed, our business will include the business of Aerial.

A significant part of our business is conducted through joint ventures with
Cook Inlet Region, Inc. in which we hold a non controlling equity interest. Our
operations and assets, and our relationship with Cook Inlet and other joint
venture entities are more fully described in "VoiceStream's Business" below.

BACKGROUND -- THE WIRELESS COMMUNICATIONS INDUSTRY

Overview

Wireless communications systems use a variety of radio frequencies to
transmit voice and data signals. Broadly defined, the wireless communications
industry includes one-way radio applications, such as paging or beeper services,
and two-way radio applications, such as cellular, PCS and enhanced specialized
mobile radio networks. Each such application is licensed in a distinct radio
frequency block.

3
<PAGE> 4

Since its introduction in 1983, wireless service has grown dramatically. As
of June 30, 1999, according to the Cellular Telephone Industry Association,
referred to as CTIA, there were 76 million wireless subscribers in the United
States, representing a penetration rate of 28%.

In the wireless communications industry, there are two principal frequency
bands licensed by the Federal Communications Commission for transmitting two way
voice and data signals, cellular and PCS. Cellular systems are generated at 824
to 899 MHz and can be either analog or digital. Digital systems convert voice or
data signals into a stream of digits that is compressed before transmission,
enabling a single radio channel to carry multiple simultaneous signal
transmissions. This technology enables enhanced capacity, along with
improvements in digital signaling thereby allowing digital-based wireless
carriers to offer new and enhanced services, such as greater call privacy, and
robust data transmission features, such as "mobile office" applications
(including facsimile, electronic mail and wireless connections to computer/data
networks, including the Internet). See "-- Operation of Wireless Communications
Systems."

PCS is a term commonly used in the United States to describe a portion of
radio spectrum from 1850 to 1990 MHz. This portion of radio spectrum is to be
used by PCS licensees to provide wireless communications services. PCS spectrum
was auctioned by the FCC in six frequency blocks (A-F) beginning with the A and
B Blocks in late 1994 and 1995. In late 1995 and in 1996 the C Block was
auctioned and the FCC concluded simultaneous auctions of the D, E and F Blocks
in 1997. In 1999, the FCC re-auctioned portions of the C, D, E and F Blocks that
were returned or not purchased in previous auctions. PCS competes directly with
existing cellular telephone, paging and specialized mobile radio services. PCS
also includes features that are not generally offered by analog cellular
providers, such as data transmissions to and from portable computers, advanced
paging services and facsimile services. In addition, wireless providers may
eventually offer mass market wireless local loop applications in competition
with wired local communications services. See "-- Governmental Regulation" for a
discussion of the FCC auction process and allocation of wireless licenses.

Operation of Wireless Communications Systems

Wireless communications system service areas, whether cellular or PCS, are
divided into multiple cells. Due to the frequencies on which they operate, a
single cell in a cellular system generally transmits over a wider radius than a
comparable PCS cell. In both cellular and PCS systems, each cell contains a
transmitter, a receiver and signaling equipment (collectively referred to as the
cell site). The cell site is connected by microwave or landline telephone lines
to a switch that uses computers to control the operation of the wireless
communications system for the entire service area. The system controls the
transfer of calls from cell to cell as a subscriber's handset travels,
coordinates calls to and from handsets, allocates calls among the cells within
the system and connects calls to the local landline telephone system or to a
long distance telephone carrier. Wireless communications providers establish
interconnection agreements with local exchange carriers and interexchange
carriers, thereby integrating their system with the existing landline
communications system.

Because the signal strength of a transmission between a handset and a cell
site declines as the handset moves away from the cell site, the switching office
and the cell site monitor the signal strength of calls in progress. When the
signal strength of a call declines to a predetermined level, the switching
office may "hand off" the call to another cell site where the signal strength is
stronger. If a handset leaves the service area of a cellular or PCS system, the
call is disconnected unless there is a technical connection with the adjacent
system.

Wireless system operators normally agree to provide service to subscribers
from other compatible wireless systems who are temporarily located in or
traveling through their service areas in a practice called roaming. Agreements
among system operators provide that the carrier that normally provides services
to the roaming subscriber pays the serving carrier at rates prescribed by the
serving carrier. Analog cellular handsets are functionally compatible with
cellular systems in all markets within the United States. As a result, analog
cellular handsets may be used wherever a subscriber is located, as long as a
cellular system is operational in the area and necessary roaming arrangements
exist. Although PCS and cellular systems utilize similar technologies and
hardware, they operate on different frequencies and use different technical and
network

4
<PAGE> 5

standards. Dual mode handsets, however, make it possible for users of one type
of system to "roam" on a different type of system outside of their service area.

PCS systems operate under one of three principal digital signal
transmission technologies, or standards, that have been deployed by various
operators and vendors for use in PCS systems: GSM; Time Division Multiple
Access, referred to as TDMA; or Code Division Multiple Access, referred to as
CDMA.

GSM and TDMA are both based upon time-division of spectrum and are
currently incompatible with each other and with CDMA. Accordingly, a subscriber
of a system that utilizes GSM technology is currently unable to use a GSM
handset when traveling in an area not served by GSM-based PCS operators, unless
the subscriber carries a dual-mode handset that permits the subscriber to use
the analog cellular system in that area. Under a Memorandum of Understanding
between GSM operators in the United States and Canada and the association of
TDMA operators in the United States and Canada, there are plans to promote the
interoperability of GSM and TDMA standards.

The following sets forth our view as to the relative advantages and
disadvantages of the three different technologies:

GSM is the most widely used wireless technology in the world, serving over
215 million customers. GSM's main advantages include:

- An open system architecture, supported by a variety of vendors, that
allows operators to achieve cost economies in infrastructure and mobile
terminal equipment

- The benefits of a single phone number and transparent services on a
global roaming basis

- High-capacity, as well as high voice quality

- Industry-leading encryption and authentication technology which provides
customers with a high level of subscription and conversation privacy

- GSM has supported wireless data from its inception, and is currently
evolving to support high-speed wireless data access to allow subscribers
access to internet and mobile data services

GSM's drawback is that the technology has not historically been widely
deployed by North American wireless operators, and is based on a different
network protocol than other North American standards, making system
interoperability and roaming with other North American cellular or PCS systems
more difficult.

CDMA has been widely deployed in North America and parts of Asia. CDMA's
main advantages include:

- It has been adopted by more PCS licensees in the United States than GSM
or TDMA, and currently has significantly greater market share and
penetration than GSM

- High voice quality

- Radio architecture that permits maximum frequency reuse, theoretically
increasing system capacity and freeing the wireless operator from
detailed frequency planning

- It has easier interoperability with North American analog cellular
systems

CDMA's drawback is that it is a closed architecture, dependent upon
intellectual property rights owned by a few manufacturers which increase the
costs of infrastructure and handsets. In addition, it has had limited global
deployment as compared to GSM, thus limiting the customers' ability to use their
CDMA service on a global basis.

TDMA has been widely deployed in North and South America. TDMA's main
advantages include:

- It has easier interoperability with North American analog cellular
systems

- Infrastructure and terminal costs that are lower than those of CDMA
systems

5
<PAGE> 6

- As a result of the convergence agreement with the GSM Memorandum of
Understanding, TDMA will have access to the data capabilities of GSM

TDMA's drawback is a narrow radio channel which limits voice quality and
support for advanced, higher-speed data services. In addition, its low level of
global deployment limits the number of equipment vendors, thus raising costs,
and also limits the customers' ability to use their TDMA service on a global
basis.

VoiceStream's Business

VoiceStream provides PCS service in urban markets. With the addition of the
Aerial markets, expected to occur early in the second quarter, we will:

- be a leading PCS provider in the United States with a nearly nationwide
wireless footprint utilizing a single technology and common frequencies;

- own, collectively with joint venture entities in which we will have
interests, 349 broadband PCS licenses covering:

- 23 of the 25 largest U.S. markets; and

- over 222 million persons; and

- be the largest PCS provider using GSM technology in the United States.

The following table sets forth the markets currently owned and operated by
us or by joint ventures in which we hold interests and also markets currently
owned and operated by Aerial or by joint ventures in which Aerial holds
interests:

OPERATING MARKETS

<TABLE>
<CAPTION>
VOICESTREAM AERIAL
- -------------------------------------------------- -------------
<S> <C> <C>
New York Indianapolis Minneapolis
Detroit Des Moines Tampa
Boston/Providence Oklahoma City Houston
Philadelphia Spokane Pittsburgh
Washington DC/Baltimore Tulsa Kansas City
Miami/Ft. Lauderdale Honolulu Columbus
Denver Hartford Orlando
Phoenix/Tucson Albany Sarasota
Seattle/Tacoma New Haven Daytona Beach
Salt Lake City Albuquerque Melbourne
San Antonio/Austin El Paso
Portland Boise
</TABLE>

We have entered into roaming agreements with substantially all of the
licensees that have deployed the GSM standard in North America, and are a member
of the GSM Alliance, an organization of North American GSM service providers
whose members hold licenses that cover substantially all of the United States
population and serve over 2,400 North American cities. Such agreements allow our
subscribers to roam in these carriers' PCS markets, and vice versa. In addition,
we have entered into roaming agreements with cellular carriers which, together
with roaming agreements with GSM carriers, will permit our subscribers with
dual-mode capability to roam in substantially all areas across the United
States. VoiceStream also has reciprocal roaming agreements with a variety of
international carriers which enable our subscribers with compatible handsets to
roam in most countries of the world.

Strategy

Our strategy is to consolidate our operations and marketing under the
VoiceStream brand name and to: (i) penetrate the rapidly growing, broad consumer
segment by offering the best value; (ii) establish brand differentiation of our
proprietary VoiceStream brand; (iii) achieve cost efficiencies through
centralization and

6
<PAGE> 7

size; (iv) build high quality networks with extensive coverage; (v) offer robust
features that capitalize on the advantages of GSM technology; and (vi) acquire
PCS licenses and systems as opportunities arise.

Markets and Systems

With the close of the Omnipoint merger, and assuming completion of the
Aerial merger, collectively with joint venture entities in which we have
interests, we will own 349 broadband PCS licenses covering over 222 million
people. Excluding the Aerial licenses, we own 300 licenses covering over 196
million people.

The following tables set forth the licenses we and the joint venture
entities in which we have interests hold, or will hold upon completion of the
Aerial merger, together with the populations covered by such licenses, and
separately sets forth the licenses presently held by us and Aerial, and joint
ventures in which we or Aerial hold interests. The markets in which we, and/or
our joint ventures hold interests, and currently operate are listed in the table
entitled "Operating Markets" above. Each table below lists Major Trading Areas,
referred to as MTAs, in descending order by covered population, largest
population listed first with Basic Trading Areas, referred to as BTAs, within
such markets listed alphabetically. Unless the context otherwise requires, when
used herein, with respect to a licensed area, "persons" and "population" are
interchangeable and refer to the aggregate number of persons located in such
licensed area. Persons and population data are estimated for 2000 based upon
1999 estimates by Claritas, a market research firm, adjusted by VoiceStream by
applying Claritas' growth factors from 1998 to 1999.

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
New York
Albany......................................... 1,034,000 A, E 40 MHz
Allentown...................................... 721,000 A 30 MHz
Binghamton..................................... 338,000 A 30 MHz
Burlington..................................... 399,000 A 30 MHz
Elmira......................................... 312,000 A 30 MHz
Glens Falls.................................... 121,000 A, E 40 MHz
Hartford....................................... 1,114,000 A 30 MHz
Ithaca......................................... 96,000 A 30 MHz
New Haven...................................... 977,000 A 30 MHz
New London..................................... 345,000 A 30 MHz
New York....................................... 18,856,000 A, D 40 MHz
Oneonta........................................ 105,000 A 30 MHz
Plattsburgh.................................... 118,000 A 30 MHz
Poughkeepsie................................... 436,000 A 30 MHz
Rutland........................................ 98,000 A 30 MHz
Scranton....................................... 649,000 A 30 MHz
Stoudsburg..................................... 131,000 A 30 MHz
Syracuse....................................... 772,000 A 30 MHz
Utica.......................................... 289,000 A 30 MHz
Watertown...................................... 295,000 A 30 MHz
-----------
27,206,000
Detroit
Adrian(3)(4)................................... 99,000 E 10 MHz
Detroit(3)(4).................................. 5,013,000 E 10 MHz
Findlay-Tiffin................................. 152,000 D, E 20 MHz
Flint(3)(4).................................... 506,000 E 10 MHz
Grand Rapids(3)(4)............................. 1,045,000 E 10 MHz
Jackson(3)(4).................................. 204,000 E 10 MHz
Lansing(3)..................................... 511,000 E 10 MHz
</TABLE>

7
<PAGE> 8

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
Lima........................................... 250,000 D, E 20 MHz
Mt. Pleasant................................... 129,000 E 10 MHz
Muskegon(4).................................... 220,000 E 10 MHz
Petoskey....................................... 101,000 D 10 MHz
Saginaw-Bay City............................... 627,000 E 10 MHz
Toledo(3)...................................... 781,000 D 10 MHz
-----------
9,638,000
Boston-Providence
Bangor(4)...................................... 318,000 E 10 MHz
Boston......................................... 4,300,000 D, E 20 MHz
Hyannis........................................ 237,000 D 10 MHz
Keene.......................................... 115,000 D, E 20 MHz
Lewiston-Auburn................................ 216,000 E 10 MHz
Manchester-Nashua-Concord...................... 597,000 D, E 20 MHz
Pittsfield(4).................................. 131,000 E 10 MHz
Portland-Brunswick............................. 506,000 D 10 MHz
Presque Isle(3)................................ 75,000 D, E 20 MHz
Providence-Pawtucket-New Bedford-Fall
River(3).................................... 1,511,000 D 10 MHz
Springfield-Holyoke(4)......................... 656,000 D 10 MHz
Waterville-Augusta............................. 167,000 D, E 20 MHz
Worcester-Fitchburg-Leominster................. 745,000 D, E 20 MHz
-----------
9,574,000
San Francisco-San Jose
San Francisco.................................. 7,260,000 E 10 MHz

Washington-Baltimore
Charlottesville................................ 223,000 E 10 MHz
Cumberland(2).................................. 155,000 E 10 MHz
Fredericksburg................................. 170,000 D 10 MHz
Hagerstown-Chambersburg-Martinsburg............ 361,000 D 10 MHz
Salisbury...................................... 177,000 D, E 20 MHz
Washington, D.C. .............................. 4,645,000 E 10 MHz
-----------
5,731,000
Cleveland
Ashtabula(4)................................... 105,000 E 10 MHz
Canton-New Philadelphia(4)..................... 527,000 E 10 MHz
Cleveland-Akron................................ 2,952,000 E 10 MHz
East Liverpool-Salem(4)........................ 112,000 E 10 MHz
Erie(4)........................................ 273,000 E 10 MHz
Mansfield(4)................................... 227,000 E 10 MHz
Meadville...................................... 90,000 E 10 MHz
Sandusky(4).................................... 138,000 E 10 MHz
Sharon......................................... 122,000 E 10 MHz
Youngstown-Warren(4)........................... 473,000 E 10 MHz
-----------
5,019,000
Denver
Casper-Gillette................................ 143,000 B 30 MHz
Cheyenne....................................... 106,000 B 30 MHz
Colorado Springs(3)............................ 526,000 B 30 MHz
Denver......................................... 2,572,000 B 30 MHz
</TABLE>

8
<PAGE> 9

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
Fort Collins................................... 240,000 B 30 MHz
Grand Junction................................. 242,000 B 30 MHz
Greeley........................................ 167,000 B 30 MHz
Pueblo......................................... 305,000 B 30 MHz
Rapid City..................................... 192,000 B 30 MHz
Riverton....................................... 50,000 B 30 MHz
Rock Springs................................... 60,000 B 30 MHz
Scottsbluff.................................... 101,000 B 30 MHz
-----------
4,704,000
Phoenix
Flagstaff(5)................................... 113,000 E 10 MHz
Nogales........................................ 39,000 E 10 MHz
Phoenix(2)..................................... 3,306,000 E 10 MHz
Prescott(5).................................... 155,000 E 10 MHz
Sierra Vista-Douglas(5)........................ 112,000 E 10 MHz
Tucson(2)...................................... 801,000 E 10 MHz
Yuma(5)........................................ 138,000 E 10 MHz
-----------
4,664,000
St. Louis
Cape Girardeau(3)(5)........................... 185,000 E 10 MHz
Carbondale-Marion(3)........................... 212,000 E 10 MHz
Columbia....................................... 210,000 D, E 20 MHz
Jefferson City(3).............................. 157,000 D 10 MHz
Kirksville..................................... 56,000 D, E 20 MHz
Mount Vernon(4)................................ 118,000 D, E 20 MHz
Poplar Bluff(3)(5)............................. 154,000 D 10 MHz
Quincy-Hannibal................................ 179,000 D, E 20 MHz
Rolla(3)(5).................................... 106,000 D 10 MHz
St. Louis(4)................................... 2,843,000 D, E 20 MHz
West Plains(3)................................. 76,000 D 10 MHz
-----------
4,296,000
Miami-Ft. Lauderdale
Miami-Ft. Lauderdale(3)........................ 3,735,000 E 10 MHz
Naples......................................... 220,000 D 10 MHz
-----------
3,955,000
Portland
Bend........................................... 146,000 A 30 MHz
Coos Bay-North Bend(3)......................... 82,000 A 30 MHz
Eugene-Springfield............................. 321,000 A 30 MHz
Klamath Falls.................................. 80,000 A 30 MHz
Longview....................................... 98,000 A 30 MHz
Medford-Grants Pass............................ 252,000 A 30 MHz
Portland....................................... 2,069,000 A 30 MHz
Roseburg....................................... 102,000 A 30 MHz
Salem-Albany................................... 525,000 A 30 MHz
-----------
3,675,000
Seattle
Olympia-Centralia.............................. 321,000 E 10 MHz
</TABLE>

9
<PAGE> 10

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
Seattle-Tacoma(2).............................. 3,209,000 E 10 MHz
-----------
3,530,000
Richmond-Norfolk
Danville....................................... 165,000 E 10 MHz
Lynchburg...................................... 159,000 E 10 MHz
Martinsville................................... 89,000 E 10 MHz
Norfolk-VA Beach(3)............................ 1,747,000 E 10 MHz
Richmond-Petersburg............................ 1,228,000 E 10 MHz
Staunton-Waynesburo............................ 107,000 E 10 MHz
-----------
3,495,000
Dallas-Fort Worth
Abilene........................................ 257,000 D 10 MHz
Amarillo....................................... 402,000 D 10 MHz
Austin(2)...................................... 1,240,000 D 10 MHz
Big Spring..................................... 33,000 D 10 MHz
Brownwood...................................... 61,000 D 10 MHz
Clovis......................................... 71,000 E 10 MHz
Hobbs.......................................... 55,000 D 10 MHz
Lubbock........................................ 393,000 E 10 MHz
Midland........................................ 129,000 D, E 20 MHz
Odessa......................................... 222,000 D, E 20 MHz
Paris.......................................... 92,000 D 10 MHz
San Angelo..................................... 163,000 D 10 MHz
Sherman-Denison................................ 169,000 D 10 MHz
-----------
3,287,000
Salt Lake City
Boise-Nampa.................................... 564,000 A 30 MHz
Idaho Falls.................................... 216,000 A 30 MHz
Logan.......................................... 102,000 A 30 MHz
Pocatello...................................... 102,000 A 30 MHz
Provo-Orem..................................... 352,000 A 30 MHz
Salt Lake City................................. 1,595,000 A 30 MHz
St. George..................................... 136,000 A, E 40 MHz
Twin Falls..................................... 159,000 A 30 MHz
-----------
3,226,000
Des Moines-Quad Cities
Burlington..................................... 137,000 A, D 20 MHz
Cedar Rapids................................... 285,000 A 10 MHz
Clinton-Sterling............................... 146,000 A, D 20 MHz
Davenport-Moline............................... 429,000 A 10 MHz
Des Moines(1).................................. 789,000 A 10/30 MHz
Dubuque........................................ 176,000 A 10 MHz
Fort Dodge..................................... 126,000 A 10 MHz
Iowa City...................................... 125,000 A 10 MHz
Marshalltown................................... 56,000 A, D 20 MHz
Mason City..................................... 115,000 A, D 20 MHz
Ottumwa........................................ 124,000 A 10 MHz
Sioux City..................................... 342,000 A 10 MHz
Waterloo-Cedar Falls........................... 258,000 A 10 MHz
-----------
3,108,000
</TABLE>

10
<PAGE> 11

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
Indianapolis
Bloomington-Bedford............................ 234,000 E 10 MHz
Columbus(3).................................... 158,000 E 10 MHz
Indianapolis................................... 1,497,000 E 10 MHz
Kokomo-Logansport(4)........................... 188,000 D 10 MHz
Lafayette...................................... 264,000 E 10 MHz
Marion......................................... 106,000 E 10 MHz
Terre Haute(3)................................. 238,000 E 10 MHz
Vincennes-Washington(3)........................ 94,000 E 10 MHz
-----------
2,779,000
El Paso-Albuquerque
Albuquerque.................................... 800,000 A 30 MHz
Carlsbad....................................... 53,000 A 30 MHz
El Paso........................................ 777,000 A 30 MHz
Farmington-Durango............................. 200,000 A 30 MHz
Gallup......................................... 134,000 A 30 MHz
Las Cruces..................................... 250,000 A 30 MHz
Roswell........................................ 80,000 A 30 MHz
Santa Fe....................................... 212,000 A 30 MHz
-----------
2,506,000
Little Rock
El Dorado-Magnolia-Camden(5)................... 103,000 E 10 MHz
Fayetteville-Springdale........................ 296,000 E 10 MHz
Fort Smith..................................... 312,000 D 10 MHz
Harrison....................................... 85,000 D 10 MHz
Hot Springs.................................... 135,000 D 10 MHz
Jonesboro-Paragould............................ 176,000 E 10 MHz
Little Rock.................................... 936,000 D 10 MHz
Pine Bluff..................................... 147,000 D 10 MHz
Russellville................................... 94,000 E 10 MHz
-----------
2,284,000
Oklahoma City
Ada............................................ 53,000 A 30 MHz
Ardmore........................................ 88,000 A 30 MHz
Enid........................................... 84,000 A, D 40 MHz
Lawton-Duncan.................................. 182,000 A 30 MHz
McAlester...................................... 53,000 A 30 MHz
Oklahoma City.................................. 1,402,000 A, D 40 MHz
Ponca City..................................... 46,000 A, D 40 MHz
Stillwater..................................... 78,000 A, D 40 MHz
-----------
1,986,000
San Antonio
San Antonio(3)................................. 1,839,000 D 10 MHz

Milwaukee
Milwaukee...................................... 1,811,000 E 10 MHz

Buffalo-Rochester
Jamestown-Dunkirk.............................. 179,000 E 10 MHz
Olean-Bradford................................. 237,000 D, E 20 MHz
</TABLE>

11
<PAGE> 12

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
Rochester(4)................................... 1,132,000 D 10 MHz
-----------
1,548,000
Minneapolis-St. Paul
Aberdeen(5).................................... 84,000 D 10 MHz
Bemidji........................................ 65,000 D 10 MHz
Bismarck....................................... 128,000 E 10 MHz
Fargo.......................................... 312,000 E 10 MHz
Grand Forks.................................... 201,000 D 10 MHz
Huron.......................................... 50,000 D 10 MHz
Mitchell....................................... 83,000 D 10 MHz
Sioux Falls.................................... 239,000 D 10 MHz
Watertown...................................... 75,000 D 10 MHz
Willmar-Marshall............................... 122,000 E 10 MHz
Worthington.................................... 94,000 D 10 MHz
-----------
1,453,000
Spokane-Billings
Billings....................................... 312,000 E 10 MHz
Bozeman........................................ 81,000 E 10 MHz
Butte.......................................... 67,000 D 10 MHz
Great Falls.................................... 159,000 E 10 MHz
Helena......................................... 70,000 D 10 MHz
Kalispell...................................... 73,000 D 10 MHz
Kennewick-Pasco................................ 182,000 D 10 MHz
Lewiston-Moscow................................ 118,000 E 10 MHz
Missoula....................................... 172,000 D 10 MHz
Walla Walla-Pendleton(2)....................... 169,000 D 10 MHz
-----------
1,403,000
Cincinnati-Dayton
Dayton-Springfield............................. 1,219,000 E 10 MHz
Honolulu
Hilo........................................... 147,000 A 30 MHz
Honolulu....................................... 873,000 A 30 MHz
Kahului-Wailuku-Lahaina........................ 124,000 A 30 MHz
Lihue.......................................... 56,000 A 30 MHz
-----------
1,200,000
Wichita
Hutchinson..................................... 127,000 D, E 20 MHz
Salina......................................... 141,000 D, E 20 MHz
Wichita(3)..................................... 679,000 E 10 MHz
-----------
947,000
Omaha
Grand Island................................... 147,000 E 10 MHz
Hastings....................................... 72,000 E 10 MHz
Lincoln........................................ 335,000 E 10 MHz
McCook......................................... 34,000 E 10 MHz
Norfolk........................................ 110,000 E 10 MHz
North Platte................................... 83,000 E 10 MHz
-----------
781,000
</TABLE>

12
<PAGE> 13

<TABLE>
<CAPTION>
VOICESTREAM LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ----------- ----- ---------
<S> <C> <C> <C>
Chicago
Elkhart(4)..................................... 259,000 E 10 MHz
Galesburg...................................... 74,000 E 10 MHz
Jacksonville(5)................................ 69,000 E 10 MHz
-----------
402,000
Kansas City
Manhattan-Junction City........................ 116,000 D 10 MHz

Tulsa(2)
Bartleville.................................... 48,000 D 10 MHz
Coffeyville.................................... 62,000 D 10 MHz
Muskogee....................................... 163,000 D 10 MHz
Tulsa.......................................... 946,000 D 10 MHz
-----------
1,219,000
-----------
VoiceStream Total................................ 125,861,000
===========
</TABLE>

- ---------------
(1) VoiceStream contributed portions of the Des Moines MTA license to Iowa
Wireless. As a result, we will own 30 MHz of the license for certain
counties within the Des Moines BTA but only 10 MHz for the remainder of the
Des Moines BTA. The remaining 20 MHz is owned by Iowa Wireless.

(2) Cook Inlet/VoiceStream PV/SS PCS also owns licenses for these BTAs.

(3) Cook Inlet/VoiceStream GSM II also owns licenses for these BTAs.

(4) Cook Inlet/VoiceStream GSM III also owns licenses for these BTAs.

(5) Cook Inlet/VoiceStream PCS also owns licenses for these BTAs.

RELATIONSHIP WITH COOK INLET -- JOINT VENTURES IN WHICH WE HOLD INTERESTS

When implementing the PCS licensing scheme in the United States, the FCC
established six PCS license Blocks, A, B, C, D, E, and F, and sold them to the
high bidders in a series of auctions.

As part of the process, the FCC adopted rules that granted a narrow
category of designated entities the right to bid for and own C and F Block
licenses. We did not qualify as a designated entity and were unable to obtain C
and F Block licenses. In order to continue expansion of our system, however, we
obtained 49.9% minority ownership interests in two joint ventures controlled by
Cook Inlet Region, Inc., each of which qualified as a designated entity and was
able to bid for and obtain C and F Block licenses. These joint ventures
generally acquired licenses in markets where we either did not hold licenses or
held licenses with limited spectrum. The markets owned by these joint ventures
include Tulsa and Spokane, which are currently operating, and Chicago and
Dallas, which are in development. We executed agreements with each of the joint
venture entities allowing the entities to operate under our brand name in
licensed markets where we did not hold licenses. In Seattle, Phoenix and other
markets where the joint ventures hold licenses, and we also hold licenses, we
both own and operate the network equipment and a system using the VoiceStream
brand name. We and each of the joint ventures utilize air time, through
reciprocal arrangements, on the other's spectrum in such markets and pay each
other for such use. The joint venture also pays us for the joint venture's use
of any network equipment.

Although Omnipoint qualified as a designated entity under FCC rules and was
therefore able to hold and operate under C and F Block PCS licenses, we do not
qualify as a designated entity and therefore on completion of the Omnipoint
merger we could not own or operate under Omnipoint's C or F Block PCS licenses.
As a result, immediately prior to the Omnipoint merger, the C and F Block PCS
licenses of Omnipoint, including the license for Philadelphia, and existing
rights of Omnipoint to obtain C and F Block PCS licenses were transferred to two
new joint venture entities controlled by Cook Inlet Region, Inc. We hold a 49.9%
minority interest in each of such entities. We executed agreements with each of
the joint venture

13
<PAGE> 14

entities permitting them to operate under the VoiceStream brand name in licensed
markets where we do not also hold licenses. In those markets where we and a
joint venture both hold licenses, we will own and operate the network equipment
and a system using the VoiceStream brand name. We and each of the joint ventures
will utilize air time, through reciprocal arrangements, on the other's spectrum
in those markets and will pay each other for such use. The joint ventures will
also pay us for the joint ventures' use of any network equipment.

Our interests in these joint ventures allow us to extend the VoiceStream
brand into markets where we otherwise would not be able to operate. Our
interests in these joint ventures are recorded as investments on our balance
sheet and we do not consolidate the revenues and expenses associated with
operations of these joint ventures in our financial statements.

We do not have control and maintain limited investor protection in the four
joint venture entities controlled by Cook Inlet Region, Inc. We have substantial
financial commitments and must rely on corresponding financial commitments to
the joint venture entities from Cook Inlet in the markets served by these joint
venture entities. Also, many of the systems owned by these joint venture
entities have not been built out and the joint ventures will have substantial
capital needs in connection with such build-outs.

Cook Inlet/VoiceStream PV/SS PCS, LP

Cook Inlet/VoiceStream PV/SS PCS, LP, formerly Cook Inlet/Western Wireless
PV/SS PCS, LP, is a Delaware limited partnership formed in November 1995. We
hold a 49.9% limited partnership interest in Cook Inlet PV/SS PCS. Cook Inlet
PV/SS PCS began operations in the Tulsa market in June 1997, in the
Phoenix/Tucson market in November 1998 and in the Seattle/Tacoma and Spokane
markets in February 1999. Cook Inlet PV/SS PCS has not yet finalized its
construction plans for the other licenses it owns. Cook Inlet PV/SS PCS owns FCC
licenses to provide wireless communications services in the following 20 BTA
license areas. See "-- Governmental Regulation; Licensing of PCS Systems."

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM PV/SS PCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
----------------------------------------- ---------- ----- -------
<S> <C> <C> <C>
Seattle
Aberdeen........................................... 88,000 C 15 MHz
Bellingham......................................... 161,000 F 10 MHz
Bremerton.......................................... 227,000 C 15 MHz
Port Angeles....................................... 94,000 C 15 MHz
Seattle-Tacoma(1).................................. 3,209,000 F 10 MHz
Wenatchee.......................................... 204,000 C 15 MHz
Yakima............................................. 241,000 C 15 MHz
----------
4,224,000
Phoenix(1)
Phoenix............................................ 3,306,000 F 10 MHz
Tucson............................................. 801,000 F 10 MHz
----------
4,107,000
Cincinnati-Dayton
Cincinnati......................................... 2,172,000 F 10 MHz

Tulsa(1)
Bartlesville....................................... 48,000 C 15 MHz
Coffeyville........................................ 62,000 C 15 MHz
Muskogee........................................... 163,000 C 15 MHz
Tulsa.............................................. 946,000 C 15 MHz
----------
1,219,000
</TABLE>

14
<PAGE> 15

Dallas-Fort Worth
Temple-Killeen..................................... 341,000 F 10 MHz
Austin(1).......................................... 1,240,000 F 10 MHz
----------
1,581,000

Kansas City
Pittsburg-Parsons.................................. 91,000 F 10 MHz
----------
Cook Inlet/VoiceStream PV/SS PCS Total............... 15,069,000
==========
</TABLE>

- ---------------
(1) VoiceStream also owns 10 MHz D or E Block licenses or 30 MHz A Block
licenses for these BTAs.

Cook Inlet/VoiceStream PCS LLC

Cook Inlet/VoiceStream PCS LLC is a Delaware limited liability company that
was formed on February 12, 1999. We hold a 49.9% membership interest in Cook
Inlet/VoiceStream PCS. Cook Inlet/ VoiceStream PCS participated in the FCC
reauction of C, D, E and F Block licenses and owns the following 28 BTA
licenses.

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM PCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
----------------------------------- ---------- ----- ------
<S> <C> <C> <C>
Chicago
Chicago............................................. 8,975,000 C 30 MHz
Champaign-Urbana.................................... 217,000 C 30 MHz
Decatur-Effingham................................... 248,000 C 30 MHz
Jacksonville(1)..................................... 69,000 C 15 MHz
Kankakee............................................ 132,000 C 30 MHz
Mattoon............................................. 62,000 C 30 MHz
Michigan City-La Porte.............................. 109,000 C 30 MHz
Rockford............................................ 445,000 C 30 MHz
Springfield......................................... 266,000 C 30 MHz
----------
10,523,000
Dallas
Dallas-Fort Worth................................... 5,389,000 C 30 MHz
Longview-Marshall................................... 316,000 C 30 MHz
Shreveport.......................................... 585,000 C 30 MHz
Texarkana........................................... 260,000 C 30 MHz
Tyler............................................... 304,000 C 30 MHz
Waco................................................ 290,000 C 30 MHz
----------
7,144,000
New Orleans
Baton Rouge......................................... 683,000 C 30 MHz
Hammond............................................. 109,000 C 30 MHz
</TABLE>

15
<PAGE> 16

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM PCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
----------------------------------- ---------- ----- ------
<S> <C> <C> <C>
Lafayette-New Iberia................................ 546,000 C 30 MHz
----------
1,338,000
Omaha
Omaha............................................... 982,000 C 15 MHz

Phoenix(1)
Flagstaff........................................... 113,000 C 30 MHz
Prescott............................................ 155,000 C 30 MHz
Sierra Vista-Douglas................................ 112,000 C 30 MHz
Yuma................................................ 138,000 C 30 MHz
----------
518,000
St. Louis(1)
Cape Girardeau...................................... 185,000 C 30 MHz
Poplar Bluff........................................ 154,000 C 30 MHz
Rolla............................................... 106,000 C 30 MHz
----------
445,000
Little Rock
El Dorado-Magnolia(1)............................... 103,000 C 30 MHz
----------
Minneapolis
Aberdeen(1)......................................... 84,000 C 30 MHz
----------
Cook Inlet/VoiceStream PCS Total...................... 21,137,000
==========
</TABLE>

- ---------------
(1) VoiceStream also owns a 10 MHz D or E Block license for the BTA.

Cook Inlet/VoiceStream GSM II PCS, LLC

Cook Inlet/VoiceStream GSM II PCS, LLC is a Delaware limited liability
company formed in June 1999. We hold a 49.9% membership interest in Cook
Inlet/VoiceStream GSM II PCS. With the closing of the Omnipoint merger and the
transfer of the designated entity licenses, Cook Inlet/VoiceStream GSM II PCS
owns BTA licenses and certain associated assets and liabilities for the
following 59 BTA markets:

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM GSM II PCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
------------------------------------------ ---------- ----- ------
<S> <C> <C> <C>
Los Angeles-San Diego, CA
Los Angeles, CA..................................... 16,132,000 F 10 MHz
Santa Barbara-Santa Maria, CA....................... 404,000 F 10 MHz
----------
16,536,000
Detroit
Battle Creek........................................ 241,000 F 10 MHz
Adrian(1)........................................... 99,000 F 10 MHz
Detroit(1).......................................... 5,013,000 F 10 MHz
Flint(1)............................................ 506,000 F 10 MHz
Grand Rapids(1)..................................... 1,045,000 F 10 MHz
Jackson(1).......................................... 204,000 F 10 MHz
Lansing(1).......................................... 511,000 F 10 MHz
Toledo(1)........................................... 781,000 F 10 MHz
----------
8,400,000
</TABLE>

16
<PAGE> 17

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM GSM II PCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
------------------------------------------ ---------- ----- ------
<S> <C> <C> <C>
Washington-Baltimore
Baltimore........................................... 2,552,000 F 10 MHz
Washington, DC(1)................................... 4,645,000 E 10 MHz
----------
7,197,000
Philadelphia
Atlantic City....................................... 337,000 C 15 MHz
Dover............................................... 297,000 C 15 MHz
Philadelphia-Wilmington-Trenton..................... 6,001,000 C 15 MHz
Reading............................................. 360,000 C 15 MHz
----------
6,995,000
Miami-Ft. Lauderdale
Miami-Ft. Lauderdale(1)............................. 3,735,000 F 10 MHz
W. Palm Beach-Boca Raton............................ 1,082,000 F 10 MHz
----------
4,817,000
Atlanta
Albany-Tilton....................................... 348,000 F 10 MHz
Augusta............................................. 574,000 F 10 MHz
Macon-Warner Robins................................. 648,000 F 10 MHz
Savannah............................................ 720,000 F 10 MHz
----------
2,290,000
Puerto Rico-USVI
San Juan............................................ 2,397,000 F 10 MHz

Birmingham
Birmingham.......................................... 1,308,000 F 10 MHz
Decatur............................................. 145,000 F 10 MHz
Gatsden............................................. 188,000 F 10 MHz
Huntsville.......................................... 511,000 F 10 MHz
----------
2,152,000
San Antonio
San Antonio(1)...................................... 1,839,000 F 10 MHz

Chicago
Benton Harbor....................................... 158,000 F 10 MHz
Danville............................................ 110,000 F 10 MHz
Ft. Wayne........................................... 696,000 F 10 MHz
Peoria.............................................. 459,000 F 10 MHz
South Bend-Mishawaka................................ 349,000 F 10 MHz
----------
1,772,000
Richmond-Norfolk
Norfolk-Virginia Beach-Newport News(1).............. 1,747,000 F 10 MHz

Nashville
Nashville........................................... 1,711,000 F 10 MHz
</TABLE>

17
<PAGE> 18

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM GSM II PCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
------------------------------------------ ---------- ----- ------
<S> <C> <C> <C>
Boston-Providence
Presque Isle(1)..................................... 75,000 F 10 MHz
Providence-Pawtucket-New Bedford-Fall River(1)...... 1,511,000 F 10 MHz
----------
1,586,000
St. Louis
Cape Girardeau-Sikeston(1).......................... 185,000 F 10 MHz
Carbondale-Marion(1)................................ 212,000 F 10 MHz
Jefferson City(1)................................... 157,000 F 10 MHz
Poplar Bluff(1)..................................... 154,000 F 10 MHz
Rolla(1)............................................ 106,000 F 10 MHz
Springfield......................................... 631,000 F 10 MHz
West Plains(1)...................................... 76,000 F 10 MHz
----------
1,521,000
Indianapolis
Anderson............................................ 178,000 F 10 MHz
Columbus(1)......................................... 158,000 F 10 MHz
Muncie.............................................. 179,000 F 10 MHz
Richmond............................................ 103,000 F 10 MHz
Terre Haute(1)...................................... 238,000 F 10 MHz
Vincennes-Washington(1)............................. 94,000 F 10 MHz
----------
950,000
Des Moines-Quad Cities
Des Moines(1)(2).................................... 789,000 F 10 MHz

Wichita
Wichita(1).......................................... 679,000 F 10 MHz

Tampa-St. Petersburg-Orlando, FL
Sarasota-Bradenton, FL.............................. 602,000 F 10 MHz

San Francisco-Oakland-San Jose, CA
Reno, NV............................................ 572,000 F 10 MHz

Denver
Colorado Springs, CO(1)............................. 526,000 F 10 MHz

Dallas-Ft. Worth
Waco................................................ 290,000 F 10 MHz

Charlotte-Greensboro-Greenville-Raleigh
Goldsboro-Kinston................................... 233,000 F 10 MHz

Cincinnati-Dayton
Williamson-Pikeville................................ 179,000 F 10 MHz

Portland
Coos Bay-North Bend(1).............................. 82,000 F 10 MHz
----------

Cook Inlet/VoiceStream GSM II Total................... 65,862,000
==========
</TABLE>

- ---------------
(1) VoiceStream also owns licenses for these BTAs.

(2) Iowa Wireless owns a 20MHz license for a substantial portion of the Des
Moines BTA.

18
<PAGE> 19

Cook Inlet/VoiceStream GSM III PCS, LLC

Cook Inlet/VoiceStream GSM III PCS, LLC is a Delaware limited liability
company formed in June 1999. We hold a 49.9% membership interest in Cook
Inlet/VoiceStream GSM III PCS. With the closing of the Omnipoint merger and the
transfer of the designated entity licenses, Cook Inlet/VoiceStream GSM III PCS
owns licenses for the following 34 BTA markets:

<TABLE>
<CAPTION>
COOK INLET/VOICESTREAM GSM III PCS
LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
---------------------------------- ---------- ----- ------
<S> <C> <C> <C>
Detroit
Adrian(1)........................................... 99,000 C 15 MHz
Alpena.............................................. 66,000 C 30 MHz
Battle Creek........................................ 241,000 C 15 MHz
Detroit(1).......................................... 5,013,000 C 30 MHz
Flint(1)............................................ 506,000 C 30 MHz
Grand Rapids(1)..................................... 1,045,000 C 15 MHz
Jackson(1).......................................... 204,000 C 15 MHz
Kalamazoo........................................... 364,000 C 30 MHz
Muskegon(1)......................................... 220,000 C 15 MHz
Sault Ste. Marie.................................... 56,000 C 30 MHz
----------
7,814,000
St. Louis
Mt. Vernon-Centralla(1)............................. 118,000 C 30 MHz
St. Louis(1)........................................ 2,843,000 C 30 MHz
----------
2,961,000
Buffalo-Rochester
Buffalo-Niagara Falls............................... 1,174,000 C 30 MHz
Rochester(1)........................................ 1,132,000 C 30 MHz
----------
2,306,000
Cleveland(1)
Ashtabula........................................... 105,000 C 30 MHz
Canton-New Philadelphia............................. 527,000 C 30 MHz
E. Liverpool-Salem.................................. 112,000 C 30 MHz
Erie................................................ 273,000 C 30 MHz
Mansfield........................................... 227,000 C 30 MHz
Sandusky............................................ 138,000 C 15 MHz
Youngstown-Warren................................... 473,000 C 30 MHz
----------
1,855,000
Philadelphia(1)
Harrisburg.......................................... 686,000 C 30 MHz
Lancaster........................................... 462,000 C 30 MHz
York-Hanover........................................ 465,000 C 30 MHz
----------
1,613,000
Chicago
Elkhart(1).......................................... 259,000 C 30 MHz
Benton Harbor....................................... 158,000 C 30 MHz
Ft. Wayne........................................... 696,000 C 30 MHz
South Bend-Mishawaka................................ 349,000 C 15 MHz
----------
1,462,000
</TABLE>

19
<PAGE> 20

Wichita
Salina(1)........................................... 141,000 C 30 MHz
----------
Cook Inlet/VoiceStream GSM III Total.................. 19,619,000
==========
</TABLE>

- ---------------
(1) VoiceStream also owns licenses for these BTAs.

OTHER JOINT VENTURE ENTITIES IN WHICH WE HOLD INTERESTS

Iowa Wireless Services, LP

Iowa Wireless Services, LP is a Delaware limited partnership ultimately
controlled by Iowa Network Services, Inc., an Iowa corporation. We hold a 38%
limited partnership interest in Iowa Wireless. Iowa Wireless began operations in
certain markets in 1998.

Iowa Wireless owns FCC licenses to provide wireless communications services
in the following 13 BTA license areas. See "-- Governmental Regulation;
Licensing of PCS Systems."

<TABLE>
<CAPTION>
IOWA WIRELESS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
---------------------- ---------- ----- ------
<S> <C> <C> <C>
Des Moines-Quad Cities
Burlington.......................................... 137,000 A, D 30 MHz
Cedar Rapids........................................ 285,000 A 20 MHz
Clinton-Sterling.................................... 146,000 A, D 30 MHz
Davenport-Moline.................................... 429,000 A 20 MHz
Des Moines(1)....................................... 789,000 A 20 MHz
Dubuque............................................. 176,000 A 20 MHz
Fort Dodge.......................................... 126,000 A 20 MHz
Iowa City........................................... 125,000 A 20 MHz
Marshalltown........................................ 56,000 A, D 30 MHz
Mason City.......................................... 115,000 A, D 30 MHz
Ottumwa............................................. 124,000 A 20 MHz
Sioux City.......................................... 342,000 A 20 MHz
Waterloo-Cedar Falls................................ 258,000 A 20 MHz
---------
Iowa Wireless Total................................... 3,108,000
=========
</TABLE>

- ---------------
(1) VoiceStream contributed portions of the Des Moines BTA license to Iowa
Wireless. As a result, we will own 30 MHz of the license for certain
counties within the Des Moines BTA but only 10 MHz for the remainder of the
Des Moines BTA. The remaining 20 MHz is owned by Iowa Wireless.

20
<PAGE> 21

STPCS, LLC

STPCS is a Delaware limited liability company ultimately controlled by
STPCS Investment, LLC. We hold an 18% membership interest in STPCS. STPCS,
through its wholly owned subsidiaries, owns seven FCC licenses to provide
wireless communications services in the following six BTA markets. See
"-- Governmental Regulation; Licensing of PCS Systems."

<TABLE>
<CAPTION>
STPCS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ---------- ----- ------
<S> <C> <C> <C>
San Antonio
Brownsville-Harlingen................................ 355,000 D, F 20 MHz
Corpus Christi....................................... 551,000 D 10 MHz
Eagle Pass-Del Rio................................... 119,000 F 10 MHz
Laredo............................................... 221,000 D 10 MHz
McAllen.............................................. 600,000 D 10 MHz
---------
1,846,000
Houston
Victoria............................................. 164,000 F 10 MHz
---------
STPCS Total............................................ 2,010,000
=========
</TABLE>

D&E/Omnipoint Wireless Joint Venture, LLC

D&E/Omnipoint Wireless Joint Venture, LLC is a Delaware limited liability
company formed in September 1997. We hold a 50% interest in this entity to which
we have committed to contribute licenses for several western Pennsylvania BTA
markets. The company launched service in the markets in September 1997.

<TABLE>
<CAPTION>
D&E/OMNIPOINT WIRELESS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
------------------------------- ---------- ----- ------
<S> <C> <C> <C>
Philadelphia
York-Hanover......................................... 465,000 E 10 MHz
Harrisburg........................................... 686,000 D 10 MHz
Lancaster............................................ 462,000 E 10 MHz
---------
D&E/Omnipoint Wireless Total........................... 1,613,000
=========
</TABLE>

21
<PAGE> 22

NPI-Omnipoint Wireless, LLC

NPI Omnipoint Wireless, LLC is a Delaware limited liability company formed
in March 1999. We hold a 30% interest in this joint venture entity to which we
have committed to contribute licenses for several central Michigan BTAs. The
company launched service in the markets in the Spring of 1999.

<TABLE>
<CAPTION>
NPI OMNIPOINT WIRELESS LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
------------------------------- ---------- ----- ------
<S> <C> <C> <C>
Detroit
Grand Rapids(1)...................................... 1,045,000 E 10 MHz
Grand Rapids......................................... 1,045,000 F 10 MHz
Grand Rapids......................................... 1,045,000 C 15 MHz
Mount Pleasant....................................... 129,000 E 10 MHz
Muskegon............................................. 220,000 E 10 MHz
Saginaw-Bay City(1).................................. 627,000 E 10 MHz
Petoskey............................................. 86,000 D 10 MHz
Alpena............................................... 64,000 C 30 MHz
Sault Ste. Marie..................................... 51,000 C 30 MHz
Muskegon............................................. 207,000 C 15 MHz
---------
NPI-Omnipoint Wireless Total........................... 2,429,000
=========
</TABLE>

- ---------------
(1) We have agreed to contribute portions of the Grand Rapids C, E and F Block
licenses and the Saginaw-Bay City E Block BTA license to NPI-Omnipoint
Wireless, LLC. As a result, we will own the E Block licenses for certain
counties within the Grand Rapids and Saginaw-Bay City BTAs, and
NPI-Omnipoint Wireless, LLC will own the E block licenses for the remainder
of the counties in the Grand Rapids and Saginaw-Bay City BTAs.

AERIAL LICENSES

Upon completion of the Aerial merger we will acquire the following
licenses:

<TABLE>
<CAPTION>
AERIAL LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ---------- ----- ------
<S> <C> <C> <C>
Minneapolis
Aberdeen............................................ 84,000 B 30 MHz
Bemidji............................................. 65,000 B 30 MHz
Bismarck............................................ 128,000 B 30 MHz
Brainerd............................................ 94,000 B 30 MHz
Dickinson........................................... 36,000 B 30 MHz
Duluth.............................................. 403,000 B 30 MHz
Eau Claire.......................................... 191,000 B 30 MHz
Fargo............................................... 312,000 B 30 MHz
Fergus Falls........................................ 128,000 B 30 MHz
Grand Forks......................................... 201,000 B 30 MHz
Huron............................................... 50,000 B 30 MHz
Ironwood............................................ 30,000 B 30 MHz
Mankato............................................. 245,000 B 30 MHz
Minneapolis......................................... 3,213,000 B 30 MHz
Minot............................................... 117,000 B 30 MHz
Mitchell............................................ 83,000 B 30 MHz
</TABLE>

22
<PAGE> 23

<TABLE>
<CAPTION>
AERIAL LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ---------- ----- ------
<S> <C> <C> <C>
Rochester........................................... 249,000 B 30 MHz
St. Cloud........................................... 284,000 B 30 MHz
Sioux Falls......................................... 239,000 B 30 MHz
Watertown........................................... 75,000 B 30 MHz
Williston........................................... 25,000 B 30 MHz
Willmar-Marshall.................................... 122,000 B 30 MHz
Worthington......................................... 94,000 B 30 MHz
----------
6,468,000
Tampa
Daytona Beach....................................... 473,000 A 30 MHz
Lakeland............................................ 474,000 A 30 MHz
Melbourne........................................... 472,000 A 30 MHz
Ocala............................................... 251,000 A 30 MHz
Orlando............................................. 1,643,000 A 30 MHz
Sarasota............................................ 602,000 A 30 MHz
Tampa............................................... 2,543,000 A 30 MHz
----------
6,458,000
Houston
Beaumont............................................ 455,000 A 30 MHz
Bryan............................................... 166,000 A 30 MHz
Houston............................................. 4,953,000 A 30 MHz
Lake Charles........................................ 279,000 A 30 MHz
Lufkin.............................................. 155,000 A 30 MHz
Victoria............................................ 164,000 A 30 MHz
----------
6,172,000
Pittsburgh
Altoona............................................. 224,000 B 30 MHz
Clarksburg.......................................... 194,000 B 30 MHz
Du Bois............................................. 128,000 B 30 MHz
Fairmont............................................ 55,000 B 30 MHz
Indiana............................................. 87,000 B 30 MHz
Johnstown........................................... 234,000 B 30 MHz
Morgantown.......................................... 107,000 B 30 MHz
New Castle.......................................... 94,000 B 30 MHz
Oil City............................................ 104,000 B 30 MHz
Pittsburgh.......................................... 2,431,000 B 30 MHz
Steubenville........................................ 131,000 B 30 MHz
Wheeling............................................ 209,000 B 30 MHz
----------
3,998,000
</TABLE>

23
<PAGE> 24

<TABLE>
<CAPTION>
AERIAL LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------- ---------- ----- ------
<S> <C> <C> <C>
Kansas City
Emporia............................................. 45,000 B 30 MHz
Joplin.............................................. 238,000 B 30 MHz
Kansas City......................................... 2,053,000 B 30 MHz
Lawrence............................................ 96,000 B 30 MHz
Manhattan-Junction City............................. 116,000 B 30 MHz
Pittsburg-Parsons................................... 91,000 B 30 MHz
St. Joseph.......................................... 190,000 B 30 MHz
Sedalia............................................. 90,000 B 30 MHz
Topeka.............................................. 255,000 B 30 MHz
----------
3,174,000
Columbus
Athens.............................................. 131,000 B 30 MHz
Chillicothe......................................... 105,000 B 30 MHz
Columbus............................................ 1,645,000 B 30 MHz
Marion.............................................. 97,000 B 30 MHz
Parkersburg......................................... 181,000 B 30 MHz
Zanesvile........................................... 188,000 B 30 MHz
----------
2,347,000
----------
Aerial Total.......................................... 28,617,000
==========
</TABLE>

OTHER JOINT VENTURES IN WHICH WE WILL HOLD AN INTEREST FOLLOWING THE AERIAL
MERGER

Following completion of the Aerial merger, we will hold interests in the
following joint venture entities:

Wireless Alliance, LLC

Wireless Alliance, LLC is a Minnesota limited liability company formed in
November 1996. We will hold a 30% interest in Wireless Alliance. The company
launched service in 1998.

<TABLE>
<CAPTION>
WIRELESS ALLIANCE LICENSES
MTA/BTA LICENSE AREA POPULATION BLOCK MHZ
-------------------------- ---------- ----- ------
<S> <C> <C> <C>
Minneapolis(1)
Duluth................................................ 403,000 B 20 MHz
Fargo................................................. 312,000 B 20 MHz
Grand Forks........................................... 201,000 B 20 MHz
Sioux Falls........................................... 239,000 B 20 MHz
---------
Wireless Alliance Total................................. 1,155,000
=========
</TABLE>

- ---------------
(1) Aerial contributed to Wireless Alliance 20 MHz of the 30 MHz of the above
BTAs within the Minneapolis MTA license in exchange for its ownership
interest in Wireless Alliance.

Access Plus, LLC

A GSM infrastructure agreement between a wholly-owned subsidiary of Aerial
Operating Company and Access Plus, LLC, provides for the build-out of the
Brainerd BTA portion of Aerial's Minneapolis MTA and the sharing of revenues
generated by this venture.

24
<PAGE> 25

PRODUCTS AND SERVICES

We provide a variety of wireless products and services designed to match a
range of needs for business and personal use. VoiceStream currently offers
several distinct services and features in its PCS systems, including:

- Enhanced Features -- Our systems offer caller identification, call hold,
voice mail and numeric paging, as well as custom calling features such as
call waiting, conference calling and call forwarding.

- Messaging and Wireless Data Transmission -- Our systems allow for two-way
messaging to and from all subscribers' handsets. This facilitates a
number of messaging and internet-related services which are currently
offered by VoiceStream, such as the receipt of wireless e-mail, and which
may be offered in the future, such as Web browsing.

- Call Security and Privacy -- Sophisticated encryption algorithms provide
increased call security, encouraging users to make private, business and
personal calls with significantly lower risk of eavesdropping than on
analog-based systems.

- Smart Card -- "Smart" cards, programmed with the user's billing
information and a specified service package, allow subscribers to obtain
PCS connectivity automatically, simply by inserting their smart cards
into compatible PCS handsets.

- Prepaid Wireless -- Our systems offer prepaid wireless services in many
of our markets.

- Over-the-Air Activation and Over-the-Air Subscriber Profile
Management -- We are able to transmit changes in the subscriber's feature
package, including mobile number assignment and personal directory
numbers, directly to the subscriber's handset.

- Roaming -- Subscribers are able to roam throughout the United States,
either on other GSM-based PCS systems operated by current licensees or by
using dual-mode handsets that can be used on existing cellular systems.
VoiceStream has entered into roaming agreements which allow its customers
to roam on cellular systems. Dual-mode handsets allow roaming onto analog
cellular systems.

MARKETING, SALES AND CUSTOMER SERVICE

Our sales and marketing strategy is to generate continued subscriber growth
and increased subscriber revenues. In addition, VoiceStream targets a customer
base which it believes is likely to generate higher monthly service revenues,
while attempting to achieve a low cost of adding new subscribers.

- Marketing -- We market our PCS products and services under the
proprietary VoiceStream and Omnipoint brand names. Our objective is to
develop brand recognition of VoiceStream through substantial advertising
and direct marketing in each of its PCS markets. We may continue to use
the Omnipoint brand for select services.

In marketing our PCS services, we concentrate our marketing efforts
primarily on the consumer market. Through our "Get More" proposition, we
emphasize that consumers get more for their money from VoiceStream's
enhanced features, privacy, customer service and competitive pricing of
these services. We also promote to businesses that would benefit from
integrated voice messaging, wireless data transmission, and enhanced
features and services. Our advertising is supported by a celebrity
spokesperson -- Jamie Lee Curtis.

- Sales -- We sell our products and services through a combination of
direct and indirect channels. As a combined entity, we will operate
company-owned retail locations and utilize a direct sales force. Our
training programs provide our sales employees with an in-depth
understanding of our systems, products and services so that they, in
turn, can provide extensive information to prospective customers. Sales
commissions generally are linked both to subscriber revenue and
subscriber retention, as well as to activation levels.

25
<PAGE> 26

We believe that our local sales offices provide the physical presence in
local markets necessary to position VoiceStream as a quality local service
provider, and give us greater control over both our costs and the sales
process. We also utilize indirect sales through an extensive network of
national and local merchant and specialty retailers. We intend to continue
to use a combination of direct and indirect sales channels, with the mix
depending on the retail needs of each particular market.

In addition, we act as a retail distributor of handsets and maintain
inventories of handsets. Although subscribers generally are responsible
for purchasing or otherwise obtaining their own handsets, VoiceStream
historically has sold handsets below cost to respond to competition and
general industry practice and expects to continue to do so in the future.

- Customer Service -- Customer service is a significant element of our
operating philosophy. We are committed to attracting and retaining
subscribers by providing consistently superior customer service. We
maintain a highly sophisticated monitoring and control system with a
well-trained staff of customer service personnel and technical personnel
to handle both routine and complex questions as they arise, 24 hours a
day, 365 days a year.

We utilize credit check procedures at the time of sale and continuously
monitor customer churn (the rate of subscriber attrition). We manage our churn
rate through a program implemented through our sales force and customer service
personnel intended to enhance subscriber loyalty and increase add-on sales and
customer referrals. The program allows the sales staff to check customer
satisfaction, as well as to offer additional calling features, such as voice
mail, call waiting and call forwarding.

SUPPLIERS AND EQUIPMENT VENDORS

We do not manufacture any of the handsets or network equipment used in our
operations. The high degree of compatibility among different manufacturers'
models of handsets and network equipment allows us to design, construct and
operate our systems without being dependent upon any single source of such
equipment. The handsets and network equipment used in VoiceStream operations are
available for purchase from multiple sources, and we anticipate that equipment
will continue to be available in the foreseeable future. We currently purchase
handsets primarily from Motorola Inc., Ericsson Inc., Mitsubishi Wireless
Communications, Inc. and Nokia Mobile Phones, Inc. We currently deploy network
equipment primarily from Ericsson, Nortel Neworks Inc. and Nokia
Telecommunications Inc.

COMPETITION

Competition for subscribers among wireless licensees is based principally
upon the services and features offered, the technical quality of the wireless
systems, customer service, system coverage, capacity and price. Under current
FCC rules, there may be up to seven PCS licensees in each geographic area in
addition to the two cellular licensees. Also, specialized mobile radio, referred
to as SMR, dispatch system operators have constructed digital mobile
communications systems on existing SMR frequencies, referred to as ESMR, in many
cities throughout the United States, including some of the markets in which we
operate.

We operate in highly competitive markets. Our principal competitors are the
cellular service providers in our markets, many of which have been operational
for a number of years, and national PCS providers, many of which offer no or low
cost roaming and toll calls. Many of our competitors have significantly greater
financial and technical resources than those available to VoiceStream and
provide comparable services in competition with our PCS systems. These
competitors include Vodafone AirTouch Cellular Communications, Inc., AT&T
Wireless Services, Inc., Bell Atlantic, GTE Mobilnet, Nextel Communications,
Inc., Sprint Corp. (PCS Group) and US West Wireless LLC. VoiceStream also
competes with paging, dispatch and conventional mobile telephone companies,
resellers and landline telephone service providers in its PCS markets.

Potential users of wireless systems may find their communications needs
satisfied by other current and developing technologies. One or two-way paging or
beeper services that feature voice messaging and data display as well as tone
only service may be adequate for potential subscribers who do not need to speak
to the

26
<PAGE> 27

caller. In the future, wireless service may also compete more directly with
traditional landline telephone service providers.

GSM systems are not deployed in all areas of the United States. As a
result, our subscribers may not be able to use PCS services conveniently while
roaming in areas outside our markets. Further, our principal PCS competitors use
standards other than GSM. For example, US West and Sprint PCS use the CDMA
standard and AT&T Wireless uses the TDMA standard. Systems using the CDMA and
TDMA standards cover more areas of the United States than do GSM systems.
Therefore, our competitors deploying such systems have a competitive advantage
in this regard.

The FCC generally requires all cellular and PCS licensees to provide
service to resellers. A reseller provides wireless service to customers but does
not hold an FCC license or own facilities. The reseller buys blocks of wireless
telephone numbers and capacity from a licensed carrier and resells service
through its own distribution network to the public. Thus, a reseller is both a
customer of a wireless licensee's services and also a competitor of that
licensee. Several small resellers currently operate in competition with our
systems. With respect to PCS licensees, the resale obligations terminate five
years after the last group of initial licenses of currently allotted PCS
spectrum is awarded.

We face increased competition from entities providing similar services
using other communications technologies. While some of these technologies and
services are currently operational, others are being developed or may be
developed in the future.

In 1996, the FCC transferred 200 MHz of spectrum previously allocated to
federal government use to the private sector. In April 1997, the FCC auctioned
30 MHz of spectrum for wireless communications services, which can provide fixed
or mobile telecommunications service. Omnipoint purchased nine licenses as a
result of such auction, all of which were contributed to Cook Inlet/VoiceStream
GSM II. In late 1997, the FCC also auctioned 10 MHz of spectrum for SMR service,
another potential competitor with PCS and cellular service. Moreover, in 1998,
the FCC auctioned more than 1000 MHz of spectrum for local multipoint
distribution service. VoiceStream acquired 16 licenses as a result of such
auction. During 1998, the FCC auctioned 25 MHz of spectrum for the General
Wireless Communications Service, plus additional spectrum in the 220 MHz band.
We cannot foresee how technological progress or economic incentives will affect
competition from these new services. In all instances, the FCC reserves the
right to amend or repeal its service regulations and auction schedule.

INTELLECTUAL PROPERTY

We hold federal trademark registration of the marks "VoiceStream" and
"VoiceStream and Design," and have registered or applied for various other trade
and service marks with the United States Patent and Trademark Office. As a
result of the Omnipoint merger, we had 71 United States patents, 12 foreign
patents, 62 United States and 82 foreign pending patent applications, 16 United
States and 115 foreign trademarks, and 23 United States and 73 pending foreign
trademark applications.

GOVERNMENTAL REGULATION

The FCC regulates the licensing, construction, operation, acquisition and
sale of PCS systems in the United States pursuant to the Communications Act of
1934, and the rules, regulations and policies promulgated by the FCC thereunder.

Licensing of PCS Systems

In order to increase competition in wireless communications, promote
improved quality and service and make available the widest possible range of
wireless services, federal legislation was enacted directing the FCC to allocate
radio frequency spectrum for PCS by competitive bidding. A PCS system operates
under a protected geographic service area license granted by the FCC for a
particular market on one of six frequency blocks allocated for broadband PCS
service. The FCC has divided the United States and its possessions and
territories into PCS markets made up of 493 Basic Trading Areas, referred to as
BTAs, and 51 Metropolitan

27
<PAGE> 28

Trading Areas, referred to as MTAs. Each MTA consists of at least two BTAs. As
many as seven licenses are issued in each PCS service area. The FCC has
allocated 120 MHz of radio spectrum in the 2 GHz band for licensed PCS services.
The FCC divided the 120 MHz of spectrum into six individual blocks, each of
which is allocated to serve either MTAs or BTAs. The spectrum allocation
includes two 30 MHz blocks (A and B Blocks) licensed for each of the 51 MTAs,
one 30 MHz block (C Block) (which has been split in some BTAs into two 15 MHz
blocks) licensed for each of the 493 BTAs, and three 10 MHz blocks (D, E and F
Blocks) licensed for each of the 493 BTAs. A PCS license has been or will be
awarded for each MTA or BTA in every block, for a total of more than 2,000
licenses.

Under the FCC's current rules specifying spectrum ownership limits
affecting broadband PCS licensees, no person or entity may hold an attributable
interest in licenses for more than 45 MHz of PCS, cellular and SMR services
regulated as CMRS where there is significant overlap in any geographic area
(significant overlap will occur when at least 10% of the population of the PCS
licensed service area is within the Cellular Geographic Service Area, referred
to as CGSA and/or SMR service area, as defined by the FCC). In an order released
September 22, 1999, the Commission raised the aggregation limit for licensees
serving rural areas (defined as cellular RSAs) to 55 MHz. For purposes of this
spectrum limit, any controlling ownership interest shall be "attributable," as
will any equity interest of 20% or more (however, 40% or more applies (1) if the
ownership interest is held by a small business, or (2) if the interest is held
by an entity with a non-controlling interest in a PCS licensee that is a small
business or (3) is held by a passive institutional investor). Furthermore, the
officers and directors of any licensee shall be considered to have an
attributable interest in each entity with which they are associated. This means
that Western Wireless's ownership of cellular licenses will be attributed to us
(because of some common officers and directors) and Cook Inlet/VoiceStream PCS's
PCS licenses will be attributed to us (because of our equity interest). Western
Wireless owns cellular licenses serving markets that are wholly or partially
within the Oklahoma City MTA, resulting in Western Wireless and our exceeding
the FCC's spectrum cap restrictions which were in effect prior to the September
22, 1999 order, prior to our spin-off from Western Wireless. Western Wireless
had filed a waiver request with the FCC which is pending, and Western Wireless
and we have been allowed to delay compliance with the restriction until the FCC
rules on the waiver request. In the event that spectrum cap restrictions are not
eliminated as part of the FCC's biennial review of regulation in the fourth
quarter of 2000, or the temporary waiver is not granted, then sometime before or
about September 1, 2000, either we or Western Wireless will be obligated to
divest sufficient portions of their markets in the Oklahoma City MTA to come
into compliance with the rules.

Attribution of Omnipoint licenses that were recently acquired by us or
transferred to Cook Inlet entities cause the spectrum cap to be exceeded in
eleven markets: Detroit and Flint, Michigan, St. Louis, Rolla, Cape
Girardeau-Sikeston and Poplar Bluff, Missouri, Salina, Kansas; Kansas RSA 3;
Kansas RSA 8; Mt. Vernon, Illinois; and El Dorado, Arkansas. In an order
released February 15, 2000, the FCC gave us until May 25, 2000 to come into
compliance with the spectrum cap in these markets. If by this date we have not
received further waiver from the FCC, we will be forced to divest sufficient
spectrum in these markets to comply with the spectrum cap.

Spectrum cap compliance problems issues may also arise in a number of MTAs
and BTAs described below as a result of the Aerial merger, depending in part
upon FCC action on a joint request for declaratory ruling on spectrum cap
compliance by us, Aerial and TDS, filed with the FCC on December 1, 1999.
Regardless of the outcome of the request for declaratory ruling, after the
Aerial merger, we and Western Wireless will exceed the spectrum cap in the
Minneapolis and the Oklahoma City MTAs and in the following BTAs:
Manhattan-Junction City and Pittsburgh-Parsons, Kansas; Bemidji, Wilmar-Marshall
and Worthington, Minnesota; and Bismark, Fargo and Grand Forks, North Dakota;
Huron, Mitchell, Sioux Falls, Watertown and Aberdeen, South Dakota. If the FCC
rules that the licenses of TDS' subsidiary United States Cellular Corporation
are attributable to VoiceStream and Western Wireless by virtue of TDS' right to
appoint a director to VoiceStream's board, or that attribution of other wireless
spectrum occurs because of other relationships, then VoiceStream or Western
Wireless will have to divest sufficient portions of its spectrum in additional
wireless markets to comply with the spectrum cap. Temporary waivers of the
spectrum cap have been sought by VoiceStream and Aerial in the context of their
FCC applications for approval of the merger. If

28
<PAGE> 29

these waivers are not granted, either VoiceStream or Western Wireless will be
obligated to divest sufficient portions of their spectrum in these markets to
come into compliance with the rules.

We do not believe the spectrum cap or any action Western Wireless or we may
be required to take to comply therewith will have a material adverse effect on
us due to the relatively minor geographic overlaps.

All PCS licenses are granted for a ten-year term, at the end of which they
must be renewed. The FCC has adopted specific standards to apply to PCS
renewals, under which the FCC will award a renewal expectancy to a PCS licensee
that (1) has provided substantial service during its past license term and (2)
has substantially complied with applicable FCC rules and policies and the
Communications Act. All 30 MHz PCS licensees, including VoiceStream and
Omnipoint, must construct facilities with a signal level sufficient to provide
adequate service to at least one-third of the population of their service area
within five years of their initial license grants and to two-thirds of the
population within ten years. All 10 MHz and 15 MHz PCS licensees, including
VoiceStream and Omnipoint, must construct facilities with a signal level
sufficient to provide adequate service to at least one-quarter of the population
in their licensed service area within five years of their initial license
grants, or make a showing of substantial service in their licensed service area
within five years of their initial license grants. Licensees that fail to meet
the coverage requirements may be subject to forfeiture of the license.

PCS systems are subject to certain Federal Aviation Administration
regulations with respect to the location, lighting and construction of
transmitter towers and antennae and may be subject to regulation under the
National Environmental Policy Act and the environmental regulations of the FCC.
State or local zoning and land use regulations will also apply to our
activities. We will use, among other facilities, common carrier point to point
microwave facilities to connect cell sites and to link them to the main
switching office. These facilities are separately licensed by the FCC and are
subject to regulation as to technical parameters and service.

We have purchased our PCS licenses from private parties and the federal
government. We used a combination of debt and equity financing to acquire such
licenses. Some joint ventures in which they hold an interest have utilized
financing from the federal government to the extent available.

Transfers and Assignments of PCS Licenses

The Communications Act and FCC rules require the FCC's prior approval of
the assignment or transfer of control of a license for a PCS system. In
addition, the FCC has established transfer disclosure requirements that require
licensees who transfer control of or assign a PCS license within the first three
years of their license term to file associated contracts for sale, option
agreements, management agreements or other documents disclosing the total
consideration that the licensee would receive in return for the transfer or
assignment of its license. Non-controlling interests in an entity that holds a
PCS license or PCS system generally may be bought or sold without FCC approval.
Any acquisition or sale by us of PCS interests may also require the prior
approval of the Federal Trade Commission and the Department of Justice, if over
a certain size, as well as state or local regulatory authorities having
competent jurisdiction.

FCC rules restrict the voluntary assignments or transfers of control of C
and F Block licenses. During the first five years of the license term,
assignments or transfers affecting control are permitted only to assignees or
transferees that meet the eligibility criteria for participation in the C and F
Block auctions at the time the application for assignment or transfer of control
is filed, or if the proposed assignee or transferee holds other licenses for C
and F Blocks and, at the time of receipt of such licenses, met the same
eligibility criteria. Any transfers or assignments during the entire ten year
initial license term are subject to an unjust enrichment penalty of acceleration
of any installment payment plans should the assignee or transferee not qualify
for the same benefits. Any transfers or assignments during the first five years
of the initial license term are subject to an unjust enrichment penalty of
forfeiture of bidding credits. In the case of the C and F Blocks, the FCC has
authority to conduct random audits to ensure that licensees are in compliance
with the FCC's eligibility rules. Violations of the Communications Act or the
FCC's rules could result in license revocations, forfeitures or fines.

29
<PAGE> 30

For a period of up to 10 years after the grant of a PCS license, subject to
extension, a PCS licensee will share spectrum with existing licensees that
operate certain fixed microwave systems within its license area. To secure a
sufficient amount of unencumbered spectrum to operate our PCS systems
efficiently and with adequate population coverage, we will need to relocate many
of these incumbent licensees. In an effort to balance the competing interests of
existing microwave users and newly authorized PCS licensees, the FCC adopted a
transition plan to relocate such microwave operators to other spectrum blocks
and a cost sharing plan so that if the relocation of an incumbent benefits more
than one PCS licensee, the benefiting PCS licensees will share the cost of the
relocation. Initially, this transition plan allowed most microwave users to
operate in the PCS spectrum for a two-year voluntary negotiation period and an
additional one-year mandatory negotiation period. The FCC has shortened the
voluntary negotiation period by one year without lengthening the mandatory
negotiation period, for PCS licensees in the C, D, E and F Blocks. For public
safety entities dedicating a majority of their system communications for police,
fire or emergency medical services operations, the voluntary negotiation period
is three years, with an additional two year mandatory negotiation period.
Parties unable to reach agreement within these time periods may refer the matter
to the FCC for resolution, but the incumbent microwave user is permitted to
continue its operations until final FCC resolution of the matter. The transition
and cost sharing plans expire on April 4, 2005, at which time remaining
incumbents in the PCS spectrum band will be responsible for their costs to
relocate to alternate spectrum locations.

Foreign Ownership

Under the Communications Act, no more than 25% of an FCC licensee's capital
stock may be indirectly owned or voted by non-United States citizens or their
representatives, by a foreign government, or by a foreign corporation, absent an
FCC finding that a higher level of foreign alien ownership is not inconsistent
with the public interest. In November 1997, the FCC adopted new rules, effective
in February 1998, to implement the World Trade Basic Telecom Organization
Agreement. Formerly, potential licensees had to demonstrate that their markets
offered effective competitive opportunities in order to obtain authorization to
exceed the 25% indirect foreign ownership threshold. Under the new rules, this
showing is only required for entities from countries that are not World Trade
Organization members. Applicants from World Trade Organization Agreement
signatories are presumed to offer competitive opportunities. However, the FCC
reserves the right to attach additional conditions to a grant of authority, and,
in the exceptional case in which an application poses a very high risk to
competition, to deny an application. The limitation on direct foreign ownership
in an FCC licensee remains fixed at 20%, with no opportunity to increase the
percentage, and is unaffected by the FCC's new rules.

By a Memorandum Opinion and Order released February 15, 2000 in connection
with the VoiceStream/ Omnipoint merger, the FCC gave the merged entity
authorization to have up to 55.6% total indirect foreign ownership. VoiceStream
has requested that the FCC apply the level of permissible indirect foreign
ownership set forth in the February 15, 2000 Order to subsidiaries that it will
acquire as part of the Aerial reorganization. Following the Aerial
reorganization, indirect foreign ownership of FCC licenses that VoiceStream
controls will be less than 55.6%.

Telecommunications Act of 1996 and Other Recent Industry Developments

On February 8, 1996, the Telecommunications Act was signed into law,
substantially revising the regulation of communications. The goal of the
Telecommunications Act is to enhance competition and remove barriers to market
entry, while deregulating the communications industry to the greatest extent
possible. To this end, local and long-distance communications providers will,
for the first time, be able to compete in each other's market, and telephone and
cable companies will likewise be able to compete in each other's markets. To
facilitate the entry of new carriers into existing markets, the
Telecommunications Act imposes certain interconnection requirements on incumbent
carriers. Additionally, all telecommunications providers are required to make an
equitable and nondiscriminatory contribution to the preservation and advancement
of universal service. Since 1996 the FCC has adopted numerous rules implementing
the provisions of the Telecommunications Act. Many of the new rules have been
and remain the subject of

30
<PAGE> 31

ongoing proceedings before the FCC and federal courts. We cannot predict the
outcome of the FCC's rulemaking proceedings to promulgate regulations to
implement the new law or the effect of the new regulations on cellular service
or PCS, and there can be no assurance that such regulations will not adversely
affect our business or financial condition.

The Telecommunications Act codified the policy that non-regional Bell
operating company CMRS providers will not be required to provide equal access to
long distance carriers, and relieved such CMRS providers of their existing equal
access obligations. The FCC, however, may require CMRS carriers to offer
unblocked access, i.e., implemented by the subscriber's use of a carrier
identification code or other mechanisms at the time of placing a call, to the
long distance provider of a subscriber's choice. The FCC has terminated its
inquiry into the imposition of equal access requirements on CMRS providers.

On July 26, 1996, the FCC released a Report and Order establishing
timetables for making emergency 911 services available by cellular, PCS and
other mobile service providers, including "enhanced 911" services that provide
the caller's telephone number, location and other useful information. Cellular
and PCS providers must be able to process and transmit 911 calls (without call
validation), including those from callers with speech or hearing disabilities.
If a cost recovery mechanism is in place and a Public Service Answering Point
requests and is capable of processing the caller's telephone number and location
information, cellular, PCS, and other mobile service providers must relay a
caller's automatic number identification and cell site location, and by 2001
they must be able to identify the location of a 911 caller within 125 meters in
67% of all cases. State actions incompatible with the FCC rules are subject to
preemption. On December 1, 1997, the FCC required wireless carriers to transmit
all 911 calls without regard to validation procedures intended to identify and
intercept calls from non-subscribers. Then, in an order released June 9, 1999,
the FCC adopted rules requiring that analog cellular phones include a separate
capability for processing 911 calls that permit these calls to be handled, where
necessary, by either cellular carrier in the area. The new rule only applies to
new analog cellular handsets but not to existing handsets or to PCS or SMR
services.

On August 1, 1996, the FCC released a Report and Order expanding the
flexibility of cellular, PCS and other CMRS providers to provide fixed as well
as mobile services. Such fixed services include, but need not be limited to,
"wireless local loop" services, e.g., to apartment and office buildings, and
wireless backup to PBXs and local area networks, to be used in the event of
interruptions due to weather or other emergencies. The FCC has not yet decided
how such fixed services should be regulated, but it has proposed a presumption
that they be regulated as CMRS services.

On August 8, 1996, the FCC released its order implementing the
interconnection provisions of the Telecommunications Act. The FCC's decision is
lengthy and complex and is subject to petitions for reconsideration and judicial
review, as described below, and its precise impact is difficult to predict with
certainty. However, the FCC's order concludes that CMRS providers are entitled
to reciprocal compensation arrangements with LECs and prohibits LECs from
charging CMRS providers for terminating LEC-originated traffic. Under the rules
adopted by the FCC, states must set arbitrated rates for interconnection and
access to unbundled elements based upon the LECs' long-run incremental costs,
plus a reasonable share of forward-looking joint and common costs. In lieu of
such cost-based rates, the FCC has established proxy rates to be used by states
to set interim interconnection rates pending the establishment of cost-based
rates. The FCC has also permitted states to impose "bill and keep" arrangements,
under which CMRS providers would make no payments for LEC termination of calls
where LECs and CMRS providers have symmetrical termination costs and roughly
balanced traffic flows. However, the FCC has found no evidence that these
conditions presently exist. The relationship of these charges to the payment of
access charges and universal service contributions has not yet been resolved by
the FCC. LECs and state regulators filed appeals of the interconnection order,
which were consolidated in the United States Court of Appeals for the Eighth
Circuit. The Court vacated many of the rules adopted by the FCC, including those
rules governing the pricing of interconnection services, but specifically
affirmed the FCC rules governing interconnection with CMRS providers. In January
1998, the

31
<PAGE> 32

United States Supreme Court agreed to review the Eighth Circuit decision. In
January 1999, the United States Supreme Court reversed many aspects of the
Eighth Circuit's judgment, holding that:

- the FCC has general jurisdiction to implement the Telecommunications
Act's local competition provisions;

- the FCC's rules governing unbundled access are consistent with the
Telecommunications Act, except for Rule 319, which gives requesting
carriers blanket access to network elements; and

- the "pick and choose" rule is a reasonable interpretation of the
Telecommunications Act. The FCC on remand adopted a new standard for
determining which network elements the incumbents must unbundle. Applying
the revised standard, the FCC reaffirmed that incumbents must provide
unbundled access to six of the original seven network elements that it
required unbundled in its original order in 1996 (operator and directory
assistance services are no longer required). As a result of the Supreme
Court vacating and remanding the Eighth Circuit's ruling that the FCC
lacked authority to set local pricing standards, the Eighth Circuit will
have to decide whether the FCC's total-element long-run incremental cost
methodology for setting interconnection and unbundled network element
rates violates the Telecommunications Act.

In its implementation of the Telecommunications Act, the FCC established
new federal universal service rules, under which wireless service providers for
the first time are eligible to receive universal service subsidies, but also are
required to contribute to both federal and state universal service funds.
Various parties challenged the FCC's universal service rules, and the cases were
consolidated in the United States Court of Appeals for the Fifth Circuit. The
court affirmed most of the FCC's decisions regarding its implementation of the
high-cost support system but remanded for further consideration the FCC's
decision to assess contributions from carriers based on both international and
interstate revenues. The court also reversed the requirement that incumbent
local exchange carriers recover their contributions from access charges and the
blanket prohibition on additional state eligibility requirements for carriers
receiving high-cost support. Additionally, the Court reversed the rule
prohibiting local telephone service providers from disconnecting low-income
subscribers. Finally, the Court concluded that the FCC exceeded its
jurisdictional authority when it assessed contributions for "schools and
libraries" programs based on the combined intrastate and interstate revenues of
interstate telecommunications providers and when it asserted its jurisdictional
authority to do the same on behalf of high-cost support.

The FCC has adopted rules on telephone number portability which will enable
subscribers to migrate their landline and cellular telephone numbers to a PCS
carrier and from a PCS carrier to another service provider. In February 1999,
the FCC extended the deadline for CMRS carriers to implement service provider
local number portability until November 24, 2002, but suggested that additional
proceedings prior to that date could result in imposition of further
requirements.

In October 1999, Congress enacted the Department of Defense Appropriations
Act for FY2000, which requires the FCC to accelerate its auction of 36 MHz of
spectrum in the 746 - 764 and 776 - 794 MHz bands for commercial use so that all
auction proceeds have been deposited by September 30, 2000. This spectrum became
available as a result of the FCC's decision to generally reclaim, for other use,
the spectrum previously allocated for television broadcast UHF channels 60 - 69.
The auction is now scheduled for June 7, 2000. "Short form" applications must be
filed by interested bidders by May 8, 2000, and up-front payments are due May
22, 2000.

The Communications Assistance for Law Enforcement Act (CALEA) requires
telecommunications carriers to ensure that their facilities are technically
capable of assisting law enforcement officials' use of wiretaps and like devices
to intercept or isolate subscriber communications. In an order released August
31, 1999, the FCC ordered all PCS, cellular and wireline carriers to implement
interim standards by June 30, 2000, with full compliance by September 30, 2001.
The order also stated that CALEA applies broadly to any carrier (excluding
private networks and information services providers) providing indiscriminate
telecommunications service to the public. Representatives of the PCS and
cellular industries are challenging the surveillance rules. Additionally, it is
not clear that CMRS providers will be able to comply with the rules'

32
<PAGE> 33

compatibility requirements by the current deadline, nor is it clear whether the
FCC will grant waivers to extend the deadline or what the scope of penalties for
failing to comply may be.

The FCC recently adopted rules limiting the use of customer proprietary
network information, (CPNI) by telecommunications carriers in marketing a broad
range of telecommunications and other services to their customers and the
customers of affiliated companies. Petitions asking the FCC to forbear from
applying CPNI requirements to certain telecommunications carriers were denied on
September 3, 1999, but the FCC did make certain modifications, allowing carriers
to use CPNI to market customer premises equipment or to regain customers who
have switched to another carrier. The rules were struck down by the U.S. Court
of Appeals for the Tenth Circuit in August 1999, but that decision has been
appealed to the Supreme Court. In the event that the FCC's CPNI restrictions are
reinstated. VoiceStream does not anticipate that compliance will have a
significant adverse impact on its financial position, results of operation or
liquidity.

CMRS providers face a September 1, 2000 deadline for compliance with FCC
rules establishing safety limits for human exposure to radio frequency
emissions. On February 18, 2000, the U.S. Court of Appeals for the Second
Circuit affirmed the FCC's guidelines. After September 1, if any facility,
operation or device is found to be non-compliant with radio frequency exposure
guidelines, and if required environmental assessment has not been filed,
penalties ranging from fines to license forfeiture may be imposed.

All of the C Block licenses held by the Cook Inlet joint ventures could be
affected by U.S. Air Waves, Inc. v. FCC, which is pending in the U.S. Court of
Appeals for the D.C. Circuit. U.S. AirWaves participated in the original C Block
auction, which closed on May 6, 1996, but withdrew after the bids exceeded the
maximum prices it was willing to pay. U.S. AirWaves is now seeking judicial
review of two orders in the FCC's rulemaking proceeding on payment financing for
PCS licenses: the Second Report and Further Notice of Proposed Rulemaking and
the Order on Reconsideration of the Second Report and Order. Since these orders
enabled initial C Block licensees to return licenses or modify the conditions of
payment, there is a remote chance that if the orders are reversed, affected
licenses could be returned to the FCC for reauction. The court consolidated into
this case similar petitions filed by seven other parties. The case has not been
placed on the court's calendar.

Additionally, 14 C Block licenses won by Cook Inlet/VoiceStream PCS LLC and
11 C Block licenses won by Omnipoint were issued subject to the outcome of the
bankruptcy proceeding of the original licensee, a subsidiary of Pocket
Communications, Inc., which was conditionally granted 43 C Block licenses in
1996. Pursuant to an FCC order, the bankruptcy debtors elected to relinquish
certain licenses, which subsequently were reauctioned, and the bankruptcy court
issued an order making the election effective. Pacific Eagle, a secured creditor
of the debtors, filed with the court a motion for reconsideration of the
election order. The motion was denied, and Pacific Eagle appealed the denial to
the U.S. District Court for Northern Maryland. As a result, the bankruptcy court
stayed its order denying the motion for reconsideration pending appeal. Because
the appeal of the election order is still pending, there is uncertainty as to
the referenced C Block licenses of the Cook Inlet joint ventures. The district
court could order the return of these licenses to the jurisdiction of the
bankruptcy court. Further, in the event that these licenses are so returned, it
is unlikely that the Cook Inlet joint ventures will be able to recoup the costs
incurred by them in connection with the construction and development of systems
related to such licenses.

EMPLOYEES AND LABOR RELATIONS

We consider our labor relations to be good and none of our employees are
covered by a collective bargaining agreement.

As of February 29, 2000, we employed a total of approximately 5,740 people
in the following areas:

<TABLE>
<CAPTION>
NUMBER OF
CATEGORY EMPLOYEES
-------- ---------
<S> <C>
Sales and marketing......................................... 1,534
Engineering................................................. 883
General and administration, including customer service...... 3,323
</TABLE>

33
<PAGE> 34

ITEM 2. PROPERTIES

We maintain our principal executive offices on leased premises in Bellevue,
Washington. We will also lease our customer service centers located in the
following cities:

<TABLE>
<S> <C> <C>
Albuquerque, New Mexico Bethlehem, Pennsylvania
Bellingham, Washington Fort Lauderdale, Florida
Salem, Oregon
</TABLE>

We, along with our subsidiaries and affiliates, also lease and own
locations for inventory storage, microwave, cell site and switching equipment,
sales and administrative offices, and retail stores. Aerial leases customer
service centers located in Kansas City and Tampa.

34
<PAGE> 35

ITEM 3. LEGAL PROCEEDINGS

Except as referenced in the next sentence there are no material, pending
legal proceedings to which VoiceStream or Omnipoint or any of their subsidiaries
or affiliates is a party or of which any of their property is subject which, if
adversely decided, would have a material adverse effect on their financial
position, results of operations or cash flows. For discussion of certain legal
proceedings relating to FCC license grants, see "Item 1. Business -- Government
Regulation."

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

None.

35
<PAGE> 36

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As a result of the spin-off our common stock began trading on May 3, 1999.
Since that date, our common stock has been traded on the NASDAQ stock market
under the symbol VSTR. The following table sets forth the quarterly high and low
bid quotations for the common stock on the NASDAQ stock market. These quotations
reflect the inter-dealer prices, without retail mark-up, mark-down or commission
and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
1999 HIGH LOW
---- ------- -------
<S> <C> <C>
Second quarter........................................... $ 33.06 $ 20.25
Third quarter............................................ $ 68.75 $ 29.75
Fourth quarter........................................... $142.31 $ 59.06
</TABLE>

<TABLE>
<CAPTION>
2000
----
<S> <C> <C>
First quarter through March 21, 2000..................... $155.31 $100.13
</TABLE>

We have never declared or paid dividends on our common stock and do not
anticipate paying dividends in the foreseeable future. In addition, provisions
of our new credit facility and the indentures for our senior notes and senior
discount notes (as described in "Management's Discussion and Analysis of Results
of Operations and Financial Condition -- Liquidity and Capital Resources") and
the senior notes issued by Omnipoint contain restrictions on our ability to
declare and pay dividends on our common stock.

As of March 13, 2000, there were approximately 2,145 shareholders of record
of our common stock.

There were no sales of unregistered equity securities made by us in 1999.

In connection with a $957 million investment by Hutchison
Telecommunications PCS (USA) made at the time of the closing of the Omnipoint
merger; Hutchison Telecommunications PCS (USA) and certain of its affiliates
entered into a standstill agreement with us. With exceptions, this agreement
provides that, for a period of five years after the completion of the Omnipoint
merger, the beneficial ownership of our common stock by Hutchison
Telecommunications PCS (USA) and their affiliates will not exceed:

- 35% during the first two years after February 25, 2000, or 33% if the
aggregate number of outstanding shares of our common stock exceeds 200
million;

- 36% during the third year after February 25, 2000; and

- 40% during the fourth and fifth years after February 25, 2000.

Among other things, this agreement also:

- prohibits Hutchison Telecommunications PCS (USA) and its affiliates from,
in certain circumstances, participating in a proxy contest, tender offer,
exchange offer or other transaction relating to a change of control of
VoiceStream;

- provides Hutchison Telecommunications PCS (USA) a preemptive right with
respect to our future private equity issuances; and

- entitles Hutchison Telecommunications PCS (USA) to registration rights.

In connection with the Aerial merger agreement, Telephone and Data Systems,
Inc., referred to as TDS, will enter into an investment agreement with us. With
certain exceptions, this agreement will provide that, until September 17, 2004,
the beneficial ownership of our common stock held by TDS and its affiliates will
not exceed 24.9% of the outstanding shares of our common stock. Among other
things, this agreement will also prohibit TDS and its affiliates from, in
certain circumstances, participating in a proxy contest, tender offer, exchange
offer or other transaction relating to a change of control of VoiceStream.

36
<PAGE> 37

The principal stockholders of VoiceStream are parties to an agreement which
governs the voting of their common stock. The agreement provides that the
parties thereto will vote their shares of our common stock for the election of a
board consisting of 16 members, subject to adjustments, of our board designated
as follows:

- Mr. Stanton, as long as he is the chief executive officer of VoiceStream;

- one member (currently Mr. Nelson) designated by Mr. Stanton, so long as
he or entities affiliated with him beneficially own at least 4,500,000
shares of our common stock;

- four members (currently Messrs. Fok, Snook and Sixt and Mrs. Chow)
designated by Hutchison Telecommunications PCS (USA) and its affiliated
entities, which number of designees shall be subject to increases or
decreases depending upon increases or reductions in Hutchison
Telecommunications PCS (USA)'s percentage ownership of our outstanding
common stock, including shares of our common stock issuable to Hutchison
Telecommunications PCS (USA) upon conversion of our 2.5% Convertible
Junior Preferred Stock;

- one member (currently Mr. O'Toole) designated by Goldman, Sachs & Co. and
affiliated entities, so long as the Goldman Sachs entities beneficially
own at least 4,500,000 shares of our common stock;

- four members (currently Messrs. Smith, Fields, Perry and Ross) who were
on the Omnipoint board prior to the Omnipoint merger selected by
Omnipoint to serve during the period from February 25, 2000 until and
including the second annual meeting of our stockholders taking place
after February 25, 2000 (and in the event any of these designees becomes
unable or unwilling to serve, the replacement designee will be named by
the persons who comprised the Omnipoint board immediately before the
Omnipoint merger);

- one member (currently Mr. Relander) designated by Sonera Ltd., so long as
Sonera owns at least 4,500,000 shares of our common stock; and

- the remaining members of the board to be selected by a majority of the
persons selected as described above.

It is contemplated that upon the closing of the Aerial merger, TDS will
execute an agreement whereby it will become a party to the voting agreement
described above. When TDS becomes a party, the voting agreement will provide
that the parties thereto will agree to vote their shares of our common stock for
a board constituted as described above, with an additional member to be
designated by TDS so long as TDS owns at least 4,500,000 shares of our common
stock; however, if TDS owns more than 9,800,000 shares of our common stock and
Sonera owns less than 4,500,000 shares of our common stock, TDS will be entitled
to designate a total of two members. The voting agreement will further provide
that if Sonera owns more than 9,800,000 shares of our common stock and TDS owns
less than 4,500,000 shares of our common stock, Sonera will be entitled to
designate a total of two members.

37
<PAGE> 38

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

SELECTED VOICESTREAM CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial and
operating data for VoiceStream as of and for each of the five years in the
period ended December 31, 1999. Financial data as of and for each of the five
years in the period ended December 31, 1999, were derived from our audited
consolidated financial statements and notes thereto. All the data should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations of VoiceStream" and our consolidated financial
statements and notes thereto.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Revenues:
Subscriber revenues...................................... $ 366,802 $ 123,966 $ 52,360 $ 7,794
Roamer revenues.......................................... 9,295 3,506 227
Equipment revenues....................................... 78,025 40,490 25,143 9,745
Other revenues........................................... 21,407
------------ ----------- ----------- -----------
Total revenues......................................... 475,529 167,962 77,730 17,539
------------ ----------- ----------- -----------
Operating expenses:
Cost of service.......................................... 114,007 50,978 43,183 12,470
Cost of equipment sales.................................. 136,584 77,071 53,469 20,789
General and administrative............................... 134,812 75,343 51,678 20,209 $ 3,069
Sales and marketing...................................... 211,399 85,447 59,466 31,505 339
Depreciation and amortization............................ 140,812 83,767 66,875 14,395 269
Stock based compensation................................. 60,690
------------ ----------- ----------- ----------- -----------
Total operating expenses............................... 798,304 372,606 274,671 99,368 3,677
------------ ----------- ----------- ----------- -----------
Operating loss............................................. (322,775) (204,644) (196,941) (81,829) (3,677)
Other income (expense):
Interest and financing expense, net...................... (103,461) (34,118) (57,558) (3,607) (40)
Equity in net loss of unconsolidated affiliates.......... (50,945) (24,120) (9,327) (954) (11)
Interest income and other, net........................... 22,442 8,616 11 40
------------ ----------- ----------- ----------- -----------
Net loss............................................... $ (454,739) $ (254,266) $ (263,815) $ (86,350) $ (3,728)
============ =========== =========== =========== ===========
CONSOLIDATED BALANCE SHEET DATA:
Current assets............................................. $ 410,576 $ 59,398 $ 49,945 $ 59,515 $ 1,684
Property and equipment, net................................ 931,792 619,280 420,638 318,473 37,914
Licensing cost and other intangible assets, net............ 450,261 312,040 315,653 227,997 145,728
Other assets............................................... 429,284 60,938 36,055 8,142 8,484
------------ ----------- ----------- ----------- -----------
Total assets........................................... $ 2,221,913 $ 1,051,656 $ 822,291 $ 614,127 $ 193,810
============ =========== =========== =========== ===========
Current liabilities........................................ $ 203,085 $ 125,026 $ 126,184 $ 155,769 $ 25,444
Long-term debt............................................. 2,011,451 540,000 300,000 143,000 13,000
Other long-term liabilities................................ 173,705 7,613
Shareholders' equity....................................... 7,377 386,630 396,107 141,653 147,753
------------ ----------- ----------- ----------- -----------
Total liabilities and shareholders' equity............. $ 2,221,913 $ 1,051,656 $ 822,291 $ 614,127 $ 193,810
============ =========== =========== =========== ===========
OTHER DATA:
Licensed population........................................ 64,825,000 62,593,000 62,808,000 19,488,000 14,853,000
Covered population(1)...................................... 23,411,000 16,121,000 12,529,000 6,133,000
Subscribers/Users:
Subscribers.............................................. 845,700 322,400 128,600 35,500
Prepaid users............................................ 9,705 10,400
Adjusted EBITDA(2)......................................... $ (121,273) $ (120,877) $ (130,066) $ (67,434) $ (3,408)
CASH FLOWS PROVIDED BY (USED IN):
Operating activities....................................... $ (241,827) $ (112,931) $ (198,129) $ (81,272) $ (4,115)
Investing activities....................................... $ (947,657) $ (253,633) $ (370,202) $ (342,587) $ (145,632)
Financing activities....................................... $ 1,416,860 $ 374,284 $ 563,254 $ 429,250 $ 149,770
</TABLE>

- ---------------
(1) Represents population that is covered by our consolidated systems.

(2) Adjusted EBITDA represents operating loss before depreciation and
amortization and non-cash stock based compensation. Management believes
Adjusted EBITDA provides meaningful additional information on our operating
results and on our ability to service its long-term debt and other fixed
obligations and to fund our continuing growth. Adjusted EBITDA is considered
by many financial analysts to be a meaningful indicator of an entity's
ability to meet its future financial obligations, and growth in Adjusted
EBITDA is considered to be an indicator of future profitability, especially
in a capital-intensive industry such as wireless telecommunications.
Adjusted EBITDA should not be construed as an alternative to operating
income (loss) as determined in accordance with generally accepted accounting
principles, referred to as GAAP, as an alternate to cash flows from
operating activities, as determined in accordance with GAAP, or as a measure
of liquidity. Because Adjusted EBITDA is not calculated in the same manner
by all companies, our presentation may not be comparable to other similarly
titled measures of other companies.

38
<PAGE> 39

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following is a discussion and analysis of the consolidated financial
condition and results of operations of VoiceStream and should be read in
conjunction with VoiceStream's consolidated financial statements and notes
thereto and other financial information included herein. Due to the phase of the
business cycle of VoiceStream's PCS operations, VoiceStream's operating results
for prior periods may not be indicative of future performance. Throughout this
Item 7, where referring to a period ending on or prior to December 31, 1999, the
term VoiceStream refers to our predecessor, now known as VS Washington
Corporation, unless the context otherwise requires.

OVERVIEW

VoiceStream provides wireless communications services in urban markets in
the United States through the ownership and operation of PCS licenses. We have
commenced commercial operations in thirteen markets under the VoiceStream brand
name as of December 31, 1999 using GSM technology. Additionally, VoiceStream PCS
services are offered in four additional markets in conjunction with joint
ventures.

We were formed in 1994 as Western PCS Corporation. Prior to May 3, 1999, we
were an 80.1% owned subsidiary of Western Wireless Corporation. The remaining
19.9% was owned by Hutchison Telecommunications PCS (USA) Limited, a subsidiary
of Hutchison Whampoa Limited, a Hong Kong company. As the result of a spin-off
transaction affected May 3, 1999, we formally separated from Western Wireless'
other operations.

On February 25, 2000, we merged with Omnipoint. Omnipoint, directly and
through joint ventures in which it has interests, provides PCS services in urban
markets, including New York, NY, Detroit, MI, Boston, MA, Philadelphia, PA,
Miami, FL, and Indianapolis, IN. On February 24, 2000, our shareholders approved
a merger with Aerial Telecommunications Inc. Aerial provides PCS services in
urban markets including Columbus, OH, Houston, TX, Kansas City, MO, Minneapolis,
MN, Pittsburgh, PA, and Tampa-St. Petersburg, FL. The close of the Aerial merger
is contingent upon, among other things, FCC approval and is expected to be
completed early in the second quarter of this year.

We did not commence operations in any of our markets until February 1996.
From that date on we have launched service in a variety of our markets as
follows:

<TABLE>
<CAPTION>
1996 1997 1998 1999
---- ---- ---- ----
<S> <C> <C> <C>
Honolulu El Paso Phoenix/Tucson Seattle/Tacoma
Portland Boise San Antonio/Austin
Salt Lake Denver Washington DC/Baltimore
City
Albuquerque
Oklahoma City
Des Moines
</TABLE>

Due to the varying dates at which each of the markets became operational,
the expenses and revenues incurred during any period may not be comparable to
another period and may not be representative of future operations. Additionally,
during each period being discussed, a portion of the operating expenses was
related to start-up costs incurred before the commencement of operations in each
of the markets. Exclusive of depreciation and amortization expense, which was
not material, approximately $2.8 million of start-up costs were incurred in
1999, $7.7 million in 1998, and $5.4 million in 1997.

Our financial accounting for joint ventures in which we hold interests
differs from that for markets we own because we account for our interests in
joint ventures as investments using the equity method of accounting. Our net
share of the revenues and expenses of markets operated by joint ventures are
reflected on a single line in our consolidated statement of operations.
Additionally, our portion of the assets and liabilities of each joint venture
will be reflected, net of our portion of each joint ventures' cumulative net
income or loss, in one line on our balance sheet.

39
<PAGE> 40

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997

At December 31, 1999, we had 845,700 subscribers, representing an increase
of 523,300 or 162.3% during 1999. At December 31, 1998 we had 322,400
subscribers, representing an increase of 193,800 or 150.7% during 1998. At
December 31, 1997, we had 128,600 subscribers.

The following table sets forth certain financial data as it relates to our
operations:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------
1999 % CHANGE 1998 % CHANGE 1997
---------- -------- --------- -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues:
Subscriber revenues.............. $ 366,802 195.9% $ 123,966 136.8% $ 52,360
Roamer revenues.................. 9,295 165.1% 3,506 1,444.5% 227
Equipment revenues............... 78,025 92.7% 40,490 61.0% 25,143
Other revenues................... 21,407 N.M. 0 N.M. 0
---------- --------- ---------
Total revenues................ 475,529 167,962 77,730
---------- --------- ---------
Operating expenses:
Cost of service.................. 114,007 123.6% 50,978 18.1% 43,183
Cost of equipment sales.......... 136,584 77.2% 77,071 44.1% 53,469
General and administrative....... 134,812 78.9% 75,343 45.8% 51,678
Sales and marketing.............. 211,399 147.4% 85,447 43.7% 59,466
Depreciation and amortization.... 140,812 68.1% 83,767 25.3% 66,875
Stock based compensation 60,690 N.M. 0 N.M. 0
---------- --------- ---------
Total operating expenses...... 798,304 372,606 274,671
---------- --------- ---------
Other income (expense)............. (131,964) 165.9% (49,622) (25.8)% (66,874)
---------- --------- ---------
Net loss........................... $ (454,739) 78.8% $(254,266) (3.6)% $(263,815)
========== ========= =========
Adjusted EBITDA.................... $ (121,273) 0.3% $(120,877) (7.1)% $(130,066)
========== ========= =========
Cash flows provided by (used in):
Operating activities............. $ (241,827) 114.1% $(112,931) (43.0)% $(198,129)
========== ========= =========
Investing activities............. $ (947,657) 273.6% $(253,633) (31.5)% $(370,202)
========== ========= =========
Financing activities............. $1,416,860 278.6% $ 374,284 (33.5)% $ 563,254
========== ========= =========
</TABLE>

REVENUES

The increase in service revenues each year is due to: i) the increase in
the number of subscribers and/or ii) an increase in the average monthly
subscriber revenue per average subscriber, or ARPU. The increase in subscribers
is partially due to the relative maturity of the nine markets operating during
the entire twelve months of 1999, which were also operating during the entire
twelve months of 1998, and the addition of two more operating markets for 1999.
Additionally, our "Get More" advertising campaign, featuring Jamie Lee Curtis,
that was initiated in the second quarter of 1998, we believe has contributed to
the rapid subscriber growth throughout all of our markets. ARPU was $55.39 for
1999 compared to $45.81 for 1998 and $57.48 for 1997. The decrease in ARPU
during 1998 is primarily due to the change in strategy in 1998, signified by the
"Get More" advertising campaign. The increase in ARPU during 1999 is primarily
attributed to an increase in the average minutes of use per subscriber and
existing subscribers migrating to, and new subscribers adding on to, our higher
priced rate plans. We intend to continue the "Get More" advertising campaign. We
expect it to continue to have a positive effect on subscriber growth. Included
in subscriber revenues are prepaid revenues of $2.5 million for 1999 and $2.1
million for 1998. For 1997, there were no prepaid revenues.

Roamer revenues are a result of our continuing effort to procure domestic
and international roaming agreements with other carriers. We expect roamer
revenues to continue to increase during 2000 due to increased wireless
subscribers and our expanded coverage. Both Omnipoint and Aerial include roamer
revenues as a component of service revenue. Upon completion of the mergers, we
expect to disclose roamer

40
<PAGE> 41

revenues separately and expect roamer revenue of the combined organizations also
to continue to increase throughout 2000 due to increased wireless subscribers
and expanded coverage including the addition of the Omnipoint operating markets.

Along with Omnipoint and Aerial we have a selection of rate plans available
to customers. Upon completion of the mergers and the implementation of our
operating practices, we expect to implement an overall marketing program,
including rate plans, comparable to that in our existing operations. Service
revenues are expected to continue to increase as the base of customers becomes
larger. However, the market response of our "Get More" advertising campaign may
not be as successful in Omnipoint and Aerial operating markets as it has been in
VoiceStream operating markets. As a result, service revenues may not grow as
rapidly as the customer base.

Equipment revenues increased each year as a result of more handsets sold.
The increase in handsets sold is due to the number of operational markets during
each year and the relative maturity of our operations in these markets.
Offsetting this increase is a decrease in the average handset selling price,
which is the result of lower handset costs and the competitive environment. The
decrease in the average handset selling price is offset by the decrease in the
average cost of handsets sold. Therefore, the gross margin remains relatively
constant and is expected to continue to be so during 2000. We anticipate
continued growth in equipment sales as a result of increases in subscriber
additions and the commencement of commercial operations in other markets.

OTHER REVENUES

Other revenues consist primarily of revenue earned as part of the
reciprocal technical services agreements we have entered into during 1999 with
the Cook Inlet entities. These agreements allow each of VoiceStream and the Cook
Inlet joint venture entities to utilize air time on the others spectrum, and/or
utilize wireless system infrastructure, in certain agreed upon markets. The
agreements are structured such that each performs as a reseller for the other
and related fees are charged and paid between the parties.

OPERATING EXPENSES

Cost of service expenses represent expenses incurred only by operational
markets. The increase in cost of service each year is primarily attributable to
the increased costs of maintaining the expanding wireless network. Cost of
service as a percentage of service revenues declined to 28.7% in 1999 from 40.0%
in 1998 and 82.1% in 1997 due to efficiencies gained from the growing subscriber
base. While cost of service expenses are expected to continue to grow in 2000
due to the growth in subscribers and operating markets, we expect the cost of
service as a percentage of service revenue to decline as greater economies of
scale are realized.

Also included in cost of service are fees incurred as part of the
reciprocal technical services agreements we have entered into during 1999 with
the Cook Inlet entities. Expenses incurred during 1999 were $25.0 million.

Cost of equipment sales increased each year primarily due to the increase
in handsets sold, offset by a decrease in the average cost of handsets sold. The
decrease in the average cost of handsets sold is offset by the decrease in the
average handset selling price, therefore the gross margin remains relatively
constant. We expect this trend to continue during 2000. Although subscribers
generally are responsible for purchasing or otherwise obtaining their own
handsets, we have historically sold handsets below cost to respond to
competition and general industry practice and expect to continue to do so in the
future.

The increase in general and administrative expenses each year is primarily
attributable to the increased costs associated with supporting a larger
subscriber base. General and administrative costs per average subscriber were
$19.23 for 1999 compared to $27.84 for 1998 and $56.74 for 1997. These decreases
are largely the result of efficiencies gained from a larger subscriber base.
While general and administrative expenses are expected to continue to grow in
2000 due to the growth in subscribers and operating markets, we expect the costs
per average subscriber to decline as greater economies of scale are realized;
however, we expect it will decline at a lower rate. The efficiencies we expect
to gain due to the increased subscriber base may be partially

41
<PAGE> 42

offset during a large portion of 2000 due to the increased costs associated with
integrating our back-end operations with those of Omnipoint and Aerial.

Sales and marketing costs increased each year as a result of the increase
in net subscriber additions and the effort to promote the VoiceStream brand name
in a greater number of markets. Sales and marketing cost per net subscriber
added, including the loss on equipment sales, was $516 for 1999 compared to $630
for 1998 and $943 for 1997. These decreases are largely the result of cost
efficiencies from a larger subscriber base. We expect sales and marketing cost
per net subscriber added to decline during 2000 due to the anticipated growth in
subscriber additions.

The increase in depreciation and amortization expense is attributable to
the continued expansion of our wireless systems. FCC licenses are not amortized
until the related market is operational. These expenses will increase as new
markets become operational and with the addition of the Omnipoint and Aerial
markets and systems.

A non-cash charge for stock based compensation of $60.7 million was
recognized during 1999 largely as a result of a restructuring of stock options
in connection with the spin-off. The remaining $25.3 million of deferred
compensation as of December 31, 1999, will be recognized as expense over the
future periods the remaining unvested options vest. Associated with the closing
of the Omnipoint merger, we expect to record approximately $68 million in
deferred stock based compensation in 2000.

OTHER INCOME (EXPENSE); NET OPERATING LOSS CARRYFORWARDS

Interest and financing expense, net of capitalized interest, increased to
$103.5 million in 1999 from $34.1 million in 1998 due to the increase in
long-term debt. Long-term debt was incurred primarily to fund VoiceStream's
capital expenditures associated with the build-out of our systems. Interest
expense will continue to increase in 2000 as a result of increased borrowings we
have incurred, and will continue to incur, to fund this expansion. The decrease
in interest and financing expense to $34.1 million in 1998 from $57.6 million in
1997 is primarily due to the equity contributions from Western Wireless in
December 1997 and Hutchison Telecommunications PCS (USA) Ltd. in February 1998.
The equity contribution from Western Wireless was a conversion of debt that had
previously incurred interest. The Hutchison investment allowed us to repay the
remaining debt to Western Wireless and to forego additional borrowings until
July 1998. The weighted average interest rate, before the effect of capitalized
interest, was 10.3% in 1999, 8.76% in 1998 and 8.23% in 1997.

Also included in other income (expense) is loss in unconsolidated
affiliates of $50.9 million in 1999, $24.1 million in 1998 and $9.3 million in
1997. The increase in losses for these periods is due to an increase in costs
associated with the launch of operations in the Spokane market for its Cook
Inlet VoiceStream PV/SS PCS, LP investment in the first quarter of 1999.

We had $1.15 billion of NOL carryforwards at December 31, 1999, which will
expire between 2011 and 2019. Management believes that available objective
evidence creates significant uncertainty regarding the realization of the net
deferred tax assets. Such factors include recurring operating losses resulting
primarily from the development of our PCS business. Accordingly, a valuation
allowance has been provided for the net deferred tax assets of VoiceStream.
After the spin-off, the NOL carryforwards resulting from our cumulative tax
losses have remained with VoiceStream. Pursuant to a tax sharing agreement
entered into at the time of the Hutchison investment, we paid Western Wireless
$20 million, an amount representative of the tax benefit of NOL's generated
while we were a wholly-owned subsidiary of Western Wireless. Certain NOL's
historically generated by Omnipoint and Aerial may be lost upon change in
control as a result of the mergers.

ADJUSTED EBITDA

Adjusted EBITDA represents operating loss before stock based compensation,
depreciation and amortization. Management believes Adjusted EBITDA provides
meaningful additional information on our operating results and on our ability to
service our long-term debt and other fixed obligations, and to fund our
continued growth. Adjusted EBITDA is considered by many financial analysts to be
a meaningful indicator of an entity's ability to meet its future financial
obligations, and growth in Adjusted EBITDA is considered to be an indicator of
future profitability, especially in a capital-intensive industry such as
wireless telecommunications. Adjusted EBITDA should not be construed as an
alternative to operating income (loss) as determined in

42
<PAGE> 43

accordance with United States generally accepted accounting principles, referred
to as GAAP, as an alternate to cash flows from operating activities (as
determined in accordance with GAAP), or as a measure of liquidity. Because
Adjusted EBITDA is not calculated in the same manner by all companies, our
presentation may not be comparable to other similarly titled measures of other
companies.

Our Adjusted EBITDA loss increased to $121.3 million in 1999 from an
Adjusted EBITDA loss of $120.9 million in 1998, due primarily to the rapid
growth in our subscriber base as well as the increased costs associated with
launch of the Seattle and Austin/San Antonio markets. Our Adjusted EBITDA loss
decreased in 1998 from $130.0 million in 1997. The improvement was primarily due
to the increased revenues and efficiencies gained as a result of increases in
subscriber base. We expect Adjusted EBITDA to improve during 2000 for our
operational markets; however, the commencement of operations in new markets will
slow and could reverse this improvement.

NET LOSS

From 1998 to 1999, the increase in net loss from $254.3 million to $454.7
million is primarily attributable to the increase in interest and finance
expense as well as the increase in our portion of the loss in our unconsolidated
affiliates. We expect a similar trend in net loss from 1999 to 2000 due to the
increase in debt expected to expand the wireless network of the combined
operations of VoiceStream, Omnipoint and Aerial. From 1997 to 1998, the decrease
in net loss is attributable to the increase in revenues, operating efficiencies
gained from the growing subscriber base and a decrease in other expense.

LIQUIDITY AND CAPITAL RESOURCES

Financing and Merger Activities

At December 31, 1999, we, through a wholly-owned subsidiary, had a credit
facility with a consortium of lenders consisting of $500 million in revolving
credit and $250 million in a revolving loan and a term loan for $250 million. As
of December 31, 1999, $500 million was outstanding under the credit facility.

On February 25, 2000, immediately following the completion of the Omnipoint
merger, through two subsidiaries of ours we entered into a new credit facility
with a consortium of lenders. Pursuant to the new credit facility, the lenders
have made available term loans and revolving credit loans in an aggregate
principal amount not to exceed $3.25 billion. The revolving credit portion of
the new credit facility is a $1.35 billion reducing revolving credit.
Immediately following the completion of the Omnipoint merger, we used the
proceeds of draws on the new credit facility to pay down certain long-term debt
of Omnipoint. Additionally, portions of the cash equity investments received
from Hutchison Telecommunications PCS (USA) and Sonera, described below, were
used to pay off the remaining balance on the previous credit facility.

The availability of the revolving credit portion of the new credit facility
declines over the period commencing three years after the closing date through
the eighth anniversary of the closing date in the following percentages: 10% in
year four, 15% in year five, 20% in year six, 20% in year seven and 35% in year
eight. The term loan portions of the new credit facility is comprised of a $900
million tranche and a $1 billion tranche. The $900 million tranche is required
to be amortized at the same rate that the availability under the revolving
credit portion of the new credit facility reduces with a final maturity on the
eighth anniversary of the closing date. The $1 billion is required to be
amortized in the following amounts during the period commencing three years
after the closing date through the ninth anniversary: $10 million in each of
years four through eight and the remaining balance in year nine.

Borrowings under the $900 million tranche bear interest, at the borrower's
option, at an annual rate of interest equal to either (1) the greater of (a) the
prime rate, or (b) the Federal Funds rate plus 1/2%, or (2) a Eurodollar rate,
in each instance plus an applicable margin. Such applicable margin will range to
a maximum of 1.50%, in the case of loans based on the prime rate or Federal
Funds rate, and to a maximum of 2.75%, in the case of loans based on a
Eurodollar rate, in each case based upon certain factors including the ratio of
total indebtedness to operating cash flow, as defined in the new credit
facility, of the borrowers.

43
<PAGE> 44

The $1 billion bears interest, at the borrower's option, at an annual rate
of interest equal to either (1) the greater of (a) the prime rate, or (b) the
Federal Funds rate plus 1/2%, or (2) a Eurodollar rate, plus an applicable
margin. Such applicable margin is a fixed percentage of 1.75%, in the case of
loans based on the prime rate or Federal Funds rate, and 3.0% in the case of
loans based on a Eurodollar rate.

The new credit facility contains affirmative and negative covenants of the
borrowers, including financial covenants, and will provide for various events of
default. The new credit facility permits the incurrence of additional
indebtedness of up to $1.5 billion, which indebtedness would be secured by the
same collateral as the indebtedness under the new credit facility. The repayment
of the loans is secured by, among other things, the grant of a security interest
in the capital stock and assets of the borrowers and certain of its
subsidiaries.

As noted above, the new credit facility permits up to $1.5 billion of
additional indebtedness, including up to $1 billion for a vendor facility, which
would be secured by the same collateral as other indebtedness under the new
credit facility. In March 2000, we reached agreements in principle with an
infrastructure equipment vendor and a bank whereby such vendor and bank would
provide to us up to $1 billion in senior credit facilities and we would agree to
acquire certain equipment, software and services from the vendor. The vendor
facilities would have a maturity of 9.25 years and be available in multiple
draws, including $500 million that could be drawn by April 28, 2000, $250
million that could be drawn by July 14, 2000, and $250 million that could be
drawn by October 31, 2000. Net proceeds of the vendor facilities would be used
for the same purposes as proceeds under the new credit facility, and would be
governed by the same covenants and agreements as the new credit facility.
Although we are working diligently with the vendor and bank to prepare formal
contracts, there can be no assurance that formal contracts will be executed or
that such funds will be available to us.

Certain long-term debt agreements of Omnipoint, and now of VoiceStream,
contain provisions which require us to offer repayment of outstanding amounts
when a change of control occurs. The Omnipoint merger constituted a change of
control. Under certain agreements, we are required to offer to repay to the
lenders amounts outstanding. Additionally, the holders of the debt issued under
certain of these agreements are entitled to a prepayment premium. It is expected
that the lenders will not exercise the right to be repaid amounts outstanding;
however, there can be no assurance that the lenders' options will not be
exercised. In the unlikely event that the lenders do exercise the offer of
repayment, we would utilize the funds available from the new credit facility.

In May 1999, one of VoiceStream's infrastructure equipment vendors
purchased $400 million of VoiceStream's newly issued 12% Senior Debentures. The
amounts outstanding under the senior debentures were paid with the proceeds
received from the private offering of senior notes and senior discount notes,
discussed below.

In November 1999, through a private offering circular, we offered a
combination of 10 3/8% Senior Notes and 11 7/8% Senior Discount Notes for
aggregate net proceeds of approximately $1.46 billion. $400 million of the
proceeds from the senior notes were used to repay the senior debentures and an
additional $485 million were used to repay outstanding borrowings under the
revolver portion of the credit facility.

Proceeds from the senior notes were $1.1 billion. The senior discount notes
were issued at a discount, resulting in proceeds of $403.6 million, which will
accrete over five years to the full principal value of $720 million. The senior
notes and the senior discount notes mature on November 15, 2009, and are
redeemable after five years at our option, in whole or in part, at varying
redemption prices. Interest on the senior notes will accrue at the rate of
10 3/8% per annum and will be payable semiannually beginning May 15, 2000.
Interest on the senior discount notes will accrue at a rate of 11 7/8% per annum
and will be payable semiannually commencing on May 15, 2005.

On February 25, 2000, we completed our merger with Omnipoint. Pursuant to
the merger agreement, 0.825 shares of our common stock plus $8.00 in cash were
exchanged for every outstanding share of Omnipoint common stock. There was a
cash or share election option available to shareholders of Omnipoint subject to
proration. In conjunction with the merger agreement signed on June 23, 1999, we
invested a total of $150 million in Omnipoint, of which $102.5 million was
invested in Omnipoint preferred stock upon signing of

44
<PAGE> 45

the merger agreement, and the remaining $47.5 million was invested in Omnipoint
preferred stock on October 1, 1999.

In connection with the Omnipoint merger agreement, Hutchison
Telecommunications PCS (USA) made an investment of $957 million into the
combined company for common and convertible preferred securities. $102.5 million
of this investment was invested directly in Omnipoint preferred stock upon
signing of the merger agreement on June 23, 1999. In addition, another $47.5
million was invested in Omnipoint preferred stock in October 1999. The remaining
$807 million was invested in us upon the closing of the merger. Additionally,
Sonera, Ltd, ("Sonera") a Finnish telecommunications company, who holds an
investment in Aerial Operating Company ("AOC"), a subsidiary of Aerial, invested
$500 million in VoiceStream at the closing of the Omnipoint merger, purchasing
shares at $57 per VoiceStream share.

On September 20, 1999, we announced board approval of a merger agreement
with Aerial. On February 24, 2000 we obtained approval for the merger from our
shareholders. Under the terms of the agreement, 0.455 shares of VoiceStream
common stock will be exchanged for each share of Aerial Series A Common Shares
outstanding. Aerial public shareholders have a right to elect to receive $18 in
cash in lieu of shares of VoiceStream. The close of the Aerial merger is
contingent upon, among other things, FCC approval, and is expected to be
completed early in the second quarter of 2000.

In connection with the Aerial merger agreement, TDS has replaced $420
million of Aerial debt owed to TDS with equity of Aerial at $22 per share.
Sonera has invested an additional $230 million in Aerial equity, also at $22 per
Aerial share. Immediately prior to the merger, Sonera will convert its interest
in AOC into Aerial common stock.

Upon completion of the Omnipoint and Aerial mergers, we expect a
significant increase in future interest expense and depreciation and
amortization expense. Interest expense is expected to increase due to new
funding obtained from the acquisition of Omnipoint and Aerial's existing debt
and/or the refinancing of such, the addition of our $1.5 billion in senior notes
and senior discount notes issued during November 1999, and any outstandings
under the new credit facility. This increase in long-term debt is expected to
result in an interest expense increase of approximately $250 million to $350
million during 2000. However, future interest rates may be more or less
favorable which would result in a significant change in these estimates, and
there can be no assurance that the refinancing of existing debt will occur and
additional debt may be incurred to fund future operations. Depreciation and
amortization expense is expected to increase due to the depreciation of fixed
assets and the amortization of intangible assets acquired in the Omnipoint and
Aerial mergers. Intangible assets acquired are expected to increase by
approximately $11 billion which would result in an increase in amortization
expense of approximately $550 million annually. However, the value of intangible
assets acquired are subject to change in the total purchase price which will
change due to fluctuations in our stock price between now and the closing of the
Aerial merger. Each $10 change in the current market price of VoiceStream's
common stock, results in a change in intangible assets of approximately $522
million, and a resulting change in annual amortization of intangible assets of
approximately $26 million. These increases in expenses are expected to
significantly impact the results of future operations. Merger related
transaction costs are not expected to significantly impact future operations.

In the ordinary course of business, we continue to evaluate acquisitions,
joint ventures and other potential business transactions. Any such transactions
would be financed with the borrowings under the new credit facility or through
the issuance of additional debt or the sale of additional equity. There can be
no assurance that such funds will be available to us on acceptable or favorable
terms.

Investments and Capital Expenditures

For 2000, we anticipate spending approximately $600 million for capacity
and expansion of operating markets and approximately $400 million for the
development and expansion of new markets (amounts include anticipated spending
by us and our Cook Inlet joint ventures). Additionally, we anticipate spending
approximately $200 million related to new call centers and expansion of existing
call centers, as well as other back office systems. We will use cash on hand,
proceeds from the senior notes and amounts available for borrowing under the new
credit facility for such purposes. Cook Inlet will use cash on hand and amounts

45
<PAGE> 46

available under its revolving credit agreement to fund its capital activity. In
addition, further funds (which may be significant) will be required to finance
the continued growth of operations, including the build-out of our markets,
provide for working capital and service debt. The build-out of additional
systems by VoiceStream will require substantial additional funds. The capital
cost of completing the project in any particular market, and overall, could vary
materially from current estimates. If adequate funds are not available from our
existing capital resources, we may be required to curtail our service operations
or to obtain additional funds. The terms of any additional funds may be less
favorable than those contained in current arrangements. In addition to the
aforementioned capital expenditures we expect to make in 2000, we have
non-cancelable lease agreements for various facilities, including cell-site
locations, of approximately $36.3 million for 2000. The sources of funding for
such expenditures will come from the same sources as discussed above.

One of our wholly owned subsidiaries holds a 49.9% interest in Cook
Inlet/VoiceStream PV/SS, PCS, LP. Cook Inlet/VoiceStream PV/SS, PCS, controlled
by Cook Inlet Region Company, is subject to the FCC's build-out requirements and
will require significant additional amounts to complete the build-out of its PCS
systems and to meet the government debt service requirements on C and F Block
licenses. No principal payments on these licenses are due in 2000. The potential
sources of such additional funding include vendor loans, loans or capital
contributions by the partners of Cook Inlet/VoiceStream PV/SS, PCS, or other
third party financing. To date, we have funded the operations of Cook
Inlet/VoiceStream PV/SS, PCS, through the issuance of promissory notes. We do
not have any further commitments to fund Cook Inlet/VoiceStream PV/ SS, PCS. At
December 31, 1999, we had advanced funds totaling $179.0 million to Cook
Inlet/VoiceStream PV/SS, PCS, under such promissory notes.

In January 1999, we entered into a second joint venture with Cook Inlet,
Cook Inlet/VoiceStream PCS LLC (49.9% of which is owned by VoiceStream), to
participate in the FCC's reauction of C and F Block licenses in 1999. We
contributed a total of $21.1 million and the Cook Inlet partners contributed
$17.4 million for the deposit required by the FCC to participate in the
reauction. This auction was completed in April 1999 and resulted in Cook
Inlet/VoiceStream PCS as the high bidder for 28 licenses including both the
Dallas and Chicago BTAs, for an aggregate amount of $192.3 million. These
licenses were granted by the FCC in October 1999, and we contributed a total of
$103.0 million to Cook Inlet/VoiceStream PCS, representing a capital
contribution $61.8 million and an advance to the partnership of $41.2 million.
The Cook Inlet partners contributed $50.8 million to Cook Inlet/VoiceStream PCS
for the remainder due.

In January 2000, Cook Inlet/VoiceStream PCS reached an agreement with an
infrastructure equipment vendor providing Cook Inlet/VoiceStream PCS with up to
$735 million, composed of $160 million revolving credit, term loans of up to
$325 million, $100 million of 13% Senior Discount Notes, and up to $150 million
13% Subordinated Notes. The net proceeds of the senior secured facility and the
subordinated facility will be used to finance capital expenditures, permitted
investments, and for working capital. In order for the full amount of these
loans to be available, Cook Inlet/VoiceStream PCS is required to make certain
purchases from the vendor.

In February 2000, VoiceStream announced that it had agreed to make an
investment of approximately $275 million in newly issued Class A shares of
Microcell Telecommunications, Inc., a Canadian GSM operator. The per share
transaction price was equal to the closing market price of Microcell's publicly
traded Class B Non-Voting shares on the Nasdaq National Market System on January
6, the date the agreement in principle was reached.

The Class A shares constitute approximately 15% of the issued and
outstanding equity securities of Microcell. Class A shares are non-voting but
are convertible at any time into common shares, which are voting (subject to
Canadian foreign ownership restrictions). If fully converted, these common
shares would represent a 22.6% voting interest in Microcell. VoiceStream will
apply the equity method of accounting to this investment. Additionally,
VoiceStream designated two members to Microcell's Board of Directors.

Cash Flow Information

Net cash used in operating activities was $241.8 million in 1999.
Adjustments to the $454.7 million net loss to reconcile to net cash used in
operating activities included $140.8 million of depreciation and

46
<PAGE> 47

amortization, $50.9 million for equity in the net loss of unconsolidated
subsidiaries, and $60.7 million for stock based compensation as a result of
stock options granted to employees at the time of the Spin-off. Other
adjustments included changes in operating assets and liabilities, including: (i)
a net increase of $73.0 million in accounts receivable due to the increase in
sales; (ii) an increase of $70.5 million in accrued liabilities due to the
increase in accrued interest on long-term debt and commissions due to the
increase in sales; and (iii) an increase of $42.9 million in inventory due to
anticipated increased sales and the number of operating markets. Net cash used
in operating activities was $112.9 million in 1998 and $198.1 million in 1997.

Net cash used in investing activities was $947.7 million in 1999. Investing
activities consisted primarily of: (i) purchases of property and equipment of
$401.6 million, largely related to the build-out and expansion of the wireless
network; (ii) investments in and advances to unconsolidated affiliates of $369.5
million, primarily attributable to the purchase of Omnipoint preferred stock and
advances to Cook Inlet/VoiceStream PV/SS PCS for working capital and purchases
of property and equipment; and (iii) acquisitions of wireless spectrum in the
Washington D.C. market for $152.5 million in cash. Net cash used in investing
activities was $253.6 million in 1998 and $370.2 million in 1997.

Net cash provided by financing activities was $1.4 billion in 1999.
Financing activities consisted primarily of: (i) net borrowings on long-term
debt of $2.6 billion; (ii) repayments of long-term debt of $1.2 billion; (iii)
net deferred financing costs of $40.6 million; and (iv) return of capital to
Western Wireless for NOLs of $20 million. Net cash provided by financing
activities was $374.3 million in 1998 and $563.3 million in 1997.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." It requires the
recognition of all derivatives as either assets or liabilities and the
measurement of those instruments at fair value. The required adoption period is
effective for the issuance of our December 31, 2000, quarterly financial
statements. The implementation of SFAS No. 133 is not expected to have a
material impact on our financial position or results of operations. SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities -- Deferral
of the Effective Date of FASB Statement No. 133", issued in August 1999,
postpones for one year the mandatory effective date for adoption of SFAS No. 133
to January 1, 2001.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin Number 101, "Revenue Recognition in Financial
Statements." This bulletin will become effective for the issuance of our March
31, 2000 quarterly financial statements. This bulletin establishes more clearly
defined revenue recognition criteria than previously existing accounting
pronouncements, and specifically addresses revenue recognition requirements for
non-refundable fees, such as activation fees collected by a company upon
entering into an arrangement with a customer, such as an arrangement to provide
telecommunication services. We are currently evaluating the full impact of this
bulletin to determine the impact on its financial position and results of
operations.

SEASONALITY

The wireless communications industry in general, and we, in particular,
have historically experienced significant subscriber growth during the fourth
calendar quarter. Accordingly, during such quarter, we experienced greater
losses on equipment sales and increases in sales and marketing expenses. We
expect this trend to continue.

YEAR 2000 ISSUES

The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Computer systems that
have date-sensitive software may recognize a date using "00" as the Year 1900
rather than the Year 2000. We evaluated and modified significant portions of our
information technology ("IT") and non-IT systems to ensure proper functioning in
the Year 2000.

Our IT and non-IT systems that have been addressed include: our wireless
networks; systems which interconnect our wireless networks with landline
systems; systems which allow verification and billing of

47
<PAGE> 48

roaming traffic; internal communication and data processing systems; billing
software and related elements; and systems of third party suppliers, including
those of financial institutions, payroll/benefits processors and credit bureaus.
We utilized both internal and external resources in implementing our Year 2000
remediation program.

As of December 31, 1999, we completed our Year 2000 remediation program.
The program consisted of four key phases: (1) inventory of all systems, (2)
research (3) implementation of and testing and (4) development of contingency
plans which include, among other things, identifying a core system of cell sites
that are being designed to operate for extended periods for mobile to mobile
service independent of external power supplies and landline telephone services.

Much of our technology, including technology associated with our critical
systems, is purchased from third parties. We are dependent on those third
parties to appropriately address the Year 2000 issue on the technology and
services they supply. To date, we have incurred no significant disruptions in
operations.

We have incurred incremental capitalized costs that represent ongoing
investment in new systems and system upgrades, the timing of which may have been
accelerated to facilitate Year 2000 compliance. These costs have not had a
material impact on our financial position or results of operations.

48
<PAGE> 49

PRESENTATION OF ADDITIONAL FINANCIAL INFORMATION

Since December 31, 1999, we have completed the Omnipoint merger and our
shareholders have approved completion of the Aerial merger. We are therefore
providing for the year ended December 31, 1999:

- Selected Omnipoint Consolidated Financial Data and

- Selected Aerial Consolidated Financial Data.

We are also providing proforma financial combined condensed financial statements
for:

- VoiceStream and Omnipoint, and

- VoiceStream, Omnipoint and Aerial.

The proforma financial data is based on the historical consolidated balance
sheets and related historical consolidated statements of operations of
VoiceStream, Omnipoint and Aerial giving effect to the Omnipoint and Aerial
merger using the purchase method of accounting, and taking into account:

- the newly formed joint ventures with Cook Inlet;

- the $957 million Hutchison Telecommunications PCS (USA) investments and
the $500 million Sonera investment in VoiceStream made on closing of the
Omnipoint merger; and

- the East/West merger with Omnipoint.

49
<PAGE> 50

SELECTED OMNIPOINT CONSOLIDATED FINANCIAL DATA

The following table sets forth certain selected consolidated financial and
operating data for Omnipoint as of and for each of the five years ended December
31, 1999. Financial data as of and for each of the five years ended December 31,
1999, were derived from Omnipoint's audited consolidated financial statements
and notes thereto. Certain reclassifications have been made to Omnipoint's
historical presentation to conform to VoiceStream's presentation. These
reclassifications do not have a material impact on the results of Omnipoint's
operations or financial position for the periods presented. All the data should
be read in conjunction with Omnipoint's consolidated financial statements and
notes thereto, incorporated herein by reference.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ---------- ---------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Revenues:
Subscriber revenues..................................... $ 299,150 $ 127,594 $ 29,448 $ 269
Roamer revenues......................................... 31,960 9,999 1,318
Equipment revenues...................................... 59,825 26,616 11,611 262
License fees and engineering services................... 2,691 4,784 9,573
------------ ---------- ---------- ----------
Total revenues........................................ 393,626 168,993 51,950 531
------------ ---------- ---------- ----------
Operating expenses:
Cost of service......................................... 144,296 120,411 45,305 3,230
Cost of equipment sales................................. 167,459 100,074 61,895
Cost of engineering services............................ 2,010 4,168 1,073
Research and development................................ 2,812 15,464 23,002 34,975 $ 14,345
General and administrative.............................. 169,449 126,982 36,314 24,407
Sales and marketing..................................... 179,223 126,905 66,983 22,733 12,619
Depreciation and amortization........................... 198,806 129,043 52,644 15,587 11,038
Stock based compensation................................ 6,276 2,753 3,070
------------ ---------- ---------- ---------- -----------
Total operating expenses.............................. 870,331 625,800 290,286 100,932 38,002
------------ ---------- ---------- ---------- -----------
Operating loss............................................ (476,705) (456,807) (238,336) (100,401) (38,002)
Other income (expense):
Interest and financing expense.......................... (261,771) (187,187) (89,061) (37,226) (517)
Equity in loss of unconsolidated affiliates............. (4,718) (11,879)
Interest income and other............................... 7,278 3,206 12,978 10,697 749
Gain on sale of subsidiaries stock...................... 41,013
------------ ---------- ---------- ---------- -----------
Loss before extraordinary item and income tax
benefit............................................. (694,903) (652,667) (314,419) (126,930) (37,770)
Income tax benefit........................................ 8,250
------------ ---------- ---------- ---------- -----------
Loss before extraordinary item.......................... (686,653) (652,667) (314,419) (126,930) (37,770)
Extraordinary loss........................................ (11,115) (6,591)
------------ ---------- ---------- ---------- -----------
Net loss.............................................. $ (686,653) $ (663,782) $ (321,010) $ (126,930) $ (37,770)
============ ========== ========== ========== ===========
CONSOLIDATED BALANCE SHEET DATA:
Current assets............................................ $ 469,923 $ 321,669 $ 197,279 $ 344,657 $ 64,134
Property and equipment, net............................... 1,067,366 1,013,225 579,050 186,851 18,957
Licensing cost and other intangible assets, net........... 698,571 711,823 995,187 751,965 391,020
Other assets.............................................. 90,608 13,402 6,937 135,999 879
------------ ---------- ---------- ---------- -----------
Total assets.......................................... $ 2,326,468 $2,060,119 $1,778,453 $1,419,472 $ 474,990
============ ========== ========== ========== ===========
Current liabilities....................................... $ 421,131 $ 362,969 $ 289,444 $ 98,342 $ 65,544
Long-term debt............................................ 2,864,159 2,283,170 1,670,915 1,187,356 395,867
Mandatorily Redeemable Preferred stock.................... 44,127
Shareholders' equity (deficit)............................ (958,822) (586,020) (181,906) 133,774 (30,548)
------------ ---------- ---------- ---------- -----------
Total liabilities and shareholders' equity
(deficit)........................................... $ 2,326,468 $2,060,119 $1,778,453 $1,419,472 $ 474,990
============ ========== ========== ========== ===========
OTHER DATA:
Licensed population....................................... 100,000,000 95,000,000 96,500,000 40,200,000 26,800,000
Covered population(1)..................................... 46,000,000 45,600,000 16,000,000
Subscribers............................................... 935,000 370,000 139,800
Adjusted EBITDA(2)........................................ $ (271,623) $ (325.011) $ (182,622) $ (84,814) $ (26,964)
CASH FLOWS PROVIDED BY (USED IN):
Operating activities...................................... $ (445,650) $ (422,665) $ (217,666) $ (64,508) $ (19,747)
Investing activities...................................... $ (257,168) $ (563,411) $ (441,503) $ (290,490) $ (43,991)
Financing activities...................................... $ 855,084 $1,117,227 $ 507,721 $ 512,243 $ 115,979
</TABLE>

- ---------------
(1) Represents population that is covered by our consolidated, directly managed
systems.

(2) Adjusted EBITDA represents operating loss before depreciation and
amortization and non-cash stock based compensation. Management believes
Adjusted EBITDA provides meaningful additional information on Omnipoint's
operating results and on its ability to service its long-term debt and other
fixed obligations and to fund Omnipoint's continuing growth. Adjusted EBITDA
is considered by many financial analysts to be a meaningful indicator of an
entity's ability to meet its future financial obligations, and growth in
Adjusted EBITDA is considered to be an indicator of future profitability,
especially in a capital-intensive industry such as wireless
telecommunications. Adjusted EBITDA should not be construed as an
alternative to operating income (loss) as determined in accordance with
GAAP, as an alternate to cash flows from operating activities, as determined
in accordance with GAAP, or as a measure of liquidity. Because Adjusted
EBITDA is not calculated in the same manner by all companies, Omnipoint's
presentation may not be comparable to other similarly titled measures of
other companies.

50
<PAGE> 51

SELECTED AERIAL CONSOLIDATED FINANCIAL DATA

The following table sets forth certain selected consolidated financial and
operating data for Aerial as of and for each of the five years in the period
ended December 31, 1999. Financial data as of and for each of the five years in
the period ended December 31, 1999, were derived from Aerial's audited
consolidated financial statements and notes thereto. Certain reclassifications
have been made to Aerial's historical presentation to conform to VoiceStream's
presentation. These reclassifications do not have a material impact on the
results of Aerial's operations or financial position for the periods presented.
All the data should be read in conjunction with Aerial's consolidated financial
statements and notes thereto, incorporated herein by reference.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Revenues:
Subscriber revenues........................................ $ 192,150 $ 121,160 $ 32,316
Roamer revenues............................................ 6,690 3,231
Equipment revenues......................................... 30,361 31,514 23,645
----------- ----------- -----------
Total revenues........................................... 229,201 155,905 55,961
----------- ----------- -----------
Operating expenses:
Cost of service............................................ 67,247 57,396 23,210
Cost of equipment sales.................................... 61,298 87,715 71,454
General and administrative................................. 136,677 139,458 95,058 $ 28,843 $ 4,795
Sales and marketing........................................ 81,980 67,920 38,077
Depreciation and amortization.............................. 92,007 83,401 40,554
Development costs.......................................... 5,773 15,107 2,767
----------- ----------- ----------- ----------- -----------
Total operating expenses................................. 439,209 435,890 274,126 43,950 7,562
----------- ----------- ----------- ----------- -----------
Operating loss.............................................. (210,008) (279,985) (218,165) (43,950) (7,562)
Other income (expense):
Interest and financing expense -- affiliate................ (61,197) (62,137) (21,558) (1,960) (1,051)
Interest and financing expense -- other.................... (22,118) (18,010) (5,507) (802)
Equity in loss of unconsolidated affiliates................ (314) (128) (2,518) (304)
Minority share of loss..................................... 15,782 23,620
Interest income and other -- affiliate..................... 95 4,488 49
Interest income and other (expense) -- other............... (4,891) 1,324 2,402 1,158
Gain on sale of PCS licenses............................... 2,582
----------- ----------- ----------- ----------- -----------
Loss before income taxes................................. (282,746) (335,316) (245,251) (38,788) (8,564)
Income tax benefit (expense)................................ 113,400 (2,579) (1,806) 867 2,096
----------- ----------- ----------- ----------- -----------
Net loss................................................. $ (169,346) $ (337,895) $ (247,057) $ (37,921) $ (6,468)
=========== =========== =========== =========== ===========
CONSOLIDATED BALANCE SHEET DATA:
Current assets.............................................. $ 67,062 $ 48,724 $ 58,009 $ 109,131 $ 42,323
Property and equipment, net................................. 580,159 576,953 553,174 252,423 12,087
Licensing costs and other intangible assets, net............ 321,688 333,816 347,973 304,354 305,818
Other assets................................................ 3,467 1,854 1,492 6,919 216
----------- ----------- ----------- ----------- -----------
Total assets............................................. $ 972,376 $ 961,347 $ 960,648 $ 672,827 $ 360,444
=========== =========== =========== =========== ===========
Current liabilities......................................... $ 160,974 $ 86,124 $ 109,769 $ 119,326 $ 9,182
Long-term debt.............................................. 288,632 827,953 644,673 103,743 60,238
Deferred tax liability, net................................. 17,772 16,357 13,779 11,973 9,742
Minority interest........................................... 94,364 5,835
Shareholders' (deficit) equity.............................. 410,634 25,078 192,427 437,785 281,282
----------- ----------- ----------- ----------- -----------
Total liabilities and shareholders' equity............... $ 972,376 $ 961,347 $ 960,648 $ 672,827 $ 360,444
=========== =========== =========== =========== ===========
OTHER DATA:
Licensed population......................................... 27,500,000 27,700,000 27,600,000 27,600,000 27,300,000
Covered population(1)....................................... 22,639,000 22,196,000 21,367,000
Subscribers................................................. 422,900 311,900 125,000
EBITDA(2)................................................... $ (118,001) $ (196,584) $ (177,611) $ (42,016) $ (7,515)
CASH FLOWS PROVIDED BY (USED IN):
Operating activities........................................ $ (95,840) $ (228,801) $ (206,863) $ (17,781) $ 126
Investing activities........................................ $ (94,566) $ 368,134 $ 568,333 $ 230,029 $ 297,397
Financing activities........................................ $ 205,350 $ (139,402) $ (391,642) $ (177,225) $ (297,812)
</TABLE>

- ---------------
(1) Represents population that is covered by our consolidated systems.

(2) EBITDA represents operating loss before depreciation and amortization. While
Aerial was a development stage enterprise, amounts related to depreciation
during 1996 and 1995 were included in general and administrative expense.
Management believes EBITDA provides meaningful additional information on
Aerial's operating results and on its ability to service its long-term debt
and other fixed obligations and to fund Aerial's continuing growth. EBITDA
is considered by many financial analysts to be a meaningful indicator of an
entity's ability to meet its future financial obligations, and growth in
EBITDA is considered to be an indicator of future profitability, especially
in a capital-intensive industry such as wireless telecommunications. EBITDA
should not be construed as an alternative to operating income (loss) as
determined in accordance with GAAP, as an alternate to cash flows from
operating activities, as determined in accordance with GAAP, or as a measure
of liquidity. Because EBITDA is not calculated in the same manner by all
companies. Aerial's presentation may not be comparable to other similarly
titled measures of other companies.

51
<PAGE> 52

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements
combine the historical consolidated balance sheets and statements of operations
of VoiceStream, Omnipoint and Aerial. These financial statements give effect to
each of the Omnipoint and the Aerial mergers using the purchase method of
accounting for a business combination for both.

We derived this information from the audited consolidated financial
statements of VoiceStream, Omnipoint and Aerial for the year ended December 31,
1999. This information is only a summary and you should read it in conjunction
with the historical financial statements and related notes contained in the
annual reports of VoiceStream, Omnipoint and Aerial and other information
included in this filing or incorporated by reference.

The unaudited pro forma condensed combined statements of operations for the
year ended December 31, 1999 assume each merger was effected on January 1, 1999.
The unaudited pro forma condensed combined balance sheet as of December 31, 1999
gives effect to each merger as if it had occurred on December 31, 1999. The
accounting policies of VoiceStream, Omnipoint and Aerial are substantially
comparable. Certain reclassifications have been made to Omnipoint's and Aerial's
historical presentation to conform to VoiceStream's presentation. These
reclassifications do not materially impact Omnipoint's or Aerial's operations or
financial position for the periods presented.

We are providing the unaudited pro forma condensed combined financial
information for illustrative purposes only. The companies may have performed
differently had they always been combined. You should not rely on the pro forma
combined financial information as being indicative of the historical results
that would have been achieved had the companies always been combined or the
future results that the combined company will experience after the mergers.

52
<PAGE> 53

VOICESTREAM WIRELESS CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(OMNIPOINT MERGER ONLY AND OMNIPOINT
AND AERIAL MERGERS)
DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
OMNIPOINT
COOK INLET MERGER VOICESTREAM
VOICESTREAM OMNIPOINT ADJUSTMENT ADJUSTMENTS AND OMNIPOINT AERIAL
----------- ----------- ---------- -------------- ------------- ----------
NOTE 1A NOTE 1B NOTE 2 NOTE 1C
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...... $ (39,567) $ 346,998 $ (463,320) Note 3 $ 1,130,611 $ (17,899)
(20,500) Note 3d
807,000 Note 4
500,000 Note 9
Accounts receivable, net....... 97,739 66,590 $ (4,919) 159,410 33,572
Inventory...................... 63,072 39,144 102,216 8,336
Prepaid expenses and other
current assets................ 14,332 17,191 (1,152) 30,371 5,267
----------- ----------- --------- ----------- ----------- ----------
Total current assets........ 135,576 469,923 (6,071) 823,180 1,422,608 29,276
----------- ----------- --------- ----------- ----------- ----------
Property and equipment, net.... 931,792 1,067,366 (169,423) 1,829,735 580,159
Licensing costs and other
intangible assets, net........ 450,261 698,571 (252,535) 4,194,940 Note 3 5,091,237 321,688
Investment in and advances to
unconsolidated affiliates..... 684,721 6,608 106,527 28,431 Note 3e 676,287 3,263
(150,000) Note 5
Other assets................... 19,563 84,000 (1,103) 102,460 204
----------- ----------- --------- ----------- ----------- ----------
$2,221,913 $ 2,326,468 $(322,605) $ 4,896,551 $ 9,122,327 $ 934,590
=========== =========== ========= =========== =========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable............... $ 84,276 $ 66,972 $ (4,708) $ 146,540 $ 35,230
Accrued liabilities............ 118,809 189,603 (18,833) 289,579 21,979
Current portion of long-term
debt.......................... 164,556 (6,089) $ 1,779,015 Note 6 1,937,482 103,765
----------- ----------- --------- ----------- ----------- ----------
Total current liabilities... 203,085 421,131 (29,630) 1,779,015 2,373,601 160,974
----------- ----------- --------- ----------- ----------- ----------
Long-term debt (Note 6)........ 2,011,451 2,864,159 (320,975) (1,779,015) Note 6 2,775,620 250,846
----------- ----------- --------- ----------- ----------- ----------
Deferred tax liability, net.... 17,772
----------
Minority interest.............. 94,364
----------
Contingencies (See Notes)
VoiceStream Junior Preferred... 760,600 Note 4 760,600
----------- -----------
Shareholders' equity (deficit):
Common stock and Series A
Common Shares and paid-in
capital....................... 1,095,539 315,920 28,000 1,385,620 Note 3 4,073,803 1,210,805
798,000 Note 3c
150,000 Note 5
46,400 Note 4
(313,606) Note 7
500,000 Note 9
67,930 Note 10
Omnipoint 7% Convertible
Preferred..................... 297,109 297,109
Series A Preferred............. 300,000 (300,000) Note 8
Deferred compensation.......... (25,264) (11,664) 11,664 Note 7 (93,194)
(67,930) Note 10
Notes receivable from
shareholders.................. (2,314) (2,314)
Accumulated deficit............ (1,062,898) (1,857,873) 1,857,873 Note 7 (1,062,898) (800,171)
----------- ----------- --------- ----------- ----------- ----------
Total shareholders' equity
(deficit)................. 7,377 (958,822) 28,000 4,135,951 3,212,506 410,634
----------- ----------- --------- ----------- ----------- ----------
$2,221,913 $ 2,326,468 $(322,605) $ 4,896,551 $ 9,122,327 $ 934,590
=========== =========== ========= =========== =========== ==========

<CAPTION>
AERIAL VOICESTREAM,
MERGER OMNIPOINT AND
ADJUSTMENTS AERIAL
-------------- -------------

<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...... $ (103,765) Note 13 $ 992,947
(16,000) Note 11f
Accounts receivable, net....... 192,982
Inventory...................... 110,552
Prepaid expenses and other
current assets................ 35,638
----------- -----------
Total current assets........ (119,765) 1,332,119
----------- -----------
Property and equipment, net.... 2,409,894
Licensing costs and other
intangible assets, net........ 6,872,652 Note 11 12,285,577
Investment in and advances to
unconsolidated affiliates..... 679,550
Other assets................... 102,664
----------- -----------
$ 6,752,887 $16,809,804
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable............... $ 181,770
Accrued liabilities............ 311,558
Current portion of long-term
debt.......................... $ (103,765) Note 13 1,937,482
----------- -----------
Total current liabilities... (103,765) 2,430,810
----------- -----------
Long-term debt (Note 6)........ 3,026,466
-----------
Deferred tax liability, net.... 17,772
-----------
Minority interest.............. (94,364) Note 16
-----------
Contingencies (See Notes)
VoiceStream Junior Preferred... (348,000) Note 4 412,600
-----------
Shareholders' equity (deficit):
Common stock and Series A
Common Shares and paid-in
capital....................... 7,326,650 Note 11 11,783,453
35,000 Note 11e
(1,210,805) Note 12
348,000 Note 4
Omnipoint 7% Convertible
Preferred..................... 297,109
Series A Preferred.............
Deferred compensation.......... (93,194)
Notes receivable from
shareholders.................. (2,314)
Accumulated deficit............ 800,171 Note 12 (1,062,898)
----------- -----------
Total shareholders' equity
(deficit)................. 7,299,016 10,922,156
----------- -----------
$ 6,752,887 $16,809,804
=========== ===========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

53
<PAGE> 54

VOICESTREAM WIRELESS CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(OMNIPOINT MERGER ONLY AND OMNIPOINT AND AERIAL MERGERS)
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COOK OMNIPOINT VOICESTREAM
INLET MERGER AND
VOICESTREAM OMNIPOINT ADJUSTMENT ADJUSTMENTS OMNIPOINT
----------- --------- ---------- ----------- -----------
NOTE 1A NOTE 1B NOTE 2
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Subscriber revenues........................ $ 366,802 $ 299,150 $ (40,195) $ 625,757
Roamer revenues............................ 9,295 31,960 (3,122) 38,133
Equipment revenues......................... 78,025 59,825 (7,821) 130,029
License fees and engineering services...... 2,691 2,691
Other revenues............................. 21,407 21,407
---------- --------- --------- -----------
Total revenues.......................... 475,529 393,626 (51,138) 818,017
---------- --------- --------- -----------
Operating expenses:
Cost of service............................ 114,007 144,296 (27,508) 230,795
Cost of equipment sales.................... 136,584 167,459 (25,967) 278,076
Cost of engineering services............... 2,010 2,010
Research and development................... 2,812 2,812
General and administrative................. 134,812 169,449 (8,047) 296,214
Sales and marketing........................ 211,399 179,223 (25,081) 365,541
Depreciation and amortization.............. 140,812 198,806 (26,684) $ 198,764 Note 14 511,698
Stock based compensation................... 60,690 6,276 67,930 Note 10 134,896
---------- --------- --------- --------- -----------
Total operating expenses................ 798,304 870,331 (113,287) 266,694 1,822,042
---------- --------- --------- --------- -----------
Operating loss............................. (322,775) (476,705) 62,149 (266,694) (1,004,025)
---------- --------- --------- --------- -----------
Other income (expense):
Interest and financing expense, net........ (112,185) (261,771) 33,237 8,724 Note 1a (331,995)
Equity in net loss of unconsolidated
affiliates................................ (50,945) (4,718) (57,715) (1,244) Notes 2,15 (114,622)
Interest income and other (expense), net... 22,442 7,278 1,000 30,720
Gain on sale of subsidiaries stock......... 41,013 41,013
Minority share of loss..................... (20,918) Note 17 (20,918)
---------- --------- --------- --------- -----------
Total other income (expense)............ (140,688) (218,198) (23,478) (13,438) (395,802)
---------- --------- --------- --------- -----------
Loss before income taxes................ (463,463) (694,903) 38,671 (280,132) (1,399,827)
Income tax benefit......................... 8,250 8,250
---------- --------- --------- --------- -----------
Net (loss) income....................... $ (463,463) $(686,653) $ 38,671 $(280,132) $(1,391,577)
========== ========= ========= ========= ===========
Pro forma loss per common share calculation
(Note 18):
Net loss................................... $(1,391,577)
Preferred dividends attributable to
VoiceStream Junior Preferred.............. (19,015)
-----------
Net loss attributable to common
shareholders.............................. $(1,410,592)
===========
Weighted average common shares used in
computing basic and diluted loss per
common share.............................. 155,130
===========
Basic and diluted loss per common share.... $ (9.09)
===========

<CAPTION>
AERIAL VOICESTREAM
MERGER OMNIPOINT
AERIAL ADJUSTMENTS AND AERIAL
----------- ----------- -----------
NOTE 1C
<S> <C> <C> <C> <C>
Revenues:
Subscriber revenues........................ $ 192,150 $ 817,907
Roamer revenues............................ 6,690 44,823
Equipment revenues......................... 30,361 160,390
License fees and engineering services...... 2,691
Other revenues............................. 21,407
----------- -----------
Total revenues.......................... 229,201 1,047,218
----------- -----------
Operating expenses:
Cost of service............................ 67,247 298,042
Cost of equipment sales.................... 61,298 339,374
Cost of engineering services............... 2,010
Research and development................... 2,812
General and administrative................. 136,677 432,891
Sales and marketing........................ 81,980 447,521
Depreciation and amortization.............. 92,007 $ 337,632 Note 14 941,337
Stock based compensation................... 134,896
----------- --------- -----------
Total operating expenses................ 439,209 337,632 2,598,883
----------- --------- -----------
Operating loss............................. (210,008) (337,632) (1,551,665)
----------- --------- -----------
Other income (expense):
Interest and financing expense, net........ (22,118) (354,113)
Equity in net loss of unconsolidated
affiliates................................ (314) (114,936)
Interest income and other (expense), net... (4,891) 25,829
Gain on sale of subsidiaries stock......... 41,013
Minority share of loss..................... 15,782 (15,782) Note 16 (20,918)
----------- --------- -----------
Total other income (expense)............ (11,541) (15,782) (423,125)
----------- --------- -----------
Loss before income taxes................ (221,549) (353,414) (1,974,790)
Income tax benefit......................... 113,400 121,650
----------- --------- -----------
Net (loss) income....................... $ (108,149) $(353,414) $(1,853,140)
=========== ========= ===========
Pro forma loss per common share calculation
(Note 18):
Net loss................................... $(1,853,140)
Preferred dividends attributable to
VoiceStream Junior Preferred.............. (10,315)
-----------
Net loss attributable to common
shareholders.............................. $(1,863,455)
===========
Weighted average common shares used in
computing basic and diluted loss per
common share.............................. 219,300
===========
Basic and diluted loss per common share.... $ (8.50)
===========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

54
<PAGE> 55

VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)

DESCRIPTION OF PRO FORMA REORGANIZATION TRANSACTIONS:

1a. Represents the historical financial position of VoiceStream adjusted for the
$275 million investment in Microcell Telecommunications Inc. acquired by
VoiceStream on February 28, 2000 (in thousands):

<TABLE>
<CAPTION>
HISTORICAL
VOICESTREAM MICROCELL VOICESTREAM
DECEMBER 31, 1999 TRANSACTION SUBTOTAL
----------------- ------------ -----------
<S> <C> <C> <C>
Cash and cash equivalents.......... $235,433 $(275,000) $(39,567)
Investments in and advances to
unconsolidated affiliates........ $409,721 $ 275,000 $684,721
</TABLE>

Additionally, the statement of operations has been adjusted for
interest and financing expenses that would have been incurred due to the
increase in borrowings related to the total $150 million investment in
Omnipoint made by VoiceStream during 1999. These adjustments assume that
VoiceStream purchased Omnipoint Series A Preferred Stock as of January 1,
1999 and incurred interest expense due to an increase in borrowings to fund
such purchase. (See Note 8) The interest expense is calculated on the total
borrowing of $150 million for the twelve months ended December 31, 1999 at
a market interest rate of 10.3%. The adjustment to reflect the VoiceStream
purchase of Omnipoint Series A Preferred Stock has been eliminated in the
Omnipoint reorganization columns to reflect the impact of this transaction
on a combined VoiceStream basis.

1b. Certain reclassifications have been made to the historical financial
information for Omnipoint to conform to VoiceStream's financial statement
presentation. These reclassifications do not materially impact Omnipoint's
results of operations or financial position.

1c. Represents the historical financial position of Aerial adjusted to reflect
the pay down of the remainder of the Aerial debt to Telephone and Data
Systems, Inc. (TDS) (in thousands):

<TABLE>
<CAPTION>
HISTORICAL
AERIAL INTERIM AERIAL
DECEMBER 31, 1999 TRANSACTIONS SUBTOTAL
----------------- ------------ ----------
<S> <C> <C> <C>
Cash and cash equivalents.......... $ 19,887 $(37,786) $ (17,899)
Long-term debt..................... $ 288,632 $(37,786) $ 250,846
</TABLE>

Interest expense for the year ended December 31, 1999 has been reduced
to reflect $420 million of Aerial subsidiary debt owed to TDS that was
replaced with equity of Aerial, as well as the TDS debt replacement and the
repayment of the remaining debt to TDS with the proceeds of the Sonera
investment in Aerial and an Aerial subsidiary.

Certain reclassifications have been made to the historical financial
information for Aerial to conform to VoiceStream's financial statement
presentation. These reclassifications do not materially impact Aerial's
results of operations or financial position.

2. These columns represent the deconsolidation and contribution of certain
operations, assets and liabilities related to two new joint venture
entities described below, which were previously consolidated in Omnipoint's
historical balance sheet and statement of operations. These adjustments
reflect a change to the equity method of accounting for VoiceStream'
interests in these entities because VoiceStream will have only a 49.9%
ownership in the two new joint venture entities.

Under the Designated Entity rules set forth by the FCC, VoiceStream
can not own or operate Omnipoint's C and F Block licenses. As a result,
immediately prior to the Omnipoint merger, the C and F Block licenses and
operations, assets and liabilities associated with these licenses and
operations were transferred to two new joint venture entities controlled by
Cook Inlet. VoiceStream will account for this

55
<PAGE> 56
VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

transfer of non-monetary assets as an investment at VoiceStream's
historical cost, which equates to the fair value of these assets and
liabilities as the result of the purchase accounting performed for the
merger. The excess purchase price attributed to these assets will be
allocated between license costs and goodwill and amortized into the loss on
unconsolidated affiliates over 40 or 20 years, respectively. Each of these
joint venture entities, Cook Inlet/VoiceStream GSM II PCS, LLC and Cook
Inlet/VoiceStream GSM III PCS, LLC, qualify as a Designated Entity.
VoiceStream has entered into an agreement to provide technical services to
each of these joint venture entities.

Cook Inlet has contributed a total of $75 million in cash to these
joint venture entities for its 50.1% ownership and exchange rights.
VoiceStream contributed a combination of non-cash assets and liabilities
for its 49.9% ownership. Cook Inlet holds the majority of voting power in
each of these joint venture entities. As part of this transaction, Cook
Inlet has certain rights, but not the obligation, to exchange its joint
venture interests into a total of 3,750,000 shares of VoiceStream common
stock for a 30 day period beginning after the FCC regulatory holding period
has expired (currently five years after the issuance date of the licenses
held by Cook Inlet/VoiceStream GSM II and III). For Cook Inlet/VoiceStream
GSM II, this date is in the second quarter of 2002, and for Cook
Inlet/VoiceStream GSM III in the fourth quarter of 2004. These rights are
conditioned upon the FCC's Designated Entity rules and VoiceStream's legal
ability to own the C and F Block licenses at the time of the exchange under
such rules.

As mentioned above, each of the joint venture agreements included
rights whereby Cook Inlet has the ability to exchange its investment in the
joint ventures for a fixed number of VoiceStream shares. The fair value of
the exchange rights of $28.0 million has been recorded as an increase to
investment in and advances to unconsolidated affiliates and additional paid
in capital as of December 31, 1999. The fair value will be amortized over
the life of these exchange rights and such amortization has been reflected
in the pro forma condensed combined financial statements for the year ended
December 31, 1999.

3. The Omnipoint merger is expected to result in an allocation of the purchase
price to the tangible and intangible assets and liabilities of Omnipoint.
The transaction is not expected to result in an incremental deferred tax
liability. Such allocation reflects the estimated fair value of the assets
and liabilities acquired by VoiceStream based upon information available at
the date of the preparation of the accompanying pro forma condensed
combined financial statements. Such allocation will be adjusted upon the
final determination of such fair values. Management is not aware of any
circumstances that would cause the final purchase price allocation to be
significantly different from that which is reflected in the accompanying
pro forma condensed combined balance sheet. However, actual valuations and
allocations may differ from those reflected herein.

56
<PAGE> 57
VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

The aggregate purchase price was calculated as follows (in thousands, except
per share data):

<TABLE>
<S> <C>
Total Omnipoint shares outstanding -- Note 3a............... 57,915
VoiceStream exchange ratio per share........................ 0.825
----------
Equivalent VoiceStream common shares........................ 47,780
The Omnipoint conversion price -- Note 3b................... $ 29.00
----------
Subtotal.................................................. $1,385,620
Cash consideration of $8 per share.......................... 463,320
Fair value of liabilities of Omnipoint at December 31,
1999...................................................... 3,231,794
Option/warrant conversion costs -- Note 3c.................. 798,000
Reorganization related costs -- Note 3d..................... 20,500
----------
Total Consideration....................................... 5,899,234
Fair value of assets of Omnipoint acquired (excluding FCC
licenses) -- Note 3e...................................... 1,258,258
Fair value of FCC licenses acquired (net book value
of licenses equal to $446,036)............................ 885,361
----------
Preliminary goodwill........................................ $3,755,615
==========
</TABLE>

3a. Outstanding shares of Omnipoint common stock used for purposes of this pro
forma are as of February 25, 2000, the reorganization date, and include
shares issued by Omnipoint as the result of the East/West merger.

3b. The conversion price is based on the average closing price of VoiceStream
common stock a few days before and after the June 23, 1999 measurement date.

3c. Represents the fair value, based on a Black-Scholes valuation, associated
with the conversion of outstanding Omnipoint options and warrants to
equivalent options and warrants of VoiceStream at the time of the Omnipoint
merger based on the number of options and warrants outstanding and the
closing market price of VoiceStream as of February 25, 2000, the Omnipoint
merger date, but excluding options whose terms were subsequently modified
by VoiceStream. At the closing of the Omnipoint merger, each outstanding
and unexercised option or warrant to purchase shares of Omnipoint's common
stock was converted into an option or warrant to purchase shares
VoiceStream common stock. The number of options and the exercise prices
will vary from the original grant based on conversion provisions in the
Omnipoint reorganization agreement resulting in the intrinsic value of each
option and warrant remaining unchanged and, accordingly, the estimated fair
value of these options and warrants has been recorded as additional
purchase price.

3d. Anticipated reorganization costs to VoiceStream as a result of the Omnipoint
merger are estimated as follows (in thousands):

<TABLE>
<S> <C>
Investment banking fees.................................... $14,000
Legal, accounting and printing fees........................ 4,000
Employee separation costs.................................. 2,500
-------
$20,500
=======
</TABLE>

3e. Includes an adjustment to reflect the step-up of the investment in the two
new Cook Inlet joint venture entities, Cook Inlet/VoiceStream GSM II and
Cook Inlet/VoiceStream GSM III, over the historical net book value of the
net assets contributed.

4. This adjustment represents the additional investment in VoiceStream by
Hutchison Telecommunications PCS (USA) pursuant to the subscription
agreement dated as of June 23, 1999. Concurrent with the

57
<PAGE> 58
VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

Omnipoint reorganization agreement, Hutchison PCS (USA) agreed to purchase
shares of VoiceStream common stock at $29.00 per share and VoiceStream 2.5%
Convertible Junior Preferred Stock for $100,000 per share for an aggregate
price of $807 million. Hutchison Telecommunications PCS (USA) purchased
7,606 shares of VoiceStream Junior Preferred for $760.6 million and 1.6
million shares of VoiceStream common stock for $46.4 million at the close of
the Omnipoint merger.

For purposes of this pro forma presentation, we have assumed that
Hutchison PCS (USA) will convert $348 million, representing 3,480 shares of
VoiceStream Junior Preferred, to 12 million shares of VoiceStream common
stock upon completion of the Aerial merger to maintain at least an 18.6%
interest in VoiceStream common stock.

The VoiceStream 2.5% Convertible Junior Preferred Stock provides for a
2.5% cumulative dividend payable at maturity (40 years from the close of the
Omnipoint merger). Such dividend is cancelled upon any conversion of the
2.5% Convertible Junior Preferred. Since the redemption of the VoiceStream
2.5% Convertible Junior Preferred Stock is outside the control of
VoiceStream, it has been classified as mezzanine financing and has been
excluded from shareholders' equity.

5. Represents the elimination in consolidation of VoiceStream's $150 million
investment in Omnipoint prior to the Omnipoint merger.

6. Immediately following the close of the Omnipoint merger, VoiceStream
elected to repay certain of Omnipoint's long-term debt. For purposes of
this pro forma presentation we have reclassified these amounts as of
December 31, 1999, to current.

Certain of the remaining long-term debt agreements of Omnipoint
contain provisions which require Omnipoint to offer repayment of
outstanding amounts when a change of control occurs. Under certain
agreements, Omnipoint is required to offer to repay to the lenders amounts
outstanding. Additionally, the holders of the debt issued under certain of
these agreements are entitled to a prepayment premium. The pro forma
condensed combined balance sheet assumes that the lenders will not exercise
the offer for Omnipoint to repay amounts outstanding, and therefore,
remaining outstanding debt amounts have not been reclassified as current.
The aggregate amount of principal maturities (including prepayment
premiums, if any) of Omnipoint's long-term debt at December 31, 1999 that
will be assumed by VoiceStream if the holders were to require or accept the
offer of repayment are as follows (in thousands):

<TABLE>
<S> <C>
Years ending December 31,
2000........................................................ $721,192
2001........................................................ 32,113
2002........................................................ 0
2003........................................................ 0
2004........................................................ 0
Thereafter.................................................. 205,000
--------
$958,305
========
</TABLE>

7. Represents the elimination in consolidation of Omnipoint's historical
common stock and paid-in capital of $315.9 million, the recording of the
$2.3 million shareholder note receivable of Omnipoint to be carried forward
to VoiceStream, the elimination of Omnipoint's historical deferred
compensation of $11.7 million, and the elimination of Omnipoint's
historical accumulated deficit of $1.9 billion.

8. Represents the elimination in consolidation of VoiceStream's $150 million
Omnipoint Series A Preferred Stock investment in Omnipoint and the
conversion of Hutchison's $150 million Omnipoint Series A Stock investment
to VoiceStream common stock.

58
<PAGE> 59
VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

9. Represents the Sonera investment made at the close of the Omnipoint merger
of $500 million in VoiceStream common stock at $57.00 per share.

10. Represents additional deferred compensation to be recorded as a result of
modifications made to stock option agreements for certain former officers
of Omnipoint. The modifications resulted in a revised vesting term of
approximately one year. Compensation expense has also been adjusted to
reflect the full vesting for the twelve months ended December 31, 1999.

11. The Aerial merger is expected to result in an allocation of the purchase
price to the tangible and intangible assets and liabilities of Aerial. The
transaction is not expected to result in an incremental deferred tax
liability. Such allocation reflects the estimated fair value of the assets
and liabilities acquired by VoiceStream based upon information available at
the date of the preparation of the accompanying pro forma condensed
combined financial statements. Such allocation will be adjusted upon the
final determination of such fair values. Management is not aware of any
circumstances that would cause the final purchase price allocation, other
than the movement of VoiceStream's stock price prior to the closing of the
merger and the resulting impacts, to be significantly different from that
which is reflected in the accompanying pro forma condensed combined balance
sheet. Each $10 change in the current market price of VoiceStream's common
stock results in a change in intangible assets of approximately $522
million, and a resulting change in the annual amortization of intangible
assets of approximately $26 million.

The aggregate purchase price was calculated as follows (in thousands,
except per share data):

<TABLE>
<S> <C>
Total Aerial common stock outstanding -- Note 11a........... 95,643
Additional Sonera investment conversion -- Note 11b......... 7,045
Conversion of Sonera shares of Aerial Operating Company to
Aerial common stock -- Note 11c........................... 11,971
----------
Total estimated Aerial shares outstanding................. 114,659
VoiceStream exchange ratio per share........................ 0.455
----------
Equivalent VoiceStream common stock......................... 52,170
The Aerial conversion price -- Note 11d..................... $ 140.438
----------
Subtotal.................................................. $7,326,650
Fair value of liabilities of Aerial at December 31, 1999.... 429,592
Option conversion costs -- Note 11e......................... 35,000
Reorganization related costs -- Note 11f.................... 16,000
----------
Total Consideration....................................... 7,807,242
Fair value of assets of Aerial acquired (excluding FCC
licenses)................................................. 612,902
Fair value of FCC licenses acquired (net book value of
licenses equal to $321,688)............................... 561,700
----------
Preliminary goodwill........................................ $6,632,640
==========
</TABLE>

11a. Outstanding shares of Aerial common stock used for purposes of this pro
forma are as of February 25, 2000, the latest practicable date.

11b. Represents the conversion of the remaining portion of the $230 million
Sonera ($155.0 million) investment that will be converted into shares of
Aerial common stock at $22.00 per share.

11c. Sonera's original investment, as adjusted, in Aerial Operating Company of
1.8 million shares is converted prior to closing to Aerial shares using a
defined conversion ratio of 6.72919.

59
<PAGE> 60
VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

11d. The conversion price is based on the closing price of VoiceStream common
stock on February 25, 2000, the latest practicable date.

11e. Represents the fair value, based on a Black-Scholes valuation, associated
with the conversion of outstanding Aerial options to equivalent options of
VoiceStream at the time of the Aerial merger based on the number of options
outstanding and the closing market price of VoiceStream as of February 25,
2000, the latest practicable date. Upon stockholder approval of the Aerial
merger, each outstanding and unexercised Aerial option will vest. Since all
Aerial options vest upon the stockholder approval of the Aerial merger, the
estimated fair value of these options has been recorded as additional
purchase price.

11f. Anticipated reorganization costs to VoiceStream as a result of the Aerial
merger are estimated as follows (in thousands):

<TABLE>
<S> <C>
Investment banking fees.................................... $ 6,000
Legal, accounting and printing fees........................ 1,900
Employee separation costs.................................. 8,100
-------
$16,000
=======
</TABLE>

12. Represents the elimination in consolidation of Aerial's Common Shares and
paid-in capital of $1.2 billion and Aerial's accumulated deficit of $800.2
million.

13. The current portion of long-term debt as well as cash and cash equivalents
have been reduced to reflect the payoff of the Nokia credit agreement of
$103.8 million.

14. This adjustment represents the amortization of the additional purchase
price allocated to the FCC licenses and goodwill. FCC licenses are
amortized over a 40 year period and the goodwill is amortized over a 20
year period.

15. This adjustment represents the amortization of the difference between the
underlying net book value of the investment in the new Cook Inlet joint
venture entities and the fair value assigned to these investments. This
difference has been allocated between FCC licenses and goodwill and is
being amortized over 40 years and 20 years, respectively.

16. Represents the elimination of Aerial's historical minority interest loss
and minority interest, resulting from Sonera's conversion of its equity in
Aerial Operating Company to equity in Aerial prior to the Aerial merger.

17. Represents dividends related to Omnipoint 7% convertible preferred stock
which will be reflected as minority interest losses subsequent to the
completion of the merger.

18. For purposes of calculating pro forma loss per share it has been assumed
that the Aerial merger will be completed and all public shareholders of
Aerial will elect to take the stock election. Additionally, pro forma loss
per share reflects the allocation of Hutchison Telecommunications PCS
(USA) $807 million investment as discussed in Note 4, between VoiceStream
common stock and VoiceStream 2.5% Convertible Junior Preferred Stock.

60
<PAGE> 61
VOICESTREAM WIRELESS CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

The following summarizes the pro forma calculation of loss per share (in
thousands, except per share data):

<TABLE>
<CAPTION>
DECEMBER 31,
1999
------------
<S> <C>
VoiceStream weighted average common shares.................. 95,708
Conversion of Omnipoint outstanding common stock(1)......... 46,386
Exchange of Omnipoint Series A Preferred Stock.............. 1,270
Additional Hutchison investment (Note 4).................... 13,600
Conversion of East/West Communications shares............... 1,394
Sonera $500 million investment.............................. 8,772
Conversion of Aerial shares(1).............................. 52,170
-----------
Total weighted average common shares.............. 219,300
===========
VoiceStream unadjusted pro forma net loss................... $(1,863,140)
VoiceStream 2.5% Convertible Junior Preferred Stock
dividends................................................. (10,315)
-----------
Pro forma net loss attributable to common shareholders...... $(1,863,455)
===========
Basic and diluted pro forma loss per common share........... $ (8.50)
===========
</TABLE>

- ---------------
(1) Shares outstanding as of February 25, 2000.

In the event Aerial's public shareholders elect to receive cash at $18.00
per share in lieu of VoiceStream common stock, the loss per share would increase
by $0.25 per share for the year ended December 31, 1999.

CONTINGENCIES:

As a result of the mergers, VS Washington may have to make substantial tax
indemnity payments to Western Wireless. In a spin-off transaction effected on
May 3, 1999, Western Wireless distributed its entire 80.1% interest in VS
Washington's common stock to its stockholders. Western Wireless will recognize
gain as a result of the spin-off, if the spin-off is considered to be part of a
plan or series of related transactions pursuant to which one or more persons
acquire, directly or indirectly, 50% or more of VS Washington's common
stock -- a "prohibited plan." VS Washington has agreed to indemnify Western
Wireless on an after-tax basis for any taxes, penalties, interest and various
other expenses incurred by Western Wireless if it is required to recognize such
gain. The amount of such gain that Western Wireless would recognize would be
equal to the difference between the fair market value of VS Washington common
stock at the time of the spin-off and Western Wireless' adjusted tax basis in
such stock at that time.

In the absence of direct authority, and although the issue is not free from
doubt, VoiceStream believes that it should be able to establish that the
spin-off and VoiceStream's acquisition of VS Washington's stock pursuant to the
mergers, in conjunction with the related transactions and Hutchison's
acquisition of its existing VoiceStream stock within two years prior to the
spin-off, are not pursuant to a prohibited plan. However, if the IRS were to
take the position that a prohibited plan did occur, the estimated range of
possible liability to VS Washington, not including interest and penalties, if
any, is from zero to $400 million.

61
<PAGE> 62

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by this item are set forth on pages F-1
through F-22.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

62
<PAGE> 63

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages and positions of our executive officers and directors are
listed below along with their business experience for the past five years. Mr.
Stanton, and, until May 3, 2002, Messrs. Guthrie and Bender, may serve as
officers of VoiceStream and Western Wireless. It is anticipated that they will
divide their time between VoiceStream and Western Wireless.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John W. Stanton................ 44 Chairman, Chief Executive Officer, and Director
Robert R. Stapleton............ 41 President and Director
Douglas G. Smith............... 46 Vice Chairman and Director
Donald Guthrie................. 44 Vice Chairman and Director
Cregg B. Baumbaugh............. 43 Executive Vice President -- Finance, Strategy and
Development
Alan R. Bender................. 45 Executive Vice President, General Counsel and Secretary
Robert P. Dotson............... 39 Senior Vice President -- Marketing and Sales
Timothy R. Wong................ 43 Senior Vice President -- Engineering
Patricia L. Miller............. 36 Vice President, Controller and Principal Accounting
Officer
Mitchell R. Cohen.............. 36 Director
Daniel J. Evans................ 74 Director
Richard L. Fields.............. 43 Director
Canning K. N. Fok.............. 48 Director
Jonathan M. Nelson............. 43 Director
Terence M. O'Toole............. 41 Director
James N. Perry, Jr............. 39 Director
James J. Ross.................. 61 Director
Hans Snook..................... 51 Director
Susan M.F. Woo Chow............ 46 Director
Frank J. Sixt.................. 48 Director
Kaj-Erik Relander.............. 37 Director
</TABLE>

In addition, pursuant to the TDS stockholder agreement and subsequent to
the closing of the Aerial merger, TDS will have the right to designate an
additional director. TDS has not at this time determined who it will designate.

John W. Stanton has been a director of VoiceStream since February 1998, and
has been Chief Executive Officer and Chairman of VoiceStream since its formation
in 1994. Mr. Stanton has also been a director, Chief Executive Officer and
Chairman of Western Wireless and its predecessors since 1992. Mr. Stanton served
as a director of McCaw Cellular from 1986 to 1994, and as a director of LIN
Broadcasting from 1990 to 1994, during which time it was a publicly-traded
company. From 1983 to 1991, Mr. Stanton served in various capacities with McCaw
Cellular, serving as Vice-Chairman of the Board of McCaw Cellular from 1988 to
September 1991 and as Chief Operating Officer of McCaw Cellular from 1985 to
1988. Mr. Stanton is also a member of the board of directors of Advanced Digital
Information Corporation, Microcell Telecommunications Inc., Omnipoint
Corporation and Columbia Sportswear, Inc. In addition, Mr. Stanton is a trustee
of Whitman College, a private college.

Robert R. Stapleton has been a director of VoiceStream since April 1999 and
President of VoiceStream since its formation in 1994. Effective April 1998, Mr.
Stapleton became responsible for all operations of VoiceStream. Mr. Stapleton
was President of Western Wireless and one of its predecessors from 1992 to May
1999. From 1989 to 1992, he served in various positions with General Cellular,
including Chief Operating Officer and Vice President of Operations. From 1984 to
1989, Mr. Stapleton was employed by mobile communications subsidiaries of
Pacific Telesis, Inc., which now are affiliated with Vodafone AirTouch.

63
<PAGE> 64

Mr. Stapleton is also a member of the board of directors of Microcell
Telecommunications Inc. and Omnipoint.

Douglas G. Smith has been a director and Vice Chairman of VoiceStream since
the Omnipoint merger on February 25, 2000. He founded Omnipoint in June 1987 and
served as its Chairman of the Board, President and Chief Executive Officer until
the Omnipoint merger. From 1985 to 1987, he was one of four professionals in a
venture capital fund focusing on opportunities in the electronic information
industry. From 1980 to 1985, he founded and managed the Investment Data Systems
Division of Strategic Information (a division of Ziff-Davis Publishing).

Donald Guthrie has been a director of VoiceStream since April 1999 and has
been Vice Chairman since February 1998. He has also served as Vice Chairman of
Western Wireless since November 1995. From February 1997 to April 1999, he also
served as the Chief Financial Officer of Western Wireless. From 1986 to October
1995, he served as Senior Vice President and Treasurer of McCaw Cellular and,
from 1990 to October 1995, he served as Senior Vice President -- Finance of LIN
Broadcasting. Mr. Guthrie also serves on the board of directors of Omnipoint.

Cregg B. Baumbaugh has been Executive Vice President -- Finance, Strategy
and Development of VoiceStream since May 3, 1999. He served as Senior Vice
President -- Corporate Development of VoiceStream and Western Wireless from 1994
to May 1999. From November 1989 through May 1999, he has served in various
positions with Western Wireless and its predecessor, including Vice
President -- Business Development. Mr. Baumbaugh serves on the board of
directors of Omnipoint.

Alan R. Bender has been Executive Vice President, General Counsel and
Secretary of VoiceStream since May 3, 1999. He also holds the positions of
Executive Vice President and Secretary of Western Wireless, and was General
Counsel of Western Wireless through February 1, 2000. From 1990 to May 1999, he
held various positions with Western Wireless, VoiceStream and their respective
predecessors, including serving as Senior Vice President and General Counsel and
Secretary since 1994. Mr. Bender serves on the board of directors of Omnipoint.

Robert P. Dotson has been Senior Vice President -- Marketing and Sales of
VoiceStream since May 3, 1999. From 1996 to May 1999, he served as Vice
President -- Marketing of VoiceStream and Western Wireless. Previously, Mr.
Dotson held various marketing positions with PepsiCo's KFC restaurant group,
serving as Senior Director of Concept Development from 1994 to 1996, Director of
International Marketing from 1993 to 1994, Divisional Marketing Director from
1991 to 1993 and Manager of New Product Development and Base Business Marketing
from 1989 through 1991.

Timothy R. Wong has been Senior Vice President -- Engineering of
VoiceStream since May 3, 1999. From 1996 to May 1999, he served as Vice
President -- Engineering of VoiceStream and Western Wireless. From 1990 to 1995,
Mr. Wong held various positions at US WEST Cellular, serving as Executive
Director -- Engineering and Operations from 1994 to 1995, Director of Wireless
Systems Engineering in 1993, Manager of International Wireless Engineering in
1992 and Manager -- Systems Design from 1990 to 1991.

Patricia L. Miller has been Vice President, Controller and Principal
Accounting Officer of VoiceStream since May 3, 1999. From 1998 to May 1999, she
served as Controller and Principal Accounting Officer of VoiceStream and Western
Wireless. From 1993 to 1997, Ms. Miller held various accounting positions with
Western Wireless. Prior to 1993, Ms. Miller held various accounting positions
with a subsidiary of Weyerhaeuser Company.

Mitchell R. Cohen has been a director of VoiceStream since February 1998.
He has also been a director of Western Wireless since its formation in 1994. Mr.
Cohen was a director of General Cellular from March 1992 to December 1995. Mr.
Cohen is a Managing Director of Hellman & Friedman, having joined Hellman &
Friedman as an associate in July 1989. From 1986 to 1989, Mr. Cohen was employed
by Shearson Lehman Hutton, Inc. Mr. Cohen currently is a director of Advanstar,
Inc.

Daniel J. Evans has been a director of VoiceStream since February 1998. He
has also been a director of Western Wireless since 1997. Mr. Evans is the
Chairman of Daniel J. Evans Associates, a consulting firm.

64
<PAGE> 65

From 1965 through 1977, Mr. Evans was Governor of the State of Washington. In
1983 he was appointed and then elected to the United States Senate to fill the
seat of the late Senator Henry M. Jackson. He serves as a director of Flow
International Corporation, Puget Sound Energy, Tera Computer Company, and serves
on the Board of Regents of the University of Washington.

Richard L. Fields has been a director of VoiceStream since the Omnipoint
merger in February 25, 2000. He served as a Director of Omnipoint between
September 1991 and February 2000. Since February 1994, Mr. Fields has been a
Managing Director and Executive Vice President of Allen & Co., and prior to such
time he was a Vice President of Allen & Co. Mr. Fields is currently a director
of LivePerson, Inc. and the Telecommunications Development Fund.

Canning K.N. Fok has been a director of VoiceStream Wireless Corporation
since February 1998. For more than five years, Mr. Fok has been Group Managing
Director of Hutchison Whampoa Limited. He is the Chairman of Hutchison
Telecommunications (Australia) Limited and Partner Communications Ltd. and the
Deputy Chairman of Cheung Kong Infrastructure Holdings Limited and Hongkong
Electric Holdings Ltd. He is also a Director of Cheung Kong (Holdings) Limited
and Global Crossing Ltd. and a member of the supervisory board of Mannesmann AG.
Mr. Fok is a Chartered Accountant.

Jonathan M. Nelson has been a director of VoiceStream since February 1998.
He has also been a director of Western Wireless since its formation in 1994. Mr.
Nelson has been President and Chief Executive Officer of Providence Equity
Partners Inc., an investment advisor, since its inception in 1995 and is a
Member of Providence Equity Partners L.L.C. which is the general partner of
Providence Equity Partners L.P. and Providence Equity Partners II L.P. He is
also Co-Chairman of Providence Ventures Inc., an investment advisor, and a
managing general partner of Providence Ventures L.P. which is the general
partner of the general partner of Providence Media Partners L.P., a venture
capital fund. Since 1986, Mr. Nelson has been a Managing Director of
Narragansett Capital, Inc., a private management company for three separate
equity investment funds. Mr. Nelson is currently a director of AT&T Canada.

Terence M. O'Toole has been a director of VoiceStream since February 1998.
He has also been a director of Western Wireless since it was formed in 1994. Mr.
O'Toole joined Goldman Sachs in 1983 and became a Vice President in 1987, a
general partner in 1992 and a Managing Director in 1996. He is currently a
director of AMF Bowling, Inc. and Amscan Holdings, Inc.

James N. Perry, Jr. has been a director of VoiceStream since the Omnipoint
merger in February 25, 2000. He served as a Director of Omnipoint between August
1993 and February 2000. Since January 1993, he has been Vice President of MDCP.
Previously, Mr. Perry served in various positions at First Capital Corporation
of Chicago and its affiliates. Mr. Perry currently serves as a director of
Allegiance Telecom, Inc. and Clearnet Communications, Inc.

James J. Ross has been a director of VoiceStream since the Omnipoint merger
in February 25, 2000. He served as Vice Chairman of Omnipoint between 1989 and
February 2000. Mr. Ross is a private venture investor. Since February 1995, Mr.
Ross has been Of Counsel in the law firm of Becker Ross Stone DeStefano & Klein
and prior to such time, he was a partner at such firm.

Hans R. Snook has been a director of VoiceStream since February 1998. For
more than five years, Mr. Snook has been Group Managing Director of Orange plc,
a telecommunications service provider in the United Kingdom, and a director of a
separate affiliate of Hutchison.

Susan M.F. Woo Chow has been a director of VoiceStream Wireless Corporation
since the Omnipoint merger on February 25, 2000. She has been an Executive
Director of Hutchison since 1993 and Deputy Group Managing Director since 1998.
She is an Executive Director of Cheung Kong Infrastructure Holdings Limited and
a Director of Hongkong Electric Holdings Limited, Partner Communications Company
Ltd. and tom.com limited.

Frank J. Sixt has been a director of VoiceStream Wireless Corporation since
the Omnipoint merger on February 25, 2000. He has been an Executive Director of
Hutchison Whampoa Limited since 1991 and Group Finance Director since 1998. He
is the Chairman of tom.com limited. He is also an Executive Director of

65
<PAGE> 66

Cheung Kong Infrastructure Holdings Limited, and Hongkong Electric Holdings
Limited and a Director of Cheung Kong (Holdings) Limited, Hutchison
Telecommunications (Australia) Limited and Partner Communications Company Ltd.

Kaj-Erik Relander has been a director of VoiceStream since the Omnipoint
merger on February 25, 2000. He has been the Executive Vice President,
International Operations, and the Chief Financial Officer of Sonera Corporation
since 1999 and, effective January 1, 2000, he will be the head of Sonera's new
Mobile and Media Division. Since joining Sonera in 1994, Mr. Relander has also
served as Sonera's Group Business Controller and as Director, Finance and
Business Development.

ITEM 11. EXECUTIVE COMPENSATION

The following table summarizes the compensation for services rendered
during 1999 and 1998 for our Chief Executive Officer and our next four most
highly compensated executive officers (collectively referred to herein as the
named executive officers). All such compensation was paid by Western Wireless
for services performed for Western Wireless and VoiceStream during 1999, prior
to the spin-off.

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------------
------------------------------ RESTRICTED
NAME AND PRINCIPAL FISCAL STOCK ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(1) AWARDS($)(2) COMPENSATION($)
------------------ ------ --------- --------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton(3).......... 1999 295,000 1,000,000(4) 939 630,000 464,593(5)
Chairman and Chief 1998 193,542 400,000 954 521,250 367,974(5)
Executive Officer
Robert R. Stapleton......... 1999 232,210 329,000 140,876 315,000 234,796(5)
President and Director 1998 165,667 200,000 124,407 260,625 186,487(5)
Donald Guthrie(3)........... 1999 212,865 180,000(4) 56,350 315,000 234,796(5)
Vice Chairman and Director 1998 165,667 150,000 57,263 260,625 186,487(5)
Cregg B. Baumbaugh.......... 1999 169,064 170,000 75,134 210,000 158,197(5)
Executive Vice 1998 145,321 110,000 66,350 173,750 125,992(5)
President --
Finance, Strategy and
Development
Alan R. Bender(3)........... 1999 169,060 170,000(4) 37,567 210,000 158,197(5)
Executive Vice President, 1998 145,321 110,000 38,175 173,750 125,992(5)
General Counsel, and
Secretary
</TABLE>

- ---------------
(1) The 1998 options were granted as a result of the conversion of Western
Wireless options granted during 1998 to each of the VoiceStream named
executive officers

(2) The shares are restricted under the Western Wireless restricted stock plan
until predetermined performance goals are met, including achieving
predetermined levels of subscribers and achieving predetermined levels of
cash flow. No restricted stock grants have been made under the VoiceStream
restricted stock plan. By their terms, none of the restricted stock grants
will vest within three years in the absence of the performance goals having
been met. Dividends will be paid on shares of the restricted stock to the
extent paid on any other shares of stock of the same class.

(3) Mr. Stanton, and until May 3, 1999, 2002, Messrs. Guthrie and Bender, will
divide their time and responsibilities between VoiceStream and Western
Wireless, and their compensation will be shared appropriately.

(4) The bonus for 1999 for each of Messrs. Stanton, Guthrie and Bender is the
aggregate bonus paid by both VoiceStream and Western Wireless, with 60% of
such bonus paid by VoiceStream and 40% by Western Wireless.

(5) VoiceStream made payments to cover the taxes related to the grant of
restricted shares and paid matching contributions to VoiceStream's 401(k)
Profit Sharing Plan and Trust.

66
<PAGE> 67

GRANTS OF STOCK OPTIONS

As part of the spin-off, each of Messrs. Stanton, Guthrie and Bender and
the then VoiceStream directors, excluding Messrs. Fok and Snook, received a
number of options to purchase our common stock, based upon the number of options
to purchase Western Wireless common stock held by each individual prior to the
spin-off.

Those who held vested options to purchase Western Wireless common stock
received an equal number of vested options to purchase our common stock which
are governed by the VoiceStream 1999 Management Incentive Stock Option Plan (See
"-- Stock Option Plan"). The following table summarizes our options granted as a
result of the conversion of Western Wireless options granted during 1999 to each
of the named executive officers.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
OPTIONS EXERCISE APPRECIATION FOR
OPTIONS GRANTED TO OR BASE OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE ------------------------
NAME (#)(1) FISCAL YEAR ($/SHARE) EXPIRATION DATE 5%($) 10%($)
---- ------- ------------ --------- ----------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John R. Stanton....... 939 0.9% $11.32 December 31, 2009 $ 6,685 $ 16,941
Robert R. Stapleton... 140,876 14.2% $11.32 December 31, 2009 $1,003,263 $2,542,465
Donald Guthrie........ 56,350 5.6% $11.32 December 31, 2009 $ 401,302 $1,016,979
Cregg B. Baumbaugh.... 75,134 7.6% $11.32 December 31, 2009 $ 535,075 $1,355,984
Alan R. Bender........ 37,567 3.8% $11.32 December 31, 2009 $ 267,537 $ 677,992
</TABLE>

- ---------------
(1) These options have terms of ten years from the date of grant, January 1,
1998, and become exercisable as to 25% of the shares on the first
anniversary and an additional 25% every year thereafter until such options
are fully exercisable.

(2) Potential realizable value is based on an assumption that the stock price of
our common stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the option term. These numbers are
calculated based on the requirements of the SEC and do not reflect our
estimate of future stock price performance.

AGGREGATED OPTION VALUES

The following table summarizes on an aggregated basis the number and value
of our options granted to the named executive officers. We do not have any
outstanding stock appreciation rights ("SARs").

AGGREGATE OPTION EXERCISES AND OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, AT DECEMBER 31,
ACQUIRED 1999(#)(1) 1999($)(1)(2)
ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton...... (3) (3) 250 1,643 $ 33,266 $ 216,679
Robert R.
Stapleton.......... 100,000 $9,312,606 509,731 281,751 $70,030,338 $37,266,885
Donald Guthrie....... 0 0 221,354 112,700 $30,545,270 $14,906,701
Cregg R. Baumbaugh... 66,500 $3,791,713 170,731 150,267 $23,243,243 $19,875,645
Alan R. Bender....... 71,500 $4,244,887 141,243 75,134 $19,234,510 $ 9,937,890
</TABLE>

- ---------------
(1) Except for the options granted to Mr. Stanton, the options were granted on
May 21, 1999, as a result of the conversion of Western Wireless options that
were granted on or prior to January 1, 1999. Mr. Stanton was granted options
as a director on December 31, 1999.

(2) Dollar values were calculated by determining the difference between the
exercise price and $142.31, which was the last sale price for our common
stock as reported on the Nasdaq Stock Market on December 31, 1999.

67
<PAGE> 68

(3) During 1999, Theresa E. Gillespie, a Senior Executive Officer of Western
Wireless and the wife of John Stanton, exercised 172,362 options for a value
of $15,552,768.

DIRECTOR COMPENSATION

Our board will consider appropriate compensation arrangements for each
director who is not also our employee or any of its subsidiaries. All directors
also will be reimbursed for reasonable travel and other out-of-pocket expenses
incurred by them in attending board or committee meetings.

We may, from time to time and in the sole discretion of our board, grant
additional options to directors under VoiceStream 1999 Management Incentive
Stock Option Plan, which is described below. It is currently intended that all
grants under such plan will be in addition to any annual fees to be paid to
directors.

DIRECTOR COMMITTEES

We intend to establish a Compensation Committee, Audit Committee and
Executive Committee at the meeting of the board of directors to be held in April
2000.

EMPLOYMENT AGREEMENTS

Mr. Stanton and, until May 3, 2002, Messrs. Guthrie and Bender, will divide
their time and responsibilities between VoiceStream and Western Wireless
pursuant to their existing employment agreements with Western Wireless. Their
employment agreements and the existing employment agreements between VoiceStream
and each of Messrs. Stapleton and Baumbaugh provide for annual base salaries of
$295,000, $215,000, $170,000, $235,000 and $170,000, respectively, and provide
each executive officer an opportunity to earn an annual bonus, as determined by
the respective board of directors, targeted at 100%, 70%, 60%, 80% and 60%,
respectively, of annual base compensation. It is expected that Western Wireless
will pay, and we will reimburse Western Wireless, for all executive compensation
for Messrs. Stanton, Guthrie and Bender which is attributable to time spent and
services rendered for VoiceStream.

The foregoing employment agreements also provide that the contracting
employee may be terminated by VoiceStream or Western Wireless, as the case may
be, at any time, with or without cause (as such term is defined in the
employment agreements); however, in the event of an involuntary termination (as
defined therein) for other than cause (1) such executive officer will be
entitled to receive a severance payment in an amount equal to any accrued but
unpaid existing annual targeted incentive bonus through the date of termination,
12 months of such executive's then base compensation, and an amount equal to 12
months of such executive's existing annual targeted incentive bonus, (2) the
employer will, at its expense, make all specified insurance payment benefits on
behalf of such executive officer and his or her dependents for 12 months
following such involuntary termination and (3) with respect to any stock options
previously granted to each executive officer which remain unvested at the time
of involuntary termination, there shall be immediate vesting of that portion of
each such grant of any unvested stock options equal to the product of the total
number of such unvested options under such grant multiplied by a fraction, the
numerator of which is the sum of the number of days from the date on which the
last vesting of options under such grant occurred to and including the date of
termination plus 365, and the denominator of which is the number of days
remaining from the date on which the last vesting of options under such grant
occurred to and including the date on which the final vesting under such grant
would have occurred absent the termination. Mr. Stapleton's agreement provides
for an immediate vesting of all options upon his involuntary termination. Among
other things, an executive officer's death or permanent disability will be
deemed an involuntary termination for other than cause. In addition, each
employment agreement provides for full vesting of all stock options granted upon
a change of control, as such term is defined in the stock option agreements with
the executive officer.

Pursuant to the terms of each of these employment agreements, each
executive officer agrees that during such executive officer's employment and for
one year following the termination of such executive officer's employment for
any reason, such executive officer will not engage in a business which is
substantially the same as or similar to the business of his employer and which
competes within the applicable commercial mobile radio services markets serviced
by his employer. Mr. Stanton's agreement provides that such prohibition shall

68
<PAGE> 69

not preclude Mr. Stanton's investment in other companies engaged in the wireless
communications business or his ability to serve as a director of other companies
engaged in the wireless communications business, in each case subject to his
fiduciary duties as a director. Upon completion of the first to occur of the
reorganizations, we will assume the obligations of VoiceStream under these
employment agreements.

INDEMNIFICATION AGREEMENTS

We have entered into an indemnification agreement with each of its
executive officers and directors, which will be separate from such executive
officer's employment agreement with Western Wireless, as the case may be.
Pursuant to this indemnification agreement, we will indemnify the executive
officer or director against certain liabilities arising by reason of the
executive officer's or the director's affiliation with us.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 13, 2000
with respect to our beneficial ownership and assuming the Aerial merger is
completed. The table shows the beneficial ownership for VoiceStream following
the Omnipoint merger and the pro forma beneficial ownership after the Aerial
merger, by (1) the holders of 5% or more of the outstanding VoiceStream common
stock; (2) the individuals who will be directors of VoiceStream; (3) the Named
Executive Officers; and (4) all VoiceStream executive officers and directors as
a group. The columns labeled "VoiceStream and Aerial" assume that: (1) all
Aerial common stock will be exchanged for VoiceStream common stock based on an
exchange ratio of 0.455 of a share of VoiceStream common stock for each share of
Aerial common stock and (2) all outstanding options to acquire Aerial common
stock will convert to immediately exercisable options to purchase shares of
VoiceStream common stock based on an exchange ratio of 0.455 of a share of
VoiceStream common stock for each share of Aerial common stock. A person or
entity is considered to "beneficially own" any shares (1) over which such person
or entity exercises sole or shared voting or investment power or (2) which such
person or entity has the right to acquire at any time within 60 days.

69
<PAGE> 70

<TABLE>
<CAPTION>
VOICESTREAM VOICESTREAM AND AERIAL
---------------------------------- ----------------------------------
SHARES OF SHARES OF
COMMON COMMON
STOCK PERCENT STOCK PERCENT
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OWNED OWNED OWNED OWNED
---------------- ------------ ------------------ ------------ ------------------
<S> <C> <C> <C> <C>
Douglas G. Smith(3)(9)........... 4,901,272 3.07% 4,901,272 2.31%
3 Metrocenter, Suite 400
Bethesda, MD 20814
Richard L. Fields(3)(10)......... 2,163,649 1.35% 2,163,649 1.02%
711 Fifth Avenue
New York, NY 10022
James N. Perry, Jr.(3)(11)....... 2,841,963 1.78% 2,841,963 1.34%
Three First National Plaza
Suite 1330
Chicago, IL 60602
Cregg B. Baumbaugh(4)............ 271,159 * 271,159 *
Alan R. Bender(4)................ 228,114 * 228,114 *
James J. Ross(3)(12)............. 1,327,523 * 1,363,170 *
Robert R. Stapleton(4)........... 649,926 * 649,926 *
Donald Guthrie(4)................ 403,492 * 403,492 *
Mitchell R. Cohen(4)............. 24,890 * 24,890 *
Daniel J. Evans(4)............... 5,394 * 5,394 *
Jonathan M. Nelson(4)............ 224,247 * 224,247 *
Terence M. O'Toole(4)(13)........ 9,801,349 6.13% 9,801,349 4.62%
Canning Fok(2)(4)(14)............ 55,899,487 30.05% 55,899,487 23.47%
Hans R. Snook(2)(4)(14)(15)...... 55,899,487 30.05% 55,902,217 23.47%
Susan M.F.W. Chow(2)(14)......... 55,899,252 30.05% 55,899,252 23.47%
Frank J. Sixt(2)(14)............. 55,899,252 30.05% 55,899,252 23.47%
Kaj-Erik Relander(16)............ 8,771,930 5.49% 18,975,774 8.95%
All VoiceStream executive
officers and directors as a
group (22 persons)(4)(17)...... 93,764,639 48.05% 103,975,254 42.04%
</TABLE>

NOTES TO BENEFICIAL OWNERSHIP TABLE

* Less than 1% of the outstanding shares of common stock.

(1) Computed in accordance with Rule 13d-3(d)(1) of the Exchange Act.

(2) Includes shares of common stock issuable upon conversion of VoiceStream
2.5% Convertible Junior Preferred.

(3) Parties or affiliates of parties to a voting agreement.

(4) Includes aggregate exercisable options, within 60 days of March 10, 2000,
to purchase common stock; does not include unexercisable options. May
include stock jointly or separately owned with or by a spouse. 485 option
shares granted to Mr. Cohen are held for the benefit of Hellman & Friedman
Partners II, L.P.; options granted to Mr. Nelson are held for the benefit
of Providence Media Partners L.P.; and options granted to Mr. O'Toole are
held for the benefit of The Goldman Sachs Group, L.P.

(5) Based on (a) 8,986,738 shares of common stock held of record by GS Capital,
(b) 470,401 shares of common stock held of record by Stone Street Fund 1992
L.P., (c) 273,069 shares of common stock held of record by Bridge Street
Fund, and (d) 68,821 shares of common stock held of record by the The
Goldman Sachs Group, L.P. Each of GS Capital, Stone Street and Bridge
Street Fund 1992, L.P. is an investment limited partnership, the general
partner, the managing general partner or the managing partner of which is
an affiliate of The Goldman Sachs Group, L.P. The Goldman Sachs Group, L.P.
disclaims beneficial ownership of shares held by such investment
partnerships to the extent partnership

70
<PAGE> 71

interests in such partnerships are held by persons other than The Goldman
Sachs Group, L.P. and its affiliates.

(6) Includes shares of VoiceStream common stock issuable in exchange for Aerial
common stock acquired in connection with the $420 million TDS debt
replacement.

(7) Includes shares of (a) VoiceStream common stock issuable in exchange for
Aerial common stock acquired in the $230 million Sonera investment and
Aerial common stock to be received upon exchange of common stock of an
Aerial subsidiary and (b) VoiceStream common stock to be acquired in the
$500 million Sonera investment in VoiceStream.

(8) Mr. Stanton and Ms. Gillespie are husband and wife. Their pro forma
beneficial ownership takes into account (a) 1,686,069 shares of common
stock held of record by PN Cellular, Inc., which is substantially owned and
controlled by Mr. Stanton and Ms. Gillespie; (b) 1,274,519 shares of common
stock held of record by Stanton Communications Corporation which is
substantially owned and controlled by Mr. Stanton and Ms. Gillespie; (c)
2,871,803 shares of common stock held by Mr. Stanton and Ms. Gillespie, as
tenants in common; (d) 164,437 shares of common stock held of record by The
Stanton Family Trust; (e) 45,000 shares and 13,333 shares of common stock
held of record by each of Mr. Stanton and Ms. Gillespie, respectively,
pursuant to Western Wireless' 1997 Executive Restricted Stock Plan; and (f)
13,300 shares of Aerial common stock held by Mr. Stanton and Ms. Gillespie
as tenants in common. Mr. Stanton and Ms. Gillespie share voting and
investment power with respect to the shares jointly owned by them, as well
as the shares held of record of PN Cellular, Stanton Communication
Corporation and The Stanton Family Trust.

(9) Takes into account 26,169 shares of common stock owned by Mr. Smith's minor
children, 3,126,969 shares of common stock held by Avance Capital, Avance
Capital II, Avance Capital III, all sole proprietorships, and 428,572
shares held in a grantor trust. Mr. Smith does not exercise voting or
investment power over, and disclaims beneficial ownership of, the shares
held in the grantor trust. Of the total shares held in Mr. Smith's name and
in the name of Avance, 395,175 are held in a blind trust. While Mr. Smith
is the beneficial owner of these shares, he exercises no control over these
shares. The blind trust is free to sell, exchange, hedge, or otherwise
dispose of these shares at any time. Mr. Smith has voting and investment
power with respect to the other shares.

(10) Takes into account 1,627,336 shares of common stock owned by Allen & Co.,
Inc., including 246,522 shares issuable upon exercise of outstanding
warrants held by Allen & Co. and 27,397 shares of common stock issuable
upon exercise of outstanding warrants held by Mr. Fields. Mr. Fields is a
Managing Director of Allen & Co. Of such amounts, Mr. Fields does not
exercise voting or investment power over, and disclaims beneficial
ownership of the 1,627,336 shares owned by Allen & Co.

(11) Takes into account 2,797,931 shares of common stock owned by Madison
Dearborn Capital Partners, L.P. and 26,789 shares of common stock held in
trust for Mr. Perry's children. Mr. Perry is a member of the L.P.
Committee, which manages Madison Dearborn Capital Partners, L.P. Mr. Perry
may therefore be deemed to share investment control with respect to the
shares of common stock owned by Madison Dearborn Capital Partners, L.P. and
may therefore be deemed to have beneficial ownership of shares of common
stock owned by Madison Dearborn Capital Partners, L.P.

(12) Takes into account 645,053 shares of common stock issuable upon exercise of
outstanding options held by Mr. Ross and 256,726 shares of common stock
held in trust for Mr. Ross' children. As a result, Mr. Ross may be deemed
to be the beneficial owner of such shares.

(13) Mr. O'Toole, who is a managing director of Goldman Sachs, disclaims
beneficial ownership of shares of common stock, which may be deemed to be
beneficially owned by GS Group, except to the extent of his pecuniary
interest therein.

(14) Takes into account the fact that Messrs. Fok, Snook and Sixt and Mrs. Chow
may each be deemed to be the owner of the 22,899,252 shares of common stock
owned by Hutchison Whampoa, as Mr. Fok is the Group Managing Director of
Hutchison, Mr. Snook is the Group Managing Director of an affiliate of

71
<PAGE> 72

Hutchison and a Director of a separate affiliate of Hutchison and each of
Mrs. Chow and Mr. Sixt are executive directors of Hutchison. Each of Mr.
Fok, Mr. Snook, Mrs. Chow and Mr. Sixt disclaim beneficial ownership of
shares held by Hutchison to the extent interests in Hutchison are held by
persons other than such individual.

(15) Includes 6,000 shares of Aerial common stock held by members of Mr. Snook's
immediate family.

(16) Kaj-Erik Relander, the director designated by Sonera, may be deemed to be
the owner of the shares of VoiceStream common stock owned by Sonera. Mr.
Relander disclaims beneficial ownership of such shares.

(17) In determining the aggregate number of shares owned by VoiceStream
executive officers and directors, shares of common stock and Aerial common
stock as to which such executive officers and directors share voting or
investment power have not been duplicated.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to a letter agreement dated October 7, 1998, we engaged Goldman
Sachs, which, with its affiliates, beneficially owns over five percent of our
outstanding securities, to act as our financial advisor in connection with the
Omnipoint merger. We selected Goldman Sachs as our financial advisor because it
is a nationally recognized investment banking firm that has substantial
experience in transactions similar to the Omnipoint transaction.

As our financial advisor, Goldman Sachs performed analyses and issued
fairness opinions with respect to both the transaction that resulted in
Omnipoint becoming our wholly owned subsidiary and the proposed transaction,
which, if completed, will result in Aerial becoming our wholly owned subsidiary.
In accordance with the letter agreement, we paid Goldman Sachs a transaction fee
equal to $14,000,000 upon consummation of the Omnipoint merger. In addition, we
reimbursed Goldman Sachs for its reasonable out-of-pocket expenses, including
attorney's fees, and agreed to indemnify Goldman Sachs against certain
liabilities, including certain liabilities under the federal securities laws.
Goldman Sachs' out-of-pocket expenses relating to the Omnipoint merger were
approximately $161,000. We have also agreed to pay Goldman Sachs a transaction
fee equal to $6,000,000 upon consummation of the Aerial merger. We have agreed
to reimburse Goldman Sachs for its reasonable out-of-pocket expenses, including
attorney's fees, relating to the Aerial merger, and to indemnify Goldman Sachs
against certain liabilities, including certain liabilities under the federal
securities laws. Goldman Sachs' estimated out-of-pocket expenses relating to the
Aerial merger are $111,000.

Investment funds affiliated with Goldman Sachs have a principal investment
in VoiceStream in the amount of 9,730,208 shares of our common stock and have
the right to designate a nominee for election to our board of directors. Terence
O'Toole, a managing director of Goldman Sachs, is one of our directors. In
addition, Goldman Sachs Credit Partners, L.P., an affiliate of Goldman Sachs,
underwrote $500 million of the $3.25 billion new credit facility we entered into
upon consummation of the Omnipoint merger.

Goldman Sachs also acted as co-manager in the private offering of $1.1
billion aggregate principal amount of our 10.375% senior notes due November 2009
and $720 million aggregate principal amount of our 11.875% senior discount notes
due November 2009 in November 1999. Goldman Sachs received a fee of
approximately $40 million in exchange for acting as a co-manager in this private
offering. Goldman Sachs provides a full range of financial, advisory and
brokerage services and, in the course of its normal trading activities, may from
time to time effect transactions and hold securities, including derivative
securities, of VoiceStream for its own accounts and for the account of
customers. As of March 21, 2000 and in addition to the principal investment
referred to above, Goldman Sachs had a long position of $250,000 in our 11.875%
senior discount notes; a long position of $250,000 and a short position of $1.5
million in our 10.375% senior notes; a long position in customer discretionary
accounts of 244,075 shares in our common stock; and a long position of 78,301
shares in our common stock in customer accounts or funds; and a long position of
$185.3 million in our bank loans. As of March 21, 2000, Goldman Sachs had a long
position in 7,900 shares of Aerial common stock.

72
<PAGE> 73

In June 1999, at the time we entered into the Omnipoint merger, Hutchison
Telecommunications and Hutchison Telecommunications PCS (USA) entered into
agreements with us providing for a $957 million investment. Hutchison
Telecommunications PCS (USA) and its affiliates beneficially own more than five
percent of our voting securities and are entitled to appoint four members of our
board of directors. In the $957 million investment, Hutchison Telecommunications
PCS (USA), agreed to purchase shares of our common stock for a purchase price of
$29 per share and shares of our 2.5% Convertible Junior Preferred Stock, for a
purchase price of $100,000 per share. The total purchase price of our common
stock and 2.5% Convertible Junior Preferred Stock was $957 million, consisting
of $807 million in cash and $150 million in shares of Omnipoint Series A
Preferred Stock purchased by Hutchison Telecommunications PCS (USA) from
Omnipoint under a securities purchase agreement. The Omnipoint Series A
Preferred Stock were exchanged at the closing of the Omnipoint merger for our
common stock at a conversion price of $29 per share. Hutchison PCS (USA) had the
right to determine the allocation between our common stock and our 2.5%
Convertible Junior Preferred Stock that it would purchase at the time of the
Omnipoint merger so long as it held at least 18.6% of the total number of
outstanding shares of our common stock immediately after the closing of the
Omnipoint reorganization. Our 2.5% Convertible Junior Preferred Stock is
convertible at any time by Hutchison Telecommunications PCS (USA) at $29 a
share. If the entire $957 million is used to purchase, or is converted into, our
common stock, at the completion of the Omnipoint merger, the total number of
shares of our common stock purchased as part of the $957 million investment will
be 33 million shares. Our 2.5% Convertible Junior Preferred Stock has no voting
rights, ranks senior to our common stock but junior to any other series or class
of our preferred stock which maybe issued, provides for a 2.5% cumulative
dividend payable at maturity (40 years from the date of issuance), and may not
be redeemed by us (other than a mandatory redemption from a holder whose
ownership of these shares may result in the loss of a license or franchise from
any governmental agency). The holders of our 2.5% Convertible Junior Preferred
Stock cannot require us to redeem these shares prior to maturity. Upon
conversion of our 2.5% Convertible Junior Preferred Stock any cumulative
dividend outstanding on the shares so converted will be canceled. Upon a change
of control of VoiceStream, we have the right to require our 2.5% Convertible
Junior Preferred Stock to be converted into our common stock.

73
<PAGE> 74

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(A) Financial Statements and Schedule

The financial statements and schedules as filed with this Form 10-K are set
forth in the Index to Consolidated Financial Statements and Schedules at page
F-1, which immediately precedes such documents.

(B) Reports on Form 8-K

A Form 8-K was filed on February 14, 2000 announcing VoiceStream's
investment of CAN$400 million in Microcell.

A Form 8-K was filed on March 3, 2000 announcing the close of the Omnipoint
merger, the Hutchison Telecommunications PCS (USA) investment in us of $807
million, the Sonera investment in us of $500 million, and the $3.25 billion
Senior Secured Credit Facility.

A Form 8-K was filed on March 3, 2000 announcing the close of our
investment of CAN$400 million in Microcell.

A Form 8-K was filed on March 22, 2000 for informational filing purposes
which included Aerial Communications, Inc., audited financial statements as of
and for the years ended December 31, 1999, 1998 and 1997.

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
2.1(1) Agreement and Plan of Reorganization by and among
VoiceStream Wireless Holding Corporation, Omnipoint
Corporation and VoiceStream Wireless Corporation, dated June
23, 1999.
2.1.1(1) First Amendment to Agreement and Plan of Reorganization by
and among VoiceStream Wireless Holding Corporation,
Omnipoint Corporation and VoiceStream Wireless Corporation,
dated as of December 30, 1999.
2.2(1) Agreement and Plan of Reorganization dated September 17,
1999 among VoiceStream Wireless Corporation, VoiceStream
Wireless Holding Corporation, VoiceStream Subsidiary III
Corporation, Aerial Communications, Inc. and Telephone and
Data Systems, Inc.
3.1(1) Amended and Restated Certificate of Incorporation.
3.2(2) Bylaws of VoiceStream Wireless Corporation.
10.1(3) Agreement and Plan of Distribution between Western Wireless
Corporation and VoiceStream Wireless Corporation, dated
April 9, 1999.
10.2(4) Waiver Agreement by and among Western Wireless Corporation,
Western PCS Corporation and certain of Western Wireless
Corporation's shareholders, dated November 30, 1994.
10.3(4) Western PCS Corporation Series A Preferred Stock Purchase
Agreement among Western Wireless Corporation, Western PCS
Corporation and the Purchasers listed therein, dated April
10, 1995.
10.4(4) PCS 1900 Project and Supply Agreement between Western PCS
Corporation and Northern Telecom Inc., dated June 30, 1995.
10.5(5) Amendment No. 1 to PCS 1900 Supply Agreement between Western
PCS Corporation and Northern Telecom Inc., dated July 25,
1996.
10.6(5) Amendment No. 2 to PCS 1900 Supply Agreement between Western
PCS Corporation and Northern Telecom Inc., dated July 25,
1996.
10.7(6) Amendment No. 3 to PCS Supply Agreement between Western PCS
Corporation and Northern Telecom Inc., dated October 14,
1996.
10.8(7) Amendment Number 4 to PCS 1900 Project and Supply Agreement
by and between Western PCS Corporation and Northern Telecom
Inc., dated March 26, 1998.
</TABLE>

74
<PAGE> 75

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.9(8) Amendment Number 5 to PCS 1900 Project and Supply Agreement
between VoiceStream Wireless Corporation and Northern
Telecom Inc., dated September 17, 1998.
10.10(9) Amendment No. 6 to PCS 1900 Project and Supply Agreement by
and between VoiceStream Wireless Corporation and Northern
Telecom Inc.
10.11(10) Amendment No. 7 to PCS 1900 Project and Supply Agreement by
and between VoiceStream Wireless Corporation and Northern
Telecom Inc., dated May 14, 1999.
10.12(4) PCS Block "C" Organization and Financing Agreement by and
among Western PCS BTA I Corporation, Western Wireless
Corporation, Cook Inlet PV/SS PCS Partners, L.P., Cook Inlet
Telecommunications, Inc., SSPCS Corporation and Providence
Media Partners L.P., dated as of November 5, 1995.
10.13(4) Limited Partnership Agreement by and between Cook Inlet
PV/SS PCS Partners, L.P. and Western PCS BTA I Corporation,
dated as of November 5, 1995.
10.14(4) First Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS, L.P.
Limited Partnership Agreement by and among Western PCS BTA I
Corporation, Western Wireless Corporation, Cook Inlet PV/SS
PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation and Providence Media Partners L.P., dated
as of April 8, 1996.
10.15(5) Second Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS, L.P.
Limited Partnership Agreement by and among Western PCS BTA I
Corporation, Western Wireless Corporation, Cook Inlet PV/SS
PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation and Providence Media Partners L.P., dated
as of June 27, 1996.
10.16(5) Third Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS, L.P.
Limited Partnership Agreement and First Amendment to
Technical Services Agreement by and among Western PCS BTA I
Corporation, Western Wireless Corporation, Cook Inlet PV/SS
PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation, Providence Media Partners L.P. and Cook
Inlet Western Wireless PV/SS PCS, L.P., dated July 30, 1996.
10.17(4) Asset Purchase Agreement between Western PCS III License
Corporation as Buyer and GTE Mobilnet Incorporated as
Seller, dated January 16, 1996.
10.18(4) Waiver Agreement by and among Western Wireless Corporation,
Western PCS Corporation and certain of Western Wireless
Corporation's shareholders, dated February 15, 1996.
10.19(11) Software License Maintenance and Subscriber Billing Services
Agreement, dated June 1997.
10.20(11) First Amendment to Software License, Maintenance and
Subscriber Billing Services Agreement dated December 1997,
between CSC Intelicom, Inc., and Western Wireless
Corporation.
10.21(12) Iowa Wireless Services, L.P. Limited Partnership Agreement,
dated as of September 30, 1997, by and between INS Wireless,
Inc., as General Partner, and Western PCS I Iowa
Corporation, as Limited Partnership.
10.22(12) Agreement to Form Limited Partnership dated September 30,
1997, by and among Western PCS Iowa Corporation, a Delaware
corporation, INS Wireless, Inc., an Iowa corporation,
Western PCS I Corporation, a Delaware corporation, and Iowa
Network Services, Inc., an Iowa corporation.
10.23(12) Purchase Agreement by and among Western PCS Corporation,
Western Wireless Corporation, Hutchison Telecommunications
Limited and Hutchison Telecommunications PCS (USA) Limited
dated October 14, 1997.
10.24(11) Letter Agreement dated December 16, 1997, between Western
Wireless Corporation and Intelicom Services, Inc. to provide
products and services pursuant to the Software License
Maintenance and Subscriber Billing Services Agreements and
First Amendment thereto.
</TABLE>

75
<PAGE> 76

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.25(12) Services Agreement by and between Western Wireless
Corporation and Western PCS Corporation.
10.26(12) Shareholders Agreement by and among Western Wireless
Corporation, Hutchison Telecommunications PCS (USA) Limited
and Western PCS Corporation, dated February 17, 1998.
10.27(3) Tax Sharing Agreement by and between Western Wireless
Corporation and Western PCS Corporation, dated February 17,
1998. (Contained as an exhibit to the Agreement and Plan of
Distribution).
10.28(3) First Amendment to Tax Sharing Agreement by and between
Western Wireless Corporation and VoiceStream Wireless
Corporation, dated May 3, 1999.
10.29(7) Supply Contract by and between Western PCS Corporation and
Nokia Telecommunications Inc., dated March 9, 1998.
10.30(7) Purchase and Sale Agreement by and between Nokia Mobile
Phones, Inc. and Western PCS Corporation, dated March 9,
1998.
10.31(8) Exchange Rights and Grant Agreement by and among Western PCS
BTA I Corporation, Western Wireless Corporation, Cook Inlet
Telecommunications, Inc. and VoiceStream Wireless
Corporation, dated December 17, 1998.
10.32(8) Exchange Rights and Grant Agreement by and among Western PCS
BTA I Corporation, Western Wireless Corporation, SSPCS
Corporation and VoiceStream Wireless Corporation, dated
January 19, 1999.
10.33(3) Cook Inlet/VoiceStream PCS LLC Limited Liability Company
Agreement by and between Cook Inlet GSM Company and Western
PCS BTA I Corporation, dated February 11, 1999.
10.34(3) Registration Rights Agreement by and among VoiceStream
Wireless Corporation, Hellman & Friedman Capital Partners
II, L.P., H&F Orchard Partners, L.P., H&F International
Partners, L.P., John W. Stanton, Theresa E. Gillespie, PN
Cellular, Inc., Stanton Family Trust, Stanton Communications
Corporation, GS Capital Partners, L.P., The Goldman Sachs
Group, L.P., Bridge Street Fund 1992, L.P., Stone Street
Fund 1992, L.P., and Providence Media Partners L.P., dated
May 3, 1999.
10.35(3) Shareholders Agreement by and among VoiceStream Wireless
Corporation, Western Wireless Corporation, Hutchison
Telecommunications Holdings (USA) Limited and Hutchison
Telecommunications PCS (USA) Limited, dated May 3, 1999.
10.36(3) First Amendment to Shareholders Agreement by and among
VoiceStream Wireless Corporation, Western Wireless
Corporation, Hutchison Telecommunications Holdings (USA)
Limited and Hutchison Telecommunications PCS (USA) Limited
dated.
10.37(9) Indenture by and between VoiceStream Wireless Corporation
and Harris Trust Company, dated May 14, 1999, relating to
12% Series A Senior Debentures due 2011 and 12% Senior
Debentures due 2011.
10.38(13) Purchase Agreement, dated as of June 23, 1999, between
Omnipoint Corporation and Cook Inlet/VS GSM II PCS, LLC.
10.39(13) Purchase Agreement, dated as of June 23, 1999, between
Omnipoint Corporation and Cook Inlet/VS GSM III PCS, LLC.
10.40(13) Stock Subscription Agreement, dated as of June 23, 1999, by
and among VoiceStream Wireless Corporation, Hutchison
Telecommunications Limited and Hutchison Telecommunications
PCS (USA) Limited.
10.41(13) Securities Purchase Agreement, dated as of June 23, 1999, by
and among VoiceStream Wireless Corporation, Hutchison
Communications PCS (USA) Limited and Omnipoint Corporation.
10.42(4) Employment Agreement by and between Robert R. Stapleton and
Western Wireless Corporation, dated March 12, 1996.
</TABLE>

76
<PAGE> 77

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.43(4) Employment Agreement by and between Cregg B. Baumbaugh and
Western Wireless Corporation, dated March 12, 1996.
10.44(14) Employment Agreement by and between Timothy Wong and Western
Wireless Corporation, dated February 10, 1998.
10.45(14) Employment Agreement by and between Robert Dotson and
Western Wireless Corporation, dated February 10, 1998.
10.46(3) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Robert R.
Stapleton, dated May 3, 1999.
10.47(3) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Cregg B.
Baumbaugh, dated May 3, 1999.
10.48(3) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Timothy Wong,
dated May 3, 1999.
10.49(3) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Robert Dotson,
dated May 3, 1999.
10.50(15) Employment Agreement, dated as of January 1, 1999, by and
between Omnipoint and Douglas G. Smith.
10.51(16) Employment Agreement, effective October 1, 1995, by and
between Omnipoint, Omnipoint Communications Inc. and George
F. Schmitt.
10.52(16) Promissory Note, dated October 1, 1995, by George F.
Schmitt.
10.53(16) Stock Restriction Agreement, dated October 1, 1995, by and
between Omnipoint and George F. Schmitt.
10.54(17) First Amendment to Stock Restriction Agreement, dated as of
June 21, 1999, by and between Omnipoint Communications, Inc.
and George F. Schmitt.
10.55(18) Employment Agreement, dated November 3, 1996, by and between
Omnipoint and Kjell S. Andersson.
10.56(18) Amendment to Employment Agreement dated as of February 24,
1997, between Omnipoint and Kjell S. Andersson.
10.57(18) Promissory Note, dated February 24, 1997, by Kjell S.
Andersson.
10.58(18) Stock Restriction Agreement, dated February 24, 1997, by and
between Omnipoint and Kjell S. Andersson.
10.59(15) Employment Agreement, dated as of April 23, 1999, by and
between Omnipoint and Harry Plonskier.
10.60(16) Amended and Restated Registration Rights Agreement, dated
June 29, 1995, by and among Omnipoint and the parties named
therein.
10.61(16) OEM Supply Agreement for Omnipoint PCS (Personal
Communication Systems) Products, dated September 22, 1994,
by and between Omnipoint and Northern Telecom Inc.
10.62(16) Manufacturing License and Escrow Agreement for Personal
Communication Service Products, dated February 28, 1995, by
and between Omnipoint and Northern Telecom Inc.
10.63(16) Collaborative Development Agreement, dated March 1, 1995, by
and between Omnipoint and Northern Telecom Inc.
10.64(16) Supply Agreement, dated September 22, 1994, by and between
Omnipoint Communications Inc. and Northern Telecom Inc.
10.65(16) Amendment No. 1 to Supply Agreement dated July 21, 1995, by
and between Omnipoint Communications Inc. and Northern
Telecom Inc.
</TABLE>

77
<PAGE> 78

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.66(16) Letter Agreement, dated January 24, 1996, by and between
Omnipoint and Ericsson Inc.
10.67(19) Acquisition Agreement for Ericsson CMS 40 Personal
Communications Systems (PCS) Infrastructure Equipment, dated
as of April 16, 1996, by and between Ericsson Inc. and
Omnipoint Communications.
10.68(19) Acquisition Supply and License Agreement for Omnipoint
Personal Communications Systems (PCS) Infrastructure
Equipment, dated as of April 16, 1996, by and between
Ericsson Inc. and Omnipoint.
10.69(19) Agreement for Purchase and Sale of Ericsson Inc. Masko
Terminal Units, dated as of April 16, 1996, by and between
Ericsson, Inc. and Omnipoint Communications Inc.
10.70(20) Purchase Agreement by and among Omnipoint Corporation,
Donaldson, Lufkin & Jenrette Securities Corporation,
BancAmerica Robertson Stephens, Bear, Stearns & Co., Inc.
and Smith Barney Inc., dated May 1, 1998.
10.71(20) Deposit Agreement by and among Omnipoint Corporation, Marine
Midland Bank, and the Holders from time to time of the
Depositary Shares, dated May 6, 1998.
10.72(20) Deposit Account Agreement by and between Omnipoint
Corporation and The First National Bank of Maryland, dated
May 6, 1998.
10.73(21) Note Purchase Agreement by and among Omnipoint Corporation,
IBJ Schroder Bank & Trust Company, as paying agent, and
certain initial purchasers named therein, dated December 21,
1998.
10.74(2) Securities Purchase Agreement by and among VoiceStream
Wireless Corporation, Hutchison Telecommunications PCS (USA)
Limited and Omnipoint Corporation, dated as of June 23,
1999.
10.75(22) PCS Infrastructure Supply Contract, dated as of March 1,
1996, between Aerial and Nokia Telecommunications, Inc.
10.76(23) Tax Settlement Agreement dated March 12, 1999, by and
between Aerial, Aerial Operating Company, Inc. and Telephone
and Data Systems, Inc.
10.77(24) Stockholder Agreement dated as of September 17, 1999, by and
between Telephone and Data Systems, Inc. and stockholders of
Aerial Communications, Inc., and VoiceStream Wireless
Corporation, and VoiceStream Wireless Holding Corporation.
10.78(24) Indemnity Agreement, dated as of September 17, 1999, among
VoiceStream Wireless Corporation, VoiceStream Wireless
Holding Corporation, Aerial Communications, Inc., Aerial
Operating Company, Inc., and Telephone and Data Systems,
Inc.
10.79(24) Debt/Equity Replacement Agreement dated as of September 17,
1999, made by and among Telephone and Data Systems, Inc.,
Aerial Communications, Inc., Aerial Operating Company, Inc.,
VoiceStream Wireless Corporation, and VoiceStream Wireless
Holding Corporation.
10.80(24) Parent Stockholder Agreement dated as of September 17, 1999,
by and among Aerial Communications, Inc., Telephone and Data
Systems, Inc., VoiceStream Wireless Corporation, VoiceStream
Wireless Holding Corporation and the individuals and
entities set forth on Schedule I thereto.
10.81.1(15) Consent and Amendment dated as of November 12, 1999, by and
among Aerial Communications, Inc., Telephone and Data
Systems, Inc., VoiceStream Wireless Corporation, VoiceStream
Wireless Holding Corporation, and Hellman & Friedman Capital
Partners II, H&F Orchard Partners, L.P., H&F International
Partners, L.P., John W. Stanton, Theresa Gillespie, PN
Cellular, Inc., Stanton Family Trust, Stanton Communications
Corporation, GS Capital Partners, L.P., The Goldman Sachs
Group, Inc., Bridge Street Fund 1992, L.P., Stone Street
Fund 1992, L.P., Providence Media Partners, L.P., Hutchison
Telecommunications Holdings (USA) Limited, and Hutchison
Telecommunications PCS (USA) Limited.
</TABLE>

78
<PAGE> 79

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.82(24) Settlement Agreement and Release, entered into as of
September 17, 1999 by and among Sonera Ltd., Sonera
Corporation U.S., Telephone and Data Systems, Inc., Aerial
Communications, Inc., and Aerial Operating Company, Inc.
10.83(25) Stock Subscription Agreement, dated as of February 11, 2000,
by and among VoiceStream Wireless Corporation and Microcell
Telecommunications Inc.
10.84(25) Shareholders Agreement of Microcell Telecommunications,
dated as of February 11, 2000 by and between VoiceStream
Wireless Corporation and Telesystem Enterprises (T.E.L.)
Ltd.
10.85 Credit Agreement dated as of February 25, 2000, by and among
VoiceStream PCS Holdings L.L.C., Omnipoint Finance, L.L.C.,
Chase Securities Inc., Bank of America Securities L.L.C., TD
Securities (USA) Inc., Goldman Sachs Credit Partners L.P.,
Barclays Capital and SG Cowen, Toronto Dominion (Texas) Inc.
23.1 Consent of Arthur Andersen LLP (independent public
accountants for VoiceStream Wireless Corporation).
27.1 Financial Data Schedule.
</TABLE>

- ---------------
(1) Incorporated by reference to the VoiceStream Wireless Holding Corporation
Registration Statement on Form S-4 (Commission File No. 333-89735), filed
January 24, 2000.

(2) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation Registration Statement on Form S-4 (Commission
File No. 333-89735), filed October 27, 1999.

(3) Incorporated by reference to the exhibit filed with VoiceStream Wireless
Corporation Form 10/A, filed with the SEC on April 13, 1999.

(4) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Registration Statement on Form S-1 (Commission File No.
333-2432), filed with the SEC on March 15, 1996.

(5) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Registration Statement on Form S-4 (Commission File No.
333-14859), filed with the SEC on October 25, 1996.

(6) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Annual Report on Form 10-K for the year ended December 31, 1996
(Commission File No. 0-28160), filed with the SEC on March 31, 1997.

(7) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Form 10-Q/A for the quarter ended June 30, 1998 (Commission
File No. 0-28160), filed with the SEC on August 17, 1998.

(8) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation Form 10 (Commission File No. 0-25441), filed with the
SEC on February 24, 1999.

(9) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation Form 8-K, filed with the SEC on May 27, 1999.

(10) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation Form 10-Q, filed with the SEC on August 9, 1999.

(11) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Annual Report on Form 10-K for the year ended December 31, 1997
(Commission File No. 0-28160), filed with the SEC on March 27, 1998.

(12) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Form 10-Q for the quarter ended September 30, 1997 (Commission
File No. 0-28160), filed with the SEC on November 6, 1997.

(13) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation form 8-K, filed with the SEC on July 7, 1999.

(14) Incorporated by reference to the Western Wireless Corporation Form 10-Q for
the quarter ended March 31, 1998 (Commission File No. 0-28160), filed with
the SEC on May, 11, 1998.

79
<PAGE> 80

(15) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation Registration Statement on Form S-4 (Commission
File No. 333-89735), filed December 3, 1999.

(16) Incorporated herein by reference to Omnipoint's Registration Statement on
Form S-1 (Commission File No. 33-98360).

(17) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation Registration Statement on Form S-4 (Commission
File No. 333-89735), filed December 29, 1999.

(18) Incorporated herein by reference to Omnipoint's Annual Report on Form 10-K
for the year ended December 31, 1996.

(19) Incorporated herein by reference to Omnipoint's Current Report on form 8-K,
filed May 3, 1996. Portions of this Exhibit were omitted and filed
separately with the Secretary of the Commission pursuant to Omnipoint's
application requesting confidential treatment under Rule 24b-2 of the
Exchange Act of 1934, filed with the SEC on May 3, 1996.

(20) Incorporated herein by reference to Omnipoint's Quarterly Report on Form
10-Q, filed with the SEC on May 15, 1998.

(21) Incorporated herein by reference to Omnipoint's Current Report on Form 8-K,
filed with the SEC on December 29, 1998.

(22) Incorporated by reference to Exhibit 10.13 to Aerial's Amendment No. 1 to
Form S-1 (Commission File No. 333-1514), filed with the SEC on March 29,
1996.

(23) Incorporated by reference to Exhibit 10.22 to Aerial Annual Report on Form
10-K for the year ended December 31, 1998 (Commission File No. 0-28262),
filed with the SEC on March 31, 1996.

(24) Incorporated herein by reference to the Telephone and Data Systems, Inc.
Form 8-K, filed with the SEC on September 17, 1999.

(25) Incorporated herein by reference to VoiceStream's Form 8-K, filed with the
SEC on March 3, 2000.

80
<PAGE> 81

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

VOICESTREAM WIRELESS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................... F-2
Consolidated Balance Sheets as of December 31, 1999 and
1998...................................................... F-3
Consolidated Statements of Operations for the years ended
December 31, 1999, 1998 and 1997.......................... F-4
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1999, 1998 and 1997.............. F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997.......................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 82

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

VoiceStream Wireless Corporation:

We have audited the accompanying consolidated balance sheets of VoiceStream
Wireless Corporation and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of VoiceStream Wireless
Corporation and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Seattle, Washington
February 28, 2000

F-2
<PAGE> 83

VOICESTREAM WIRELESS CORPORATION

CONSOLIDATED BALANCE SHEETS
(dollars in thousands)

ASSETS

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------
1999 1998
----------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 235,433 $ 8,057
Accounts receivable, net of allowance for doubtful
accounts of $17,482 and $5,715, respectively........... 97,739 24,766
Inventory................................................. 63,072 20,182
Prepaid expenses and other current assets................. 14,332 6,393
----------- ----------
Total current assets.............................. 410,576 59,398
Property and equipment, net of accumulated depreciation of
$284,670 and $151,408, respectively....................... 931,792 619,280
Licensing costs and other intangible assets, net of
accumulated amortization of $21,815 and $13,799,
respectively.............................................. 450,261 312,040
Investments in and advances to unconsolidated affiliates.... 409,721 60,938
Other assets................................................ 19,563
----------- ----------
$ 2,221,913 $1,051,656
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 22,878 $ 16,172
Accrued liabilities....................................... 116,031 45,566
Construction accounts payable............................. 61,398 58,217
Payable to Western Wireless............................... 2,778 5,071
----------- ----------
Total current liabilities......................... 203,085 125,026
Long-term debt.............................................. 2,011,451 540,000
Commitments and contingencies (Note 8)
Shareholders' equity:
Preferred stock, no par value, 50,000,000 shares
authorized; no shares issued and outstanding
Common stock, no par value, and paid-in capital;
300,000,000 shares authorized, 96,305,360 and
95,541,623 shares issued and outstanding,
respectively........................................... 1,095,539 994,789
Deferred compensation..................................... (25,264)
Deficit................................................... (1,062,898) (608,159)
----------- ----------
Total shareholders' equity........................ 7,377 386,630
----------- ----------
$ 2,221,913 $1,051,656
=========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.
F-3
<PAGE> 84

VOICESTREAM WIRELESS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------
1999 1998 1997
----------- ----------- ---------
<S> <C> <C> <C>
Revenues:
Subscriber revenues................................ $ 366,802 $ 123,966 $ 52,360
Roamer revenues.................................... 9,295 3,506 227
Equipment revenues................................. 78,025 40,490 25,143
Other revenues..................................... 21,407
----------- ----------- ---------
Total revenues............................. 475,529 167,962 77,730
----------- ----------- ---------
Operating expenses:
Cost of service.................................... 114,007 50,978 43,183
Cost of equipment sales............................ 136,584 77,071 53,469
General and administrative......................... 134,812 75,343 51,678
Sales and marketing................................ 211,399 85,447 59,466
Depreciation and amortization...................... 140,812 83,767 66,875
Stock based compensation........................... 60,690
----------- ----------- ---------
Total operating expenses................... 798,304 372,606 274,671
----------- ----------- ---------
Operating loss....................................... (322,775) (204,644) (196,941)
----------- ----------- ---------
Other income (expense):
Interest and financing expense, net................ (103,461) (34,118) (57,558)
Equity in net losses of unconsolidated
affiliates...................................... (50,945) (24,120) (9,327)
Interest income and other, net..................... 22,442 8,616 11
----------- ----------- ---------
Total other expense, net................... (131,964) (49,622) (66,874)
----------- ----------- ---------
Net loss........................................ $ (454,739) $ (254,266) $(263,815)
=========== =========== =========
Basic and diluted loss per common share.............. $ (4.75) $ (2.75)
=========== ===========
Weighted average common shares used in computing
basic and diluted loss per common share............ 95,708,000 92,387,000
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-4
<PAGE> 85

VOICESTREAM WIRELESS CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(dollars in thousands)

<TABLE>
<CAPTION>
PAR VALUE
COMMON AND PAID-IN DEFERRED
STOCK CAPITAL COMPENSATION DEFICIT TOTAL
---------- ------------------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1997...... 76,531,259 $ 231,731 $ (90,078) $ 141,653
Additional capital
contribution............. 518,269 518,269
Net loss.................... (263,815) (263,815)
---------- ---------- -------- ----------- ---------
Balance, December 31, 1997.... 76,531,259 750,000 (353,893) 396,107
Shares issued:
Private placement........ 19,010,364 244,789 244,789
Net loss.................... (254,266) (254,266)
---------- ---------- -------- ----------- ---------
Balance, December 31, 1998.... 95,541,623 994,789 (608,159) 386,630
Shares issued for stock
compensation plans....... 763,737 3,643 3,643
Return of capital
contribution............. (20,000) (20,000)
Deferred compensation....... 86,543 $(85,954) 589
Vesting of deferred
compensation............. 60,690 60,690
Exchange rights............. 30,564 30,564
Net loss.................... (454,739) (454,739)
---------- ---------- -------- ----------- ---------
Balance, December 31, 1999.... 96,305,360 $1,095,539 $(25,264) $(1,062,898) $ 7,377
========== ========== ======== =========== =========
</TABLE>

See accompanying notes to consolidated financial statements.
F-5
<PAGE> 86

VOICESTREAM WIRELESS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------
1999 1998 1997
----------- --------- ---------
<S> <C> <C> <C>
Operating activities:
Net loss............................................. $ (454,739) $(254,266) $(263,815)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization..................... 140,812 83,767 66,875
Interest accretion on senior discount notes....... 3,925
Equity in net loss of unconsolidated affiliates... 50,945 24,120 9,327
Stock based compensation.......................... 60,690
Allowance for bad debt............................ 11,767 3,675 1,293
Amortization of debt issuance cost................ 1,528 571 1,122
Changes in operating assets and liabilities, net
of effects from consolidating acquired
interests:
Accounts receivable............................. (84,740) (10,066) (14,262)
Inventory....................................... (42,890) 2,534 (2,581)
Prepaid expenses and other current assets....... (6,296) 2,124 (4,957)
Accounts payable................................ 6,706 13,669 (8,068)
Accrued liabilities............................. 70,465 20,941 16,937
----------- --------- ---------
Net cash used in operating activities........ (241,827) (112,931) (198,129)
----------- --------- ---------
Investing activities:
Purchase of property and equipment................... (401,621) (206,503) (264,432)
Additions to licensing costs and other intangible
assets............................................ (4,495) (12,871) (71,634)
Acquisition of wireless properties, net of cash
acquired.......................................... (152,517) (4,645)
Investments in and advances to unconsolidated
affiliates........................................ (369,461) (34,259) (37,240)
Refund of deposit held by FCC........................ 7,749
Other................................................ (19,563)
----------- --------- ---------
Net cash used in investing activities........ (947,657) (253,633) (370,202)
----------- --------- ---------
Financing activities:
Proceeds from issuance of common stock, net.......... 3,643 244,789
Additions to long-term debt.......................... 2,622,526 540,000 157,000
Repayment of long-term debt.......................... (1,155,000) (300,000)
(Repayment of) advances from Western Wireless, net... 6,291 (105,446) 406,254
Return of capital.................................... (20,000)
Deferred financing costs, net........................ (40,600) (5,059)
----------- --------- ---------
Net cash provided by financing activities.... 1,416,860 374,284 563,254
----------- --------- ---------
Change in cash and cash equivalents.................... 227,376 7,720 (5,077)
Cash and cash equivalents, beginning of year........... 8,057 337 5,414
----------- --------- ---------
Cash and cash equivalents, end of year................. $ 235,433 $ 8,057 $ 337
=========== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.
F-6
<PAGE> 87

VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION:

VoiceStream Wireless Corporation ("VoiceStream") provides wireless
communications services in urban markets in the United States through the
ownership and operation of PCS licenses. VoiceStream has commenced commercial
operations in thirteen markets under the VoiceStream brand name using the Global
System for Mobile Communications ("GSM") technology. Additionally, VoiceStream
PCS services are offered in four additional markets in conjunction with joint
ventures.

In June 1999 VoiceStream formed a wholly owned subsidiary ("VoiceStream
Delaware") as a Delaware corporation to act as the parent company for business
combinations involving VoiceStream. On February 25, 2000, as a result of a
reorganization of VoiceStream, VoiceStream Delaware, as a holding company,
became the parent of Omnipoint Corporation and of VoiceStream.

Prior to May 3, 1999, VoiceStream was an 80.1% owned subsidiary of Western
Wireless Corporation. The remaining 19.9% was owned by Hutchison
Telecommunications PCS (USA) Limited, a subsidiary of Hutchison Whampoa Limited,
a Hong Kong company. On May 3, 1999, VoiceStream was formally separated in a
spin-off transaction from Western Wireless' other operations.

On February 24, 2000, the stockholders of VoiceStream and Aerial
Communications, Inc. approved VoiceStream's acquisition by merger of Aerial. The
closing of the Aerial merger is contingent upon, among other things, FCC
approval and is expected to be completed early in the second quarter of this
year.

VoiceStream expects to incur significant operating losses and to generate
negative cash flows from operating activities during the next several years
while it expands its PCS systems and customer base. These losses are expected to
be financed through borrowings or the issuance of new debt or additional equity.
There can be no assurance that such funds will be available to VoiceStream on
acceptable or favorable terms.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of consolidation:

The consolidated financial statements include the accounts of VoiceStream
and its wholly owned subsidiaries. All affiliate investments in which
VoiceStream has between a 20% and 50% interest are accounted for using the
equity method. All significant intercompany accounts and transactions have been
eliminated.

Cash and cash equivalents:

Cash and cash equivalents generally consist of cash and marketable
securities that have original maturity dates not exceeding three months. Such
investments are stated at cost, which approximates fair value.

Revenue recognition:

Service revenues based on customer usage are recognized at the time the
service is provided. Access and special feature service revenues are recognized
when earned. Sales of equipment, primarily handsets, are recognized when the
goods are delivered to the customer.

Inventory:

Inventory consists primarily of handsets and accessories. Inventory is
stated at the lower of cost or market, determined on a first-in, first-out
basis.

F-7
<PAGE> 88
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Property and equipment and depreciation:

Property and equipment are stated at cost. Depreciation commences once the
assets have been placed in service and is computed using the straight-line
method over the estimated useful lives of the assets which primarily range from
three to twenty years.

Licensing costs and other intangible assets and amortization:

Licensing costs primarily represent costs incurred to acquire Federal
Communication Commission's ("FCC") PCS licenses, including PCS licenses
principally obtained through acquisitions.

Amortization of licenses begins with the commencement of service to
customers and is computed using the straight-line method over 40 years.

Other intangible assets consist primarily of deferred financing costs and
certain lease rights. Deferred financing costs are amortized using the effective
interest method over the terms of the respective loans. Lease rights are being
amortized over the remaining life of the lease.

In accordance with Statement of Financial Accounting Standards ("SFAS") No.
121, "Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed of," VoiceStream periodically evaluates whether there has
been any indication of impairment of its long-lived assets, including its
licensing costs and other intangibles. As of December 31, 1999, there has been
no indication of such impairment.

Capitalized Interest:

VoiceStream PCS licenses and wireless communications systems represent
qualified assets pursuant to SFAS No. 34, "Capitalization of Interest Cost."
VoiceStream capitalized interest of $2.5 million in 1999, $1.8 million in 1998
and $4.0 million in 1997.

Income taxes:

Deferred tax assets and liabilities are recognized based on temporary
differences between the financial statements and the tax bases of assets and
liabilities using enacted tax rates expected to be in effect when they are
realized. A valuation allowance against deferred tax assets is recorded, if,
based upon weighted available evidence, it is more likely than not that some or
all of the deferred tax assets will not be realized. For income tax purposes,
VoiceStream's results have historically been included in the consolidated
federal income tax return of Western Wireless for the periods ended May 3, 1999,
December 31, 1998 and December 31, 1997. For these periods, the
provision/benefit for income taxes has been computed as if VoiceStream filed a
separate federal income tax return using the tax rate applicable to Western
Wireless on a consolidated basis. After the Spin-off, VoiceStream's results of
operations are no longer included in Western Wireless' consolidated tax return.

Loss per common share:

Loss per common share is calculated using the weighted average number of
shares of outstanding common stock during the period. The number of shares
outstanding has been calculated based on the requirements of SFAS No. 128,
"Earnings Per Share." Due to the net loss incurred during the periods presented,
all options outstanding are anti-dilutive, thus basic and diluted loss per share
are equal.

F-8
<PAGE> 89
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Stock-based compensation plans:

VoiceStream accounts for its stock-based compensation plans under APB
Opinion No. 25, "Accounting for Stock Issued to Employees." See Note 10 for
discussion of the effect on net loss and other related disclosures had
VoiceStream accounted for these plans under SFAS No. 123, "Accounting for
Stock-Based Compensation."

Fair value of financial instruments:

As required under the Credit Facility (as defined in Note 7), VoiceStream
enters into interest rate swap and cap agreements to manage interest rate
exposure pertaining to long-term debt. VoiceStream has only limited involvement
with these financial instruments, and does not use them for trading purposes. In
addition, VoiceStream has historically held derivative financial instruments to
maturity and has never recognized a material gain or loss on disposal. It is
VoiceStream's intent to hold existing derivatives to maturity. Interest rate
swaps are accounted for on an accrual basis, the income or expense of which is
included in interest expense. Premiums paid to purchase interest rate cap
agreements are classified as an asset and amortized to interest expense over the
terms of the agreements. These transactions do not subject VoiceStream to risk
of loss because gains and losses on these contracts are offset against losses
and gains on the underlying liabilities. No collateral is held in relation to
financial instruments.

The carrying value of short-term financial instruments approximates fair
value due to the short maturity of these instruments. The fair value of
long-term debt is based on incremental borrowing rates currently available on
loans with similar term and maturities. VoiceStream does not hold or issue any
financial instruments for trading purposes.

Supplemental cash flow disclosure:

Cash paid for interest (net of amounts capitalized) was $77.5 million in
1999, $26.8 million in 1998 and $17.8 million in 1997.

Non-cash investing and financing activities were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER, 31
------------------------------
1999 1998 1997
(dollars in thousands) ------- ------- --------
<S> <C> <C> <C>
Conversion of payable to Western Wireless to equity
(See Note 14)...................................... $518,269
Exchange rights...................................... $30,564
</TABLE>

Estimates used in preparation of financial statements:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

Reclassifications:

Certain amounts in prior year's financial statements have been reclassified
to conform to the 1999 presentation.

F-9
<PAGE> 90
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Recently issued accounting standards:

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." It requires the
recognition of all derivatives as either assets or liabilities and the
measurement of those instruments at fair value. The required adoption period is
effective for the issuance of VoiceStream's December 31, 2000, quarterly
financial statements. The implementation of SFAS No. 133 is not expected to have
a material impact on VoiceStream's financial position or results of operations.
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133", issued
in August 1999, postpones for one year the mandatory effective date for adoption
of SFAS No. 133 to January 1, 2001.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin Number 101, "Revenue Recognition in Financial
Statements." This bulletin will become effective for the issuance of
VoiceStream's March 31, 2000, quarterly financial statements. This bulletin
establishes more clearly defined revenue recognition criteria than previously
existing accounting pronouncements, and specifically addresses revenue
recognition requirements for non-refundable fees, such as activation fees
collected by a company upon entering into an arrangement with a customer, such
as an arrangement to provide telecommunication services. VoiceStream is
currently evaluating the full impact of this bulletin to determine the impact on
its financial position and results of operations.

3. PROPERTY AND EQUIPMENT:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998
(dollars in thousands) --------- ---------
<S> <C> <C>
Land, buildings and improvements............................ $ 24,590 $ 15,549
Wireless communications systems............................. 849,148 459,710
Furniture and equipment..................................... 109,576 57,840
--------- ---------
983,314 533,099
Less accumulated depreciation............................... (284,670) (151,408)
--------- ---------
698,644 381,691
Construction in progress.................................... 233,148 237,589
--------- ---------
$ 931,792 $ 619,280
========= =========
</TABLE>

Depreciation expense was $133.9 million in 1999, $77.6 million in 1998 and
$61.2 million in 1997.

4. LICENSING COSTS AND OTHER INTANGIBLE ASSETS:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
(dollars in thousands) -------- --------
<S> <C> <C>
License costs............................................... $323,272 $320,834
Lease rights................................................ 101,376
Other intangible assets..................................... 47,428 5,005
-------- --------
472,076 325,839
Accumulated amortization.................................... (21,815) (13,799)
-------- --------
$450,261 $312,040
======== ========
</TABLE>

Amortization expense was $6.9 million in 1999, $6.2 million in 1998 and
$5.7 million in 1997.

F-10
<PAGE> 91
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES:

A subsidiary of VoiceStream holds a 49.9% interest in Cook Inlet
VoiceStream PV/SS PCS, LP ("Cook Inlet PCS"). VoiceStream funded the operations
of Cook Inlet PCS during 1999 and 1998 through loans evidenced by promissory
notes which are due 180 days after the date of issuance. The weighted average
interest rate was 15% for the years ended December 31, 1999, 1998 and 1997. All
promissory notes that have come due were replaced with new promissory notes. The
total investment in Cook Inlet PCS, including advances under such promissory
notes, was $124.6 million and $47.9 million at December 31, 1999 and 1998,
respectively.

In January 1999, certain partners of Cook Inlet PCS, including VoiceStream,
formed another joint venture, Cook Inlet/VoiceStream PCS LLC ("CIVS") (49.9% of
which is owned by a subsidiary of VoiceStream), to participate in the FCC's
reauction of C and F Block licenses in 1999. VoiceStream contributed a total of
$21.1 million and Cook Inlet partners contributed $17.4 million for the deposit
required by the FCC to participate in the reauction. This auction was completed
in April 1999 and resulted in CIVS as the high bidder for 28 licenses including
both the Dallas and Chicago Basic Trading Areas ("BTAs"), for an aggregate
amount of $192.3 million. These licenses were granted by the FCC in October
1999, and VoiceStream contributed a total of $103.0 million to CIVS,
representing a capital contribution of $61.8 million and an advance to the
partnership of $41.2 million. The Cook Inlet partners contributed $50.8 million
to CIVS for the remainder due. Amounts advanced to CIVS by VoiceStream have
since been repaid.

The Cook Inlet partners have certain rights, but not the obligation, to
exchange their joint venture interests for a fixed number of shares of
VoiceStream's common stock for a 30 day period beginning after the FCC
regulatory holding period has expired (currently five years after the issuance
date of the licenses held by CIVS). The fair value of the CIVS exchange rights
of $30.6 million have been recorded as an increase to investment in and advances
to unconsolidated affiliates and additional paid-in capital at December 31,
1999. The exchange rights are being amortized over the life of these exchange
rights. For the year ended December 31, 1999, $1.7 million in expense was
recognized for this amortization.

VoiceStream and the Cook Inlet Partners have entered into reciprocal
technical services agreements which allow each to utilize airtime on the others
spectrum, and/or utilize wireless system infrastructure, in certain agreed upon
markets. The agreements are structured such that each performs as a reseller for
the other and related fees are charged and paid between the parties. During
1999, VoiceStream earned revenues of $21.4 million and incurred expenses of
$25.0 million in fees related to these agreements.

In January 2000, CIVS reached an agreement with an infrastructure equipment
vendor providing CIVS with up to $735 million, composed of a $160 million
revolving credit agreement, term loans of up to $325 million, consisting of $125
million in Tranche A and $200 million in Tranche B, $100 million of 13% Series A
Senior Discount Notes, and up to $150 million 13% Series A Subordinated Notes.
The senior secured facility and the subordinated facilities are not guaranteed
by VoiceStream but are secured by certain assets of CIVS. The net proceeds will
be used to finance capital expenditures, permitted investments, and for working
capital. The amount available for borrowing pursuant to the senior credit
facilities is based upon certain equipment purchases by CIVS, with up to $735
million in the aggregate being available.

In February 2000, VoiceStream announced that it had agreed to make an
investment of approximately $275.0 million in newly issued Class A shares of
Microcell. The per share transaction price was equal to the closing market price
of Microcell's publicly traded Class B Non-Voting shares on the Nasdaq National
Market System on January 6, the date the agreement in principle was reached.

F-11
<PAGE> 92
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES (CONTINUED):
a 22.6% voting interest in Microcell. VoiceStream will apply the equity method
of accounting to this investment. Additionally, VoiceStream was able to
designate two members of Microcell's Board of Directors.

6. ACCRUED LIABILITIES:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1999 1998
-------- -------
<S> <C> <C>
(dollars in thousands)
Accrued payroll and benefits................................ $ 32,436 $ 6,558
Accrued interest expense.................................... 18,652 2,823
Accrued property taxes and other taxes...................... 22,606 25,693
Other....................................................... 42,337 10,492
-------- -------
$116,031 $45,566
======== =======
</TABLE>

7. LONG-TERM DEBT:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998
---------- --------
<S> <C> <C>
(dollars in thousands)
Credit Facility:
Revolver.................................................. $ 250,000 $290,000
Term loan................................................. 250,000 250,000
10 3/8% Senior Notes........................................ 1,100,000
11 7/8% Senior Discount Notes............................... 720,000
---------- --------
2,320,000 540,000
Less unamortized discount................................... (308,549)
---------- --------
$2,011,451 $540,000
========== ========
</TABLE>

At December 31, 1999, VoiceStream, through a wholly-owned subsidiary, has a
credit facility with a consortium of lenders (the "Credit Facility") consisting
of $500 million in revolving credit and $250 million in a delayed draw term loan
(collectively the "Revolver") and a term loan for $250 million (the "Term
Loan"). As of December 31, 1999, $500 million was outstanding under the Credit
Facility.

On February 25, 2000, immediately following the completion of the Omnipoint
merger, VoiceStream entered into a new credit facility with a consortium of
lenders. Pursuant to the new credit facility, the lenders have made available
term loans and revolving credit loans in an aggregate principal amount not to
exceed $3.25 billion. The revolving credit portion of the new credit facility is
a $1.35 billion reducing revolving credit. Immediately following the completion
of the Omnipoint merger, VoiceStream used the proceeds of draws on the new
credit facility to pay down certain long-term debt of Omnipoint. Additionally, a
portion of the cash equity investments received from Hutchison
Telecommunications PCS (USA) and Sonera, described below, were used to pay off
the remaining balance on the previous Credit Facility.

F-12
<PAGE> 93
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. LONG-TERM DEBT (CONTINUED):
anniversary of the closing date. Tranche B is required to be amortized in the
following amounts during the period commencing three years after the closing
date through the ninth anniversary: $10 million in each of years four through
eight and the remaining balance in year nine.

Borrowings under Tranche A bear interest, at the borrower's option, at an
annual rate of interest equal to either (1) the greater of (a) the prime rate,
or (b) the Federal Funds rate plus 1/2%, or (2) a Eurodollar rate, in each
instance plus an applicable margin. Such applicable margin will range to a
maximum of 1.50%, in the case of loans based on the prime rate or Federal Funds
rate, and to a maximum of 2.75%, in the case of loans based on a Eurodollar
rate, in each case based upon certain factors including the ratio of total
indebtedness to operating cash flow, as defined in the new credit facility, of
VoiceStream.

Tranche B bears interest, at VoiceStream's option, at an annual rate of
interest equal to either (1) the greater of (a) the prime rate, or (b) the
Federal Funds rate plus 1/2%, or (2) a Eurodollar rate, plus an applicable
margin. Such applicable margin is a fixed percentage of 1.75%, in the case of
loans based on the prime rate or Federal Funds rate, and 3.0% in the case of
loans based on a Eurodollar rate.

The new credit facility contains affirmative and negative covenants, with
which VoiceStream must comply, including financial covenants, and provides for
various events of default. The new credit facility permits the incurrence of
additional indebtedness of up to $1.5 billion. The repayment of the loans is
secured by, among other things, the grant of a security interest in the capital
stock and assets of the VoiceStream and certain of its subsidiaries.

As noted above, the new credit facility permits up to $1.5 billion of
additional indebtedness, including up to $1 billion for a vendor facility, which
would be secured by the same collateral as other indebtedness under the new
credit facility. In March 2000, VoiceStream reached agreements in principle with
an infrastructure equipment vendor and a bank whereby such vendor and bank would
provide up to $1 billion in senior credit facilities and VoiceStream would agree
to acquire certain equipment, software and services from the vendor. The vendor
facilities would have a maturity of 9.25 years and be available in multiple
draws, including $500 million that could be drawn by April 28, 2000, $250
million that could be drawn by July 14, 2000, and $250 million that could be
drawn by October 31, 2000. Net proceeds of the vendor facilities would be used
for the same purposes as proceeds under the new credit facility, and would be
governed by the same covenants and agreements as the new credit facility.
Although VoiceStream is working diligently with the vendor and bank to prepare
formal contracts, there can be no assurance that formal contracts will be
executed or that such funds will be available to VoiceStream.

Certain long-term debt agreements of Omnipoint, and now of VoiceStream,
contain provisions which require VoiceStream to offer repayment of outstanding
amounts when a change of control occurs. The Omnipoint merger constituted a
change of control. Under certain agreements, VoiceStream is required to offer to
repay to the lenders amounts outstanding. Additionally, the holders of the debt
issued under certain of these agreements are entitled to a prepayment premium.
It is expected that the lenders will not exercise the offer to repay amounts
outstanding. However, there can be no assurance that the lenders' options will
not be exercised. In the unlikely event that the lenders do exercise the offer
of repayment, VoiceStream would utilize the funds available from the new credit
facility.

In May 1999, one of VoiceStream's infrastructure equipment vendors
purchased $400 million of VoiceStream's newly issued 12% Senior Debentures (the
"Senior Debentures"). The amounts outstanding under the Senior Debentures were
repaid in November 1999 with the proceeds received from the private offering of
Senior Notes and Senior Discount Notes, discussed below.

In November 1999, VoiceStream, through a private offering circular, offered
a combination of 10 3/8% Senior Notes and 11 7/8% Senior Discount Notes for
aggregate net proceeds of approximately $1.46 billion.

F-13
<PAGE> 94
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. LONG-TERM DEBT (CONTINUED):
VoiceStream used $400 million of the proceeds from the Senior Notes to repay the
Senior Debentures and an additional $485 million to repay outstanding borrowings
under the revolver portion of the Credit Facility.

Proceeds from the Senior Notes issued were $1.1 billion. The Senior
Discount Notes were issued at a discount, resulting in proceeds of $403.6
million, which will accrete over five years to its full principal value of $720
million. The Senior Notes and the Senior Discount Notes mature on November 15,
2009, and are redeemable after five years at VoiceStream's option, in whole or
in part, at varying redemption prices. Interest on the Senior Notes will accrue
at the rate of 10 3/8% per annum and will be payable semiannually beginning May
15, 2000. Interest on the Senior Discount Notes will accrue at a rate of 11 7/8%
per annum and will be payable semiannually commencing on May 15, 2005. The note
indentures contain affirmative and negative covenants. As of December 31, 1999,
VoiceStream was in compliance with these covenants.

The Credit Facility requires VoiceStream to enter into interest rate swap
and cap agreements to manage the interest rate exposure pertaining to borrowings
under the Credit Facility. VoiceStream had entered into interest rate caps and
swaps with a total notional amount of $325.0 million at December 31, 1999.
Generally these instruments have initial terms ranging from 1 to 4 years and
effectively convert variable rate debt to fixed rate. The weighted average
interest rate under these agreements was approximately 6.06% during the year
ended December 31, 1999. The amount of unrealized gain or loss attributable to
changing interest rates at December 31, 1999, was not material.

The aggregate amounts of principal maturities of VoiceStream's long-term
debt at December 31, 1999, are as follows (dollars in thousands):

<TABLE>
<S> <C>
Year ending December 31,
2000........................................................ $ 0
2001........................................................ 15,000
2002........................................................ 27,500
2003........................................................ 40,000
2004........................................................ 52,500
Thereafter.................................................. 2,185,000
----------
$2,320,000
==========
</TABLE>

8. COMMITMENTS AND CONTINGENCIES:

Commitments:

Future minimum payments required under operating leases and agreements that
have initial or remaining noncancellable terms in excess of one year as of
December 31, 1999, are summarized below (dollars in thousands):

<TABLE>
<S> <C>
Year ending December 31,
2000........................................................ $ 36,344
2001........................................................ 30,910
2002........................................................ 21,665
2003........................................................ 18,136
2004........................................................ 9,452
Thereafter.................................................. 21,646
--------
$138,153
========
</TABLE>

F-14
<PAGE> 95
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. COMMITMENTS AND CONTINGENCIES (CONTINUED):
Aggregate rental expense for all operating leases was approximately $32.1
million in 1999, $21.3 million in 1998 and $18.0 million in 1997.

In order to ensure adequate supply and availability of certain
infrastructure equipment and services, VoiceStream has committed to purchase PCS
equipment from various suppliers. The aggregate amount of these commitments
total $775.0 million as of December 31, 1999. At December 31, 1999, VoiceStream
has ordered approximately $549.5 million under all of these agreements, of which
approximately $32.6 million is undelivered. In March 2000, VoiceStream committed
to purchase an additional $352 million of similar PCS equipment from a supplier.

VoiceStream and its affiliates have various other purchase commitments for
materials, supplies and other items incident to the ordinary course of business
which are neither significant individually nor in the aggregate. Such
commitments are not at prices in excess of current market value.

Contingencies:

As a result of the Omnipoint and Aerial mergers, VoiceStream may have to
make substantial tax indemnity payments to Western Wireless. In the spin-off
transaction effected on May 3, 1999, Western Wireless distributed its entire
80.1% interest in VoiceStream's common stock to its stockholders. Western
Wireless will recognize gain as a result of the spin-off, if the spin-off is
considered to be part of a plan or series of related transactions pursuant to
which one or more persons acquire, directly or indirectly, 50% or more of
VoiceStream's common stock, considered under IRS rules a "prohibited
transaction". VoiceStream has agreed to indemnify Western Wireless on an
after-tax basis for any taxes, penalties, interest and various other expenses
incurred by Western Wireless if it is required to recognize such a gain. The
amount of such gain that Western Wireless would recognize would be equal to the
difference between the fair market value of VoiceStream common stock at the time
of the spin-off and Western Wireless' adjusted tax basis in such stock at the
time.

In the absence of direct authority, and although the issue is not free from
doubt, VoiceStream believes that it should be able to establish that the
spin-off and VoiceStream Delaware's acquisitions of VoiceStream's stock pursuant
to the mergers, in conjunction with the related transactions and Hutchison's
acquisition of its existing VoiceStream stock within two years prior to the
spin-off, are not pursuant to a prohibited plan. However, if the IRS were to
take the position that a prohibited plan did occur, the estimated range of
possible liability of VoiceStream, not including interest and penalties, if any,
is from zero to $400 million.

Fourteen of the C Block licenses won by CIVS were issued subject to the
outcome of the bankruptcy proceedings of the original licensee. Pursuant to an
FCC order, the bankruptcy debtors elected to relinquish certain licenses, which
were subsequently reauctioned. A secured creditor of the debtors, filed with the
court a motion for reconsideration of the election order, which was denied. An
appeal of this denial is currently before the U. S. District Court of Northern
Maryland. Because the appeal of the election order is still pending, there is
uncertainty as to these C Block licenses of the Cook Inlet entities. In the
event that these licenses are returned to the jurisdiction of the bankruptcy
court, it is unlikely that the Cook Inlet entities will be able to recoup any or
all of the costs incurred by them in connection with the construction and
development of systems related to such licenses.

F-15
<PAGE> 96
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. INCOME TAXES:

Significant components of deferred income tax assets and liabilities, net
of tax, are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
(dollars in thousands)
Deferred tax assets:
Net operating loss carryforwards.......................... $ 459,459 $ 282,002
Other temporary differences............................... 76,117 13,459
--------- ---------
Total deferred tax assets................................... 535,576 295,461
Valuation allowance......................................... (459,968) (243,049)
--------- ---------
75,608 52,412
Deferred tax liabilities:
Property and wireless licenses basis differences.......... (75,608) (52,412)
--------- ---------
$ 0 $ 0
========= =========
</TABLE>

VoiceStream had approximately $1.15 billion net operating loss ("NOL")
carryforwards at December 31, 1999. The NOLs will expire between 2011 and 2019.
The valuation allowance increased approximately $216.9 million in 1999, $100.0
million in 1998 and $105.0 million in 1997.

Management believes that available objective evidence creates sufficient
uncertainty regarding the realization of the net deferred tax assets. Such
factors include recurring operating losses resulting primarily from the
development of VoiceStream's PCS business. Accordingly, a valuation allowance
has been provided for the net deferred tax assets of VoiceStream.

The difference between the statutory tax rate of approximately 40% (35%
federal and 5% state, net of federal benefits) and the tax benefit of zero
recorded by VoiceStream is primarily due to VoiceStream's full valuation
allowance against net deferred tax assets. VoiceStream's ability to utilize the
NOLs in any given year may be limited by certain events, including a significant
change in ownership interest.

After the Spin-off, the NOL carryforwards resulting from VoiceStream's
cumulative tax losses have remained with VoiceStream. Pursuant to a tax sharing
agreement entered into at the time of the Hutchison Investment (as defined in
Note 14), VoiceStream paid Western Wireless $20 million, an amount
representative of the tax benefit of NOLs generated while VoiceStream was a
wholly-owned subsidiary of Western Wireless.

10. STOCK-BASED COMPENSATION PLANS:

Prior to 1999, VoiceStream had no stock options outstanding. During 1999,
deferred compensation and compensation expense was recognized as a result of
restructuring employee stock options in connection with the Spin-off from
Western Wireless on May 3, 1999. As of the date of the Spin-off, all unvested
outstanding options of VoiceStream employees were converted from Western
Wireless options to VoiceStream options and all vested outstanding options were
issued an additional option in VoiceStream as well as maintaining the existing
option in Western Wireless. The number of options and related strike price
varied to maintain the original economic value to the employee.

In accordance with the provisions of EITF 90-9, "Changes to Fixed Employee
Stock Option Plans as a Result of Equity Restructuring", VoiceStream recorded
deferred compensation of $69.0 million as a result of this restructure. Of the
$69.0 million, $50.4 million was recognized as expense during 1999 to reflect
the cost of options that have fully vested. Additionally, deferred compensation
of $17.6 million was recognized

F-16
<PAGE> 97
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. STOCK-BASED COMPENSATION PLANS (CONTINUED):
pursuant to fair market value adjustments for the underlying shares in the
Restricted Stock Plan and $10.3 million was recognized as expense during 1999.
This plan is accounted for as a variable plan.

The Employee Stock Purchase Plan (the "ESPP"), which has been effective
since 1999, provides for the issuance of up to 1,000,000 shares of Common Stock
to eligible employees participating in the plan. The terms and conditions of
eligibility under the ESPP require that an employee must have been employed by
VoiceStream or its subsidiaries for at least three months prior to
participation. A participant may contribute up to 10% of their total annual
compensation toward the ESPP, not to exceed the IRS contribution limit each
calendar year. Shares are offered under this ESPP at 85% of market value at each
offer date. Participants are fully vested at all times.

The Management Incentive Stock Plan ("MISOP"), which has been effective
since 1999, provides for the issuance of up to 7,600,000 shares of common stock
as either Nonqualified Stock Options or as Incentive Stock Options. The vesting
period and option term is determined by the MISOP administrator. Options
typically vest over a four year period and have a term of up to 10 years.

At December 31, 1999, VoiceStream has accounted for its stock compensation
plans following the guidelines of APB Opinion No. 25 and related
interpretations. Had compensation cost been determined based upon the fair value
at the grant dates for awards under these plans consistent with the method
defined in SFAS No. 123, VoiceStream's net loss and basic loss per share would
have increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1999
(in thousands, except per share data) -----------------
<S> <C>
Net loss:
As reported............................................... $(454,739)
Pro forma................................................. $(497,159)
Basic and diluted loss per share:
As reported............................................... $ (4.75)
Pro forma................................................. $ (5.19)
</TABLE>

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model using the following weighted-average
assumptions:

<TABLE>
<CAPTION>
1999
---------------------
<S> <C>
Weighted average risk free interest rate............... 5.61% to 6.41%
Expected dividend yield................................ 0%
Expected volatility.................................... 75%
Expected lives (in years).............................. 7.5
</TABLE>

The Black-Scholes option-pricing model requires the input of highly
subjective assumptions and does not necessarily provide a reliable measure of
fair value.

F-17
<PAGE> 98
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. STOCK-BASED COMPENSATION PLANS (CONTINUED):
Options granted, exercised and canceled are summarized as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1999
-------------------------
WEIGHTED
AVERAGE
SHARES PRICE PER SHARE
(in thousands, except per share data) ------ ---------------
<S> <C> <C>

Outstanding, beginning of period....................... $0.00
Options granted........................................ 4,899 $8.00
Options exercised...................................... (764) $5.19
Options cancelled...................................... $0.00
----- -----
Outstanding, end of the period......................... 4,135 $8.52
===== =====
Exercisable, end of period............................. 2,232 $6.06
===== =====
</TABLE>

The weighted average fair value of stock options granted was $25.97 in
1999.

The following table summarizes information about stock options outstanding
at December 31, 1999 (in thousands, except per share data):

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------- -----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
RANGE OF NUMBER REMAINING EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE PRICE EXERCISABLE PRICE
--------------- ----------- ---------------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$ 0.60 - $ 6.01.................. 1,195 5 years $ 4.80 1,195 $ 4.80
$ 6.87 - $ 7.31.................. 1,033 7 years $ 7.15 830 $ 7.11
$ 7.99 - $ 8.59.................. 50 7 years $ 8.47 28 $ 8.51
$ 9.25 - $ 9.25.................. 863 8 years $ 9.25 179 $ 9.25
$10.62 - $45.13.................. 994 9 years $13.79 $10.61
----- ------- ------ ----- ------
$ 0.60 - $45.13.................. 4,135 7 years $ 8.52 2,232 $ 6.06
===== ====== ===== ======
</TABLE>

11. MERGERS AND ACQUISITIONS:

On February 25, 2000, VoiceStream completed the merger with Omnipoint
Corporation. Pursuant to the agreement, VoiceStream exchanged 0.825 shares of
VoiceStream common stock plus $8.00 in cash for every share of outstanding
Omnipoint common stock. There was a cash or share election option available to
shareholders of Omnipoint subject to proration. In conjunction with the merger
agreement, VoiceStream committed to invest a total of $150.0 million in
Omnipoint, of which $102.5 million was invested in Omnipoint preferred stock
upon signing of the merger agreement. The remaining $47.5 million was invested
in Omnipoint preferred stock on October 1, 1999.

In connection with the Omnipoint merger agreement, Hutchison
Telecommunications PCS (USA) made an investment of approximately $957.0 million
into the combined company for common and convertible preferred securities.
$102.5 million of this investment was invested directly in Omnipoint preferred
stock subsequent to finalizing the merger agreement. In addition, another $47.5
million was invested in Omnipoint preferred stock in October 1999. The remaining
$807.0 million was invested into the combined company upon the closing of the
merger. Additionally, Sonera, Ltd, ("Sonera") a Finnish telecommunications
company, who holds an investment in Aerial Operating Company ("AOC"), a
subsidiary of Aerial, invested $500.0 million in VoiceStream at the closing of
the Omnipoint merger, purchasing shares at $57 per VoiceStream share.

F-18
<PAGE> 99
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. MERGERS AND ACQUISITIONS (CONTINUED):
On September 20, 1999, VoiceStream announced Board approval of a merger
agreement with Aerial. On February 24, 2000, VoiceStream obtained approval for
the merger from its shareholders. Under the terms of the agreement, VoiceStream
will exchange 0.455 shares of VoiceStream common stock for each share of Aerial
Series A Common Shares. Aerial public shareholders have a right to elect to
receive $18 in cash in lieu of shares of VoiceStream. The close of the Aerial
merger is contingent upon, among other things, FCC approval and is expected to
be completed early in the second quarter 2000.

In connection with the Aerial merger agreement, Telephone and Data Systems,
Inc. ("TDS") has replaced $420.0 million of Aerial debt owed to TDS with equity
of Aerial at $22 per share. Sonera has invested an additional $230.0 million in
Aerial equity, also at $22 per Aerial share. Immediately prior to the merger,
Sonera will convert its interest in AOC into Aerial common stock

On December 31, 1999, VoiceStream purchased certain GSM assets from Sprint
GSM, for approximately $152.5 million in cash. The total purchase price was
allocated to lease rights of $101.4 million, $48.9 to property and equipment,
and $2.2 million to other assets. The effect of this transaction, did not have a
material impact on VoiceStream's financial position or results of operations.

On February 28, 2000, VoiceStream completed the purchase of 9,590,000 newly
issued Class A shares of Microcell Telecommunications Inc. ("Microcell") for
approximately $275 million. The per share transaction price was equal to the
closing market price of Microcell's publicly traded Class B Non-Voting shares on
the Nasdaq National Market System on January 6. The purchase will be accounted
for using the equity method of accounting. The acquisition of these shares did
not have a material impact on VoiceStream's financial position or results of
operations.

12. SELECTED QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED):

Selected quarterly consolidated financial information for the years ended
December 31, 1999 and 1998 is as follows (dollars in thousands, except per share
data):

<TABLE>
<CAPTION>
BASIC AND
DILUTED LOSS
TOTAL PER COMMON
QUARTER ENDED REVENUES OPERATING LOSS NET LOSS SHARE
------------- -------- -------------- --------- ------------
<S> <C> <C> <C> <C>
March 31, 1998.................... $ 29,883 $ (48,233) $ (64,301) $(0.75)
June 30, 1998..................... $ 36,508 $ (50,412) $ (56,794) $(0.59)
September 30, 1998................ $ 46,186 $ (48,845) $ (61,463) $(0.64)
December 31, 1998................. $ 55,385 $ (57,154) $ (71,708) $(0.77)

March 31, 1999*................... $ 67,712 $ (57,481) $ (77,186) $(0.81)
June 30, 1999*.................... $109,050 $(105,933) $(132,817) $(1.39)
September 30, 1999*............... $134,932 $ (61,739) $ (93,034) $(0.97)
December 31, 1999................. $163,835 $ (97,622) $(151,702) $(1.58)
</TABLE>

* Certain reclassifications have been made to the quarterly revenue amounts
to conform to the annual presentation.

13. RELATED PARTY TRANSACTIONS:

VoiceStream's financial statements include an allocation of certain
centralized costs that were incurred by Western Wireless and benefit all of its
operations, including those of VoiceStream prior to the Spin-off. Such
centralized items included the costs of customer service and accounting to
support these functions. These items were allocated to the respective
operational units in a manner that reflected the relative time

F-19
<PAGE> 100
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. RELATED PARTY TRANSACTIONS (CONTINUED):
devoted to each of the operational units. VoiceStream was allocated costs of
$5.0 million, $33.3 million and $29.1 million for the years ended December 31,
1999, 1998, and 1997, respectively.

Management believes that the financial information presented fairly
reflects the results of operations had VoiceStream been a stand alone entity
during the entire period presented. Management believes that allocations
reflected in the financial statements are reasonable; however, the financial
information included herein is not necessarily indicative of the financial
position, results of operations or cash flows of VoiceStream in the future.

After the Spin-off, the net operating loss ("NOL") carryforwards resulting
from VoiceStream's cumulative tax losses were transferred from Western Wireless
to VoiceStream. Pursuant to a tax sharing agreement entered into at the time of
the Hutchison investment, VoiceStream paid Western Wireless $20.0 million, the
amount representative of the tax benefit of NOLs generated while VoiceStream was
a subsidiary of Western Wireless. This was accounted for as a return of capital
to Western Wireless.

14. HUTCHISON TRANSACTION:

Under an agreement between Hutchison Telecommunications PCS (USA) and
Western Wireless, Western Wireless was required to invest $750.0 million of
equity in VoiceStream. In the fourth quarter of 1997, approximately $518.3
million of the advances made by Western Wireless to VoiceStream were converted
to equity to comply with this requirement. This agreement required that any
additional investment made by Western Wireless over $750.0 million was to be
reimbursed from the proceeds of Hutchison Telecommunications PCS (USA)'s
investment in VoiceStream.

In February 1998, Hutchison Telecommunications PCS (USA) purchased 19.9% of
VoiceStream for an aggregate purchase price of $248.4 million ("the Hutchison
Transaction"). Western Wireless amended certain outstanding financing agreements
to which it was subject, and unless otherwise agreed to by Hutchison
Telecommunications PCS (USA) and Western Wireless, neither Western Wireless nor
VoiceStream has any liability related to any indebtedness of the other.
Hutchison Telecommunications PCS (USA) designated two directors to a ten person
Board of Directors who had approval rights over certain transactions of
VoiceStream.

F-20
<PAGE> 101
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY):

CONDENSED BALANCE SHEETS:
(dollars in thousands)

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------------
1999 1998
----------- ---------
<S> <C> <C>
Current assets.............................................. $ 50,649 $ 16
Property and equipment, net of accumulated depreciation of
$1,071 and $57............................................ 104,368 2,398
Licensing costs and other intangible assets, net of
accumulated amortization of $371 and $0................... 213,327 74,200
Investment in and advances to affiliates.................... 1,175,743 311,226
----------- ---------
Total assets...................................... $ 1,544,087 $ 387,840
=========== =========
Current liabilities......................................... $ 25,259 $ 1,210
Long-term debt, net of unamortized discount of $309 million,
due 2009.................................................. 1,511,451
Preferred stock, no par value, 50,000,000 shares authorized;
no shares issued and outstanding. Common stock, no par
value, and paid-in capital, 300,000,000 shares authorized,
96,305,360 and 95,541,623 shares issued and outstanding,
respectively.............................................. 1,095,539 994,789
Deferred compensation....................................... (25,264)
Deficit..................................................... (1,062,898) (608,159)
----------- ---------
Total debt and shareholders' equity............... $ 1,544,087 $ 387,840
=========== =========
</TABLE>

CONDENSED STATEMENTS OF OPERATIONS:
(dollars in thousands)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------
1999 1998 1997
----------- --------- ---------
<S> <C> <C> <C>
Total revenues..................................... $ 3,603
Operating expenses................................. 76,101 $ 354
----------- ---------
Operating loss..................................... (72,498) (354)
Other income (expense):
Interest and financing expense, net.............. (48,818) (540) $ (2,443)
Equity in net losses of affiliates............... (349,699) (259,755) (261,372)
Other, net....................................... 16,276 6,383
----------- --------- ---------
Other expense, net............................... (382,241) (253,912) (263,815)
----------- --------- ---------
Net loss........................................... $ (454,739) $(254,266) $(263,815)
=========== ========= =========
</TABLE>

See accompanying note to Parent Company only
Condensed Financial Information

F-21
<PAGE> 102
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (CONTINUED):
(dollars in thousands)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------
1999 1998 1997
----------- --------- ---------
<S> <C> <C> <C>
CONDENSED STATEMENTS OF CASH FLOWS:
(dollars in thousands)
Operating activities:
Net loss............................................. $ (454,739) $(254,266) $(263,815)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Equity in net loss of affiliates.................. 349,699 259,755 261,372
Stock based compensation.......................... 60,690
Other............................................. 20,058 294 (173)
----------- --------- ---------
Net cash provided by (used in) operating
activities................................. (24,292) 5,783 (2,616)
----------- --------- ---------
Investing activities:
Purchase of property and equipment................... (61,473) (1,422)
Additions to licensing costs and other intangible
assets............................................ (496) (8,744) (43,851)
Acquisition of wireless properties, net of cash
acquired.......................................... (152,517) (4,645)
Investments in and advances to unconsolidated
affiliates........................................ (1,176,856) (134,960) (362,891)
Refund of FCC deposit................................ 7,749
----------- --------- ---------
Net cash used in investing activities........ (1,391,342) (145,126) (403,638)
----------- --------- ---------
Financing activities:
Proceeds from issuance of common stock, net.......... 3,643
Additions to long-term debt.......................... 1,911,451
Repayment of debt.................................... (400,000)
(Repayment of) advances from affiliate, net.......... 6,291 (105,446) 406,254
Equity contributions................................. 244,789
Return of capital.................................... (20,000)
Deferred financing costs, net........................ (40,600)
----------- --------- ---------
Net cash provided by financing activities.... 1,460,785 139,343 406,254
----------- --------- ---------
Change in cash and cash equivalents.................... 45,151 0 0
Cash and cash equivalents, beginning of year........... 0 0 0
----------- --------- ---------
Cash and cash equivalents, end of year................. $ 45,151 $ 0 $ 0
=========== ========= =========
</TABLE>

See accompanying note to Parent Company only
Condensed Financial Information

A. BASIS OF PRESENTATION:

The condensed financial information presented above represents the balance
sheet, statements of operations and cash flows of VoiceStream as if the
subsidiary that is restricted under the Credit Facility (see Note 7 in
consolidated footnotes) was an unconsolidated entity. VoiceStream less this
subsidiary is referred to as "Parent Company Only". VoiceStream ownership in
such subsidiary has been reflected in this condensed financial information using
the equity method. The condensed balance sheet, statements of operations, and
statements of cash flow for Parent Company Only and the related notes should be
read in conjunction with the VoiceStream Consolidated Financial Statements and
Notes thereto.

F-22
<PAGE> 103
VOICESTREAM WIRELESS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. ACCOUNTS RECEIVABLE ALLOWANCE FOR DOUBTFUL ACCOUNTS

(dollars in thousands)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
OF PERIOD EXPENSES DEDUCTIONS(1) PERIOD
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Year ended December 31, 1997................. $ 747 $ 6,628 $ (5,335) $ 2,040
====== ======= ======== =======
Year ended December 31, 1998................. $2,040 $12,780 $ (9,105) $ 5,715
====== ======= ======== =======
Year ended December 31, 1999................. $5,715 $37,000 $(25,233) $17,482
====== ======= ======== =======
</TABLE>

- ---------------
(1) Write-offs, net of bad debt recovery.

F-23
<PAGE> 104

SIGNATURES

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

March 23, 2000

VOICESTREAM WIRELESS CORPORATION

By /s/ JOHN W. STANTON

------------------------------------
John W. Stanton
Chairman of the Board, Director and
Chief Executive Officer
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>

/s/ ROBERT R. STAPLETON President and Director March 23, 2000
- -----------------------------------------------------
Robert R. Stapleton

/s/ CREGG B. BAUMBAUGH Executive Vice President -- March 23, 2000
- ----------------------------------------------------- Finance, Strategy and
Cregg B. Baumbaugh Development (Principal
Financial Officer)

/s/ DONALD GUTHRIE Vice Chairman and Director March 23, 2000
- -----------------------------------------------------
Donald Guthrie

/s/ DOUGLAS G. SMITH Vice Chairman and Director March 23, 2000
- -----------------------------------------------------
Douglas G. Smith

/s/ PATRICIA L. MILLER Vice President and March 23, 2000
- ----------------------------------------------------- Controller (Principal
Patricia L. Miller Accounting Officer)

/s/ MITCHELL R. COHEN Director March 23, 2000
- -----------------------------------------------------
Mitchell R. Cohen

/s/ DANIEL J. EVANS Director March 23, 2000
- -----------------------------------------------------
Daniel J. Evans

/s/ RICHARD L. FIELDS Director March 23, 2000
- -----------------------------------------------------
Richard L. Fields

/s/ CANNING K. N. FOK Director March 23, 2000
- -----------------------------------------------------
Canning K. N. Fok

/s/ JONATHAN M. NELSON Director March 23, 2000
- -----------------------------------------------------
Jonathan M. Nelson

/s/ TERENCE M. O'TOOLE Director March 23, 2000
- -----------------------------------------------------
Terence M. O'Toole
</TABLE>
<PAGE> 105

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ JAMES N. PERRY JR. Director March 23, 2000
- -----------------------------------------------------
James N. Perry Jr.

/s/ JAMES J. ROSS Director March 23, 2000
- -----------------------------------------------------
James J. Ross

/s/ HANS SNOOK Director March 23, 2000
- -----------------------------------------------------
Hans Snook

/s/ SUSAN M.F. WOO CHOW Director March 23, 2000
- -----------------------------------------------------
Susan M.F. Woo Chow

/s/ FRANK J. SIXT Director March 23, 2000
- -----------------------------------------------------
Frank J. Sixt

/s/ KAJ-ERIK RELANDER Director March 23, 2000
- -----------------------------------------------------
Kaj-Erik Relander
</TABLE>

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K, as it relates to VoiceStream Wireless
Corporation and Subsidiaries, into the Company's previously filed Registration
Statement File Nos. 333-31086, 333-31088 and 333-31090.

/s/ Arthur Andersen LLP
Seattle, Washington
March 17, 2000

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VOICESTREAM
WIRELESS CORPORATION'S CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS AS
OF AND FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-K.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 235,433
<SECURITIES> 0
<RECEIVABLES> 115,221
<ALLOWANCES> 17,482
<INVENTORY> 63,072
<CURRENT-ASSETS> 410,576
<PP&E> 1,216,462
<DEPRECIATION> 284,670
<TOTAL-ASSETS> 2,221,913
<CURRENT-LIABILITIES> 203,085
<BONDS> 2,011,451
0
0
<COMMON> 1,095,539
<OTHER-SE> 25,264
<TOTAL-LIABILITY-AND-EQUITY> 2,221,913
<SALES> 78,025
<TOTAL-REVENUES> 475,529
<CGS> 136,584
<TOTAL-COSTS> 798,304
<OTHER-EXPENSES> 131,964
<LOSS-PROVISION> 37,000
<INTEREST-EXPENSE> 103,461
<INCOME-PRETAX> (454,739)
<INCOME-TAX> 0
<INCOME-CONTINUING> (454,739)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (454,739)
<EPS-BASIC> (4.75)
<EPS-DILUTED> (4.75)

</TABLE>