General
Shenandoah Telecommunications Company is a diversified telecommunications company providing both regulated and
unregulated telecommunications services through its nine wholly owned subsidiaries.  These subsidiaries provide local
exchange telephone services, wireless personal communications services (PCS), as well as cable television, paging,
Internet access, long distance, fiber optics facilities, and leased tower facilities.  The Company is the exclusive provider
of wireless mobility communications network products and services under the Sprint brand from Harrisonburg,
Virginia to Harrisburg, York and Altoona, Pennsylvania.  The Company refers to the Hagerstown, Maryland;
Martinsburg, West Virginia; and Harrisonburg and Winchester, Virginia markets as its Quad State markets.  The
Company refers to the Altoona, Harrisburg, and York, Pennsylvania markets as its Central Penn markets.  Competitive
local exchange carrier (CLEC) services were established on a limited basis during 2002.  In addition, the Company
sells and leases equipment, mainly related to services it provides, and also participates in emerging services and
technologies by direct investment in non-affiliated companies.
The Company reports revenues as wireless, wireline and other revenues.  These revenue classifications are defined as
follows: Wireless revenues are made up of the Personal Communications Company (a PCS Affiliate of Sprint), and the
Mobile Company.  Wireline revenues include the following subsidiary revenues in the financial results: Telephone
Company, Network Company, Cable Television Company, and the Long Distance Company.  Other revenues are
comprised of the revenues of ShenTel Service Company, the Leasing Company, ShenTel Communications Company
and the Holding Company.  For additional information on the Company's business segments, see Note 14 to audited
consolidated financial statements appearing elsewhere in this report.
The Company participates in the telecommunications industry, which requires substantial investment in fixed assets or
plant.  This significant capital requirement may preclude profitability during the initial years of operation. The strategy
of the Company is to grow and diversify the business by adding services and geographic areas that can leverage the
existing plant, but to do so within the opportunities and constraints presented by the industry.  For many years the
Company focused on reducing reliance on the regulated telephone operation, which up until 1981 was the primary
business within the Company.  This initial diversification was concentrated in other wireline businesses, such as the
cable television and regional fiber facility businesses, but in 1990 the Company made its first significant investment in
the wireless sector through its former investment in the Virginia 10 RSA Limited partnership.  By 1998, revenues of
the regulated telephone operation had decreased to 59.2% of total revenues.  In that same year more than 76.6% of the
Company’s total revenue was generated by wireline operations, and initiatives were already underway to make wireless
a more significant contributor to total revenues.
During the 1990’s significant investments were made in the cellular and PCS (wireless) businesses.  The VA 10 RSA
cellular operation, in which the Company held a 66% interest and was the general partner, experienced rapid revenue
growth and excellent margins in the late 1990’s.  The cellular operation covered only six counties, and became
increasingly dependent on roaming revenues. Management believed the roaming revenues and associated margins
would be unsustainable as other wireless providers increasingly offered nationally-branded services with significantly
reduced usage charges.  To position it to participate in the newer, more advanced, digital wireless services, in 1995 the
Company entered the PCS business through an affiliation with American Personal Communications (APC), initiating