POWERTEL INC /DE/, 10-K, 2000-03-29

POWERTEL INC /DE/
10-K, 2000-03-29
RADIOTELEPHONE COMMUNICATIONS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[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: 0-23012

POWERTEL, INC.
(Exact name of Registrant as specified in its charter)

Delaware 58-1944750
(State of incorporation) (I.R.S. Employer Identification No.)

1233 O.G. Skinner Drive, West Point, Georgia 31833
(Address of principal executive office) (Zip Code)

(Registrant's telephone number including area code): (706) 645-2000

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.01 Per Share
(Title of each class)

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 into Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of $80.00 on March 27, 2000, as
reported on the Nasdaq Stock Market's National Market, was approximately
$1,306,429,000. As of March 27, 2000, the Registrant had 30,937,441 shares of
common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Definitive Proxy Statement for the 2000 Annual
Meeting of Stockholders are incorporated by reference into Part III of this
Report.

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INDEX TO FORM 10-K

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PART I

Item 1 Business ........................................................................................... 2
Item 2 Properties ......................................................................................... 9
Item 3 Legal Proceedings .................................................................................. 9
Item 4 Submission of Matters to a Vote of Security Holders ................................................ 9

PART II

Item 5 Market for Common Equity and Related Stockholder Matters ........................................... 10
Item 6 Selected Financial Data ............................................................................ 11
Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations .............. 13
Item 7A. Quantitative and Qualitative Disclosures About Market Risks ........................................ 21
Item 8 Financial Statements and Supplementary Data ........................................................ 21
Item 9 Changes and Disagreements with Accountants in Accounting and Financial Disclosures ................. 21

PART III

Item 10. Directors and Executive Officers of the Registrant ................................................. 21
Item 11. Executive Compensation ............................................................................. 21
Item 12. Security Ownership of Certain Beneficial Owners and Management ..................................... 22
Item 13. Certain Relationships and Related Transactions ..................................................... 22

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K .................................... 22

Signatures .................................................................................................... 29
</TABLE>

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PART I

ITEM 1. BUSINESS

Unless otherwise indicated, all population data set forth herein is
based on the 1999 Paul Kagan Associates, Inc. Cellular/PCS POP Book, and all
industry data set forth herein is based upon information compiled by the
Cellular Telecommunications Industry Association and/or Paul Kagan Associates,
Inc.

We provide digital wireless personal communications services ("PCS")
in the southeastern United States under the name "Powertel." Our licenses
encompass a territory of approximately 246,000 contiguous square miles with a
population of approximately 24.4 million people. We hold licenses to serve the
Major Trading Areas ("MTAs") of Atlanta, Georgia; Jacksonville, Florida;
Memphis, Tennessee/Jackson, Mississippi; and Birmingham, Alabama, as well as 13
Basic Trading Areas ("BTAs") in Kentucky and Tennessee. We hold 30 MHz of
spectrum in our MTA markets, and we hold 20 MHz of spectrum in all of our BTA
markets except for the Knoxville, Tennessee BTA, where we hold a license for 10
MHz of spectrum. We have one of the largest contiguous licensed PCS footprints
in the southeastern United States.

We introduced our services in October 1996 in Jacksonville, Florida
and Montgomery, Alabama and, to date, have launched our services in a total of
34 markets in the Southeast. In most of these markets, we were the first to
offer PCS services commercially. As of December 31, 1999, we had approximately
341,000 postpaid subscribers and 205,000 prepaid subscribers.

On April 30, 1999, we sold substantially all of our cellular assets in
western Georgia and eastern Alabama to Public Service Cellular, Inc. for
approximately $89 million in cash. This transaction constituted the sale of all
of our cellular telephone operations. On June 2, 1999, we and certain of our
subsidiaries sold 619 of our communications towers to a subsidiary of Crown
Castle International Corp. for approximately $262 million in cash. In
connection with this sale, certain of our subsidiaries agreed to lease space on
these towers for a period of ten years, with three five-year renewal periods
that may be exercised at the lessee's option. On December 2, 1999, we and
certain of our subsidiaries sold an additional 31 tower sites to Crown Castle
for approximately $13 million in cash. We have also entered into a contract
with Crown Castle under which they will provide us with build-to-suit tower
construction services through December 31, 2000.

THE WIRELESS TELECOMMUNICATIONS INDUSTRY

Since 1983, the demand for wireless telecommunications services has
grown dramatically as cellular, paging and other emerging wireless
communications services have become widely available and increasingly
affordable. Service revenues for the wireless telephone industry reached
approximately $43 billion in 1999, as compared to approximately $364 million in
1985. The number of wireless telephone subscribers nationwide has grown from
approximately 680,000 in 1986 to more than 88.7 million in 1999.

Analog cellular services are the most widely deployed two-way wireless
services available today. However, analog cellular systems transmit voice and
data signals by means of one continuous electronic signal that varies in
amplitude or frequency over a single radio channel. In contrast, digital
systems, including the systems used to provide PCS, transmit signals as a
stream of digits that is compressed before transmission, enabling a single
radio channel to carry multiple simultaneous signal transmissions. This
increased capacity, along with other enhancements in digital protocols, allows
digital-based wireless technologies to offer new and enhanced services,
including greater call privacy and single number (or "find me") service, and
more robust data transmission features, including "mobile office" applications
such as facsimile and e-mail.

Although PCS and cellular networks use similar technologies and
hardware, they are incompatible because they operate on different frequencies
and utilize different signaling protocols. We began marketing dual-mode
handsets capable of receiving and transmitting over both analog cellular and
GSM-based PCS networks in December 1998. Our dual-mode service provides
automatic delivery of calls over analog cellular systems to our PCS
subscribers roaming in areas where GSM-based PCS service is not available and
where we have a roaming agreement with the analog cellular provider.

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PCS systems in the U.S. operate under one of three digital
transmission protocols -- GSM, CDMA or TDMA. These protocols are incompatible
with each other. Our network uses GSM, which is the leading digital wireless
technology in the world with over 254 million subscribers worldwide. We are
also a member of the GSM Alliance L.L.C., a consortium of 16 PCS carriers which
offer PCS service using the GSM protocol in nearly 4,000 cities and towns
throughout the U.S. Through the GSM Alliance, we allow our subscribers to roam
in most major metropolitan areas in the U.S. and Canada. GSM Alliance members
include us, Aerial, Airadigm, BellSouth Mobility DCS, the GSM subsidiary of
BellSouth Corporation, Conestoga Wireless, Cook Inlet PCS, DiGiPH PCS, Iowa
Wireless Services, Microcell Connexions, NPI Wireless, Pacific Bell Mobile
Services, SOL Communications, Telemetrix Technologies, TWS, VoiceStream and
Wireless 2000 PCS. We offer a single roaming rate to our subscribers when
roaming on any GSM network throughout the U.S. and Canada and have launched our
new 50-State Rates allowing our subscribers to roam on any GSM network in the
U.S. where we have a reciprocal roaming agreement at no extra charge.

While the three existing PCS protocols are incompatible, there is an
ongoing debate focused on determining the next generation of worldwide wireless
standards. Controversy exists over whether world standards organizations, such
as the European Telecommunications Standards Institute ("ETSI") and the
International Telecommunications Union, should dictate a single standard for
third generation ("3G") wireless services. The leading protocols under
consideration include W-CDMA, which is a GSM-based version of next generation
wideband CDMA technology supported by the GSM Alliance, and CDMA2000, which is a
narrowband, I-95 CDMA-based 3G technology supported by certain U.S.
manufacturers. This debate has become highly visible in international politics.
ETSI, which has advocated W-CDMA as the European 3G standard, is being
challenged by other standards bodies and the United States as being isolationist
and precluding non-European manufacturers from a significant marketplace in the
future. The GSM Alliance is actively lobbying for the adoption of multiple
standards for 3G wireless, much like the co-existing standards for second
generation wireless today. However, these international standards debates could
have a significant impact upon the future of GSM carriers in the event that a
standard or family of standards are adopted that have limited backwards
compatibility with existing GSM networks.

OUR OPERATIONS

Markets. Our licenses cover approximately 246,000 contiguous square
miles in portions of the following 12 states: Alabama; Arkansas; Florida;
Georgia; Illinois; Indiana; Kentucky; Louisiana; Mississippi; Missouri; South
Carolina; and Tennessee. Our markets include approximately 24.4 million people.
We currently provide PCS services in the 34 markets where we have completed our
initial buildout. Generally, our "initial buildout" of a licensed territory
includes the construction of cell sites: (a) in metropolitan areas with a
population greater than 100,000 people; (b) in smaller cities that, due to
location or demographics, we consider to be strategically important; and (c)
along the major highway corridors connecting these areas. We have completed the
initial buildout of our PCS system in the following cities:

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GEORGIA TENNESSEE ALABAMA
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Athens Chattanooga Anniston
Atlanta Jackson Auburn-Opelika
Augusta Memphis Birmingham
Brunswick Nashville Decatur
Columbus Dothan
Dalton Florence
Gainesville MISSISSIPPI Gadsden
LaGrange ----------- Huntsville
Macon Montgomery
Savannah Jackson Tuscaloosa
West Point Tupelo
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<TABLE>
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FLORIDA SOUTH CAROLINA KENTUCKY
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Gainesville Aiken Bowling Green
Jacksonville Hilton Head Frankfort
Panama City North Augusta Lexington
St. Augustine Louisville
Tallahassee
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We also offer service along the major highway corridors connecting all of our
markets. Based on subscriber demand and competitive factors, we intend to
continue the buildout of our PCS system to enhance and expand our coverage. As
of December 31, 1999, we had a total of approximately 546,000 post paid and
prepaid subscribers.

Strategy. Our strategy is to:

- expand our subscriber base by providing wireless services of
the highest quality, functionality and value;

- offer a broad range of services, including enhanced services
and mobile data services;

- expand our regional market presence by managing and
affiliating with other PCS licensees, as well as potentially
acquiring additional strategic PCS licenses and other PCS
providers; and

- provide our subscribers with the ability to receive service
in areas outside of our service area, including
internationally, by entering into additional roaming
agreements.

We intend to achieve significant market penetration by aggressively marketing
competitively priced PCS services, including enhanced services not currently
provided by analog or digital cellular operators, and by providing superior
customer service. We intend to remain a low-cost provider of PCS services by
generating economies of scale through our operation in contiguous market areas
and our focus on subscriber acquisition and retention.

Services. Our service offerings currently consist of a full range of
wireless telecommunications services, including enhanced features and services
not generally provided by analog or digital cellular operators, which include:

- secure communications;

- sophisticated call management incorporating features
such as caller I.D. and call forwarding;

- enhanced battery life; and

- a short message service which allows subscribers to send and
receive alphanumeric and text messages on their handsets.

In addition, we have expanded our service offerings to include alternative line
service, international roaming and some data and information services, including
mobile e-mail. In the future, we intend to offer single number service, home
zone billing, virtual private network services and fixed wireless services that
could serve as the subscriber's primary mode of telecommunication, as well as
real-time high speed access to the Internet to facilitate content delivery,
wireless commerce and personalized information services.

We provide prepaid services through an advanced intelligent network
platform that allows real-time addition to and declination of a subscriber's
account. Prepaid subscribers are not required to apply for credit and may
purchase prepaid vouchers to increase their account balance at any time.

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Our postpaid subscribers who subscribe to a calling plan with a $50 or
higher monthly access fee may call anywhere in the U.S. from our service area
with no additional long distance charges. Regular airtime rates apply. In July
1999, we launched our new 50-State Rates which offer our subscribers flat-rate
pricing for local, long-distance and roaming calls on any GSM network in the
U.S. where we have a reciprocal roaming arrangement. We also offer dual-mode
services for an additional charge of $5 per month. We change our service
offerings and pricing from time to time.

Roaming. Our subscribers may roam outside their "local" markets
anywhere within our PCS coverage area without being assessed daily access fees
or increased airtime usage rates. Some of our roaming partners own licenses in
MTAs and BTAs that are contiguous to our PCS markets, which increases the size
of the contiguous geographic area where our subscribers can use their handsets.
We provide GSM roaming services outside of our service area at a single roaming
rate which is lower than rates traditionally offered by most cellular
providers. In addition, our 50-State Rates offer flat-rate prices on any GSM
network in the U.S. where we have a reciprocal roaming arrangement. GSM service
is currently available in nearly 4,000 cities and towns in the U.S. We have
also entered into roaming agreements with international GSM providers,
primarily through our membership in the GSM Alliance, which allow subscribers
to roam internationally either through the use of subscriber identity module
cards or multi-frequency handsets on "world phones."

System Buildout. Although we have completed the initial buildout of
our PCS system, we continue to build out our existing markets for increased
coverage and capacity needs, and we are planning to build out some secondary
cities within our licensed footprint. Generally, we select sites on the basis
of their coverage of targeted subscribers, the cost to construct the site and
on frequency propagation characteristics. In many cases, we must obtain zoning
approval prior to constructing a site. For new sites, our experience indicates
that the site acquisition process can take three to twelve months. Once we
acquire a site and obtain the requisite governmental approval, preparation of
the site, including grounding, ventilation and air conditioning, equipment
installation, testing and optimization, generally requires an additional two to
four months.

Customer Service. We recognize that superior customer service is vital
to minimizing subscriber churn and to the long-term success of our business. We
try to ensure that our PCS subscribers are fully introduced to our service
offerings, that they understand how to use their handsets and features and that
they receive prompt and reliable service from our customer service
representatives. We provide subscribers with toll-free access to our customer
service representatives 24 hours a day, seven days a week. In addition,
subscribers can reach a customer service representative from their handsets
(with no airtime charge) by dialing 611. Our inbound customer service
organization is located in one call center in Jacksonville, Florida so that we
can serve our subscribers more efficiently.

Sales, Marketing and Distribution. We market our services primarily
through:

- our direct sales force;

- retail stores and kiosks which we operate;

- a network of independent agents, each of which has a retail
store presence;

- mass merchandisers, such as Best Buy, Sam's Club and Circuit
City; and

- a limited amount of direct mail advertising.

In addition to traditional distribution channels, we market our PCS services
through the Internet, including through our Web site which includes an on-line
retail store where potential subscribers may apply for services, purchase
handsets and accessories and review their account and billing information. We
support our marketing activities with local and regional radio, television and
print advertising.

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Our direct and retail store sales force currently consists of
approximately 700 employees. We train our sales employees to understand our
products and services, so that they can provide extensive information to
prospective subscribers. We generally link sales commissions to subscriber
revenue and subscriber retention.

We also negotiate volume discounts from manufacturers of handsets and
pass a substantial portion of the discount on and further subsidize the cost of
these handsets to our subscribers, sales agents and distributors. Although we
subsidize a portion of most handset purchases, even after this subsidy, our
handsets are generally more expensive to subscribers than cellular handsets. We
offer over-the-air activation whereby a subscriber can initiate service by
purchasing a handset from any of our distribution channels and pressing any key
on the handset to reach Powertel customer service. During this call, the
customer service representative can obtain all necessary subscriber information
and conduct a credit scoring assessment or, if the subscriber has chosen the
prepaid plan, the customer service representative can activate the subscriber's
handset immediately. At this time, we do not require our PCS subscribers to
sign long-term service contracts.

In marketing our services, we emphasize the enhanced features and
favorable pricing of our services. We also promote the improved call security
of our PCS system, which we believe encourages users to make confidential calls
that they might not otherwise make on an analog cellular telephone. We also
expect that the services offered by PCS operators will eventually be capable of
replacing some traditional landline telephone services. The potential for
increased PCS penetration of the landline market was enhanced by the 1996
Telecommunications Act, which requires local exchange carriers to interconnect
with other telecommunications providers like us at just and reasonable rates
that are based on costs of providing the interconnection.

DISPOSITION OF OUR CELLULAR ASSETS

On April 30, 1999, we and our wholly-owned subsidiaries, ICEL, Inc.
and InterCel Licenses, Inc., sold and assigned to Public Service Cellular, Inc.
substantially all of our assets and rights relating to our cellular business in
eastern Alabama and western Georgia, including FCC licenses to provide cellular
and microwave service in this area. Through this transaction, we sold all of
our cellular telephone operations. At closing, PSC paid us approximately $83
million in cash (including reimbursement for certain capital expenditures of
$.3 million) and paid $6.2 million into escrow. On November 1, 1999,
substantially all funds were released to us from escrow. We recorded a gain of
$79.3 million on the sale.

DISPOSITION OF SOME OF OUR TOWER ASSETS

On June 2, 1999, we, together with some of our wholly-owned
subsidiaries, sold and transferred to Crown Castle 619 of our towers, related
assets and liabilities. At the closing, Crown Castle paid us approximately $262
million in cash, which equals approximately $423,077 per site. We also gave
Crown Castle a $383,000 credit against the aggregate purchase price as
consideration for Crown Castle's acceptance of towers with site leases which
may require revenue received from us or our affiliates to be shared with the
site lessors.

Also on June 2, 1999, pursuant to master site agreements, we and
certain of our subsidiaries agreed to pay Crown Castle monthly rent of $1,800
per tower for the continued use of the space that we or our affiliates occupied
on the towers prior to the closing. Monthly payments under the individual site
leases are subject to increase based on an agreed upon schedule and if and when
we or our affiliates add equipment to a site. In any event, the monthly rent,
including additional rents related to the addition of equipment, will be
increased on each fifth anniversary of each site lease up to an amount that is
115% of the monthly rent paid during the preceding five-year period. The term
of each site lease is ten years. We have the right to extend any site lease for
up to three additional five-year periods. Each site lease will automatically
renew for an option term unless we or our affiliates notify Crown Castle of our
intent not to renew at least 180 days prior to the end of the then current
term.

On December 2, 1999, we sold and transferred an additional 31 towers to
Crown Castle for approximately $13 million. We recorded an aggregate realized
gain of $49.9 million in 1999 on these two sales, and we will amortize an
aggregate deferred gain of $88.3 million over the 10-year lease term.

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In September 1999, we entered into a build-to-suit construction
contract with Crown Castle that grants Crown Castle a right of first refusal to
build, acquire and lease back to us up to 40 tower sites to be constructed
prior to December 31, 2000.

COMPETITION; OTHER TELECOMMUNICATIONS TECHNOLOGIES

Competition in the wireless communications business is intense, and we
expect it to continue to increase as a result of the entrance of new
competitors and the development of new technologies, products and services.
Each of the markets in which we compete is or will be served by multiple other
wireless service providers, including cellular, PCS and other wireless
operators and resellers.

We compete directly with several other PCS providers, including
BellSouth Mobility, GTE Wireless, Sprint PCS and AT&T Wireless, in our PCS
markets. The FCC continues to auction additional licenses for wireless
services, which may allow more competitors to enter the marketplace. We expect
that existing wireless service providers in our PCS markets will continue to
upgrade their systems. Some of these providers have been operational for a
number of years and have significantly greater financial and technical
resources than those available to us. Our wireless competitors include AT&T
Wireless, AirTouch, BellSouth Mobility, GTE Mobilnet, Alltel, Nextel, Price
Communications Wireless and Sprint PCS. Two of our PCS competitors, AT&T
Wireless and Sprint PCS, claim a national digital network which some subscribers
may view as an advantage. We, however, continue to believe that our large
contiguous regional footprint, combined with our GSM and analog roaming
agreements, allow us to effectively compete against these competitors.

Continuing technological advances in telecommunications, and FCC
policies encouraging the development of new spectrum-based technologies, make
it impossible to predict the extent of future competition. The 1996
Telecommunications Act alters regulatory and industry barriers which for years
deterred easy competition within and between telecommunications markets. The
amended statute and related FCC rulemakings are expected to continue to open
new avenues for competitive offerings of wireless, wireline and hybrid
services.

Since the introduction of PCS and enhanced specialized mobile radio
("ESMR"), the two-way wireless services industry has experienced a downward
trend in market prices. We anticipate that this trend will continue in the
future due to increased competition. We compete to attract and retain
subscribers principally on the basis of our service offerings and pricing, our
customer service and our large contiguous footprint. Our ability to compete
successfully will also depend, in part, on our ability to anticipate and
respond to various competitive factors affecting the industry, including new
services that may be introduced, changes in consumer preferences, demographic
trends, economic conditions and discount pricing strategies by competitors,
which could adversely affect our operating margins.

Beginning March 23, 1999, the FCC re-auctioned additional PCS licenses
(including licenses reserved for small businesses) which, for various reasons,
had been returned to the FCC. These licenses were for varying amounts of
spectrum, ranging from 10 MHz to 30 MHz. While we did not participate directly
in this auction, we provided certain financing, subject to restrictions, to a
qualified small business, Eliska Wireless, Inc., that acquired licenses for 15
MHz of spectrum in each of the Knoxville, Tennessee BTA and the
Kingsport/Johnson City/Bristol, Tennessee BTA.

REGULATION OF WIRELESS TELECOMMUNICATIONS SYSTEMS

The FCC regulates the licensing, construction, operation and
acquisition of wireless telecommunications systems in the United States
pursuant to the Communications Act of 1934, as amended, and the rules,
regulations and policies promulgated by the FCC. Additional regulatory
authority over PCS providers is granted to the FCC by the Budget Act and the
1996 Telecommunications Act.

Under the Communications Act, the FCC is authorized to establish
regulations governing the interconnection of PCS systems with wireline and
other wireless carriers, allocate channels and frequencies, grant or deny
license renewals and applications for transfer of control or assignment of PCS
licenses, monitor the foreign ownership of PCS licenses, and impose fines and
forfeitures for any violations of FCC regulations. The

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1996 Telecommunications Act and ongoing FCC rulemakings have led to new
regulations concerning interconnection of networks. The 1996 Telecommunications
Act also permits the FCC to lift regulations where they are no longer necessary
in the public interest.

Licensing of PCS. The FCC has divided the United States and its
possessions and territories into PCS markets made up of 493 BTAs and 51 MTAs.
Each MTA consists of at least two BTAs. Numerous licensees may compete in each
PCS service area. The FCC has allocated 120 MHz of radio spectrum in the 2 GHz
band for licensed broadband 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. Under the FCC's rules, a broadband PCS licensee may own
combinations of licenses (e.g., one MTA (30 MHz) and one BTA (10 MHz)) with
total aggregate spectrum of up to 45 MHz in a single geographic area. All PCS
licenses are granted for a ten-year period, at the end of which they must be
renewed. Licenses may be revoked at any time for cause, including failure to
meet certain buildout requirements imposed by the FCC on all PCS licensees.

The FCC has recently announced that it intends to conduct an auction
for certain PCS licenses related to the bankruptcy of Nextwave Wireless, Inc.
beginning in July 2000. We may participate in this auction in order to obtain
additional spectrum which would enhance our current licensed footprint.

Other FCC Requirements. The FCC also imposes requirements on our
operations with respect to interconnection to other telecommunications
providers, the provision of 911 and enhanced 911 services, mandatory
contributions to the FCC's universal service fund, obligations to allow resale
of our services, and other technical and reporting matters.

Other Federal Regulations. Wireless systems are subject to Federal
Aviation Administration regulations relating to the location, lighting and
construction of wireless transmitter towers and antennas and may be subject to
regulation under the National Environmental Policy Act and the environmental
regulations of the FCC. We use common carrier point-to-point microwave and
traditional landline facilities to connect our cell sites and to link them to
our main switching offices. These facilities are separately licensed by the FCC
and are subject to regulation as to technical parameters and service.

State and Local Regulation. In 1993, Congress amended the
Communications Act to preempt state or local regulation of the entry of, or the
rates charged by, any commercial or private mobile radio service provider.
Notwithstanding this preemption, a state may petition the FCC for authority to
begin regulating or to continue regulating commercial mobile radio service
("CMRS") rates. Petitioners must demonstrate that existing market conditions
cannot protect consumers from unreasonable and unjust rates or that the service
is a replacement for traditional wireline telephone service for a substantial
portion of the wireline service within the state. So far, the states in which
we currently provide or plan to provide service (Alabama, Arkansas, Florida,
Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, South
Carolina and Tennessee) either have not sought to regulate these matters or, in
the case of Louisiana, the FCC has denied their petition to regulate.

States are not, however, prohibited from regulating other terms and
conditions of CMRS, such as service quality, billing procedures and consumer
protection standards. In addition, the siting and construction of transmitter
towers, antennas and equipment shelters are often subject to state or local
zoning, land use and other regulations.

EMPLOYEES AND AGENTS

As of December 31, 1999, we had approximately 2,100 employees. We
anticipate that the continued development of our PCS system will require us to
continue to hire a substantial number of new employees. None of our employees
is represented by a labor organization, and we consider our employee relations
to be good.

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ITEM 2. PROPERTIES

We maintain our 28,000 square foot corporate headquarters and network
operations center in West Point, Georgia and lease an additional 10,000 square
feet of office space from KNOLOGY, Inc. and approximately 10,000 square feet of
office space from ITC DeltaCom, Inc. Additionally, our information technology
center is located in leased space in Atlanta, Georgia, and we have a call
center in Jacksonville, Florida. In connection with our PCS system, we lease
space for regional headquarters and switch facilities in the following cities:
Birmingham, Alabama; Memphis, Tennessee; Jacksonville, Florida; Atlanta,
Georgia; Nashville, Tennessee; and Louisville, Kentucky. The Atlanta MTA leases
two separate switching facilities, both of which are located in the city of
Atlanta but in separate locations. The Birmingham MTA leases additional space
in Jackson, Mississippi to accommodate its sales and operations personnel. We
also lease warehouse space in Oneonta, Alabama for network equipment and cell
site equipment related to the buildout of our PCS system.

We also currently lease retail space for 35 Powertel retail stores in
the Atlanta market, 15 in the Birmingham market, eight in the Memphis market,
14 in the Jacksonville market, seven in the Nashville BTA market and ten in the
other BTA markets. We lease a 55,500 square foot building in LaGrange, Georgia
with warehouse and office space for our inventory and distribution activities.
We also lease land, rooftop space or tower space for a significant number of
our approximately 1,630 PCS cell sites.

We believe that all of our properties are well maintained.

ITEM 3. LEGAL PROCEEDINGS

We are subject from time to time to legal proceedings that arise out
of our business operations, including service, billing and collection matters.
Although the actual damages sought in such legal proceedings are generally
small, certain of these legal proceedings may seek punitive damages and/or
attempt to be certified as class actions. While we do not expect such legal
proceedings to have a material adverse effect on our business operations, no
assurance can be given that the resolution of any or all of such legal
proceedings will not have a material adverse effect on our business, financial
condition or results of operations.

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

During 1999, we only submitted matters to a vote of our stockholders
at our 1999 annual meeting of stockholders held on May 20, 1999. We previously
reported on such matters.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Price Range of Common Stock. Our common stock is currently traded on
the Nasdaq Stock Market's National Market System under the symbol "PTEL." As of
March 27, 2000, there were approximately 310 holders of record of our common
stock.

The high and low sales prices for each full quarterly period of 1999
and 1998 are as follows:

<TABLE>
<CAPTION>
1999 HIGH LOW
------ ---------- ----------

<S> <C> <C>
First quarter $ 17.75 $ 12.31
Second quarter 32.50 13.38
Third quarter 59.00 28.63
Fourth quarter 105.00 50.86

1998 HIGH LOW
------ ---------- ----------

First quarter $ 25.06 $ 16.75
Second quarter 24.13 15.75
Third quarter 21.25 9.63
Fourth quarter 16.25 9.31
</TABLE>

Dividend Policy. We have never declared or paid any cash dividends on
our capital stock, and we do not anticipate paying cash dividends in the
foreseeable future. We intend to retain earnings to finance the expansion of
our operations. Our Series E 6.5% Cumulative Convertible Preferred Stock (the
"Series E Preferred") and Series F 6.5% Cumulative Convertible Preferred Stock
(the "Series F Preferred") pay a 6.5% annual dividend quarterly in common stock
or cash. However, we are prohibited from paying cash dividends for the
foreseeable future because of restrictions contained in our indentures relating
to our public bonds and our credit agreement covering certain equipment
purchases from Ericsson Inc. To date, we have issued an aggregate of 814,758
shares of common stock as dividends on the Series E Preferred and Series F
Preferred.

10
<PAGE> 12

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain selected financial information
for Powertel as of and for each of the years in the five-year period ended
December 31, 1999. Arthur Andersen LLP has audited our consolidated financial
statements. Our stockholders should read the selected financial information in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and notes
thereto and other financial and operating information included elsewhere in this
Report.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Service revenues ............................. $ 254,051 $ 152,275 $ 62,745 $ 31,875 $ 25,384
Equipment sales .............................. 29,360 23,161 16,171 7,250 3,928
------------ ------------ ------------ ------------ ------------
Total revenues and sales ................ 283,411 175,436 78,916 39,125 29,312
------------ ------------ ------------ ------------ ------------
Cost of services ............................. 59,183 42,777 28,277 5,811 2,394
Cost of equipment sales ...................... 73,526 79,144 45,318 11,653 3,127
Operations expenses .......................... 64,269 56,522 23,989 9,927 3,596
Selling and marketing expenses ............... 99,012 63,936 41,409 13,301 4,280
General and administrative expenses .......... 44,184 37,639 25,742 16,963 4,218
Depreciation ................................. 78,968 57,938 42,747 5,887 2,741
Amortization ................................. 10,212 9,716 6,535 4,214 2,360
------------ ------------ ------------ ------------ ------------
Total operating expenses ................ 429,354 347,672 214,017 67,756 22,716
------------ ------------ ------------ ------------ ------------
Operating (loss) income ............. (145,943) (172,236) (135,101) (28,631) 6,596
Interest expense (income), net(a) ............ 108,183 93,656 42,564 (3,175) 1,657
Gain on sale of assets(b) .................... (129,172) -- (41,912) -- --
Miscellaneous (income) expense ............... (288) (62) (585) 1,226 (295)
------------ ------------ ------------ ------------ ------------
(Loss) income before income taxes
and cumulative effect ............... (124,666) (265,830) (135,168) (26,682) 5,234
Income tax (benefit) provision ............... -- -- -- (1,654) 2,230
------------ ------------ ------------ ------------ ------------
(Loss) income before cumulative effect... (124,666) (265,830) (135,168) (25,028) 3,004
Dividends on cumulative convertible,
redeemable preferred stock .............. (9,750) (5,010) -- -- --

Net (loss) income attributable to common
stockholders before cumulative effect.. (134,416) (270,840) (135,168) (25,028) 3,004
Cumulative effect of change in accounting
principle, net of tax(c) ................ -- -- -- (2,583) --
------------ ------------ ------------ ------------ ------------
Net (loss) income attributable to
common stockholders ............ $ (134,416) $ (270,840) $ (135,168) $ (27,611) $ 3,004
------------ ------------ ------------ ------------ ------------

Earnings (loss) per share:
Net (loss) income attributable to common
stockholders before cumulative effect
of change in accounting principle ....... $ (4.75) $ (10.02) $ (5.04) $ (1.00) $ 0.30
Cumulative effect of change in
accounting principle .................... -- -- -- (0.10) --
------------ ------------ ------------ ------------ ------------
Basic and diluted (loss) income
per common share ........................ $ (4.75) $ (10.02) $ (5.04) $ (1.10) $ 0.30
------------ ------------ ------------ ------------ ------------

OTHER FINANCIAL AND OPERATING DATA:
EBITDA(d) .................................... $ (56,763) $ (104,582) $ (85,819) $ (18,530) $ 11,697
Capital expenditures ......................... 130,816 207,292 291,849 233,551 7,661
Cellular subscribers at end of period(e) ..... -- 28,989 25,848 47,617 38,582
Net cellular population equivalents(f) ....... -- 295,600 295,600 737,800 732,900
PCS subscribers at end of period ............. 546,364 295,295 118,757 14,892 --
Net PCS population equivalents(f) ............ 24,425,900 24,425,900 24,292,400 17,460,000 --
</TABLE>

11
<PAGE> 13
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital .............................. $ 357,953 $ 226,861 $ 313,722 $ 256,349 $ 977
Property and equipment, net .................. 561,110 642,404 491,750 251,269 18,066
Licenses, goodwill and other intangibles,
net..................................... 400,587 407,998 416,252 388,634 24,904
Total assets ................................. 1,439,795 1,380,578 1,378,592 947,117 74,330
Long-term obligations ........................ 1,253,845 1,108,070 969,014 504,065 29,411
Retained earnings (accumulated deficit) ...... (563,190) (428,774) (157,934) (22,766) 4,845
Stockholders' (deficit) equity ............... (69,857) 50,331 317,816 407,007 36,674
</TABLE>

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

(a) For the years ended December 31, 1999, 1998, 1997 and 1996, interest
income was $18.9 million, $19.5 million, $21.0 million and $17.3
million, respectively. This excludes capitalized interest of $1.9
million, $22.1 million and $29.0 million for the years ended December
31, 1998, 1997 and 1996, respectively. We did not have interest income
or capitalized interest for the year ended December 31, 1995 and did
not capitalize interest for the year ended December 31, 1999. During
the construction of the PCS system, the cost of the PCS licenses and
the costs related to the construction expenditures are considered to
be assets qualifying for interest capitalization under FASB Statement
No. 34 "Capitalization of Interest Cost."
(b) During the year ended December 31, 1999, we sold substantially all of
our remaining cellular telephone assets for $89.3 million and 650 of
our wireless towers for $274.6 million, resulting in an aggregate
realized gain of $129.2 million. During the year ended December 31,
1997, we sold substantially all of our cellular telephone assets in the
State of Maine for $77.2 million, resulting in a gain of $41.9 million.
(c) During 1996, we changed our method of accounting for costs incurred in
connection with certain promotional programs under which subscribers
receive discounted cellular equipment or airtime usage credits. Under
our previous accounting method, all such costs were deferred and
amortized over the life of the related non-cancelable cellular
telephone service agreement. Under the new accounting method, the
costs are expensed as incurred.
(d) EBITDA represents operating (loss) income before depreciation and
amortization. EBITDA is provided because it is a measure commonly used
in the industry. EBITDA is not a measurement of financial performance
under generally accepted accounting principles and should not be
considered an alternative to net income as a measure of performance or
to cash flow as a measure of liquidity.
(e) Cellular subscribers at end of period include 20,288 and 25,456
subscribers of Unicel in the State of Maine for the periods ended
December 31, 1995 and 1996, respectively.
(f) Net population equivalents means the estimated population of the
license market area multiplied by the percentage ownership of the
license. For the periods ended December 31, 1995 and 1996, net
cellular population equivalents include 442,000 and 442,200 population
equivalents, respectively, from Unicel's license market areas
(including Maine RSA 2).

12
<PAGE> 14

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

OVERVIEW

We provide PCS services in the southeastern United States under the
name "Powertel." Our PCS licenses encompass a territory of approximately
246,000 contiguous square miles with a population of approximately 24.4 million
people. We hold licenses to serve the Atlanta, Georgia MTA, the Jacksonville,
Florida MTA, the Memphis, Tennessee/Jackson, Mississippi MTA and the
Birmingham, Alabama MTA and 13 BTAs in Kentucky and Tennessee. We hold 30 MHz
of spectrum licensed for PCS in the MTA Markets, and we hold 20 MHz of spectrum
licensed for PCS in all of the BTA Markets except for the Knoxville, Tennessee
BTA, where we hold a license for 10 MHz of spectrum. We have one of the largest
contiguous licensed PCS footprints in the southeastern United States.

We introduced our PCS services in October 1996 in Jacksonville,
Florida and Montgomery, Alabama and, to date, have launched our PCS services in
a total of 34 markets in the Southeast. As of December 31, 1999, we had
approximately 341,000 postpaid PCS subscribers and 205,000 prepaid PCS
subscribers.

On April 30, 1999, we sold substantially all of our cellular telephone
assets to Public Service Cellular, Inc. for $89.3 million. Prior to that sale,
we provided cellular telephone service in contiguous portions of eastern
Alabama and western Georgia under the name "InterCel."

On June 2, 1999, we sold 619 of our towers, related assets and
liabilities to a subsidiary of Crown Castle International Corp. for $261.5
million in cash. In connection with this sale, we agreed to lease space on these
towers for a monthly rent of $1,800 per tower for an initial lease term of ten
years, with three five-year renewal periods that we may exercise at our option.
On September 27, 1999, we also entered into a build-to-suit construction
contract with Crown Castle that grants Crown Castle a right of first refusal to
build, acquire and lease back to us at a rent of $1,800 per month up to 40 tower
sites to be constructed prior to December 31, 2000. On December 2, 1999, we sold
an additional 31 towers to Crown Castle under substantially similar terms as the
June sale for $13.1 million in cash.

We incurred a net loss of $124.7 million for the year ended December
31, 1999, primarily as a result of the significant costs required to maintain
our expanding PCS network, the hiring and management of required personnel to
operate our business and market our services, the subsidization of handsets to
our subscribers and the depreciation of PCS equipment and amortization of the
PCS licenses. We expect to continue incurring operating losses beyond 1999 as
we continue to expand and enhance our PCS network, increase our subscriber base
and subsidize the cost of handsets to our subscribers.

Until recently, average revenues per subscriber in the wireless
industry have declined, which we believe is the result of the addition of new
subscribers on lower-priced rate plans, as well as intensified competition
within the wireless industry. We believe the effects of these trends on our
earnings will be mitigated by a corresponding increase in the number of wireless
subscribers who desire additional value-added services primarily in the data
area and our continued focus on offering products and services designed to
encourage our subscribers to purchase higher - priced rate plans.

Minimizing subscriber attrition, or "churn," remains a challenge as
our subscriber base grows and competition intensifies. We generated an average
monthly churn rate of 2.9% and 5.3% for our postpaid and prepaid PCS subscriber
base, respectively, for the year ended December 31, 1999, as compared to 4.1%
for our postpaid PCS subscriber base for 1998. Because we did not launch
prepaid service until September 1998, we did not report prepaid PCS churn
during 1998. We believe the continued improvement in our postpaid PCS churn
rate is the result of stricter credit evaluation policies, improved customer
service response and training, our centralized call center, focused collections
efforts and the availability of our prepaid service alternative.

13
<PAGE> 15

We are a member of the GSM Alliance, a consortium of PCS carriers who
offer GSM-based PCS service throughout North America. All members of the GSM
Alliance have executed roaming agreements with each other, which allow GSM
subscribers to roam throughout many major metropolitan areas in the U.S. and
Canada. Additionally, we have signed a substantial number of international
roaming agreements and expect to sign numerous others with international GSM
carriers to facilitate international roaming, which we officially launched
in August 1999.

RESULTS OF OPERATIONS

The following table reflects the composition of our cellular and PCS
service revenue and equipment sales and related gross margins, as well as
overall operating and other costs and margins. Our historical results of
operations, particularly in view of the sale of our cellular telephone assets
and certain of our tower assets and the start-up costs associated with our PCS
business, will not be comparable with future periods.

YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
1999 1998
---------------------------------------- -----------------------------------------
COMBINED COMBINED
CELLULAR CELLULAR
AND AND
CELLULAR(A) PCS PCS CELLULAR PCS PCS
---------- ---------- ---------- ---------- ---------- -----------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C>
SERVICE REVENUES & COST
ANALYSIS:
Service revenues:
Postpaid revenues ............ $ 3,791 $ 172,565 $ 176,356 $ 11,385 $ 121,324 $ 132,709
Roaming revenues ............. 2,597 6,202 8,799 6,685 3,559 10,244
Prepaid revenues ............. -- 55,752 55,752 -- 2,579 2,579
Other revenues ............... 304 12,840 13,144 712 6,031 6,743
---------- ---------- ---------- ---------- ---------- ----------
Total service revenues ..... 6,692 247,359 254,051 18,782 133,493 152,275
Cost of services .................. 564 58,619 59,183 1,825 40,952 42,777
---------- ---------- ---------- ---------- ---------- ----------
Gross margin ................. $ 6,128 $ 188,740 $ 194,868 $ 16,957 $ 92,541 $ 109,498
========== ========== ========== ========== ========== ==========

EQUIPMENT SALES & COST
ANALYSIS:
Equipment sales ................... $ 316 $ 29,044 $ 29,360 $ 828 $ 22,333 $ 23,161
Cost of equipment sales ........... 598 72,928 73,526 1,735 77,409 79,144
---------- ---------- ---------- ---------- ---------- ----------
Gross margin ................. $ (282) $ (43,884) $ (44,166) $ (907) $ (55,076) $ (55,983)
========== ========== ========== ========== ========== ==========

OPERATING MARGIN ANALYSIS:
Total revenues and sales .......... $ 7,008 $ 276,403 $ 283,411 $ 19,610 $ 155,826 $ 175,436
---------- ---------- ---------- ---------- ---------- ----------

Operating expenses:
Cost of services and
equipment sales ............ 1,162 131,547 132,709 3,560 118,361 121,921
Operations ................... 576 63,693 64,269 1,957 54,565 56,522
Selling and marketing ........ 658 98,354 99,012 2,259 61,677 63,936
General and administrative ... 537 43,647 44,184 1,815 35,824 37,639
Depreciation ................. 521 78,447 78,968 1,886 56,052 57,938
Amortization ................. -- 10,212 10,212 -- 9,716 9,716
---------- ---------- ---------- ---------- ---------- ----------
Total operating expenses ... 3,454 425,900 429,354 11,477 336,195 347,672
---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss) ........... $ 3,554 $ (149,497) (145,943) $ 8,133 $ (180,369) (172,236)
========== ========== ========== ==========

Interest expense, net ............. 108,183 93,656
Gain on sale of assets ............ (129,172) --
Miscellaneous income .............. (288) (62)
---------- ----------
Loss before income taxes .......... (124,666) (265,830)
Income tax provision .............. -- --
---------- ----------
Net loss .......................... (124,666) (265,830)
Dividends on cumulative
convertible, redeemable
preferred stock .............. (9,750) (5,010)
---------- ----------
Net loss attributable to common
stockholders ................. $ (134,416) $ (270,840)
========== ==========

OTHER SUPPLEMENTAL DATA:
Subscribers at end of period ...... -- 546,364 546,364 28,989 295,295 324,284
Capital expenditures .............. $ 326 $ 130,490 $ 130,816 $ 2,302 $ 204,990 $ 207,292

<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1997
----------------------------------------
COMBINED
CELLULAR
AND
CELLULAR PCS PCS
---------- ---------- ----------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C>
SERVICE REVENUES & COST
ANALYSIS:
Service revenues:
Postpaid revenues ............ $ 15,695 $ 36,256 $ 51,951
Roaming revenues ............. 5,669 189 5,858
Prepaid revenues ............. -- -- --
Other revenues ............... 781 4,155 4,936
---------- ---------- ----------
Total service revenues ..... 22,145 40,600 62,745
Cost of services .................. 2,992 25,285 28,277
---------- ---------- ----------
Gross margin ................. $ 19,153 $ 15,315 $ 34,468
========== ========== ==========

EQUIPMENT SALES & COST
ANALYSIS:
Equipment sales ................... $ 773 $ 15,398 $ 16,171
Cost of equipment sales ........... 2,241 43,077 45,318
---------- ---------- ----------
Gross margin ................. $ (1,468) $ (27,679) $ (29,147)
========== ========== ==========

OPERATING MARGIN ANALYSIS:
Total revenues and sales .......... $ 22,918 $ 55,998 $ 78,916
---------- ---------- ----------

Operating expenses:
Cost of services and
equipment sales ............ 5,233 68,362 73,595
Operations ................... 2,700 21,289 23,989
Selling and marketing ........ 3,269 38,140 41,409
General and administrative ... 2,282 23,460 25,742
Depreciation ................. 2,331 40,416 42,747
Amortization ................. 262 6,273 6,535
---------- ---------- ----------
Total operating expenses ... 16,077 197,940 214,017
---------- ---------- ----------
Operating income (loss) ........... $ 6,841 $ (141,942) (135,101)
========== ==========

Interest expense, net ............. 42,564
Gain on sale of assets ............ (41,912)
Miscellaneous income .............. (585)
----------
Loss before income taxes .......... (135,168)
Income tax provision .............. --
----------
Net loss .......................... (135,168)
Dividends on cumulative
convertible, redeemable
preferred stock .............. --
----------
Net loss attributable to common
stockholders ................. $ (135,168)
==========

OTHER SUPPLEMENTAL DATA:
Subscribers at end of period ...... 25,848 118,757 144,605
Capital expenditures .............. $ 2,255 $ 289,594 $ 291,849
</TABLE>

- -----------------
(a) We sold our remaining cellular operations in April 1999.

14
<PAGE> 16

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Unless specifically noted, the following discussion reflects the
results of operations for our PCS line of business only. We sold substantially
all of the assets used in our cellular line of business in the second quarter of
1999.

Postpaid PCS service revenues increased $51.2 million, or 42.2%, for
1999 as compared to 1998. This increase is the result of continued PCS
subscriber growth in our existing markets and our launch of 6 new PCS markets,
primarily in Kentucky, since the beginning of the fourth quarter of 1998. Our
postpaid PCS subscribers grew to approximately 341,000 at December 31, 1999,
from approximately 253,000 at December 31, 1998. A significant portion of our
postpaid subscriber growth in 1999 is attributable to the introduction of our
50-State Rates in July 1999.

The average monthly service revenue ("RPU") per postpaid PCS subscriber
decreased to $49.18 for 1999 as compared to $54.27 for 1998. This decline in RPU
reflects the addition of new subscribers on lower-priced rate plans, which is
the result of intensified competition within the wireless industry. During the
last half of 1999, we introduced rate plans which emphasize bundled airtime and
toll minutes for higher-priced plans, which we believe contributed to a moderate
increase in RPU towards the end of the year.

PCS roaming revenues (including roaming long distance) increased $2.6
million, or 74.3%, for 1999 as compared to 1998. This increase is due primarily
to an increase in the number of roamers and usage per roamer, which is the
result of increased penetration levels by surrounding GSM carriers and our
success in obtaining roaming agreements with these carriers. We also launched
international roaming in August and currently have agreements with other GSM
carriers in more than 50 countries outside North America.

Prepaid PCS service revenues increased $53.2 million, or 2,061.8%, for
1999 as compared to 1998, which is attributable to the introduction of our
intelligent network-based prepaid service alternative in September 1998. Our
prepaid PCS subscribers grew to approximately 205,000 at December 31, 1999,
from approximately 42,000 at December 31, 1998. A significant portion of our
prepaid subscriber growth occurred in the fourth quarter of 1999 due to the
launch of our promotional "Ready to Call" kit.

RPU per prepaid PCS subscriber increased to $48.08 for 1999 as
compared to $40.05 for the fourth quarter of 1998. The increase during 1999 is
attributable primarily to the growth in prepaid subscribers combined with
increased minutes of use. Towards the end of 1999, RPU declined marginally due
to the introduction of lower-denominated prepaid cards for airtime renewals.

Other service revenues, which include activation fees, fees from
enhanced services and interconnection fees billed to local exchange carriers
("LECs") for connections to our PCS network, increased $6.4 million, or 94.9%,
for 1999 as compared to 1998. This increase is due primarily to the increase in
interconnection fees as a result of increased utilization of our PCS network by
LECs and the re-introduction of activation fees in 1999.

Cost of services includes the cost of interconnection with LEC
facilities, direct cell site costs (property taxes and insurance, site lease
costs and electric utilities), roaming validation (provided by a third-party
clearinghouse), long distance toll costs and certain prepaid subscriber-related
fees. PCS cost of services increased $17.7 million, or 43.1%, for 1999 as
compared to 1998. This increase is the result of the 221 additional cell sites
we placed in service in 1999, as well as increased interconnection and toll
costs related to increased traffic on our expanding PCS network and increased
commissions due to the significant volume of prepaid card renewals.

We generated a negative PCS equipment margin of 151.1% on $29 million
of sales during 1999 as compared to a negative 246.6% on $22.3 million of sales
for 1998. The improvement in margins reflects a continued decrease in the
average cost of handsets because of changes in the handset mix and our efforts
to limit the subsidization of handset upgrades for existing subscribers. We
expect to continue subsidizing the cost of handsets to subscribers for the
foreseeable future.

15
<PAGE> 17

PCS operations costs, which include the costs of managing and
maintaining our PCS system, customer service, credit and collections (including
bad debt) and inventory management increased $9.1 million, or 16.7%, for 1999
as compared to 1998. Substantially all of this increase is attributable to the
costs of providing customer service through our centralized call center to the
growing PCS subscriber base and the costs of maintaining our expanding PCS
network, which increased due to certain equipment warranty expirations. This
increase was partially offset by a substantial reduction in bad debt provisions
resulting from improvements in credit and collections, as well as the success
of our prepaid PCS service alternative.

PCS selling and marketing costs increased $36.7 million, or 59.5%, for
1999 as compared to 1998. Substantially all of this increase is attributable to
increases in advertising and marketing costs and the continued expansion of our
sales distribution channels, including increases in personnel, sales
commissions and retail location costs. During 1999, we added approximately 370
new distribution points, including 45 new retail store locations.

PCS general and administrative costs increased $7.8 million, or 21.8%,
for 1999 as compared to 1998. Substantially all of this increase is
attributable to increased personnel and facilities costs at our corporate and
regional administrative offices and information technology center.

Depreciation and amortization increased $21.5 million, or 31.8%, for
1999 as compared to 1998 and consists principally of the depreciation of the
PCS network and the amortization of PCS licenses. Substantially all of the
increase is attributable to the approximately 720 cell sites that we placed in
service in 1999 and 1998 (including 221 cell sites in 1999), as well as
depreciation of computer systems and infrastructure costs required to manage
the administrative functions of our business.

Net consolidated interest expense increased $14.5 million, or 15.5%,
for 1999 as compared to 1998. This increase in interest expense resulted
primarily from increased borrowings under our credit facility and an increase
in our bond accretion.

We recorded a gain on sale of assets of $129.2 million for 1999. We
sold our cellular telephone operations for $89.3 million, which resulted in a
gain of $79.3 million. We also sold 650 of our wireless transmission towers for
$274.6 million, which resulted in a realized gain of $49.9 million and a
deferred gain of $88.3 million. The deferred gain will be amortized over the
initial lease term of ten years as a reduction of cost of services.

The effective income tax rate for 1999 and 1998 was 0%. We generated a
net loss of $124.7 million for the year ended December 31, 1999, and expect to
incur net losses beyond 1999. We will not recognize the tax benefit of these
losses until management determines that it is more likely than not that such
benefit is realizable.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Postpaid service revenues increased $80.8 million, or 155.5%, for 1998
as compared to 1997. PCS postpaid service revenues increased $85.1 million in
1998, or 234.6%, primarily as a result of our continued subscriber growth and
our launch of seven new PCS markets, including Atlanta, Georgia, since the
fourth quarter of 1997. Our postpaid PCS subscribers grew to approximately
253,000 at December 31, 1998, from approximately 119,000 at December 31, 1997.
Cellular postpaid service revenues decreased $4.3 million, or 27.5%, primarily
as a result of the sale of our cellular operations in the State of Maine during
the second quarter of 1997 and the corresponding disposition of approximately
27,000 subscribers.

RPU per PCS postpaid subscriber decreased to $54.27 in 1998, as
compared to $57.81 in 1997. This decrease was attributable primarily to changes
in our rate plan offerings from 1997 to 1998. In 1997, a substantial portion of
our PCS subscribers were participants in a promotional plan under which they
received unlimited monthly airtime for local calling for a fixed monthly fee of
$50. In 1998, we offered multiple rate plans with fixed monthly access charges
ranging from $20 to $90. These rate plans contributed to an overall reduction
in RPU per PCS postpaid subscriber as subscribers gravitated toward lower
fixed-rate plans, a trend consistent with a general trend in the wireless
industry of declining RPU.

16
<PAGE> 18

RPU per cellular postpaid subscriber decreased to $35.58 in 1998 from
$38.33 for 1997. This decrease reflected increased price competition among
wireless carriers, which prompted us to offer cellular rate plans with more
bundled airtime minutes.

PCS roaming revenues (including roaming long distance) were $3.6
million in 1998, as compared to $.2 million in 1997, which reflected the
success of our roaming agreements with GSM Alliance partners that became
effective during the last few months of 1997. Cellular roaming revenues
increased $1.0 million, or 17.9%, in 1998, as compared to 1997. This increase
was due primarily to an increase in the number of roamers and the increased
usage per roamer in 1998.

Because we introduced our intelligent network-based prepaid service
alternative in September 1998, we generated $2.6 million in PCS prepaid service
revenues in 1998. RPU per PCS prepaid subscriber was $40.05 since the launch of
this service.

Other service revenues, which include activation fees, fees from
enhanced services, co-location revenue and interconnection fees billed to LECs
for connections to our PCS and cellular networks, increased $1.8 million, or
36.6%, for 1998 as compared to 1997. This increase was due primarily to our
concentrated efforts to secure tenants for co-location on our towers and the
increase in interconnection fees as a result of increased traffic originating
on the LECs' networks and terminating on our PCS and cellular networks. We
waived all activation fees for new PCS subscribers in the third and fourth
quarters of 1998.

Cost of services includes the cost of interconnection with LEC
facilities, direct cell site costs (property taxes and insurance, site lease
costs and electric utilities), PCS and cellular roaming validation (provided by
a third-party clearinghouse), long distance toll costs and supplementary
services (such as voice mail). PCS cost of services increased $15.7 million, or
62.0%, in 1998 as compared to 1997. This increase primarily reflected costs
related to the approximately 500 additional cell sites we placed in service in
1998, as well as increased interconnection and toll costs related to increased
traffic on our expanding PCS network. Cellular cost of services decreased $1.2
million, or 39.0%, in 1998 as compared to 1997, primarily as a result of the
sale of our cellular operations in the State of Maine.

We generated a negative PCS equipment margin of 246.6% on $22.3
million of sales in 1998, as compared to 179.8% on $15.4 million of sales in
1997. The increase in negative PCS equipment margin was primarily the result of
special promotional prices that we offered on several handsets during the third
and fourth quarters of 1998. We generated a negative cellular equipment margin
of 109.5% on $.8 million of sales in 1998, as compared to 189.9% on $.8 million
of sales in 1997. This improvement in negative margin was attributable to a
decrease in the cost of cellular handsets in 1998. We expect to continue
subsidizing the cost of PCS handsets to subscribers for the foreseeable future.

Operations costs, which include the costs of managing and maintaining
our cellular and PCS systems, customer service, credit and collections
(including bad debt) and inventory management increased $32.5 million, or
135.6%, for 1998 as compared to 1997. PCS operations costs increased $33.2
million, or 156.3%, which was attributable to costs incurred to provide
customer service to the growing PCS subscriber base, to maintain the expanding
PCS network and to a significant increase in the bad debt provision resulting
from the disconnection of non-paying PCS subscribers. Cellular operations costs
decreased $.7 million, or 27.5%, which was attributable primarily to the sale
of our cellular operations in the State of Maine.

Selling and marketing costs increased $22.5 million, or 54.4%, for
1998 as compared to 1997. PCS selling and marketing costs increased $23.5
million, or 61.7%, which was attributable to continued increases in PCS
advertising and marketing costs and the expansion of our sales distribution
channels, including increases in personnel, commissions and retail location
costs. Cellular selling and marketing costs decreased $1.0 million, or 30.9%,
which was attributable primarily to the sale of our cellular operations in the
State of Maine.

General and administrative costs increased $11.9 million, or
46.2%, for 1998 as compared to 1997. Substantially all of this increase was
attributable to PCS general and administrative costs, which increased due to

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<PAGE> 19

increased personnel and the related facilities costs at our corporate and
regional administrative offices and information technology center.

Depreciation and amortization increased $18.4 million, or 37.3%, for
1998 as compared to 1997 and consists principally of the depreciation of the
PCS and cellular network and the amortization of PCS licenses. Substantially
all of the increase was attributable to depreciation associated with the
approximately 500 additional PCS cell sites that we placed in service in 1998
and amortization associated with our launch of seven new PCS markets since the
fourth quarter of 1997.

Net consolidated interest expense increased $51.1 million, or 120.0%,
for 1998 as compared to 1997. This increase resulted primarily from interest
expense incurred on our $300 million 11.125% Senior Notes Due 2007, lower funds
available for investment due to the buildout of the PCS network and a reduction
in capitalized interest ($1.9 million in 1998 compared to $22.1 million in
1997), which was attributable to the completion and placing in service of
substantial portions of the PCS system.

The effective income tax rate for 1998 and 1997 was 0%. We generated a
$265.8 million net loss for 1998 and expect to continue to incur significant
operating losses in 1999 and beyond. We will not recognize the tax benefit of
these operating losses until management determines that it is more likely than
not that such benefit is realizable.

LIQUIDITY AND CAPITAL RESOURCES

We had cash and cash equivalents of $371.4 million and restricted cash
of $16.2 million at December 31, 1999, as compared to $204.8 million and $33.4
million, respectively, at December 31, 1998. During 1999, we used net cash of
$99.0 million for operating activities, as compared to $165.8 million for 1998.
The net loss from operations totaled $124.7 million for 1999, which was after
recognition of a gain on sale of assets of $129.2 million. The cash impact of
the net loss was partially offset by $89.2 million of depreciation and
amortization and $68.9 million of bond accretion on the senior discount notes.

Cash provided from investing activities was $255.3 million for 1999,
as compared to cash used in investing activities of $184.1 for 1998. The cash
was primarily generated from the sale of assets of $364.0 million and the
liquidation of short-term investments of $31.5 million. This was partially
offset by capital expenditures totaling $130.8 million primarily related to the
buildout of our PCS system and support systems.

Cash provided from financing activities was $10.2 million for 1999, as
compared to $227.7 million for 1998. Financing activities for 1999 consisted
primarily of borrowings of $6.5 million under the Credit Facility and proceeds
from the exercise of stock options and warrants of $4.0 million.

On April 30, 1999, we sold to Public Service Cellular, Inc.
substantially all of our cellular assets for $89.3 million. At closing, PSC
paid us $83.1 million in cash (including reimbursement for certain capital
expenditures of $.3 million) and paid $6.2 million into escrow. On November 1,
1999, substantially all remaining funds were released to us from escrow.

During 1998, we sold 50,000 shares of our nonvoting Series E 6.5%
Cumulative Convertible Preferred Stock (the "Series E Preferred") to SCANA
Communications, Inc., a wholly-owned subsidiary of SCANA Corporation, and
50,000 shares of our nonvoting Series F 6.5% Cumulative Convertible Preferred
Stock (the "Series F Preferred") to ITC Wireless, Inc., a wholly-owned
subsidiary of ITC Holding Company, Inc., for an aggregate purchase price of
$150 million. The Series E Preferred and Series F Preferred become convertible
on June 22, 2003, at the option of the holder, into common stock at a
conversion price of $22.01, subject to

18
<PAGE> 20

adjustment. Each is redeemable at our option any time after June 22, 2003, but
no later than June 1, 2010. Each has a liquidation preference over the common
stock of $1,500 per share, subject to adjustment, plus accrued and unpaid
dividends in the event of our liquidation, dissolution or winding up. The 6.5%
annual dividend on each of the Series E Preferred and Series F Preferred is
payable quarterly in common stock or, under certain circumstances, cash. We
intend to pay such quarterly dividends in common stock for the foreseeable
future.

During 1997, we issued $300 million principal amount of our 11.125%
Senior Notes due June 2007. We used $89.6 million of the proceeds from the
Senior Notes to purchase and pledge, for the benefit of the holders, certain
U.S. government securities to provide for the payment of the first six
scheduled interest payments.

During 1997, we sold 50,000 shares of our nonvoting Series C
Convertible Preferred Stock (the "Series C Preferred") to The Huff Alternative
Income Fund, L.P. ("Huff") and 50,000 shares of our nonvoting Series D
Convertible Preferred Stock (the "Series D Preferred") to SCANA for an
aggregate purchase price of $45 million. In September 1999, Huff converted all
of the Series C Preferred shares into 1,764,706 shares of common stock. The
Series D Preferred becomes convertible on March 14, 2002, at the option of the
holder, into common stock at a conversion price of $12.75, subject to
adjustment. The Series D Preferred is redeemable at our option any time after
June 5, 2002. The Series D Preferred has a liquidation preference over the
common stock of $450 per share, subject to adjustment, plus declared and unpaid
dividends in the event of our liquidation, dissolution or winding up.

In May 1997, we sold our cellular operations in the State of Maine to
a subsidiary of Rural Cellular Corporation. On the closing date, Rural Cellular
Corporation paid us $71.8 million in cash and paid $5.4 million into escrow. In
November 1997, we received the remaining funds from escrow. In addition, Rural
Cellular reimbursed us for approximately $250,000 in capital expenditures made
on its behalf prior to the closing of the transaction.

We maintain a $265 million credit facility, which funds our purchase
of PCS network equipment and services. As of December 31, 1999, we had borrowed
the maximum amount available under the credit facility. We will repay the
aggregate advances under the credit facility in twenty equal quarterly
installments, commencing in March 2000 and continuing for a period of five
years thereafter, with the last installment in an amount necessary to repay in
full the remaining outstanding balance.

Total capital expenditures, including capital expenditures for
information technology and the support of the PCS business, were $130.8 million,
$207.3 million and $291.8 million for 1999, 1998 and 1997, respectively. Costs
associated with the initial PCS system buildout, which we have completed,
included tower sites, leasehold improvements, base station and switch equipment
and labor expenses related to construction of sites. We currently estimate that
capital expenditures will total approximately $151 million for 2000. These
expenditures are primarily to enhance and expand our PCS network in existing
markets in order to increase capacity and to satisfy subscriber needs and
competitive requirements, as well as to build out certain secondary cities
within our licensed footprint. We will continue to upgrade our network capacity
and service quality, particularly as they relate to our prepaid service
intelligent-network platform, to support our anticipated subscriber growth.

Although we have completed the initial buildout of our PCS system, we
continue to require significant amounts of capital to fund the operation and
expansion of our PCS business. We believe cash on hand and cash from continuing
operations will be sufficient to fund our PCS operations in 2000.

We are unable to predict the amount of expenditures that we will make
beyond 2000, and we may need to raise additional capital to fund and expand our
business operations. We also will need to raise additional capital if we decide
to acquire additional licenses or businesses. We may attempt to raise
additional capital through public or private debt or equity financings, vendor
financings or other means. However, we cannot guarantee that additional
financing will be available to us or, if available, that we will be able to
obtain it on terms acceptable to us, favorable to our stockholders and within
the limitations contained in our indentures, credit facility and any future
financing arrangements. If we fail to obtain additional financing, we could
experience delays in some or all of our expansion plans and expenditures, which
could limit our ability to meet our debt service obligations and could
materially adversely affect our business, financial condition and operating
results.

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<PAGE> 21

We expect to continue to incur operating losses in the future while we
continue to expand our PCS system and build our subscriber base. Our ability to
satisfy our debt repayment obligations and covenants depends upon our future
performance, which is subject to a number of factors, many of which are beyond
our control. Cash interest will not be payable on our senior discount notes
prior to 2001. We cannot guarantee that we will generate sufficient cash flow
from our operating activities to meet our debt service and working capital
requirements, and we may need to refinance our indebtedness. However, our
ability to refinance our indebtedness will depend on, among other things, our
financial condition, the state of the public and private debt and equity
markets, the restrictions in the instruments governing our indebtedness and
other factors, some of which may be beyond our control. In addition, if we do
not generate sufficient cash flow to meet our debt service requirements or if
we fail to comply with the covenants governing our indebtedness, we may need
additional financing in order to service or extinguish our indebtedness. We may
not be able to obtain financing or refinancing on terms that are either
acceptable or favorable to our stockholders or us.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which is effective for fiscal
years beginning after June 15, 1999. In June 1999, the FASB issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date of FASB Statement No.
133", which amends SFAS 133 to be effective for all fiscal quarters of all
fiscal years beginning after June 15, 2000 (that is, January 1, 2001 for
companies with calendar-year fiscal years). SFAS 133 establishes accounting and
reporting standards for derivative instruments and transactions involving hedge
accounting. We do not anticipate this statement will have a material impact on
our financial statements.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"), which is
effective for fiscal years beginning after December 15, 1998. SOP 98-1 requires
capitalization of certain costs of internal-use software. We adopted SOP 98-1
in January 1999, and it did not have a material impact on our financial
statements.

OTHER

The Year 2000 issue relates to the inability of computer systems or
any equipment with computer chips that use or store dates to distinguish
between years with the same last two digits in different centuries, such as
1900 and 2000. We did not experience any significant malfunctions or errors in
our operating or business systems when the date changed from 1999 to 2000.

As of December 31, 1999, we had incurred $8.4 million to address Year
2000 issues. Although we successfully transitioned into the year 2000 without
any significant problems, our management will continue to monitor the
situation, identify any problems and ensure that all systems are compliant
throughout the year 2000. Given that many of our financial and network systems
have been implemented in the last few years, our management is confident that
this newer equipment and software is generally Year 2000 compliant. However, if
we encounter significant Year 2000 problems, we will report them in our future
reports.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements appear in a number of places in this
Report and include all statements which are not historical facts and which
relate to our intent, belief or current expectations, or that of our directors
or officers. In this Report, we may have made forward-looking statements with
respect to, among other things: (i) our financing plans; (ii) trends affecting
our financial condition or results of operations; (iii) our growth and
operating strategies; and (iv) our anticipated capital needs and capital
expenditures. These statements can sometimes be identified by our use of
forward-looking words such

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<PAGE> 22

as "believe," "may," "will," "anticipate," "estimate," "continue," "expect,"
"could," "should," "would" or "intend." We caution investors that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties. Our actual results may differ materially from those
projected in these forward-looking statements as a result of: (i) factors
affecting the availability, terms and cost of capital, risks associated with the
selection of our PCS digital protocol, competitive factors and pricing
pressures, general economic conditions, the failure of the market demand for our
products and services to be commensurate with our management's expectations or
past experience, issues associated with management of our growth, including the
expansion of our network capacity, the impact of present or future laws and
regulations on our business, changes in operating expenses or the failure of
operating and buildout expenses to be consistent with our management's
expectations and the difficulty of accurately predicting the outcome and effect
of certain matters, such as matters involving litigation and investigations;
(ii) various factors discussed herein; and (iii) those factors discussed in
detail in our previous filings with the Securities and Exchange Commission,
including the "Risk Factors" section of our Registration Statement on Form S-3
(Registration No. 333-84951), as declared effective by the Securities and
Exchange Commission on September 24, 1999.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Our management believes our exposure to market rate fluctuations on
our investments is nominal due to the short-term nature of those investments.
We have market risk to the extent of our borrowings under our credit facility
because of the variable interest rate on the credit facility. However, our
management does not foresee any material prolonged changes in interest rates in
the near future. At present, we have no plans to enter into any hedging
arrangements with respect to our borrowings.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements, including our consolidated balance sheets as
of December 31, 1999 and 1998 and consolidated statements of income,
consolidated statements of cash flows and consolidated statements of changes in
stockholders' (deficit) equity for the years ended December 31, 1999, 1998 and
1997, together with the report of Arthur Andersen L.L.P. dated February 4, 2000,
and the schedule containing certain supporting information are attached to this
Report as pages F-1 through F-19.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS IN ACCOUNTING AND FINANCIAL
DISCLOSURES

We had no disagreements on accounting or financial disclosure matters
with our accountants, nor did we change accountants, during the two fiscal
years ended December 31, 1999.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

We incorporate by reference the information contained under the
caption "ELECTION OF DIRECTORS" in the Definitive Proxy Statement for the 2000
Annual Meeting of Stockholders of Powertel (the "2000 Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

We incorporate by reference the information contained under the
caption "EXECUTIVE COMPENSATION" in the 2000 Proxy Statement except for those
portions entitled "Compensation/Stock Option Committee Report on Executive
Compensation" and "Comparative Company Performance."

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<PAGE> 23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

We incorporate by reference the information contained under the
caption "EXECUTIVE COMPENSATION -- Beneficial Ownership of Capital Stock" in
the 2000 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We incorporate by reference the information contained under the
caption "ELECTION OF DIRECTORS -- Certain Relationships and Related
Transactions" in the 2000 Proxy Statement.

PART IV

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

(A)(1) FINANCIAL STATEMENTS

The following financial statements of Powertel, Inc. are filed as a
part of this Report and are attached as pages F-1 through F-19.

Report of Independent Public Accountants

Consolidated Balance Sheets as of December 31, 1999 and 1998

Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997

Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997

Consolidated Statements of Changes in Stockholders' (Deficit)
Equity for the years ended December 31, 1999, 1998 and 1997

Notes to Financial Statements

(A)(2) FINANCIAL STATEMENT SCHEDULES

The following financial statement schedules of Powertel, Inc. are
filed as a part of this report and are attached as pages S-1 through
S-2:

Report of Independent Public Accountants as to Schedules

Schedule II - Valuation and Qualifying Accounts for the years
ended December 31, 1999, 1998 and 1997

All other schedules for which provision is made in the applicable accounting
regulations of the SEC are not required under the related instructions or are
inapplicable and, therefore, have been omitted.

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<PAGE> 24

(A)(3) EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------ -------------------

<S> <C>
2(a)* Asset Purchase Agreement dated December 23, 1996 by and among
Rural Cellular Corporation, Unity Cellular Systems, Inc.,
InterCel Licenses, Inc. and InterCel, Inc. (Filed as Exhibit
99.1 to the Company's Form 8-K dated December 23, 1996 and
incorporated herein by reference.)

2(b)* Closing Memorandum dated May 1, 1997 by and between Rural
Cellular Corporation, MRCC, Inc., Unity Cellular Systems,
Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as
Exhibit 2.2 to the Company's Form 8-K dated May 12, 1997 and
incorporated herein by reference.)**

2(c)* Asset Purchase Agreement dated January 5, 1999 by and among
Public Service Cellular, Inc., Powertel, Inc., ICEL, Inc. and
InterCel Licenses, Inc. (Filed as Exhibit 99.1 to the
Company's Form 8-K dated January 5, 1999 and incorporated
herein by reference.)**

2(d)* Closing Memorandum dated April 30, 1999 by and between Public
Service Cellular, Inc., Powertel, Inc., ICEL, Inc. and
InterCel Licenses, Inc. (Filed as Exhibit 2.2 to the
Company's Form 8-K dated April 30, 1999 and incorporated
herein by reference.)**

2(e)* Asset Purchase Agreement dated March 15, 1999 by and among
Crown Castle International Corp., CCP Inc., Powertel Atlanta
Towers, LLC, Powertel Birmingham Towers, LLC, Powertel
Jacksonville Towers, LLC, Powertel Kentucky Towers, LLC,
Powertel Memphis Towers, LLC and Powertel, Inc. (Filed as
Exhibit 2(d) to Powertel's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "1998 10-K") and
incorporated herein by reference.)**

2(f)* Escrow Agreement dated March 15, 1999 by and among Crown
Castle International Corp., CCP Inc., Powertel Atlanta
Towers, LLC, Powertel Birmingham Towers, LLC, Powertel
Jacksonville Towers, LLC, Powertel Kentucky Towers, LLC,
Powertel Memphis Towers, LLC, Powertel, Inc. and SunTrust
Bank. (Filed as Exhibit 2(e) to the 1998 10-K and
incorporated herein by reference.)

3(a)* Third Restated Certificate of Incorporation of InterCel, Inc.
dated June 6, 1996. (Filed as Exhibit 10(yy) to the Company's
Form 10-Q filed for the quarter ended September 30, 1996 (the
"1996 Third Quarter 10-Q") and incorporated herein by
reference.)

3(b)* Certificate of Amendment of Restated Certificate of
Incorporation of InterCel, Inc. dated June 23, 1997. (Filed
as Exhibit 10(b) to the Company's Form 8-K filed July 1, 1997
and incorporated herein by reference.)

3(c)* Restated By-Laws of InterCel, Inc. (Filed as Exhibit 3(b) to
Registration Statement on Form S-1, File No. 33-72734 (the
"1993 Form S-1"), and incorporated herein by reference.)

4(a)* Indenture dated as of February 7, 1996 between InterCel, Inc.
and Bankers Trust Company, as Trustee, relating to the 12%
Senior Discount Notes Due 2006 of InterCel, Inc. (Filed as
Exhibit 4(a) to Registration Statement on Form S-1, File No.
33-96218 ("February 1996 Form S-1"), and incorporated herein
by reference.)

4(b)* Warrant Agreement dated as of February 7, 1996 between
InterCel, Inc. and Bankers Trust Company, as Warrant Agent.
(Filed as Exhibit 4(b) to the February 1996 Form S-1 and
incorporated herein by reference.)
</TABLE>

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<PAGE> 25
<TABLE>

<S> <C>
4(c)* Form of Indenture (including form of Note) between InterCel,
Inc. and Bankers Trust Company, as Trustee, relating to the
12% Senior Discount Notes Due 2006 of InterCel, Inc. (Filed
as Exhibit 4(c) to Registration Statement on Form S-1, File
No. 333-2748 (the "April 1996 Form S-1"), and incorporated
herein by reference.)

4(d)* Indenture (including form of Note) dated June 10, 1997
between InterCel, Inc. and Bankers Trust Company, as Trustee,
relating to the 11-1/8% Senior Notes Due 2007 of InterCel,
Inc. (Filed as Exhibit 4(h) to Registration Statement on Form
S-4, File No. 333-31399 (the "1997 Form S-4"), and
incorporated herein by reference.)

4(e)* Collateral Pledge and Security Agreement dated June 10, 1997
between InterCel, Inc. and Bankers Trust Company, as Trustee.
(Filed as Exhibit 4(j) to the 1997 Form S-4 and incorporated
herein by reference.)

4(f)* Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series A Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 10(tt) to the 1996 Third Quarter 10-Q and
incorporated herein by reference.)

4(g)* Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series B Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 10(uu) to the 1996 Third Quarter 10-Q and
incorporated herein by reference.)

4(h)* Certificate of Amendment to the Certificate of Designations,
Powers, Preferences and Relative, Participating or Other
Rights, and the Qualifications, Limitations or Restrictions
Thereof, of Series B Convertible Preferred Stock of InterCel,
Inc. (Filed as Exhibit 4(k) to the 1997 Form S-4 and
incorporated herein by reference.)

4(i)* Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series C Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(f) to the Company's Form 10-K filed for the year
ended December 31, 1996 (the "1996 Form 10-K") and
incorporated herein by reference.)

4(j)* Amended Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series C Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(l) to the 1997 Form S-4 and incorporated herein
by reference.)

4(k)* Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series D Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(g) to the 1996 Form 10-K and incorporated herein
by reference.)

4(l)* Amended Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series D Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(m) to the 1997 Form S-4 and incorporated herein
by reference.)

4(m)* Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series E 6.5% Cumulative Convertible Preferred Stock of
Powertel, Inc. (Filed as Exhibit 4(a) to the Company's Form
10-Q filed for the quarter ended June 30, 1998 (the "1998
Second Quarter 10-Q") and incorporated herein by reference.)
</TABLE>

24
<PAGE> 26
<TABLE>

<S> <C>
4(n)* Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series F 6.5% Cumulative Convertible Preferred Stock of
Powertel, Inc. (Filed as Exhibit 4(b) to the 1998 Second
Quarter 10-Q and incorporated herein by reference.)

4(o)* First Supplemental Indenture dated as of June 16, 1998 to the
following Indentures: Indenture dated as of February 7, 1996
for the 12% Senior Discount Notes Due 2006; Indenture dated
as of April 19, 1996 for the 12% Senior Discount Notes Due
2006; Indenture dated as of June 10, 1997 for the 11 1/8%
Senior Notes Due 2007. (Filed as Exhibit 4(c) to the 1998
Second Quarter 10-Q and incorporated herein by reference.)

10(a)* Software License Agreement between InterCel, Inc. and
Systematics Telecommunications Services, Inc. dated July 24,
1992. (Filed as Exhibit 10(aa) to the Company's Form 10-KSB
filed for the year ended December 31, 1992 and incorporated
herein by reference.)

10(b)* Directors and Officers Insurance and Company Reimbursement
Policy. (Filed as Exhibit 10(ii) to the 1993 Form S-1 and
incorporated herein by reference.)

10(c)* Form of Indemnity Agreement. (Filed as Exhibit 10(jj) to the
1993 Form S-1 and incorporated herein by reference.)

10(d)* InterCel, Inc. 1995 Employee Restricted Stock Plan (as
amended on November 17, 1995). (Filed as Exhibit 10(e) to the
February 1996 Form S-1 and incorporated herein by reference.)

10(e)* InterCel, Inc. Amended and Restated 1991 Stock Option Plan.
(Filed as Appendix C to the Company's Definitive Proxy
Statement for the 1999 Annual Meeting of Stockholders and
incorporated herein by reference.)

10(f)* InterCel, Inc. Amended Nonemployee Stock Option Plan. (Filed
as Exhibit 10(q) to the Company's Form 10-K filed for the
year ended December 31, 1994 (the "1994 Form 10-K") and
incorporated herein by reference.)

10(g)* Directed Employee Benefit Trust Agreement between The Charles
Schwab Trust Company and InterCel, Inc. (Filed as Exhibit
10(jjjj) to the 1994 Form 10-K and incorporated herein by
reference.)

10(h)* Second Amendment to InterCel, Inc. Pension Plan dated as of
August 2, 1996. (Filed as Exhibit 10(ss) to the 1996 Third
Quarter 10-Q and incorporated herein by reference.)

10(i)* InterCel, Inc. 401(k) Profit Sharing Plan. (Filed as Exhibit
10(j) to the February 1996 Form S-1 and incorporated herein
by reference.)

10(j)* Defined Benefit Pension Plan and Trust Adoption Agreement
(Unity Telephone Company) dated as of January 15, 1984.
(Filed as Exhibit 10(ss) to the 1993 Form S-1 and
incorporated herein by reference.)

10(k)* Defined Benefit Pension Plan (Unity Telephone Company).
(Filed as Exhibit 10(tt) to the 1993 Form S-1 and
incorporated herein by reference.)

10(l)* Amendment to Unity Telephone Pension Plan dated June 29,
1992. (Filed as Exhibit 10(uu) to the 1993 Form S-1 and
incorporated herein by reference.)

10(m)* ITC Holding Company Inc. Employees Pension Plan and Trust (as
amended on December 15, 1994). (Filed as Exhibit 10(zz) to
the February 1996 Form S-1 and incorporated herein by
reference.)
</TABLE>

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<PAGE> 27
<TABLE>

<S> <C>
10(n)* DMS-MTX Cellular Supply Agreement dated March 29, 1995
between InterCel, Inc. and Northern Telecom Inc. (Filed as
Exhibit 10(pp) to the February 1996 Form S-1 and incorporated
herein by reference.)

10(o)* Amendment No. 1 to DMS-MTX Cellular Supply Agreement between
InterCel, Inc. and Northern Telecom Inc. dated August 9,
1995. (Filed as Exhibit 10(qq) to the February 1996 Form S-1
and incorporated herein by reference.)

10(p)* Information and Network Products and Services Agreement dated
June 16, 1994 between InterCel, Inc. and GTE
Telecommunications Service Incorporated. (Filed as Exhibit
10(uu) to the February 1996 Form S-1 and incorporated herein
by reference.)

10(q)* Credit Agreement dated as of March 4, 1996 among InterCel PCS
Services, Inc., as Borrower, Ericsson Inc., as Initial
Lender, and Ericsson Inc., as Agent. (Filed as Exhibit 10(nn)
to the April 1996 Form S-1 and incorporated herein by
reference.)

10(r)* Amendment No. 1 to the Credit Agreement by and among
Powertel, Inc., as Borrower, Ericsson Inc., as Initial
Lender, and Ericsson Inc., as Agent, dated as of October 31,
1996. (Filed as Exhibit 10(ww) to the 1996 Third Quarter 10-Q
and incorporated herein by reference.)

10(s)* Amendment No. 2 to the Credit Agreement by and among
Powertel, Inc., as Borrower, Ericsson Project Finance A.B.,
as Lender, and Ericsson Inc., as Agent, dated as of March 31,
1997. (Filed as Exhibit 10(e) to the 1997 Form S-4 and
incorporated herein by reference.)

10(t)* Amendment No. 3 to the Credit Agreement by and among Powertel
PCS, Inc., as Borrower, Goldman Sachs Credit Partners L.P.,
as Lender, and Ericsson Inc., as Agent, dated as of June 26,
1997. (Filed as Exhibit 10(f) to the 1997 Form S-4 and
incorporated herein by reference.)

10(u)* Amendment No. 4 to the Credit Agreement by and among Powertel
PCS, Inc., as Borrower, Goldman Sachs Credit Partners L.P.,
as Lender, and Ericsson Inc., as Agent, dated as of November
18, 1997. (Filed as Exhibit 10(u) to the Company's Form 10-K
for the year ended December 31, 1997 (the "1997 Form 10-K")
and incorporated herein by reference.)

10(v)* Amendment No. 5 to the Credit Agreement by and among Powertel
PCS, Inc., as Borrower, Goldman Sachs Credit Partners L.P.,
as Lender, and Ericsson Inc., as Agent, dated as of December
23, 1997. (Filed as Exhibit 10(v) to the 1997 Form 10-K and
incorporated herein by reference.)

10(w)* Acquisition Agreement dated as of March 4, 1996 between
InterCel PCS Services, Inc. and Ericsson Inc. (Filed as
Exhibit 10(rr) to the April 1996 Form S-1 and incorporated
herein by reference.)

10(x)* Amendment No. 1 to the Acquisition Agreement for Ericsson CMS
40 Personal Communications Systems dated as of September 2,
1997 between Powertel PCS, Inc. and Ericsson Inc. (Filed as
Exhibit 10(j) to the Company's Form 10-Q filed for the
quarter ended September 30, 1997 and incorporated herein by
reference.)

10(y)* License Agreement between LHS Communications, Inc. and
Powertel, Inc. dated August 2, 1996. (Filed as Exhibit 10(vv)
to the 1996 Third Quarter 10-Q and incorporated herein by
reference.)

10(z)* Agreement between BellSouth Telecommunications, Inc. and
Powertel, Inc. effective as of April 1, 1997. (Filed as
Exhibit 10(qq) to the 1997 First Quarter 10-Q and
incorporated herein by reference.)
</TABLE>

26
<PAGE> 28
<TABLE>

<S> <C>
10(aa)* Termination of Stock Purchase Agreement dated as of April 30,
1997 between InterCel, Inc. and The Huff Alternative Income
Fund, L.P. (Filed as Exhibit 10(nn) to the 1997 First Quarter
10-Q and incorporated herein by reference.)

10(bb)* Termination of Stock Purchase Agreement dated as of April 30,
1997 between InterCel, Inc. and SCANA Communications, Inc.
(Filed as Exhibit 10(oo) to the 1997 First Quarter 10-Q and
incorporated herein by reference.)

10(cc)* Stock Purchase Agreement dated as of May 23, 1997 between
InterCel, Inc. and SCANA Communications, Inc. (Filed as
Exhibit 10(c) to the 1997 Form S-4 and incorporated herein by
reference.)

10(dd)* Stock Purchase Agreement dated as of May 23, 1997 between
InterCel, Inc. and The Huff Alternative Income Fund, L.P.
(Filed as Exhibit 10(a) to the 1997 Form S-4 and incorporated
herein by reference.)

10(ee)* First Amendment to Interconnection Agreement between
Powertel, Inc. and BellSouth Telecommunications, Inc.
effective as of April 1, 1997. (Filed as Exhibit 10(mm) to
the 1997 Form 10-K and incorporated herein by reference.)

10(ff)* Powertel 401(k) Profit Sharing Plan (as amended and restated
effective January 1, 1997, and as renamed effective July 1,
1997). (Filed as Exhibit 10(nn) to the 1997 Form 10-K and
incorporated herein by reference.)

10(gg)* Stock Purchase Agreement dated June 22, 1998, by and between
Powertel, Inc. and SCANA Communications, Inc. (Filed as
Exhibit 10(a) to the 1998 Second Quarter 10-Q and
incorporated herein by reference.)

10(hh)* Stock Purchase Agreement dated June 22, 1998, by and between
Powertel, Inc. and ITC Wireless, Inc. (Filed as Exhibit 10(b)
to the 1998 Second Quarter 10-Q and incorporated herein by
reference.)

10(ii)* Amended and Restated Credit Agreement dated as of February 6,
1998, among Powertel PCS, Inc., the Banks and Other Financial
Institutions Listed on the Signature Pages thereof, Ericsson
Inc., as Agent, and National Westminster Bank PLC, as
Administrative Agent for the Lenders. (Filed as Exhibit
(10(a) to the Company's Form 10-Q filed for the quarter ended
March 31, 1998 and incorporated herein by reference.) +

10(jj)* Letter Agreement dated April 22, 1998 by and among Powertel
PCS, Inc., Ericsson Inc., National Westminster Bank plc., GE
Capital and the lenders consenting thereto relating to the
Credit Facility. (Filed as Exhibit 10(c) to the 1998 Second
Quarter 10-Q and incorporated herein by reference.)

21 Subsidiaries of Powertel, Inc.

23 Consent of Arthur Andersen LLP

24 Powers of Attorney for the following individuals: Campbell B.
Lanier, III, Allen E. Smith, Fred G. Astor, Jr., Donald W.
Burton, O. Gene Gabbard and Ann Milligan (included on
signature page hereto)
</TABLE>

27
<PAGE> 29

27 Financial Data Schedule (for SEC use only)

- ---------------------------------
* Previously filed.

** The Registrant agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Securities and Exchange
Commission upon request, as provided in Item 601(b)(2) of
Regulation S-K.

+ Confidential treatment has been granted for certain
confidential portions of this exhibit pursuant to Rule
24(b)(2) under the Exchange Act. In accordance with Rule
24(b)(2), these confidential portions have been omitted from
this exhibit and filed separately with the Commission.

(B) REPORTS ON FORM 8-K

None.

28
<PAGE> 30

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, thereto duly authorized.

POWERTEL, INC.

March 29, 2000 By: /s/ Allen E. Smith
------------------------------------------------
Allen E. Smith
Chief Executive Officer, President and Director

POWER OF ATTORNEY

KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints jointly and severally, Allen
E. Smith and Fred G. Astor, Jr., and each one of them, his attorneys-in-fact,
each with the power of substitution, for him in any and all capacities, to sign
any and all amendments to this Annual Report (Form 10-K) and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each said attorneys-in-fact, or his substitute or substitutes, may do or cause
to be done by virtue hereof.

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

March 29, 2000 /s/ Campbell B. Lanier, III
------------------------------------------------
Campbell B. Lanier, III
Chairman of the Board of Directors

March 29, 2000 /s/ Allen E. Smith
------------------------------------------------
Allen E. Smith
Chief Executive Officer, President and Director
(principal executive officer)

March 29, 2000 /s/ Fred G. Astor, Jr.
------------------------------------------------
Fred G. Astor, Jr.
Chief Financial Officer and Executive Vice President
(principal financial and accounting officer)

March 29, 2000 /s/ Donald W. Burton
------------------------------------------------
Donald W. Burton
Director

March 29, 2000 /s/ O. Gene Gabbard
------------------------------------------------
O. Gene Gabbard
Director

<PAGE> 31

March 29, 2000 /s/ Ann Milligan
------------------------------------------------
Ann Milligan
Director

March ____, 2000
------------------------------------------------
William H. Scott, III
Director

March ____, 2000
------------------------------------------------
William B. Timmerman
Director

March ____, 2000
------------------------------------------------
Donald W. Weber
Director

30
<PAGE> 32

INDEX TO 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 Changes in Stockholders' (Deficit) Equity for the Years Ended F-5
December 31, 1999, 1998 and 1997.......................................................................

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> 33

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Powertel, Inc.:

We have audited the accompanying consolidated balance sheets of
POWERTEL, INC. (a Delaware corporation) and subsidiaries as of December 31, 1999
and 1998 and the related consolidated statements of operations, changes in
stockholders' equity (deficit), and cash flows for each of the three years ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 Powertel, Inc. 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 ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 4, 2000

F-2
<PAGE> 34

POWERTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------
1999 1998
----------- -----------
(DOLLARS IN THOUSANDS)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................................. $ 371,396 $ 204,787
Restricted cash for payment of interest (Note 2).......................... 16,223 33,375
Accounts receivable, net of allowance for doubtful accounts
of $6,544 and $4,895 at December 31, 1999 and 1998, respectively........ 30,925 28,726
Inventories (Note 2)...................................................... 21,250 20,683
Prepaid expenses and other................................................ 21,747 9,248
----------- -----------
461,541 296,819
----------- -----------

PROPERTY AND EQUIPMENT, AT COST (Note 2):
Land...................................................................... 932 932
Building and towers....................................................... 241,617 311,723
Equipment................................................................. 433,264 329,993
Furniture and fixtures.................................................... 11,259 8,616
Assets under construction................................................. 34,841 98,350
----------- -----------
721,913 749,614
Less: accumulated depreciation......................................... (160,803) (107,210)
----------- -----------
561,110 642,404
----------- -----------

OTHER ASSETS (Note 2):
Licenses, net of accumulated amortization of $26,950 and $16,748 at
December 31, 1999 and 1998, respectively............................... 400,587 407,998
Deferred charges and other, net of accumulated amortization of $8,206
and $5,749 at December 31, 1999 and 1998, respectively................. 16,557 19,014
Restricted cash for payment of interest.................................. -- 14,343
----------- -----------
417,144 441,355
----------- -----------

Total assets......................................................... $ 1,439,795 $ 1,380,578
=========== ===========

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

CURRENT LIABILITIES:
Accounts payable - trade................................................. $ 26,261 $ 14,633
Accrued other............................................................ 20,612 20,529
Accrued construction costs............................................... 18,479 17,807
Current portion of long-term obligations (Note 5)........................ 12,946 49
Accrued taxes other than income.......................................... 12,601 6,261
Advance billings and customer deposits................................... 9,908 7,898
Accrued interest......................................................... 2,781 2,781
----------- -----------
103,588 69,958
----------- -----------

LONG-TERM OBLIGATIONS (Note 5):
12% Senior Discount Notes due February 2006.............................. 310,076 275,069
12% Senior Discount Notes due May 2006................................... 308,308 274,393
11.125% Senior Notes due June 2007....................................... 300,000 300,000
Long-term portion of Credit Facility..................................... 252,107 258,532
Deferred gain on sale-leaseback (Note 3)................................. 83,331 --
Other................................................................... 23 76
----------- -----------
1,253,845 1,108,070
----------- -----------

COMMITMENTS AND CONTINGENCIES (Note 9)

CUMULATIVE CONVERTIBLE, REDEEMABLE
PREFERRED STOCK (Note 6)................................................... 152,219 152,219
----------- -----------

STOCKHOLDERS' (DEFICIT) EQUITY:
Preferred Stock (Note 6).................................................. 3 4
Common Stock: $.01 par value; 100,000,000 shares authorized,
29,933,269 and 27,265,924 issued and outstanding at December 31, 1999
and 1998, respectively.................................................. 299 273
Paid-in capital........................................................... 494,936 479,875
Accumulated deficit....................................................... (563,190) (428,774)
Deferred compensation..................................................... (1,410) (702)
Treasury stock, at cost - 55,352 and 52,483 shares at December 31, 1999
and 1998, respectively.................................................. (495) (345)
----------- -----------
(69,857) 50,331
----------- -----------

Total liabilities and stockholders' (deficit) equity.................. $ 1,439,795 $ 1,380,578
=========== ===========
</TABLE>

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

F-3
<PAGE> 35

POWERTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
--------- --------- ---------
(DOLLARS AND SHARES IN THOUSANDS,
EXCEPT PER SHARE DATA)

<S> <C> <C> <C>
REVENUES AND SALES (Note 2):
Postpaid revenues ......................... $ 176,356 $ 132,709 $ 51,951
Roaming revenues .......................... 8,799 10,244 5,858
Prepaid revenues .......................... 55,752 2,579 --
Other revenues ............................ 13,144 6,743 4,936
--------- --------- ---------
Total service revenues .................. 254,051 152,275 62,745
Equipment sales ........................... 29,360 23,161 16,171
--------- --------- ---------
Total revenues and sales .............. 283,411 175,436 78,916
--------- --------- ---------

OPERATING EXPENSES:
Cost of services .......................... 59,183 42,777 28,277
Cost of equipment sales ................... 73,526 79,144 45,318
Operations ................................ 64,269 56,522 23,989
Selling and marketing ..................... 99,012 63,936 41,409
General and administrative ................ 44,184 37,639 25,742
Depreciation .............................. 78,968 57,938 42,747
Amortization .............................. 10,212 9,716 6,535
--------- --------- ---------
Total operating expenses .............. 429,354 347,672 214,017
--------- --------- ---------

OPERATING LOSS ............................... (145,943) (172,236) (135,101)
--------- --------- ---------
OTHER (INCOME) EXPENSE:
Interest expense, net ..................... 108,183 93,656 42,564
Gain on sale of assets .................... (129,172) -- (41,912)
Miscellaneous income ...................... (288) (62) (585)
--------- --------- ---------
Total other (income) expense .......... (21,277) 93,594 67
--------- --------- ---------
LOSS BEFORE INCOME TAXES ..................... (124,666) (265,830) (135,168)
INCOME TAX PROVISION ......................... -- -- --
--------- --------- ---------
NET LOSS ..................................... (124,666) (265,830) (135,168)
DIVIDENDS ON CUMULATIVE CONVERTIBLE,
REDEEMABLE PREFERRED STOCK ................ (9,750) (5,010) --
--------- --------- ---------

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.. $(134,416) $(270,840) $(135,168)
========= ========= =========

PER SHARE DATA (Note 2):
BASIC AND DILUTED LOSS PER COMMON SHARE.... $ (4.75) $ (10.02) $ (5.04)
========= ========= =========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING ........... 28,270 27,019 26,834
========= ========= =========
</TABLE>

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

F-4
<PAGE> 36

POWERTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

TOTAL
CONVERTIBLE STOCKHOLDERS'
COMMON PREFERRED PAID-IN ACCUMULATED DEFERRED TREASURY (DEFICIT)
STOCK STOCK CAPITAL DEFICIT COMPENSATION STOCK EQUITY
----- ----- ------- ------- ------------ ----- ---------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 ...... $269 $ 2 $ 430,053 $ (22,766) $ (206) $(345) $ 407,007
Stock options exercised ......... 1 -- 711 -- -- -- 712
Issuance of restricted common
stock (Note 7) ............... -- -- 1,455 -- (1,455) -- --
Issuance of Series C Convertible
Preferred Stock, net of
issuance costs (Note 6) ...... -- 1 22,445 -- -- -- 22,446
Issuance of Series D Convertible
Preferred Stock, net of
issuance costs (Note 6) ...... -- 1 22,445 -- -- -- 22,446
Amortization of deferred
compensation ................. -- -- -- -- 373 -- 373
Net loss attributable to common
stockholders ................. -- -- -- (135,168) -- -- (135,168)
---- --- --------- --------- ------- ----- ---------
BALANCE, DECEMBER 31, 1997 ...... 270 4 477,109 (157,934) (1,288) (345) 317,816
Stock options exercised ......... 1 -- 195 -- -- -- 196
6.5% stock dividend on Cumulative
Convertible, Redeemable
Preferred Stock (Note 6) ..... 2 -- 2,571 -- -- -- 2,573
Amortization of deferred
compensation ................. -- -- -- -- 586 -- 586
Net loss attributable to common
stockholders ................. -- -- -- (270,840) -- -- (270,840)
---- --- --------- --------- ------- ----- ---------
BALANCE, DECEMBER 31, 1998 ...... 273 4 479,875 (428,774) (702) (345) 50,331
Stock options and warrants
exercised ....................... 3 -- 3,971 -- -- -- 3,974
Issuance of restricted common
stock (Note 7) ............... -- -- 1,362 -- (1,362) -- --
Conversion of Series C
Convertible Preferred Stock
(Note 6) ..................... 18 (1) (17) -- -- -- --
6.5% stock dividend on Cumulative
Convertible, Redeemable
Preferred stock (Note 6) ..... 5 -- 9,745 -- -- -- 9,750
Purchase of treasury shares ..... -- -- -- -- -- (150) (150)
Amortization of deferred
compensation ................. -- -- -- -- 654 -- 654
Net loss attributable to common
stockholders ................. -- -- -- (134,416) -- -- (134,416)
---- --- --------- --------- ------- ----- ---------
BALANCE, DECEMBER 31, 1999 ...... $299 $ 3 $ 494,936 $(563,190) $(1,410) $(495) $ (69,857)
==== === ========= ========= ======= ===== =========
</TABLE>

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

F-5
<PAGE> 37

POWERTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
--------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss ........................................................ $(124,666) $(265,830) $(135,168)
Adjustments to reconcile net loss to net cash used in
operating activities:
Gain on sale of subsidiary, net ............................... (79,312) -- (41,912)
Realized gain on sale-leaseback, net .......................... (49,860) -- --
Bond accretion ................................................ 68,922 59,204 34,061
Depreciation and amortization ................................. 89,180 67,654 49,282
Other, net .................................................... (1,878) 3,041 2,565
Changes in assets and liabilities:
(Increase) decrease in accounts receivable .................. (5,841) 5,823 (28,596)
(Increase) decrease in inventories .......................... (879) (16,708) 3,393
(Increase) decrease in other assets ......................... (2,492) (2,690) 8,613
Increase (decrease) in accounts payable, accrued expenses
and other current liabilities ............................. 7,849 (16,312) 50,732
--------- --------- ---------
Net cash used in operating activities ................... (98,977) (165,818) (57,030)
--------- --------- ---------

CASH FLOWS PROVIDED FROM (USED IN) INVESTING ACTIVITIES:
Proceeds from sale-leaseback .................................... 274,617 -- --
Proceeds from sale of subsidiary ................................ 89,339 -- 77,204
Capital expenditures ............................................ (130,816) (207,292) (291,849)
Liquidation (purchase) of investments, net ...................... 31,495 29,367 (1,426)
Short-term notes receivable ..................................... (7,163) -- --
Microwave relocation ............................................ (2,801) (862) (9,266)
Increase (decrease) in accrued construction costs ............... 672 (5,285) 7,878
Payment for FCC licenses ........................................ -- -- (31,251)
--------- --------- ---------
Net cash provided from (used in) investing activities ... 255,343 (184,072) (248,710)
--------- --------- ---------

CASH FLOWS PROVIDED FROM FINANCING ACTIVITIES:
Borrowings under Credit Facility ................................ 6,468 78,571 110,447
Proceeds from sale of common stock, net ......................... 3,974 196 712
Proceeds from sale of cumulative convertible, redeemable
preferred stock, net ......................................... -- 149,782 --
Proceeds from issuance of 11.125% Senior Notes due June 2007 .... -- -- 290,637
Proceeds from sale of preferred stock, net ...................... -- -- 44,892
Other, net ...................................................... (199) (826) 481
--------- --------- ---------
Net cash provided from financing activities ............. 10,243 227,723 447,169
--------- --------- ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............... 166,609 (122,167) 141,429

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ..................... 204,787 326,954 185,525
--------- --------- ---------

CASH AND CASH EQUIVALENTS AT END OF YEAR ........................... $ 371,396 $ 204,787 $ 326,954
========= ========= =========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, net of amounts capitalized .............. $ 55,675 $ 52,913 $ 24,453
Cash paid for income taxes ...................................... -- -- 213
Net book value of assets sold in subsidiary disposition ......... 10,027 -- 35,292
Net book value of assets sold under sale-leaseback .............. 136,437 -- --
Noncash investing and financing activities:
Total capitalized interest .................................... -- 1,900 22,093
Dividends on cumulative convertible, redeemable preferred stock
paid in stock .............................................. 9,750 2,573 --
</TABLE>

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

F-6
<PAGE> 38

POWERTEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998, AND 1997

1. ORGANIZATION AND NATURE OF BUSINESS

Powertel, Inc. (the "Company") was incorporated in Delaware in April
1991 under the name Intercel, Inc. In June 1997, the Company changed its name to
Powertel, Inc. The Company provides digital wireless personal communication
services ("PCS") in the southeastern United States. Prior to April 30, 1999, the
Company also provided cellular telephone services in contiguous portions of
eastern Alabama and western Georgia under the name "Intercel" (Note 4).

Prior to May 1, 1997, the Company provided cellular telephone services
in the State of Maine under the name "Unicel" (Note 4).

The Company's PCS licenses encompass a territory of approximately
246,000 contiguous square miles with a population of approximately 24.4 million
people (according to industry publications) in the Major Trading Areas ("MTAs")
of Atlanta, Georgia; Jacksonville, Florida; Memphis, Tennessee/Jackson,
Mississippi; and Birmingham, Alabama; and in 13 Basic Trading Areas ("BTAs") in
Kentucky and Tennessee. The Company holds 30 MHz of spectrum licensed for PCS in
the MTA Markets and 20 MHz of spectrum licensed for PCS in all of the BTA
Markets except for the Knoxville, Tennessee BTA, where the Company holds a
license for 10 MHz of spectrum. The Company first introduced its PCS services in
October 1996 in Jacksonville, Florida and Montgomery, Alabama and, to date, has
launched its PCS services in a total of 34 markets in the Southeast.

While there are numerous wireless telephone systems operating in the
United States and other countries, the wireless telecommunications industry has
only limited operating history. Achieving profitable PCS operations will require
the Company to successfully compete with other PCS providers in all of its
markets, as well as with both existing and future wireless providers. In
addition, successful PCS operations will require the development of products
that are at least as commercially effective as its wireless competitors. Any
failure to anticipate and respond to changes to technology and subscriber
desires could have an adverse effect on the PCS business.

Management expects to continue incurring operating losses in future
periods while it continues to develop and expand its PCS system and PCS
subscriber base. Management believes it has adequate resources to fund these
losses during its initial years of operation or that additional sources of funds
will be available via public and private debt and equity placements or
additional lines of credit. If such sources are needed but not available,
management will have to alter its current operating plans.

2. SUMMARY OF ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements are prepared on the accrual basis
of accounting and include the accounts of the Company and all majority-owned
subsidiaries. All significant intercompany balances have been eliminated.

Use of Estimates

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. Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

F-7
<PAGE> 39

Source of Supplies

The Company relies on local telephone companies and other companies to
provide certain communications services. Although management feels alternative
telecommunications facilities could be found in a timely manner, any disruption
of these services could have an adverse effect on operating results.

Although the Company attempts to maintain multiple vendors for each
required product, its inventory and equipment, which are important components of
its operations, are each currently acquired primarily from less than five
sources. In addition, some of the Company's suppliers have limited resources and
production capacity. If the suppliers are unable to meet the Company's needs as
it builds out its network infrastructure and sells services and equipment, then
delays and increased costs in the expansion of the Company's network
infrastructure or losses of potential subscribers could result, which would
affect operating results adversely.

Presentation

Certain prior year amounts have been reclassified to conform to the
current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, and
short-term investments with original maturities of three months or less.

Restricted Cash for Payment of Interest

Restricted cash consists of certain U.S. government securities with
varying maturities which have been purchased and pledged, for the benefit of the
holders of the 11.125% Senior Notes due June 2007, to provide for the payment of
the first six scheduled interest payments on such Notes (Note 5).

Credit Risk

The Company's accounts receivable subject the Company to credit risk.
The Company extends credit to its subscribers based upon an evaluation of the
subscriber's financial condition and credit history and generally does not
require collateral. The Company maintains an allowance for doubtful accounts
based upon the expected collectibility of subscribers' accounts receivable. The
Company bills certain services to subscribers in advance and has the ability to
terminate access on delinquent accounts. The Company also introduced an
intelligent-network-based prepaid service alternative during September 1998.
Management believes these factors, as well as the large and geographically
diverse number of subscribers comprising the subscriber base, mitigate the risk
of loss and the concentration of credit risk.

The carrying amount of the Company's receivables approximates their
fair value.

Inventories

The Company maintains inventories for resale of wireless handsets and
accessory parts (i.e., antennae, batteries, cable, etc.). Inventories are valued
at the lower of average cost (which approximates first-in, first-out) or market
and are recorded net of a reserve for obsolescence of $1.5 million and $1.8
million at December 31, 1999 and 1998, respectively.

Property and Depreciation

Property and equipment are recorded at cost, including certain
engineering costs. The Company records depreciation using the straight-line
method over the estimated useful lives of the assets, which are 10 to 15 years
for towers, buildings and improvements and 3 to 10 years for equipment,
furniture and fixtures. The Company's policy is to remove the cost and
accumulated depreciation of retirements from the accounts and recognize the

F-8
<PAGE> 40

related gain or loss upon the disposition of assets. Such gains and losses were
not material for any period presented, except as described in Notes 3 and 4.

Assets Under Construction

Expenditures to construct the Company's PCS system are recorded as
assets under construction until the assets are placed in service. When the
assets are placed in service, they are transferred to the appropriate property
and equipment category and depreciated.

The Company capitalized interest incurred on borrowings related to
assets under construction during the initial buildout of the PCS system. Of the
cumulative aggregate capitalized interest of $50.3 million, $9.9 was attributed
to property, plant and equipment at December 31, 1999.

Licenses

Licenses consist of costs incurred to acquire PCS licenses, including
cumulative capitalized interest of $40.4 million at December 31, 1999, and
certain microwave relocation costs. Licenses are stated at cost less accumulated
amortization and are being amortized using the straight-line method over 40
years.

Deferred Charges and Other

Deferred charges and other consist primarily of costs related to the
offerings of the Company's senior notes and senior discount notes (Note 5) and
are being amortized over the 10-year lives of the related notes.

Impairment of Long-Lived Assets

The Company periodically reviews the values assigned to long-lived
assets, including property and equipment, licenses and deferred charges, to
determine if any possible impairment has occurred and is other than temporary.
Management believes the long-lived assets in the accompanying consolidated
balance sheets are appropriately valued.

Stock-Based Compensation Plans

The Company accounts for its stock-based compensation plans under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"). Effective in 1996, the Company adopted the disclosure
option of Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123") (Note 7) for all options granted
subsequent to January 1, 1995.

Revenue Recognition

The Company earns revenues by providing PCS and cellular service to
both local subscribers and subscribers of other PCS and cellular carriers
traveling ("roaming") through the Company's service area, as well as from sales
of PCS and cellular equipment. Postpaid service revenues consist of base monthly
service fees ("access"), airtime revenue and long-distance revenues ("toll
revenues"). Generally, access fees are billed one month in advance, but
recognized when earned, while airtime and toll revenues are recognized when
service is provided.

The Company introduced a prepaid PCS service alternative in September
1998. Prepaid PCS service revenues are collected in advance but recognized as
service is provided.

Roaming revenues consist of the airtime and toll fees charged to the
subscribers of other PCS and cellular carriers for use of the Company's PCS
network while traveling in the Company's service area. Roaming revenues are
recognized when service is rendered.

F-9
<PAGE> 41

Other revenues consist of activation fees, optional enhanced service
features and interconnection fees charged to local exchange carriers for
connections to the PCS network and are recognized when earned.

Equipment sales are recognized upon delivery of the equipment to the
customer.

Advertising

The Company expenses advertising as incurred

Interest Expense, Net

Interest expense, net is comprised of the following (in millions):

<TABLE>

<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>

Interest income.......... $ (18.9) $ (19.5) $ (21.0)
Interest expense......... 127.1 115.1 85.7
Capitalized interest..... -- (1.9) (22.1)
------- ------- -------
Interest expense, net $ 108.2 $ 93.7 $ 42.6
======= ======= =======
</TABLE>

Loss Per Share

Basic loss per share (EPS) was computed by dividing net loss available
to common stockholders by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS is the same as basic EPS for all
periods presented as all common stock equivalents would have an antidilutive
effect.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which is effective for fiscal
years beginning after June 15, 1999. In June 1999, the FASB issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities -- Deferral of the Effective Date of FASB Statement No.
133", which amends Statement 133 to be effective for all fiscal quarters of all
fiscal years beginning after June 15, 2000 (that is, January 1, 2001 for
companies with calendar-year fiscal years). SFAS 133 establishes accounting and
reporting standards for derivative instruments and transactions involving hedge
accounting. The Company does not anticipate that this statement will have a
material impact on its financial statements.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"), which
is effective for fiscal years beginning after December 15, 1998. SOP 98-1
requires capitalization of certain costs of internal-use software. The Company
adopted SOP 98-1 in January 1999. Adoption of SOP 98-1 did not have a material
impact on the Company's financial statements.

3. TOWER ASSETS SALE-LEASEBACK

On June 2, 1999, pursuant to an Asset Purchase Agreement dated March
15, 1999, the Company sold to CCP Inc., a wholly-owned subsidiary of Crown
Castle International Corp ("Crown Castle"), 619 of its wireless transmission
towers, related assets and certain liabilities for $261.5 million. On December
2, 1999, pursuant to an Asset Purchase Agreement dated September 27, 1999, the
Company sold to Crown Castle an additional 31 towers for $13.1 million. In
connection with these sales, the Company entered into master lease agreements
with Crown Castle to lease space on the towers for a monthly rent of $1,800 per
tower for an initial lease term of ten years, with three five-year renewal
periods at the option of the Company. The transactions were recorded as a
sale-leaseback. Accordingly, $88.3 million of the total gain on the sale of
$138.2 million was deferred and will be amortized over the initial lease term of
ten years as a reduction of cost of services. The unamortized portion of the
deferred gain is recorded as a long-term obligation in the accompanying
consolidated balance sheets.

In connection with these transactions, the Company also entered into a
build-to-suit construction contract with Crown Castle (Note 9).

4. ASSET DISPOSITIONS

On April 30, 1999, pursuant to an Asset Purchase Agreement dated
January 5, 1999, the Company and certain of its wholly-owned subsidiaries sold
to Public Service Cellular, Inc. ("PSC") substantially all of the assets and FCC
Licenses of the Company relating to its cellular telephone operations in eastern
Alabama and western Georgia for $89.3 million. The transaction constituted the
sale of all of the Company's cellular telephone operations and resulted in a
$79.3 million gain to the Company. At closing, PSC paid the Company $83.1
million

F-10
<PAGE> 42

in cash (including reimbursement for certain capital expenditures of $.3
million) and paid $6.2 million into escrow. On November 1, 1999, substantially
all of the $6.2 million was released from escrow to the Company.

On May 1, 1997, pursuant to an Asset Purchase Agreement dated as of
December 23, 1996, certain subsidiaries of the Company sold and assigned (the
"Unicel Disposition") to a subsidiary of Rural Cellular Corporation ("Rural
Cellular"), substantially all the assets and rights of the Company (including
its 51% general partnership interest in the Northern Maine Cellular Partnership)
to provide cellular and microwave service in the Bangor, Maine MSA and Maine
RSA3 and to provide microwave service in Maine RSA2. This transaction resulted
in a $41.9 million gain to the Company. At closing, Rural Cellular paid the
Company $71.8 million in cash and paid $5.4 million into escrow. On November 3,
1997, the $5.4 million was released from escrow to the Company.

The following unaudited pro forma condensed consolidated statements of
operations (in millions, except per share data) assume the sales occurred at the
beginning of each period presented. In the opinion of management, all
adjustments necessary to present fairly such unaudited pro forma condensed
statements of operations have been made.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------
1999 1998 1997
------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Revenues and sales ............................ $ 276.4 $ 155.8 $ 55.9
Net loss (excluding gain on sale).............. (207.6) (273.9) (183.9)
Basic and diluted loss per common share........ $ (7.68) $(10.33) $ (6.86)

</TABLE>

5. LONG-TERM OBLIGATIONS

During 1997, the Company issued $300 million principal amount of
11.125% Senior Notes due June 2007 (the "June Notes"). The June Notes may be
redeemed at any time on or after June 1, 2002, at the option of the Company, at
105.5626% of their principal amount, plus accrued interest, declining to 100% of
their principal amount, plus accrued interest, on and after June 1, 2004. In
addition, at any time prior to June 1, 2000, up to 35% of the aggregate
principal amount of the June Notes may be redeemed from the proceeds of one or
more public equity offerings at 111.125% of their principal amount, provided
that after any such redemption at least $195.0 million aggregate principal
amount of the June Notes remains outstanding. Interest on the June Notes is
payable semiannually in cash on June 1 and December 1 of each year.

The Company used $89.6 million of the proceeds from the June Notes to
purchase and pledge, for the benefit of the holders of the June Notes, certain
U.S. government securities to provide for the payment of the first six scheduled
interest payments on the June Notes. The remaining unpaid portion of such
amounts is classified as "Restricted Cash for Payment of Interest" in the
accompanying consolidated balance sheets (Note 2).

During 1996, the Company issued $360 million principal amount at
maturity of the Company's 12% Senior Discount Notes due April 2006 (the "April
Notes") and $357 million aggregate principal amount at maturity of the Company's
12% Senior Discount Notes due February 2006 (the "February Notes"). The April
Notes may be redeemed at any time on or after May 1, 2001, at the option of the
Company, at 106% of their principal amount at maturity, plus accrued interest,
declining to 100% of their principal amount at maturity, plus accrued interest,
on and after May 1, 2003. The April Notes will fully accrete to face value on
May 1, 2001, at which time they will bear interest, payable in cash, at a rate
of 12% per annum on each May 1 and November 1, commencing November 1, 2001.

The February Notes may be redeemed at any time on or after February 1,
2001, at the option of the Company, at 106% of their principal amount at
maturity, plus accrued interest, declining to 100% of their principal amount at
maturity, plus accrued interest on and after February 1, 2003. The February
Notes will fully

F-11
<PAGE> 43

accrete to face value on February 1, 2001, at which time they will bear
interest, payable in cash, at a rate of 12% per annum on each February 1 and
August 1, commencing August 1, 2001.

Unamortized original issue discount on the April Notes and February
Notes is being amortized using effective interest rates of 12% and 12.35%,
respectively. For the years ended December 31, 1999, 1998 and 1997, total
accretion of the original issue discount was $68.9 million, $61.1 million and
$54.5 million, respectively, of which $0.0 million, $1.9 million and $20.4
million was capitalized and $68.9 million, $59.2 million and $34.1 million,
respectively, was included in interest expense in the accompanying consolidated
statements of operations.

The Company maintains a $265 million Credit Facility regarding the
purchase of and vendor financing for PCS network equipment and services. Under
the original terms of the Credit Facility, advances were made as requested by
the Company to finance purchases from Ericsson Inc. pursuant to the terms of the
related Ericsson Equipment Purchase Agreement (Note 9). As of December 31, 1999,
the Company had borrowed the maximum available under the Credit Facility. The
aggregate amount of the advances made will be repaid in twenty equal quarterly
installments, commencing in March 2000 and continuing for a period of five years
thereafter, with the last installment in an amount necessary to repay in full
the remaining outstanding balance.

The interest rate under the Credit Facility is based on the applicable
Eurodollar Rate plus 3% (9.0625% at December 31, 1999) but can be converted to a
fluctuating interest rate per annum based on the higher of Citibank N.A.'s base
rate or .5% above the Federal Funds Rate, plus 1%, at the discretion of the
lender. Interest on the unpaid principal amount of each advance is payable in
arrears on the last day of each calendar quarter.

The Credit Facility is secured by all the equipment purchased with the
proceeds therefrom, subject to the terms of the Ericsson Equipment Purchase
Agreement, as well as a pledge of the stock of the Company's subsidiaries that
hold the PCS licenses.

Scheduled maturities of long-term obligations are as follows (in
millions):

<TABLE>
<S> <C>
2000 $ 12.9
2001 33.0
2002 53.0
2003 53.0
2004 53.0
Thereafter 978.5
-----------
Total $ 1,183.4
===========
</TABLE>

The indentures relating to the June Notes, February Notes and April
Notes (the "Indentures") and Credit Facility contain certain restrictive
covenants which significantly limit or prohibit, among other things, the ability
of the Company to incur additional indebtedness, make prepayments of certain
indebtedness, pay dividends, make investments, engage in transactions with
stockholders and affiliates, issue capital stock, create liens, sell assets and
engage in mergers and consolidations. The Credit Facility also requires the
Company to maintain certain financial ratios. If the Company fails to comply
with these restrictive covenants or maintain such ratios, the Company's
obligation to repay all, or significant portions of, the Notes and Credit
Facility may be accelerated. The limitations in the Indentures are subject to
certain qualifications and exceptions, which, in particular, allow the Company
and its subsidiaries to incur additional indebtedness in certain circumstances.

At December 31, 1999, the Company was in compliance with all covenants
and financial ratios under the Indentures and Credit Facility.

F-12
<PAGE> 44

6. PREFERRED STOCK

The Preferred Stock reflected in the accompanying consolidated balance
sheets is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1999 1998
--------- ---------
(IN THOUSANDS)

<S> <C> <C>
Preferred stock, $.01 par value, 1,000,000 shares authorized:
Series E Cumulative Convertible, Redeemable Preferred, 50,000 shares
issued and outstanding at December 31, 1999 and 1998 .................. $ 76,109 $ 76,109
Series F Cumulative Convertible, Redeemable Preferred, 50,000 shares
issued and outstanding at December 31, 1999 and 1998 .................. 76,110 76,110
--------- ---------
Total cumulative convertible, redeemable preferred stock ...... $ 152,219 $ 152,219
========= =========

Series A Convertible Preferred, 100,000 shares issued and outstanding
in 1999 and 1998 .................................................. $ 1 $ 1
Series B Convertible Preferred, 100,000 shares issued and
outstanding in 1999 and 1998 .......................................... 1 1
Series C Convertible Preferred, 0 and 50,000 shares issued and
outstanding in 1999 and 1998, respectively ............................ -- 1
Series D Convertible Preferred, 50,000 shares issued and
outstanding in 1999 and 1998 .......................................... 1 1
--------- ---------
Total preferred stock in stockholders' equity ..................... $ 3 $ 4
========= =========
</TABLE>

On September 22, 1999, The Huff Alternative Income Fund, L.P., which
originally purchased 50,000 shares of Series C Convertible Preferred Stock (the
"Series C Preferred") from the Company on June 5, 1997, converted all of the
Series C Preferred shares into 1,764,706 shares of common stock.

On September 15, 1999, Sonera Ltd. purchased 100,000 shares of
non-voting Series A Convertible Preferred Stock (the "Series A Preferred") from
Ericsson Inc., which originally purchased the Series A Preferred from the
Company on June 29, 1996. The Series A Preferred is currently convertible, at
the option of the holder, at a rate of 46.27 shares of common stock per share of
preferred stock, subject to adjustment. The Series A Preferred is redeemable, at
the option of the Company, in whole or in part, on a pro rata basis, at a
redemption price of $750 per share plus declared and unpaid dividends, anytime
subsequent to June 28, 2001. The Series A Preferred has a liquidation preference
of $750 per share plus declared and unpaid dividends in the event of a
liquidation, dissolution or winding up of the Company.

On June 22, 1998, in separate private placements, the Company issued:
(a) 50,000 shares of non-voting Series E 6.5% Cumulative Convertible, Redeemable
Preferred Stock (the "Series E Preferred") to SCANA Communications, Inc., a
wholly-owned subsidiary of SCANA Corporation ("SCANA"), for $75 million; and (b)
50,000 shares of non-voting Series F 6.5% Cumulative Convertible, Redeemable
Preferred Stock (the "Series F Preferred") to ITC Wireless, Inc., a wholly-owned
subsidiary of ITC Holding Company, Inc., for $75 million. The Series E Preferred
and Series F Preferred become convertible on June 22, 2003, at the option of the
holder, at a rate of 68.15 shares of common stock per share of preferred stock,
subject to adjustment. Each is redeemable at the option of the Company, in whole
or in part, on a pro rata basis, at a redemption price of $1,500 per share plus
accrued and unpaid dividends, anytime subsequent to June 22, 2003, but no later
than June 1, 2010. Each has a liquidation preference over the common stock of
$1,500 per share, subject to adjustment, plus accrued and unpaid dividends in
the event of a liquidation, dissolution or winding up of the Company.

Due to the mandatory redemption feature included in the Series E
Preferred and Series F Preferred, the Series E Preferred and Series F Preferred
have been classified in the mezzanine of the accompanying consolidated balance
sheets at redemption value, net of issuance costs.

The 6.5% annual dividend on each of the Series E Preferred and Series F
Preferred is payable quarterly in common stock or, under certain circumstances,
cash. The Company intends to pay such quarterly dividend in common stock for the
foreseeable future.

F-13
<PAGE> 45

During 1997, the Company issued 50,000 shares of non-voting Series D
Convertible Preferred Stock (the "Series D Preferred") to SCANA for $22.5
million. The Series D Preferred becomes convertible on March 14, 2002, at the
option of the holder, at a rate of 35.29 shares of common stock per share of
preferred stock, subject to adjustment. The Series D Preferred is redeemable, at
the option of the Company, in whole or in part, on a pro rata basis, at a
redemption price of $450 per share plus declared and unpaid dividends, anytime
subsequent to June 5, 2002. The Series D Preferred has a liquidation preference
of $450 per share plus declared and unpaid dividends in the event of a
liquidation, dissolution or winding up of the Company.

During 1996, the Company issued 100,000 shares of non-voting Series B
Convertible Preferred Stock (the "Series B Preferred") to SCANA for $75 million.
The Series B Preferred becomes convertible on March 14, 2002, at the option of
the holder, at a rate of 45.45 shares of common stock per share of preferred
stock, subject to adjustment. The Series B Preferred is redeemable, at the
option of the Company, in whole or in part, on a pro rata basis, at a redemption
price of $750 per share plus declared and unpaid dividends, anytime subsequent
to June 28, 2001. The Series B Preferred has a liquidation preference of $750
per share plus declared and unpaid dividends in the event of a liquidation,
dissolution or winding up of the Company.

The Company's certificate of incorporation authorizes the Board of
Directors to issue, from time to time and without further stockholder action,
one or more series of preferred stock and to fix the relative rights and
preferences of the shares, including voting powers, dividend rights, liquidation
preferences, redemption rights, and conversion privileges.

7. STOCK OPTION PLANS

Stock Options

Under the Powertel, Inc. 1991 Stock Option Plan, as amended (the "Stock
Plan"), 5,000,000 shares of common stock are reserved for issuance upon exercise
of options. Substantially all of the employees of the Company are eligible to
receive options under the Stock Plan. Management recommends to the
Compensation/Stock Option Committee the number of options to grant based on
management's analysis of the employee's performance and level of responsibility.
The Board of Directors also may include in each option granted under the Stock
Plan certain additional limitations on the recipient's right to exercise the
option. Options under the Stock Plan may be either "incentive stock options," as
defined under Section 422 of the Internal Revenue Code, or nonqualified options.

Under the Company's Nonemployee Stock Option Plan (the "Nonemployee
Plan"), 400,000 shares of common stock are reserved for issuance upon exercise
of options. All nonemployee directors of the Company and all employees of
affiliates of the Company are eligible to receive options under the Nonemployee
Plan. Options to purchase 10,000 shares of common stock are granted to each
nonemployee director upon his or her election or appointment to the Board of
Directors. The Nonemployee Plan does not provide for discretionary option
grants.

Options granted under the Stock Plan and Nonemployee Plan generally
become exercisable as to 50% two years after the date of grant, 25% three years
after the date of grant, and 25% four years after the date of grant, but no
option may be exercised more than ten years after the date of grant. Options
generally are exercisable at a price established by the Compensation/Stock
Option Committee equal to at least 100% of the fair market value of the Common
Stock on the options' grant date, except that the exercise price with respect to
options granted to an individual who owns more than 10% of the combined voting
power of all classes of stock of the Company must be at least 110% of the fair
market value of the common stock on the date of grant. The full exercise price
for shares being purchased must be paid at the time of exercise in cash or, if
permitted by the particular option agreement, in whole or in part by delivery of
shares of Common Stock having a fair market value (on the delivery date) of not
less than the exercise price.

F-14
<PAGE> 46

The Company accounts for its stock-based compensation related to the
Stock Plan and Nonemployee Plan under APB 25. Accordingly, no compensation
expense has been recognized, as all options have been granted with an exercise
price equal to the fair value of the Company's stock on the date of grant. For
SFAS 123 pro forma purposes, the fair value of each option grant has been
estimated as of the date of grant using the Black-Scholes option pricing model
with the following assumptions:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------

<S> <C> <C> <C>
Risk-free interest rate.................... 5.31% 4.65% 5.92%
Expected dividend yield.................... -- -- --
Expected lives............................. 6.0 Yrs. 8.2 Yrs. 8.2 Yrs.
Expected volatility........................ 54% 50% 55%
</TABLE>

Using these assumptions, the fair value of the stock options granted in
1999, 1998 and 1997 is $9.7 million, $6.7 million and $4.3 million,
respectively, which would be amortized as compensation expense over the vesting
period of the options. Had compensation cost been determined consistent with the
provisions of SFAS 123, the Company's net loss and pro forma net loss per common
share for 1999, 1998 and 1997 would have been as follows (in millions, except
per share amounts):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------
1999 1998 1997
-------- -------- --------

<S> <C> <C> <C>
Net loss:
As reported ................... $ (134.4) $ (270.8) $ (135.2)
Pro forma ..................... (141.5) (274.6) (139.6)
Net loss per common share:
As reported ................... $ (4.75) $ (10.02) $ (5.04)
Pro forma ..................... (5.00) (10.12) (5.21)
</TABLE>

Because SFAS 123 has not been applied to options granted prior to
January 1, 1995, the resulting pro forma compensation cost may not be
representative of that expected in future years.

Under the Company's 1995 Employee Restricted Stock Plan (the
"Restricted Stock Plan"), 200,000 shares of common stock are reserved for
issuance, of which 163,800 shares had been awarded through December 31, 1999.
These restricted stock awards vest in three equal installments on the first,
second and third anniversaries of the date of grant. The compensation associated
with the restricted grants (i.e., the difference between the market price of the
Company's Common Stock on the date of grant and the exercise price) is being
amortized ratably over the three-year vesting period. Such compensation expense
totaled $0.7 million, $0.6 million and $0.4 million for the years ended December
31, 1999, 1998 and 1997, respectively. Any unamortized deferred compensation is
reflected as a reduction to stockholders' equity (deficit) in the accompanying
consolidated balance sheets. The Restricted Stock Plan is administered by the
Compensation/Stock Option Committee of the Board of Directors.

F-15
<PAGE> 47

A summary of the combined status of all stock plans at December 31,
1999, 1998 and 1997 is presented in the following table:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED AVERAGE
SHARES PRICE PER SHARE
--------- ----------------

<S> <C> <C>
Outstanding at December 31, 1996 1,692,153 $ 13.78
Granted.............................. 921,344 13.27
Forfeited............................ (175,926) 17.15
Exercised............................ (67,293) 14.17
---------
Outstanding at December 31, 1997 2,370,278 13.39
Granted.............................. 541,192 17.71
Forfeited............................ (293,401) 16.80
Exercised............................ (28,119) 10.98
---------
Outstanding at December 31, 1998 2,589,950 13.93
Granted.............................. 691,701 24.41
Forfeited............................ (189,341) 17.66
Exercised............................ (305,139) 13.24
---------
Outstanding at December 31, 1999........ 2,787,171 16.36
=========
</TABLE>

The following table summarizes the exercise price range, weighted
average exercise price and weighted average remaining contractual life for the
options outstanding as of December 31, 1999:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE WEIGHTED AVERAGE REMAINING
OUTSTANDING RANGE EXERCISE PRICE CONTRACTUAL LIFE
----------- -------------- ---------------- -----------------

<S> <C> <C> <C>
135,000 $ 3.33-3.33 $ 3.33 1.3 Years
79,100 5.25-6.50 5.61 2.4 Years
790,663 8.25-12.38 11.32 6.3 Years
1,306,773 12.50-18.75 15.65 7.6 Years
329,515 18.81-25.75 21.63 7.5 Years
52,720 28.38-42.00 34.54 9.6 Years
38,200 44.19-65.00 52.70 9.7 Years
55,200 66.38-92.88 78.76 9.9 Years
--------- ----------- ----- ---------
2,787,171 3.33-92.88 16.36 6.9 Years
</TABLE>

Total stock options exercisable at December 31, 1999 were 1,298,791 at
a weighted average exercise price of $12.45.

Stock Warrants

As of December 31, 1999, the Company had outstanding approximately 1.2
million warrants to purchase its common stock. Each warrant entitles the holder
to purchase 1.0705 shares of common stock at $16.95 per share (as adjusted for
the June 1996 issuance of the Series A Preferred and Series B Preferred). The
warrants may be exercised at any time prior to February 1, 2006. At December 31,
1999, 69,301 warrants had been exercised.

F-16
<PAGE> 48

8. INCOME TAXES

The reconciliation of the statutory federal income tax rate to the
Company's effective income tax rate is as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1999 1998 1997
----- ----- -----

<S> <C> <C> <C>
Statutory federal income tax rate................. (35)% (35)% (35)%
Increase (decrease) in income tax rate
resulting from:
State income taxes, net of federal benefit... (6) (6) (7)
Valuation allowance.......................... 41 41 42
----- ----- -----
Effective income tax rate......................... 0% 0% 0%
===== ===== =====
</TABLE>

The significant components of the Company's net deferred tax asset are
as follows (in millions):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------
1999 1998 1997
-------- -------- --------

<S> <C> <C> <C>
Deferred Tax Assets:
Net operating loss carryforwards ........................ $ 140.0 $ 136.5 $ 49.0
Start up costs capitalized .............................. 17.2 19.7 15.9
Bond accretion capitalized .............................. 71.8 46.3 20.2
Deferred gain ........................................... 34.9 -- --
Other ................................................... 10.5 8.4 1.5
-------- -------- --------
274.4 210.9 86.6
-------- -------- --------
Deferred Tax Liabilities:
Depreciation ............................................ (34.0) (25.6) (11.3)
Other ................................................... (2.0) (1.5) (0.5)
-------- -------- --------
(36.0) (27.1) (11.8)
-------- -------- --------
Net deferred tax asset before valuation allowance .......... 238.4 183.8 74.8
Valuation allowance ........................................ (237.1) (182.5) (73.5)
-------- -------- --------
Net deferred tax asset ..................................... 1.3 1.3 1.3
Less: current portion ...................................... 1.3 1.3 1.3
-------- -------- --------
Net deferred tax asset-- non-current portion ............... $ -- $ -- $ --
======== ======== ========
</TABLE>

At December 31, 1999, the Company had available net operating loss
carryforwards for regular tax purposes of approximately $328 million, which will
expire at various dates between 2005 and 2018, and alternative minimum tax
credit carryforwards of $0.2 million, which have no expiration. The utilization
of a portion of these carryforwards is subject to limitations under the Internal
Revenue Code of 1986. Since management is currently unable to determine whether
it is more likely than not that some portion of the net deferred tax asset will
be realized, a valuation allowance of $237.1 million has been provided in the
accompanying consolidated financial statements. The valuation allowance
increased $54.6 million and $109.0 million in 1999 and 1998, respectively.

9. COMMITMENTS AND CONTINGENCIES

Leases

Lease expenses relate to the lease of office and warehouse space, land
for cell sites, cell sites, dedicated lines and trunk access facilities,
computer equipment, and billboards and include leases with affiliates (Note 10).
Rents charged to expense were approximately $29.1 million, $20.6 million and
$10.5 million for the years ended December 31, 1999, 1998 and 1997,
respectively.

F-17
<PAGE> 49

At December 31, 1999, future minimum lease payments under noncancelable
operating leases with initial remaining terms of more than one year are as
follows (in millions):

<S> <C>
2000 $ 30.1
2001 28.7
2002 24.5
2003 18.7
2004 12.0
Thereafter 31.3
--------
$ 145.3
========
</TABLE>

Construction Contract

On September 27, 1999, the Company entered into a build-to-suit
construction contract (Note 3) with Crown Castle that grants Crown Castle a
right of first refusal to build, acquire and lease back to the Company at $1,800
per month up to 40 tower sites to be constructed prior to December 31, 2000.

Equipment Purchase Commitments

In 1996, the Company entered into a five-year equipment purchase
agreement and related vendor financing agreement (Note 5) with Ericsson Inc. for
the purchase of certain network equipment and services required for the initial
buildout and operation of the Company's PCS system. Under the terms of the
agreement and subsequent amendments, the Company committed to purchase certain
PCS network equipment and services for specific markets and utilize Ericsson as
the exclusive provider of certain PCS network equipment until December 31, 2001
for all of its markets. The Company's grant of exclusivity is conditioned upon
Ericsson's ability to provide sufficient quantities of PCS network equipment to
meet the Company's needs in the PCS markets, provide commercial service for each
PCS market by pre-defined dates, and continue to provide "state of the art"
equipment. The Company's cumulative total purchases under the agreement were
approximately $297 million at December 31, 1999.

Litigation

The Company is subject to litigation related to matters arising in the
normal course of business. As of December 31, 1999 management is not aware of
any asserted or pending material litigation or claims against the Company that
would have a material impact.

10. TRANSACTIONS WITH AFFILIATES

The Company leases certain dedicated and trunk telephone access lines
and purchases local and long-distance services through its former parent, ITC
Holding Company, Inc., and certain of its other subsidiaries and related
parties. The total expense recorded by the Company for these services was
approximately $10.7 million, $10.1 million and $5.8 million for the years ended
December 31, 1999, 1998 and 1997, respectively.

The Company purchases certain equipment, inventory and services related
to the buildout and operation of its PCS line of business from preferred
stockholders and certain of their subsidiaries. The Company's total purchases
for equipment, inventory and services from these related parties were $75.5
million, $138.3 million and $106.8 million for the years ended December 31,
1999, 1998 and 1997, respectively.

F-18
<PAGE> 50

11. BUSINESS SEGMENT DATA

Effective with the year ended December 31, 1998, the Company adopted
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"), which requires the
Company to report financial and descriptive information about its reportable
operating segments. SFAS 131 requires the reporting of a measure of segment
profit or loss, certain specific revenue and expense items and segment assets,
as well as a reconciliation of total segment revenues, total segment profit or
loss, total segment assets and other amounts disclosed for segments to
corresponding amounts in the company's general purpose financial statements.

The Company classifies its operations into two business segments: PCS
and cellular. Certain corporate administrative expenses have been allocated to
the segments based upon the nature of the expense. Intersegment revenues are not
material. Summarized financial information by business segment is as follows (in
millions):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------
1999 1998 1997
------------------------------ ----------------------------- -----------------------------
PCS(A) CELLULAR(B) TOTALS PCS CELLULAR TOTALS PCS CELLULAR(C) TOTALS
-------- ----------- ------- -------- -------- -------- -------- ----------- ------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and sales ............... $ 276.4 $ 7.0 $ 283.4 $ 155.8 $19.6 $ 175.4 $ 55.9 $23.0 $ 78.9
Depreciation and amortization .... 88.7 0.5 89.2 65.8 1.9 67.7 46.7 2.6 49.3
Operating (loss) income .......... (149.5) 3.6 (145.9) (180.3) 8.1 (172.2) (141.9) 6.8 (135.1)
Interest expense (income), net ... 108.2 -- 108.2 93.7 -- 93.7 42.6 -- 42.6
Net (loss) income ................ (207.6) 82.9 (124.7) (273.9) 8.1 (265.8) (183.9) 48.7 (135.2)
Total assets ..................... 1,439.8 -- 1,439.8 1,365.6 15.0 1,380.6 1,364.5 14.1 1,378.6
Capital expenditures ............. 130.5 .3 130.8 205.0 2.3 207.3 289.6 2.2 291.8

</TABLE>
- ---------------
(a) Includes realized gain on sale of tower assets of $49.9 million.
(b) Includes gain on sale of subsidiary of $79.3 million.
(c) Includes gain on sale of subsidiary of $41.9 million.

12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE DATA)

<S> <C> <C> <C> <C>
1999 QUARTERS:
Revenues and sales ........................................ $ 62.0 $ 64.0 $ 72.4 $ 85.0
Operating loss ............................................ (33.6) (36.9) (30.8) (44.6)
Net (loss) income attributable to common stockholders ..... (63.8) 60.6 (58.9) (72.3)
Basic (loss) earnings per common share .................... $ (2.33) $ 2.19 $ (2.10) $ (2.43)
Diluted (loss) earnings per common share .................. (2.33) 1.22 (2.10) (2.43)
1998 QUARTERS:
Revenues and sales ........................................ $ 36.7 $ 40.8 $ 44.6 $ 53.3
Operating loss ............................................ (36.0) (34.2) (41.1) (60.9)
Net (loss) income attributable to common stockholders ..... (57.7) (57.8) (66.7) (88.6)
Basic and diluted loss per common share ................... $ (2.14) $ (2.15) $ (2.47) $ (3.26)
1997 QUARTERS:
Revenues and sales ........................................ $ 19.1 $ 16.6 $ 18.5 $ 24.7
Operating loss ............................................ (24.6) (23.3) (32.7) (54.5)
Net (loss) income attributable to common stockholders ..... (29.6) 12.1 (45.9) (71.8)
Basic (loss) earnings per common share .................... $ (1.10) $ 0.45 $ (1.71) $ (2.66)
Diluted (loss) earnings per common share .................. (1.10) 0.42 (1.71) (2.66)
</TABLE>

F-19
<PAGE> 51

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES

We have audited in accordance with auditing standards generally
accepted in the United States, the financial statements of POWERTEL, INC. and
subsidiaries included in this Form 10-K and have issued our report thereon dated
February 4, 2000. Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The schedule listed in the
index is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 4, 2000

S-1
<PAGE> 52

POWERTEL, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------------------------------ ------------ ------------ ------------ ------------

BALANCE AT ADDITIONS WRITEOFFS, BALANCE AT
BEGINNING CHARGED NET OF END OF
CLASSIFICATION OF PERIOD TO INCOME RECOVERIES PERIOD
- ------------------------------------------ ------------ ------------ ------------ ------------

<S> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1999
Allowance for doubtful accounts .......... $ 4,894,688 $ 12,203,408 $(10,553,730) $ 6,544,366
Allowance for obsolete inventory ......... 1,813,394 2,255,888 (2,545,698) 1,523,584
------------ ------------ ------------ ------------
$ 6,708,082 $ 14,459,296 $(13,099,428) $ 8,067,950
============ ============ ============ ============

FOR THE YEAR ENDED DECEMBER 31, 1998
Allowance for doubtful accounts .......... $ 1,768,194 $ 21,206,041 $(18,079,547) $ 4,894,688
Allowance for obsolete inventory ......... 1,178,699 1,876,220 (1,241,525) 1,813,394
------------ ------------ ------------ ------------
$ 2,946,893 $ 23,082,261 $(19,321,072) $ 6,708,082
============ ============ ============ ============

FOR THE YEAR ENDED DECEMBER 31, 1997
Allowance for doubtful accounts .......... $ 217,000 $ 7,610,741 $ (6,059,547) $ 1,768,194
Allowance for obsolete inventory ......... 53,470 1,197,121 (71,892) 1,178,699
------------ ------------ ------------ ------------
$ 270,470 $ 8,807,862 $ (6,131,439) $ 2,946,893
============ ============ ============ ============
</TABLE>

S-2

<PAGE> 1
EXHIBIT 21

SUBSIDIARIES

Powertel PCS, Inc.
ICEL, Inc.
InterCel Licenses, Inc.
Powertel Atlanta Towers, LLC
Powertel Birmingham Towers, LLC
Powertel Jacksonville Towers, LLC
Powertel Kentucky Towers, LLC
Powertel Memphis Towers, LLC
Powertel/Atlanta, Inc.
Powertel/Birmingham, Inc.
Powertel/Jacksonville, Inc.
Powertel/Kentucky, Inc.
Powertel/Memphis, Inc.
Powertel Atlanta Licenses, Inc.
Powertel Knoxville Licenses, Inc.
Powertel Birmingham Licenses, Inc.
Powertel Jacksonville Licenses, Inc.
Powertel Kentucky Licenses, Inc.
Powertel Memphis Licenses, Inc.
Powertel Nashville Licenses, Inc.

<PAGE> 1
EXHIBIT 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the inclusion
of our reports dated February 4, 2000 included in Powertel, Inc.'s Annual Report
on Form 10-K for the year ending December 31, 1999 as well as the incorporation
by reference of such reports into the Company's previously filed Registration
Statements (File Nos. 33-52550, 33-52552, 33-81842, 33-91734, 33-96218,
333-09769 and 333-84951).

/s/ Arthur Andersen LLP
March 24, 2000

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF POWERTEL, INC. FOR THE YEAR ENDED DECEMBER 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 371,396
<SECURITIES> 16,223
<RECEIVABLES> 30,925
<ALLOWANCES> 0
<INVENTORY> 21,250
<CURRENT-ASSETS> 461,541
<PP&E> 0
<DEPRECIATION> (160,803)
<TOTAL-ASSETS> 1,439,795
<CURRENT-LIABILITIES> 103,588
<BONDS> 918,384
0
3
<COMMON> 299
<OTHER-SE> (70,159)
<TOTAL-LIABILITY-AND-EQUITY> 1,439,795
<SALES> 29,360
<TOTAL-REVENUES> 283,411
<CGS> (73,526)
<TOTAL-COSTS> (429,354)
<OTHER-EXPENSES> (21,277)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 108,183
<INCOME-PRETAX> (124,666)
<INCOME-TAX> 0
<INCOME-CONTINUING> (124,666)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (134,416)
<EPS-BASIC> (4.75)
<EPS-DILUTED> (4.75)

</TABLE>