UBIQUITEL INC, 10-Q, 2000-08-14

UBIQUITEL INC
10-Q, 2000-08-14
RADIOTELEPHONE COMMUNICATIONS

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

COMMISSION FILE NUMBER
000-30761

UBIQUITEL INC.
(Exact name of Co-Registrant as specified in its charter)

DELAWARE 23-3017909
(State of incorporation) (I.R.S. Employer Identification No.)

1 BALA PLAZA, SUITE 402, BALA CYNWYD, PA 19004
(Address of principal executive office) (Zip code)

Co-Registrant's telephone number: (610) 660-9510

Commission File Number
333-39950

UbiquiTel Operating Company
(Exact name of Co-Registrant as specified in its charter)

DELAWARE 23-3024747
(State of incorporation) (I.R.S. Employer Identification No.)

1 BALA PLAZA, SUITE 402, BALA CYNWYD, PA 19004
(Address of principal executive office) (Zip code)

Co-Registrant's telephone number: (610) 660-9510

Indicate by check mark whether each of the Co-Registrants (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 / / No /X/

There were 63,543,604 shares of common stock, $.0005 par value, of UbiquiTel
Inc. outstanding at July 27, 2000.

There were 1,000 shares of common stock, $.01 par value, of UbiquiTel Operating
Company outstanding at July 27, 2000.

<PAGE>

UBIQUITEL INC. AND SUBSIDIARIES

FORM 10-Q - QUARTER ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
INDEX

PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2000 (unaudited) and
December 31, 1999 (audited)...................................................4
Consolidated Statements of Operations for the three and six
months ended June 30, 2000 (unaudited) and period from inception,
September 29, 1999 to June 30, 2000 (unaudited)...............................5
Consolidated Statements of Cash Flows for the six months ended
June 30, 2000 (unaudited) and period from inception, September 29, 1999
to June 30, 2000 (unaudited)..................................................6
Notes to the Consolidated Financial Statements................................7

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations....................................................13

Item 3. Quantitative and Qualitative Disclosure About Market Risk....................20

PART II. OTHER INFORMATION

Item 1. Legal Proceedings............................................................20

Item 2. Changes in Securities and Use of Proceeds....................................20

Item 3. Defaults Upon Senior Securities..............................................21

Item 4. Submission of Matters to a Vote of Security Holders..........................21

Item 5. Other Information............................................................21

Item 6. Exhibits and Reports on Form 8-K.............................................21

Signatures............................................................................. 22

</TABLE>

<PAGE>

Explanatory Note:

The Consolidated Financial Statements included herein are that of UbiquiTel
Inc. ("UbiquiTel"). The Co-Registrants are UbiquiTel and UbiquiTel Operating
Company ("Operating Company"), which is a wholly-owned subsidiary of UbiquiTel
and the issuer of 14% Senior Subordinated Discount Notes due 2010 (the
"Notes"). UbiquiTel has provided a full, unconditional, joint and several
guaranty of Operating Company's obligations under the Notes. UbiquiTel has no
operations separate from its investment in Operating Company. No separate
financial statements and other disclosures concerning Operating Company other
than narrative disclosures and financial information set forth in Note 10 to
the Consolidated Financial Statements have been presented herein because
management has determined that such information is not material to investors.
As used herein and except as the context otherwise may require, the "Company,"
"we," "us," "our" or "UbiquiTel" means, collectively UbiquiTel, Operating
Company and all of their consolidated subsidiaries.

3
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UBIQUITEL INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
------------------ ------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................................................ $ 216,207,391 $ 23,959,190
Accounts receivable, net of allowance for doubtful accounts ...................... 873,890 --
Inventory ........................................................................ 204,087 --
Prepaid expenses and other assets ................................................ 481,035 35,636
------------------ ------------------
Total current assets ........................................................ 217,766,403 23,994,826
PROPERTY AND EQUIPMENT, NET ......................................................... 21,780,787 --
CONSTRUCTION IN PROGRESS ............................................................ 19,931,883 4,085,942
RESTRICTED CASH ..................................................................... 75,000,000 --
DEFERRED FINANCING COSTS, NET ....................................................... 12,893,522 2,110,642
INTANGIBLE ASSETS, NET .............................................................. 16,293,415 --
OTHER ASSETS ........................................................................ 211,571 --
------------------ ------------------
Total assets ............................................................. $ 363,877,581 $ 30,191,410
------------------ ------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses ............................................ $ 8,103,653 $ 4,460,635
Due to shareholders .............................................................. 13,927 1,663,441
Accrued interest ................................................................. 1,426,110 10,521
Dividends payable ................................................................ -- 9,030
Current installments of capital leases ........................................... 72,226 --
------------------ ------------------
Total current liabilities ................................................... 9,615,916 6,143,627
------------------ ------------------
LONG-TERM DEBT ...................................................................... 216,332,834 5,811,869
CAPITAL LEASE OBLIGATIONS, NON CURRENT .............................................. 161,717 --
------------------ ------------------
Total long-term liabilities ................................................. 216,494,551 5,811,869
------------------ ------------------
Total liabilities ........................................................ 226,110,467 11,955,496
------------------ ------------------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE WARRANTS ................................................................. 570,023 2,758,154
------------------ ------------------
STOCKHOLDERS' EQUITY:
Series A convertible preferred stock, par value, $0.001 per share; 90,000,000
shares authorized at December 31, 1999, eliminated in June, 2000;
17,008,500 issued and outstanding at December 31, 1999 ........................ -- 17,009
Series B convertible preferred stock, par value, $0.001 per share; 35,000,000
shares authorized at December 31, 1999, eliminated in June, 2000; 0 shares
issued and outstanding at December 31, 1999 ................................... -- --
Preferred stock, par value, $0.001 per share; 10,000,000 shares authorized; 0
shares issued and outstanding at June 30, 2000 and December 31, 1999 .......... -- --
100,000,000 shares of voting common stock, par value, $0.0005 authorized;
62,763,604 and 6,834,000 shares issued and outstanding at June 30, 2000
and December 31, 1999, respectively ........................................... 31,382 3,417
32,000,000 shares of nonvoting common stock, par value, $0.0005 authorized at
December 31, 1999, eliminated in June, 2000; 32,000,000 shares issued and
outstanding at December 31, 1999 .............................................. -- 16,000
Additional paid-in-capital ....................................................... 162,344,444 17,428,425
Accumulated deficit during the development stage ................................. (25,178,735) (1,987,091)
------------------ ------------------
Total stockholders' equity .................................................. 137,197,091 15,477,760
------------------ ------------------
Total liabilities and stockholders' equity ............................... $ 363,877,581 $ 30,191,410
------------------ ------------------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

4
<PAGE>

UBIQUITEL INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION,
SEPTEMBER 29, 1999
THREE MONTHS ENDED SIX MONTHS ENDED TO
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 2000
------------------ ------------------ ------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>

REVENUES:
Service revenue ...................................... $ 2,070,007 $ 2,138,526 $ 2,138,526
Product sales ........................................ 161,839 161,839 161,839
------------------ ------------------ ------------------
Total revenue .................................... 2,231,846 2,300,365 2,300,365

COSTS AND EXPENSES:
Cost of service and operations ....................... 1,822,644 2,038,295 2,038,295
Cost of products sold ................................ 274,938 274,938 274,938
Selling and marketing ................................ 526,256 579,776 579,776
General and administrative expenses excluding non-cash
compensation charges ............................... 1,457,170 1,988,911 2,543,341
Non-cash compensation for general and administrative
matters ............................................ 127,057 245,700 1,640,429
Depreciation and amortization ........................ 795,227 819,898 819,898
------------------ ------------------ ------------------
Total costs and expenses ......................... 5,003,292 5,947,518 7,896,677
OPERATING LOSS .......................................... (2,771,446) (3,647,153) (5,596,312)
INTEREST INCOME ......................................... 3,280,456 3,663,241 3,663,241
INTEREST EXPENSE ........................................ (8,180,606) (8,609,386) (8,638,288)
------------------ ------------------ ------------------
LOSS BEFORE EXTRAORDINARY ITEM AND PREFERRED STOCK
DIVIDENDS ............................................ (7,671,596) (8,593,298) (10,571,359)
LESS: PREFERRED STOCK DIVIDENDS PLUS ACCRETION .......... (1,150,029) (10,380,668) (10,389,698)
------------------ ------------------ ------------------
LOSS BEFORE EXTRAORDINARY ITEM .......................... (8,821,625) (18,973,966) (20,961,057)
EXTRAORDINARY ITEM-EARLY EXTINGUISHMENT OF DEBT ......... (2,494,797) (4,217,677) (4,217,677)
------------------ ------------------ ------------------
NET LOSS ................................................ $ (11,316,422) $ (23,191,643) $ (25,178,734)
================== ================== ==================

BASIC AND FULLY DILUTED NET LOSS PER SHARE OF COMMON
STOCK:
Loss before extraordinary item ....................... $ (0.17) $ (0.40)
Extraordinary item ................................... (0.05) (0.09)
------------------ ------------------
Net Loss ............................................. $ (0.22) $ (0.49)
================== ==================

BASIC AND FULLY DILUTED WEIGHTED-AVERAGE OUTSTANDING
COMMON SHARES ........................................ 52,739,143 47,606,744
================== ==================

</TABLE>

The accompanying notes are an integral part of these consolidated statements.

<PAGE>

UBIQUITEL INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION,
SIX MONTHS ENDED SEPTEMBER 29, 1999
JUNE 30, 2000 TO JUNE 30, 2000
------------------ ------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss before extraordinary item and preferred stock dividends ................. $ (8,593,298) $ (10,571,359)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred financing costs .................................. 798,739 817,120
Amortization of intangible assets ......................................... 321,115 321,115
Depreciation .............................................................. 498,783 498,783
Interest accrued on senior debt ........................................... 4,680,723 4,680,723
Non-cash compensation from stock options granted to employees ............. 245,700 1,640,429
Changes in operating assets and liabilities exclusive of acquisition
and capital expenditures:
Accounts receivable ....................................................... (465,613) (465,613)
Inventory ................................................................. (204,087) (204,087)
Prepaid expenses and other assets ......................................... (553,541) (589,177)
Accounts payable and accrued expenses ..................................... 1,395,980 1,780,035
------------------ ------------------
Net cash used in operating activities ................................. (1,875,499) (2,092,031)
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ...................................................... (14,726,275) (14,736,675)
Purchase of Spokane market ................................................ (35,506,694) (35,506,694)
Purchase of other network assets from Sprint .............................. (2,875,794) (2,875,794)
Change in restricted cash ................................................. (75,000,000) (75,000,000)
------------------ ------------------
Net cash used in investing activities ................................. (128,108,763) (128,119,163)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of senior subordinated notes and detachable
warrants ................................................................. 152,277,000 152,277,000
Repayment of long-term debt ............................................... (8,000,000) --
Drawings under senior secured credit facility ............................. 75,000,000 75,000,000
Financing costs ........................................................... (12,934,591) (13,668,591)
Capital lease payments .................................................... (8,019) (8,019)
Proceeds from issuance of convertible preferred stock subsequently
converted to common stock ................................................ 25,000,000 42,008,500
Preferred dividend payment ................................................ (1,007,684) (1,007,684)
Warrants exercised ........................................................ 24,891 24,891
Proceeds from issuance of common stock .................................... 100,000,000 100,019,417
Offering costs ............................................................ (8,119,134) (8,226,929)
------------------ ------------------
Net cash provided by financing activities ............................. 322,232,463 346,418,585
------------------ ------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS .................................... 192,248,201 216,207,391
CASH AND CASH EQUIVALENTS, beginning of period ............................... 23,959,190 --
------------------ ------------------
CASH AND CASH EQUIVALENTS, end of period ..................................... $ 216,207,391 $ 216,207,391
================== ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest .................................................... $ 1,703,814 $ 1,703,814
Cash paid for income taxes ................................................ -- --
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Network assets acquired but not paid ...................................... 5,969,074 5,969,074
Extraordinary item-early extinguishment of debt ........................... 4,217,677 4,217,677
Deferred financing costs incurred but not paid ............................ 325,000 325,000
Preferred stock accretion ................................................. 9,372,628 9,732,628
IPO costs incurred but not paid ........................................... 112,090 112,090

</TABLE>

The accompanying notes are an integral part of these consolidated statements.

<PAGE>

UBIQUITEL INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIAL INFORMATION

The consolidated financial information as of June 30, 2000 and for the three
months and six months ended June 30, 2000 is unaudited, but have been prepared
in accordance with generally accepted accounting principles for interim
financial information and Article 10 of Regulation S-X. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles. In the opinion of management, the interim data includes
all adjustments, consisting only of normal recurring adjustments, that are
considered necessary for fair presentation of the Company's financial position
at June 30, 2000, and the Company's operations for the three months and six
months ended June 30, 2000 and cash flows for the six months ended June 30,
2000. Operating results for the three months and six months ended June 30,
2000 are not necessarily indicative of results that may be expected for the
entire year. This financial information should be read in conjunction with the
audited financial statements and notes thereto for the years ended December
31, 1999 of UbiquiTel and the Spokane District (wholly owned by Sprint
Spectrum L.P. through April 15, 2000), the predecessor of UbiquiTel, which are
included in UbiquiTel's Registration Statement on Form S-1 (Registration No.
333-32236), as filed with and declared effective by the Securities and
Exchange Commission on June 7, 2000.

USE OF ESTIMATES

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

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998 and June 1999, the Financial Standards Board ("FASB"), issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities
and SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No. 133." These
statements require companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedging accounting.
SFAS No. 133 will be effective for UbiquiTel fiscal year ending December 31,
2001. Management believes that the adoption of these statements will not have
a significant impact on the Company's financial results.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB101"), "Revenue Recognition in Financial
Statements." SAB101 summarizes certain of the staff's interpretations in
applying generally accepted accounting principles to revenue recognition. The
provisions of SAB101 are effective for UbiquiTel's quarter ending June 30,
2000. Management is currently assessing the impact of the adoption of SAB101.

2. ORGANIZATION AND NATURE OF BUSINESS

The Company was formed for the purpose of becoming the exclusive provider of
Sprint Personal Communications Services ("PCS") in certain defined midsize and
smaller markets in the West and Midwestern United States.

<PAGE>

In October 1998, UbiquiTel L.L.C. (a Washington State Limited Liability
Company), whose sole member was The Walter Group entered into an agreement
with Sprint PCS for no consideration given for the exclusive rights to market
Sprint's 100% digital, 100% PCS products and services to the approximately 1.0
million residents in the Reno/Tahoe Nevada market. UbiquiTel L.L.C. had no
financial transactions from its inception (August 24, 1998) to September 29,
1999. On September 29, 1999, UbiquiTel Inc. (formerly "UbiquiTel Holdings,
Inc."), a Delaware Corporation, was incorporated. On November 1, 1999, the
Founders' Agreement was executed and common stock was issued to a group of
five shareholders referred to as "the Founders" including The Walter Group. In
November 1999, UbiquiTel L.L.C. assigned all of its material contracts
including the rights to the Sprint PCS agreements to UbiquiTel Inc. On
December 28, 1999, UbiquiTel Inc. amended its agreement with Sprint PCS to
expand the Company's markets to the Northern California, Spokane/Montana,
Southern Idaho/Utah/Nevada and Southern Indiana/Kentucky markets, which
together with the Reno/Tahoe markets contain approximately 7.7 million
residents.

On November 9, 1999, Operating Company (a Delaware Corporation, formerly a
Delaware limited liability company), was formed to serve as the operating
company for UbiquiTel. Also, on March 17, 2000, UbiquiTel Leasing Company, (a
Delaware Corporation) was formed to serve as the leasing company for UbiquiTel.

3. DEVELOPMENT STAGE ENTERPRISE

UbiquiTel was established on September 29, 1999 (inception). The Company has
devoted most of its efforts to date on activities such as preparing business
plans, raising capital, and planning the build-out of its PCS network in the
Reno/Tahoe market. From inception through June 30, 2000, the Company has not
generated significant revenues (approximately $2.3 million since inception)
and has incurred expenses of approximately $17.1 million including an
extraordinary item of approximately $4.2 million, resulting in an accumulated
deficit during the development stage of approximately $25.2 million as of June
30, 2000 after preferred stock dividends and effects of a beneficial
conversion on Series B Convertible Preferred Stock.

4. BASIC AND DILUTED NET LOSS PER SHARE

UbiquiTel computes net loss per common share in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128") and
SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under the provisions of SFAS
128 and SAB 98, basic and diluted net loss per common share is computed by
dividing the net loss available to common shareholders for the period by the
weighted average number of shares of common stock. No conversion of common
stock equivalents has been assumed in the calculations since the effect would
be anti-dilutive. Accordingly, the number of weighted average shares
outstanding as well as the amount of net loss per share are the same for basic
and diluted per share calculations for the period reflected in the
accompanying financial statement.

The following summarizes the securities outstanding, which are excluded from
the loss per share calculation, as amounts would have an anti-dilutive effect.

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2000 JUNE 30, 2000
----------------------- ----------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Stock Options ................................................. 4,051,500 4,051,500
Warrants ...................................................... 4,843,987 4,843,987
----------------------- ----------------------
Total ......................................................... 8,895,487 8,895,487
======================= ======================
</TABLE>

8
<PAGE>

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31,1999
-------------------- --------------------
(UNAUDITED)
<S> <C> <C>
Network Equipment .............................................. $ 21,583,760 $ --
Vehicles ....................................................... 119,894 --
Furniture & Office Equipment ................................... 575,915 --
-------------------- --------------------
22,279,569 --
Accumulated Depreciation ....................................... (498,782) --
-------------------- --------------------
Subtotal ................................................ 21,780,787 --
Construction in Progress ....................................... 19,931,883 4,085,942
-------------------- --------------------
Total ................................................... $ 41,712,670 $ 4,085,942
==================== ====================
</TABLE>

6. LONG-TERM DEBT

Long-term debt outstanding as of December 31, 1999 and June 30, 2000
(unaudited) is as follows:

<TABLE>
<CAPTION>
JUNE 30,2000 DECEMBER 31,1999
-------------------- --------------------
(UNAUDITED)
<S> <C> <C>
12% Senior Subordinated Note ................................... $ -- $ 8,000,000
Less: Discount .............................................. -- (2,188,131)
14% Senior Subordinated Discount Notes ......................... 300,000,000 --
Less: Discount .............................................. (143,042,277) --
Less: Warrants .............................................. (15,624,889) --
Senior Secured Credit Facility ................................. 75,000,000 --
-------------------- --------------------
Long-term debt ......................................... $ 216,332,834 $ 5,811,869
-------------------- --------------------
</TABLE>

On November 12, 1999, the Company signed a commitment letter for a Purchase
Agreement with BET Associates, which included an $8.0 million senior
subordinated note. The Purchase Agreement was finalized and executed on
December 28, 1999. The note bore stated interest at 12% payable quarterly and
matured on December 28, 2007. BET Associates also received a warrant to
purchase 4,978,150 shares of voting common stock at a par value of $0.0005 per
share and an exercise price of $0.005 per share with an exercise period of ten
years. Of the $8.0 million in proceeds received under the purchase agreement,
approximately $2.2 million was allocated to the detachable warrants based on
the fair value of the warrants on the date of issuance as determined using the
Black-Scholes Model. On April 11, 2000, following the finalization and
execution of the senior subordinated discount note, the notes were prepaid as
required by the Note Agreement with a prepayment premium of 1% and interest
earned from April 1, 2000 to the repayment date.

On December 29, 1999 (the "facility effective date"), the Company finalized
and executed a $25.0 million Senior Secured Credit Agreement (the "Facility"),
with Paribas, as Administrative Agent, and certain banks and other financial
institutions party thereto. No amount was drawn under this Facility. On
February 22, 2000, Operating Company received a commitment letter from
Paribas, as Administrative Agent, and certain banks and other financial
institutions party thereto for a $250.0 million senior secured credit
facility. UbiquiTel has guaranteed the credit facility which was finalized and
executed on March 31, 2000 and replaces the previous $25.0 million facility.
The credit facility consists of a revolving loan of up to $55.0 million, a
term loan A of $120.0 million and a term loan B of $75.0 million.

<PAGE>

The revolving loan and term loan A will mature in October 2007 and the term
loan B will mature in October 2008. The revolving loans are required to be
repaid beginning in February 2002, in eighteen quarterly consecutive
installments. The term loans A and B are required to be repaid beginning in
June 2004 in fourteen and eighteen consecutive quarterly installments,
respectively. The amount of each of the quarterly consecutive installments
increases incrementally in accordance with the credit facility agreement. The
amount that can be borrowed and outstanding under the revolving loans reduces
in eight quarterly reductions of approximately $6.9 million beginning with
December 2005.

Operating Company may borrow funds as either a base rate loan with an interest
rate of prime plus 2.00% for the revolving loans and term loan A and prime
plus 2.50% for term loan B or a Eurodollar Loan with an interest rate of the
London Interbank Offered Rate, commonly referred to as LIBOR, plus 3.25% for
the revolving loans and term loan A and plus 3.75% for term loan B. In
addition, an unused credit facility fee ranging from 0.75% to 1.375% will be
charged quarterly on the average unused portion of the facility.

Initial borrowings of $75.0 million under the term loan B were made on April
11, 2000. This amount was funded into an escrow account that is controlled by
Paribas and will not be released until specified conditions have been
satisfied. These conditions include, among others, evidence that the Company
has used all of the proceeds from the sale of the Notes and from UbiquiTel's
initial public offering of its common stock to pay fees and expenses in
connection with those offerings, to fund the build-out of the Company's PCS
network or for other general corporate and working capital purposes.
Additional borrowings are subject to these escrow arrangements and will not be
provided until the initial borrowings of $75.0 million have been released.

In conjunction with the closing of this facility, the Company incurred
financing fees of approximately $7.1 million which are being amortized over
the term of the credit facility. Deferred financing fees of approximately $1.7
million relating to the old credit facility have been expensed during the
three month period ended June 30, 2000 (unaudited) as an extraordinary item.

On April 11, 2000, Operating Company issued 14% Senior Subordinated Discount
Notes. See Note 10 for additional information.

7. STOCK OPTION PLAN

The Company adopted an incentive stock option plan in 1999, which provides for
the granting of non-qualified stock options to purchase shares of the
Company's common stock to officers and key employees. The Company applied APB
No. 25, "Accounting for stock issued to employees" and related interpretations
in accounting for its employee stock options.

In 1999, the Company granted an aggregate of 650,000 non-qualified options to
three employees pursuant to its 2000 Stock Equity Incentive Plan. These
options have an exercise price of $0.50 per share and vest over four years.
Following the resignation of one of the employees during the three month
period ended June 30, 2000, 200,000 non-qualified options were forfeited.
Donald A. Harris, President and CEO, pursuant to his employment agreement
dated November 29, 1999, was granted an option to purchase 2,550,000 shares of
the Company's common stock which is not subject to the Company's equity
incentive plan.

In January 2000, the Company issued an aggregate of 320,000 non-qualified
options to employees pursuant to its 2000 Stock Equity Incentive Plan. 260,000
of these options had an exercise price that was approximately $7.50 less per
share than the fair market value of the common stock on the date of grant.
Accordingly, the Company will recognize compensation expense of approximately
$2.0 million over the 48-month vesting period for these options.

<PAGE>

During the three months and six months ended June 30, 2000 (unaudited), the
Company amortized approximately $127,000 and $246,000 of this expense,
respectively. The remaining 60,000 options had an exercise price equal to the
initial public offering price of $8.00 per share. The total options
outstanding at the end of the period were 4,051,500.

In February 2000, the board of directors approved the 2000 Equity Incentive
Plan (the "Plan"). The purpose of the Plan is to attract, retain and reward
key employees, consultants and non-employee directors. A committee consisting
of members from the board of directors administers the Plan. The committee
may grant stock options, stock appreciation rights and other equity-based
awards to eligible persons, as defined in the Plan. The plan authorized up to
4,080,000 shares of common stock for issuance under the Plan and does not
include awards paid in cash. During the three and six month periods ended
June 30, 2000, the committee granted 731,500 and 1,051,500 options to
employees. The options with the exception of the 260,000 options discussed
above were granted with an exercise price equal to the fair value of the
stock using the Black-Scholes Model which up to and including June 7, 2000
was the initial public offering price of $8.00 per share.

8. INCOME TAXES

The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"). SFAS 109 requires an asset and liability approach which
requires the recognition of deferred tax assets and deferred tax liabilities
for the expected future tax consequences of temporary differences between the
carrying amounts and the tax bases of assets and liabilities. Valuation
allowances will be established when necessary to reduce deferred tax assets to
the amount expected to be realized.

No benefit for federal income tax has been recorded for the six months ended
June 30, 2000, as the net deferred tax asset is fully reserved because of the
uncertainties regarding the Company's ability to utilize the asset in future
years.

9. STOCKHOLDERS' EQUITY

On June 7, 2000, UbiquiTel completed the initial public offering of its common
stock ("IPO"). A total of 12,500,000 shares of common stock (excluding 780,000
shares of common stock upon exercise of a portion of the underwriters'
overallotment option effective on July 6, 2000) were sold to the public at a
price of $8.00 per share. UbiquiTel received net proceeds of approximately
$93.8 million after underwriting discounts of $6.2 million. Concurrently with
the IPO, all of the shares of UbiquiTel's preferred stock were converted into
shares of UbiquiTel's common stock on a two-for-one basis.

10. WHOLLY-OWNED OPERATING SUBSIDIARY SUMMARIZED FINANCIAL INFORMATION

On April 11, 2000, Operating Company issued 14% Senior Subordinated Discount
Notes with a maturity value of $300.0 million and Warrants to purchase
3,579,000 shares of common stock of UbiquiTel at an exercise price of $11.37
per share under Section 4(2) of the Securities Act of 1933. The Notes were
issued at a discount and generated approximately $152.3 million in gross
proceeds. The proceeds will be used to partially fund capital expenditures
relating to the network build-out, operating losses, working capital, the
acquisition of the Sprint PCS Spokane, Washington assets, repayment of the
$8.0 million 12% Senior Subordinated Note and the related prepayment fee and
other general corporate purposes. The Notes have a ten-year maturity and will
accrete in value until April 15, 2005 at an interest rate of 14%. Interest
will become payable semiannually beginning on October 15, 2005. Up to 35% of
the Notes will be redeemable on or prior to April 15, 2003 from net proceeds
of one or more public equity offerings, other than the IPO. Any remaining
Notes will be redeemable on or after April 15, 2005.

<PAGE>

The indenture governing the Notes contains customary covenants, including
covenants limiting indebtedness, dividends and distributions on, and
redemptions and repurchases of, capital stock and other similar payments, the
acquisition and disposition of assets, and transactions with affiliates or
related persons. The indenture governing the Notes provides for customary
events of default, including cross defaults, judgment defaults and events of
bankruptcy.

UbiquiTel has unconditionally guaranteed Operating Company's obligations under
the Notes. UbiquiTel has no operations separate from its investment in
Operating Company. Separate financial statements and other disclosures related
to Operating Company as issuer of the debt are not provided because management
has determined that such information is not material to investors. The
summarized financial information of Operating Company as of December 31, 1999
and June 30, 2000 (unaudited) and for the three months ended June 30, 2000,
and for the six months ended June 30, 2000 (unaudited) and the cumulative
period from November 9, 1999 (inception) to June 30, 2000 (unaudited) is
presented below:

Summarized balance sheet data JUNE 30, 2000 DECEMBER 31, 1999
-------------------- --------------------
(Unaudited)
<S> <C> <C>

Assets:
Cash and other current assets .................... $ 217,766,403 $ 23,994,826
Property and equipment ........................... 21,780,787 --
Construction in progress, net .................... 19,931,883 4,085,942
Other assets ..................................... 16,504,986 --
Restricted cash .................................. 75,000,000 --
Deferred financing costs ......................... 12,893,522 2,110,642
-------------------- --------------------
Total assets ................................. $ 363,877,581 $ 30,191,410
-------------------- --------------------

Liabilities and Equity:
Accounts payable and accrued expenses ............ $ 2,225,909 $ 373,575
Due to Lucent Technologies ....................... 5,765,654 3,883,419
Due to related parties ........................... 13,927 813,441
Accrued interest ................................. 1,426,110 10,521
Current installment of capital leases ............ 72,226 --
Advances from parent ............................. 150,975,640 19,584,045
Long-term debts and leases ....................... 216,494,551 5,811,869
-------------------- --------------------
Total liabilities ............................ 376,974,017 30,476,870
Equity and Accumulated Deficit ................... (13,096,436) (285,460)
-------------------- --------------------
Total liabilities and equity ................. $ 363,877,581 $ 30,191,410
==================== ====================
</TABLE>

<TABLE>
<CAPTION>
Cumulative for
the Period from
Three Months Six Months Inception
Ended ended (November 9, 1999)
Summarized statement of operations data June 30, 2000 June 30, 2000 to June 30, 2000
-------------------- -------------------- --------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>

Revenues .............................................. $ 2,231,846 $ 2,300,365 $ 2,300,365
Costs and expenses, including non-cash
compensation charges .............................. (5,003,292) (5,947,518) (6,205,076)
Interest expense (income) ............................. (4,900,150) (4,946,145) (4,975,047)
Extraordinary item--loss on early
extinguishment of debt ............................ (2,494,798) (4,217,677) (4,217,677)
-------------------- -------------------- --------------------
Net loss .............................................. $ (10,166,394) $ (12,810,975) $ (13,097,435)
==================== ==================== ====================
</TABLE>

12
<PAGE>

11. ACQUISITION OF SPOKANE MARKET

In January 2000, the Company signed an agreement to purchase from Sprint PCS
the Spokane, Washington market's PCS networks and related assets and
subscribers for approximately $35.0 million. The Company closed this
transaction on April 15, 2000. The acquisition was accounted for under the
Purchase method as specified in APB 16. At June 30, 2000, the allocation of
the purchase price for this acquisition is preliminary and is subject to
further refinement based upon the completion of final valuation studies. The
operating results of the acquired business have been included in the
Consolidated Statement of Operations from the date of acquisition.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

This quarterly report on Form 10-Q includes forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially
from the results anticipated in these forward-looking statements. Investors
are referred to the documents filed by UbiquiTel with the Securities and
Exchange Commission, specifically the most recent filings which identify
important risk factors that could cause actual results to differ from those
contained in the forward looking statements, including potential fluctuations
in quarterly results, dependence on new product development, rapid technology
and market change and risks related to the build-out of our PCS network as
well as future growth and rapid expansion. These and other applicable risks
are described under the caption "Risk Factors" in UbiquiTel's Registration
Statement on Form S-1 (Registration No. 333-32236), as filed with and declared
effective by the Securities and Exchange Commission on June 7, 2000. We are a
development stage company and intend to significantly expand our operations.
Accordingly, we do not believe the discussion and analysis of our historical
financial condition and results of operations set forth below are indicative
nor should they be relied upon as an indicator of our future performance.

OVERVIEW

In October 1998, a limited liability company whose sole member was The Walter
Group, entered into a management agreement with Sprint PCS whereby it became
the Sprint PCS affiliate with the exclusive right to provide 100% digital,
100% PCS services under the Sprint and Sprint PCS brand names in the
Reno/Tahoe market. The limited liability company subsequently changed its name
to UbiquiTel L.L.C. In November 1999, UbiquiTel L.L.C. assigned the management
and related agreements to UbiquiTel, Inc. UbiquiTel L.L.C. had no operations
or financial transactions prior to the assignment of these agreements to
UbiquiTel, Inc.

In December 1999, we amended our management agreement with Sprint PCS to
expand to markets to include a total of 7.7 million residents in the western
and Midwestern United States.

In March 2000, Operating Company entered into a new $250.0 million credit
facility.

In April 2000, we completed a sale of 300,000 units consisting of the Notes
and warrants to purchase, in the aggregate, 3,579,000 shares of UbiquiTel's
common stock. We received gross proceeds of approximately $152.3 million from
the sale of the units.

In April 2000, we acquired Sprint PCS' Spokane, Washington PCS network and
related assets for $35.0 million cash. We acquired switching equipment,
transmitting and receiving equipment at 41 radio communications sites,
ancillary equipment, prepaid expenses, goodwill and customer lists. The
Spokane market did not launch operations until December 16, 1996, and had no
significant revenues until 1997. We also acquired from Sprint certain network
equipment in Logan, UT and Las Vegas, NV.

<PAGE>

In June 2000, UbiquiTel sold 12,500,000 shares of its common stock in its
initial public offering. In July 2000, UbiquiTel sold an additional 780,000
shares of its common stock upon exercise of a portion of the underwriters'
overallotment option. We received gross proceeds of approximately $106.2
million from the offering, including the exercise of the overallotment option.

We have currently commenced limited operations in one of our markets, which
together with the Spokane, Washington market, cover approximately 500,000
residents. We currently have approximately 10,000 subscribers. We expect to
cover approximately 55% of the resident population in our markets by the end
of 2001 and expect to cover approximately 63% by June 30, 2004 upon completion
of our build-out.

We are a development stage company with very limited operations and revenues,
significant losses and substantial capital requirements. From our inception on
September 29, 1999 through June 30, 2000, we have incurred losses of
approximately $25.2 million. We expect to continue to incur significant
operating losses and to generate significant negative cash flow from operating
activities until at least 2003 while we develop and construct our PCS network
and build our customer base. Through June 30, 2000, we incurred approximately
$42.2 million of capital expenditures, inclusive of approximately $18.4
million worth of Network Equipment acquired as part of Spokane market purchase.

As a Sprint PCS affiliate, we do not own the licenses to operate our network
and instead, we pay Sprint PCS for the use of its licenses. Under our
management agreement with Sprint PCS, Sprint PCS is entitled to receive 8.0%
of all collected revenue from Sprint PCS subscribers based in our markets and
fees from wireless service providers other than Sprint PCS when their
subscribers roam into our network. We are entitled to 100% of revenues
collected from the sale of handsets and accessories, on roaming revenues
received when Sprint PCS customers from a different territory make a wireless
call on our PCS network, and on roaming revenues from non-Sprint PCS
customers. We are responsible for building, owning and managing the portion of
the Sprint PCS Network located in our markets under the Sprint and Sprint PCS
brand names. Sprint PCS paid approximately $90.0 million for the PCS licenses
in our markets and will incur additional expenses for microwave clearing. Our
results of operations are dependent on Sprint PCS' network and, to a lesser
extent, on the networks of our affiliates.

As a Sprint PCS affiliate, we will purchase a full suite of support services
from Sprint PCS. Initially, the charges for these services will be lower than
if we provided these services ourselves. In addition, we expect that, by using
these established services, our capital expenditures and demands on our
management's time in connection with support services will be lower than if we
developed and provided the services ourselves. We will have access to these
services during the term of our Sprint PCS management agreement unless Sprint
PCS provides us at least nine months advance notice of its intention to
terminate any particular service. Because of the economic benefits to us, we
will initially purchase: customer billing and collections; customer care;
subscriber activation including credit verification; handset logistics;
network operations control center monitoring; national platform
interconnectivity; voice mail; directory assistance and operator services;
long distance; and roaming clearinghouse services. If Sprint PCS terminates
any of these services or increases the amount it charges us for any of these
services, our operating costs may increase and our operations may be
interrupted or restricted.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2000

Customer Additions

<PAGE>

As of June 30, 2000, the Company provided personal communication services to
approximately 9,900 customers resulting from the acquisition of Spokane market
from Sprint on April 15, 2000 and subsequent activations in that market.

Revenues

- SUBSCRIBER REVENUE. Subscriber revenue during the quarter ended June
30, 2000 was approximately $1.4 million. This consists of monthly
recurring service charges and monthly non-recurring charges for local,
long distance, travel and roaming airtime usage in excess of the
pre-subscribed usage plan received from Sprint PCS subscribers based in
our territory. Our customers' charges are dependent on their rate
plans, based on the number of minutes included in their plan. These
plans generally reflect the terms of national plans offered by Sprint
PCS and are issued from month-to-month.

- SPRINT PCS TRAVEL REVENUE. Sprint PCS travel revenue is generated on a
per-minute rate when a Sprint PCS subscriber based outside our markets
uses our portion of the Sprint PCS network. During the quarter ended
June 30, 2000, we generated approximately $693,000 in Travel revenue
from our networks in Auburn/Grass valley, CA, Spokane, WA, Las Vegas,
NV, and Logan, UT. With the exception of our network in Auburn/Grass
Valley, all of our networks generated travel revenue for two and a half
months during the quarter.

- NON-SPRINT PCS ROAMING REVENUE. Non-Sprint PCS roaming revenue is
generated when a non-Sprint PCS subscriber uses our portion of the
Sprint PCS network. We earned approximately $16,000 in non-Sprint
roaming revenue during the quarter.

During the quarter ended June 30, 2000, our average monthly revenue per user
including travel and roaming revenues, was approximately $83, and without
roaming and travel revenues was approximately $56.

- PRODUCT SALES REVENUE. Product sales revenue is generated from the sale
of handsets and accessories. We record and retain 100% of the revenue
from the sale of handsets and accessories, net of an allowance for
returns, as product sales revenue. The amount recorded during the
quarter ended June 30, 2000 for product sales totaled approximately
$162,000.

Cost of Service and operations

- NETWORK OPERATIONS EXPENSES. Expenses totaling approximately $1.3
million incurred during the quarter ended June 30, 2000 related to
network operations which includes radio communications site lease
costs, utilities, network control maintenance, network control site
leases, engineering personnel, transport facilities, interconnect
charges.

- ROAMING AND TRAVEL EXPENSES. We pay Sprint PCS travel fees on a
per-minute rate when our customers use the Sprint PCS network outside
our market. Pursuant to our affiliation agreement, Sprint PCS can
change this rate. We pay roaming fees to other wireless providers when
our customers use their network. During the quarter ended June 30,
2000, we paid a total of approximately $365,000 in roaming and travel
fees.

- OPERATING EXPENSES. Other operating expenses totaling approximately
$173,000 were incurred during the quarter ended June 30, 2000. The fees
we pay to Sprint PCS for the use of their support services, including
billing and collections services and customer care are also included in
this expense category.

<PAGE>

Cost of Products Sold

The cost of products sold totaled approximately $275,000 during the quarter
ended June 30, 2000. This includes the cost of handsets and accessories. The
cost of handsets exceeds the retail sales price because we subsidize the cost
of handsets, consistent with industry practice.

Selling and Marketing

Selling expenses relate to our distribution channels, sales representatives,
sales support personnel, our retail stores, advertising programs and residual
commissions. We incurred expenses of approximately $526,000 during the three
month period ended June 30, 2000. At June 30, 2000, there were approximately
26 employees performing sales and marketing functions.

General and Administrative

We incurred general and administrative expenses totaling approximately $1.5
million during the quarter ended June 30, 2000. General and administrative
expenses include our corporate executive payroll, compensation and benefits,
insurance and facilities, information technology and local market finance and
administration expenses. This also includes the fees we pay to Sprint for
management support.

Noncash Compensation for General and Administrative Matters

During the quarter ended June 30, 2000, non-cash compensation for general and
administrative matters totaled approximately $127,000. The Company applies the
provisions of APB Opinion No. 25 and related interpretations in accounting for
its stock option plan. Unearned stock option compensation is recorded for the
difference between the exercise price and the fair market value of the
Company's stock at the date of grant and is recognized as noncash stock option
compensation expense in the period in which the related services are rendered.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended June 30, 2000
totaled approximately $795,000. We depreciate our property and equipment using
the straight-line method over five to ten years. Amortization of intangible
assets is over 2 to 20 years.

Interest Income

For the three months ended June 30, 2000, interest income was approximately
$3.8 million. This was generated from cash proceeds from our private equity
sales, the initial public offering, senior subordinated discount notes and
drawings under the senior secured credit facility. The proceeds were invested
in liquid accounts waiting to be deployed. As capital expenditures are made to
complete the build-out of our network, decreasing cash balances may result in
lower interest income for the remainder of 2000.

Interest Expense

Interest expense totaled approximately $8.2 million during the three months
ended June 30, 2000. We accrue interest at a rate of 14% per annum on our
senior subordinated discount notes through April 15, 2005 and will pay
interest semiannually in cash thereafter. Interest on our senior credit
facility accrued at prime rate plus specified margin through May 2000 and was
subsequently rolled under the reserve adjusted London interbank offered rate,
based on monthly contracts.

<PAGE>

Interest expense also included the amortized amount of deferred financing fees
relating to our senior credit facility and senior subordinated discount notes.
We expect our interest expense to increase in the future as we borrow under
our senior credit facility to fund our network build-out and operating losses.

Net Loss

For the three months ended June 30, 2000, the net loss was approximately $11.3
million.

FOR THE SIX MONTHS ENDED JUNE 30, 2000

Our operating results for the six months ended June 30, 2000 consist largely
of revenues generated in the three months ended June 30, 2000 and operating
expenses associated with those revenues. Our activities in the first quarter
were limited to network build-out and development of various operating
functions for the Company.

Revenues

- SUBSCRIBER REVENUE. Subscriber revenue for the six months ended June
30, 2000 was approximately $1.4 million. This consists of monthly
recurring service charges and monthly non-recurring charges for local,
long distance, travel and roaming airtime usage in excess of the
pre-subscribed usage plan received from Sprint PCS subscribers based in
our territory.

- SPRINT PCS TRAVEL REVENUE. During the six months ended June 30, 2000,
we generated approximately $761,000 in travel revenue from our networks
in Auburn/Grass valley, CA, Spokane, WA, Las Vegas, NV, and Logan, UT.
With the exception of our network in Auburn/Grass Valley, all of our
networks generated travel revenue for two and a half months during the
quarter.

- PRODUCT SALES REVENUE. Product sales revenue is generated from the sale
of handsets and accessories. We record and retain 100% of the revenue
from the sale of handsets and accessories, net of an allowance for
returns, as product sales revenue. The amount recorded during the six
months ended June 30, 2000 for product sales totaled approximately
$162,000.

Cost of Service and operations

- NETWORK OPERATIONS EXPENSES. Network operating expenses totaling
approximately $1.5 million was incurred during the six months ended
June 30, 2000. These included radio communications site lease costs,
utilities, network control maintenance, network control site leases,
engineering personnel, transport facilities, interconnect charges. The
payroll and other expenses associated with network build-out were also
included in network operating expenses.

- ROAMING AND TRAVEL EXPENSES. During the six months ended June 30, 2000,
we paid a total of approximately $365,000 in roaming and travel fees.

- OPERATING EXPENSES. Other operating expenses totaling approximately
$173,000 were incurred during the six months ended June 30, 2000. The
fees we pay to Sprint PCS for the use of their support services,
including billing and collections services, customer care and
subscriber activation are also included in this expense category.

<PAGE>

Cost of Products Sold

The cost of products sold totaled approximately $275,000 during the six months
ended June 30, 2000. This includes the cost of handsets and accessories. The
cost of handsets exceeds the retail sales price because we subsidize the cost
of handsets, consistent with industry practice.

Selling and Marketing

Selling expenses relate to our distribution channels, sales representatives,
sales support personnel, our retail stores, advertising programs and residual
commissions. We incurred expenses of approximately $580,000 during the six
month period ended June 30, 2000.

General and Administrative

We incurred general and administrative expenses totaling approximately $2.0
million during the six months ended June 30, 2000. General and administrative
expenses include our corporate executive payroll, compensation and benefits,
insurance and facilities, information technology and local market finance and
administration expenses. This also includes the fees we pay to Sprint for
management support.

Noncash Compensation for General and Administrative Matters

During the six months ended June 30, 2000, non-cash compensation for general
and administrative matters totaled approximately $246,000. The Company applies
the provisions of APB Opinion No. 25 and related interpretations in accounting
for its stock option plan. Unearned stock option compensation is recorded for
the difference between the exercise price and the fair market value of the
Company's stock at the date of grant and is recognized as noncash stock option
compensation expense in the period in which the related services are rendered.

Depreciation and Amortization

Depreciation and amortization expense for the six months ended June 30, 2000
totaled approximately $820,000. We depreciate our property and equipment using
the straight-line method over five to ten years.

Interest Income

For the six months ended June 30, 2000, interest income was approximately $3.7
million. This was generated from cash proceeds from our private equity sales,
the initial public offering, senior subordinated discount notes and drawings
under the senior secured credit facility. The proceeds were invested in liquid
accounts waiting to be deployed. As capital expenditures are made to complete
the build-out of our network, decreasing cash balances may result in lower
interest income for the remainder of 2000.

Interest Expense

Interest expense totaled approximately $8.6 million during the six months
ended June 30, 2000. We accrue interest at a rate of 14% per annum on our
senior subordinated discount notes through April 15, 2005 and will pay
interest semiannually in cash thereafter. Interest on our senior credit
facility accrued at prime rate plus specified margin through May 2000 and was
subsequently rolled under the reserve adjusted London interbank offered rate,
based on monthly contracts. Interest expense also included the amortized
amount of deferred financing fees relating to our senior credit facility and
senior subordinated discount notes.

<PAGE>

Net Loss

For the six months ended June 30, 2000, the net loss was approximately $23.2
million.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, our activities have consisted principally of raising capital,
consummating and supporting our agreements with Sprint PCS, developing the
initial design of our PCS network and adding to our management team. We have
relied on the proceeds from equity and debt financing, rather than revenues,
as our primary sources of capital. Specifically, operations during this
development phase have been funded through equity infusions of $142.0 million
in the form of preferred stock and initial public offering and the proceeds of
senior subordinated discount notes of $152.3 million. Cash interest on the
senior subordinated discount notes will become payable on October 15, 2005.

Completion of our PCS network will require substantial capital. Our build-out
plan includes the installation of 3 switches and over 500 radio communications
sites by the end of 2001. In addition, we will develop approximately 20
company-owned Sprint PCS stores and associated administrative systems within
the same time period. As of June 30,2000, we have completed the construction
of two retail stores in Spokane, WA. We also have 57 radio communications
sites currently generating revenues as of June 30, 2000.

On March 31, 2000, we signed a new senior secured credit agreement with
Paribas. The new senior credit facility consists of a revolving loan of up to
$55.0 million, a term loan A of $120.0 million and a term loan B of $75.0
million. Concurrently with the closing of our senior subordinated discount
notes, we borrowed $75.0 million of term loans, which were funded into an
escrow account. These borrowings under the credit facility at June 30, 2000,
bear interest at LIBOR plus 4.25%. The escrow account will remain the property
of our lenders and will not be released to us if an event of default has
occurred under the credit agreement. Additionally, the escrow account will not
be released to us until specified conditions have been satisfied. These
conditions include, among others, evidence that we have used all of the
proceeds from our sale of senior subordinated discount notes and from
UbiquiTel's initial public offering to pay fees and expenses in connection
with these offerings, to fund the build-out of our network or for other
general corporate and working capital purposes. Additional borrowings under
our senior credit facility must be placed into escrow until the conditions to
release our initial borrowing of $75.0 million have been satisfied. Our senior
credit facility contains financial and other covenants customary for the
wireless industry, and is secured by a first priority lien on our assets and a
pledge by UbiquiTel of the capital stock in Operating Company. Scheduled
amortization payments of principal for the term loans under the senior credit
facility begin on June 30, 2004.

As of June 30, 2000, we had approximately $216.2 million in cash and cash
equivalents, and an additional $75.0 million in an escrow account subject to
release pending satisfaction of certain conditions under our senior credit
facility. Working capital was approximately $208.2 million.

Net cash used by operating activities was approximately $1.9 million for the
six months ended June 30, 2000. This was primarily attributable to the
operating loss of approximately $8.6 million being partly offset by noncash
items of approximately $6.5 million including approximately $4.7 million of
interest accrued on the notes and cash provided by working capital of
approximately $173,000.

Net cash used in investing activities was approximately $128.1 million during
the six months ended June 30, 2000. The expenditures were related primarily
to the purchase of Spokane market for approximately $35.5 million, the
purchase of other network assets from Sprint for approximately $2.9 million
and payment for equipment needed in the construction of our portion of the
Sprint PCS Network. This also included investment of $75 million restricted
cash in short-term securities.

<PAGE>

Net cash provided by financing activities was approximately $322.2 million,
consisting primarily of the preferred stock issued of $25.0 million, proceeds
of $152.3 million from the senior subordinated discount notes, $75.0 million
drawing under the senior credit facility and the $100.0 million proceed from
the initial public offering. The proceeds were reduced by financing costs and
IPO costs of approximately $21.0 million, preferred dividend payment of
approximately $1.0 million and the repayment of the $8.0 million term loan.

As part of our management agreement, Sprint PCS requires us to build-out
portions of our network by various dates including December 31, 2000, March
31, 2001, September 30, 2001 and June 1, 2005. We believe we have sufficient
funds available through cash, investments and future advancements under our
senior credit facility to fund capital expenditures, including the completion
of our build-out, working capital requirements and operating losses through
2003. The actual funds required to build-out our portion of the Sprint PCS
network and to fund operating losses and working capital needs may vary
materially from our estimates, and additional funds could be required.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

For the quarter ended June 30, 2000, we did not experience any material change
in market risk exposures that affect the quantitative and qualitative
disclosures presented in UbiquiTel's Registration Statement on Form S-1
(Registration No. 333-32236), as filed with and declared effective by the
Securities and Exchange Commission on June 7, 2000 except as noted below.

The Company's senior credit facility is subject to market risk and interest
rate changes. At the Company's option, the term loans under the credit
facility bear interest at either LIBOR plus a specified margin or prime plus a
specified margin. The outstanding principal balance on the credit facility is
approximately $75.0 million at June 30, 2000. Considering this total
outstanding balance of approximately $75.0 million at June 30, 2000, a 1%
change in interest rate would result in an increase in pre-tax losses of
approximately $750,000 per year.

Inflation

Management believes that inflation has not had, and will not have, a material
adverse effect on our results of operations.

Seasonality

Our business is seasonal because the wireless industry is heavily dependent on
fourth quarter results. Among other things, the industry relies on
significantly higher customer additions and handset sales in the fourth
quarter as compared to the other three fiscal quarters. The factors
contributing to this trend include the increasing use of retail distribution,
which is dependent on year-end holiday shopping, the timing of new product and
service offerings, competitive pricing pressures and aggressive marketing and
promotions during the holiday season.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Changes in Securities and Use of Proceeds

<PAGE>

(c) Reference is made to Notes 7 and 10 of the Consolidated Financial
Statements included herein for a description of stock options granted to our
employees to purchase shares of UbiquiTel's common stock during the
three-month period ended June 30, 2000 and the sale of warrants to purchase
3,579,000 shares of UbiquiTel's common stock on April 11, 2000. The issuances
of such securities were deemed to be exempt from registration under the
Securities Act of 1933 in reliance upon Section 4(2) or in reliance upon Rule
701 promulgated thereunder, in each case as transactions not involving a
public offering.

(d) On June 7, 2000, UbiquiTel completed a public offering of its common
stock. An aggregate of 13,280,000 shares (including 780,000 shares upon
exercise of a portion of the underwriters' overallotment option on July 7,
2000) were sold to the public at a price of $8.00 per share. The offering was
effected pursuant to a Registration Statement on Form S-1 (Registration No.
333-32236), which was declared effective by the Securities and Exchange
Commission on June 7, 2000. Donaldson Lufkin & Jenrette, Banc of America
Securities LLC and DLJDIRECT Inc. were the managing underwriters for the
offering.

Of the approximately $106.2 million in aggregate proceeds received by us in
the offering, (i) approximately $6.6 million was paid to underwriters in
connection with the underwriting discount, and (ii) approximately $2.0 million
was paid in connection with offering expenses, printing fees, filing fees and
legal fees. We expect to use the proceeds of the offering to partially fund
the construction of our network and general corporate purposes, including
working capital and the funding of operating losses. Pending such uses, we
expect to invest the proceeds in short-term, interest bearing,
investment-grade securities.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

On May 30, 2000, in connection with UbiquiTel's initial public offering, the
security holders of UbiquiTel acting by written consent approved, among other
things, (i) a two-for-one stock split of UbiquiTel's voting and non-voting
common stock, (ii) the amendment and restatement of UbiquiTel's certificate of
incorporation and (iii) the amendment and restatement of UbiquiTel's by-laws.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

(a) Reports on Form 8-K

None.

(b) Exhibits:

Exhibit No. Description
----------- -----------
27.1 Financial Data Schedule

<PAGE>

SIGNATURES

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

CO-REGISTRANTS:

UBIQUITEL INC.
UBIQUITEL OPERATING COMPANY

By: /s/ DONALD A. HARRIS
-------------------------------------------
Donald A. Harris
Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)

By: /s/ PETER LUCAS
--------------------------------------------
Peter Lucas
Interim Chief Financial Officer
(Principal Financial and Accounting Officer)

August 14, 2000