Event Brief

CORPORATE PARTICIPANTS

John Drake

Alamosa Holdings, Inc. - Director, Investor Relations

David Sharbutt

Alamosa Holdings, Inc. - Chairman, CEO

Kendall Cowan

Alamosa Holdings, Inc. - CFO

Steve Richardson

Alamosa Holdings, Inc. - COO

Presentation Summary

I. Q03 Corporate Overview(D.S.) 

     A. With challenges ahead, co. is pleased to report tangible results for 1Q03 and moved company forward in a tough operating environment.

         1. 1Q is traditionally one of the most difficult in the wireless industry.

         2. This combined with low consumer confidence at historical lows made a traditionally slow period even more challenging.

         3. Despite these, co. delivered solid quarter highlighted by lower churn, solid gross adds, resulting in better than expected net additions.

     B. Business plan and guidance are still on track for the rest of the year.

     C. On top of operational results, co. has maintained funding positions and have the resources to accomplish business goals.

         1. $80m of unrestricted cash on the balance sheet, vs. $77m in 1Q02.

     D. Co. remains concerned about factors outside of control, such as:

         1. Exposure to declining ARPU's due to irrational competition and rate plans.

             a. High cost of customer acquisition due to lack of consolidation in the wireless sector.

         2. This has caused a negative sentiment toward wireless credits due to concerns about capital structures and more specifically, the Sprint affiliation program.

         3. While co. can do many things to affect results, these factors may mitigate or even adversely impact results QtoQ.

II. Q03 Financial Overview(D.S.)

     A. 1Q results were a welcome start to 2003.

         1. Co. generated customer additions similar to the seasonally strong 4Q, improved mix of prime and sub-prime customers, further reduced churn rate, and delivered an increase in positive EBITDA.

     B. 1Q financial performance showed an incremental increase in subscriber revenues and an increase in positive EBITDA, which was $17.1m vs. $12.1m in the 4Q02.

         1. EBITDA = $3.1m a year ago.

     C. Increased unrestricted cash reserves by approximately $18m.

     D. Co. had 31,000 net additions in 1Q03, and made good performance in balancing subscriber growth with quality customers.

         1. Customer churn rate improved, and co. is focused on improving cash cost of operations.

     E. Co. accounted about one third of affiliate net additions for 1Q03.

     F. Co. continues to be focused on deploying capital efficiently.

         1. Spent $9m on fixed asset additions in the 1Q, and anticipate spending between $40-50m for the year, down from $70m in 2002.

     G. Co. is seeing extremely good leverage on fixed capital, with minute to use growing by more than 162m minutes to 1.3b minutes per use in the 1Q.

     H. Funding position remains strong, with available funding of $115m.

III. Q03 Subscriber and ARPU Overview(S.R.)

     A. The current economy and subsequent military action continued to have an impact on overall industry growth in the quarter.

         1. Despite these conditions and a very competitive subscriber environment in wireless, co. added 31,000 net subscribers and retained position as the largest Sprint PCS affiliate with approximately 653,000 customers.

     B. During the 1Q, co. continued to make progress in improving subscriber growth while improving the quality of subscriber base.

         1. Gross additions were 10% below 1Q02, but in that quarter, co. did not implement the deposit requirement in all of the national channels until February 2002.

         2. In the 1Q03, co. increased deposit from $125 to $250 in a little more than half the regions.

         3. Mix of prime and sub-prime activations has improved, and it was a better quarter YoverY.

     C. 1Q gross add levels were similar to 4Q02, and was aided by Sprint month at Radio Shack in February and new promotions by Sprint throughout the quarter.

         1. New calling plans such as unlimited PCS-to-PCS calling are being well received.

     D. While co. experienced a sequential decline in base ARPU from $57 to $55, it can rebound in the remainder of the year for several reasons.

         1. First, ARPU has a tendency in the first part of the year has a tendency to trend down due to promotional rates from the previous 4Q and seasonal phone and travel patterns.

         2. There remains a downward pressure on rates due to the actions or pricing practices of competitors.

IV. Q03 Churn and Network Overview(S.R.)

     A. Churn rate improved to 3% in the 1Q.

         1. While this is still high, it is a 12% improvement from 3.4% in the 4Q, and a 21% improvement from 3.8% in the 3Q.

         2. Co. thinks churn can continue to decline throughout 2003; however, there may be some fluctuations because of the economy and some ClearPay customers remaining in the base.

         3. Churn was evenly balanced between voluntary and involuntary churn, with voluntary slightly higher due to the reduction of ClearPay churn in the quarter.

     B. From a marketing perspective, distribution mix was relatively stable for the quarter, with almost 56% of gross additions coming from retail stores and local in-direct retailers.

         1. National in-direct channels stayed the same and accounted for about 32% of gross additions.

         2. 12% of gross additions came from major markets and other channels such as e-commerce, telesales, and other Sprint markets.

     C. Number of distribution points within the footprint remains steady at 1200 doors, and the number of 3G handsets sold in the quarter increased to 89%, vs. 81% in the 4Q and 76% in the 3Q.

     D. At the end of 1Q03, co. covered 11.8m POPs out of 15.8m licensed POPs in the footprint.

         1. POP penetration = 5.5%, vs. 5.3% in the 4Q. This level of growth equates to approximately 1.1% annualized incremental penetration, which when added with 4Q, is in line with previous guidance of between 6.2 -- 6.5% by end of 2003.

     E. Network usage continues to increase due to the result of larger subscriber base, higher subscriber usage, and in-bound travel.

     F. Network continues to deliver leverage for invested capital.

     G. System minutes of use increased from 1.15b in the 4Q to 1.31b in the 1Q, and 916m in the 1Q02.

         1. Avg. customer minutes of use, including outbound roaming, increased from 586 minutes in the 4Q to 647 minutes in the 1Q.

     H. Customers use of the Alamosa network accounted for 510 of the 647 minutes, vs. 458 of the 586 minutes in the 4Q.

         1. Call experience, as measured by blocks and drops, continues to be good at 2%.

V. PCS Vision Overview(S.R.)

     A. PCS Vision continues to be popular among new subscribers.

         1. About 23% of new adds during the quarter subscribed to PCS Vision.

         2. This level compares very favorably to 12% of new adds in the 4Q, and 6% from the August 8th introduction in the 3Q02.

         3. At the end of the 1Q, 5% of the entire base was PCS Vision customers.

     B. PCS Vision should help stabilize ARPU.

         1. In March, network switched 1m megabytes of data use, vs. a little over 516,000 megabytes in December.

     C. More recently, co. introduced PictureMail, which allows customers to share everyday moments.

         1. Sprint leads the industry in wireless data adoption, and co. is confident that these features will allow it to lead in pictures.

     D. Sprint recently increased its Vision pricing to $15 to any PCS Free and Clear Plan, and reduced trial period to 60 days.

         1. Co. will evaluate the effects on ARPU and retention rates, which remains at better than 50% of customers coming off the trial period.

VI. Q03 Revenue and Subscriber Highlights(K.C.)

     A. Co. ended the quarter with 653,000 subscribers.

         1. Net additions of 31,000 for the quarter represented a 5% increase over 4Q.

         2. At March 31st, subscriber base included 73% prime, 27% sub-prime, an improvement from 71% prime and 29% sub-prime at end of 4Q.

         3. Prime customers accounted for about 65% of gross additions, with sub-prime customers accounting for the remaining 35%.

     B. Co. has re-established a more normal subscriber growth with the right economics for the business, as customer mix before ClearPay business was about 75% prime, 25% sub-prime.

     C. Total revenues for 1Q03 = $141m, down from total revenue of $149m in 4Q, but up 10% from 1Q02.

         1. Total revenue was sequentially lower primarily as a result of a decrease in the reciprocal rate with Sprint.

     D. Subscriber rate revenues increased slightly to $104m from $102m in the 4Q, and avg. revenue per user, or ARPU, before roaming was $55 in 1Q vs. $57 in 4Q.

         1. Some of this was not unexpected, as this is typical in the 1Q following the holiday season.

         2. The unexpected part of the decline in ARPU was largely due to the reduction in overage revenue, due to the large bucket plans added in the 4Q.

     E. MRC is about 70% of ARPU, average = 16%, with the remainder in fees and other charges.

     F. Travel revenues decreased to $32m from $41m in the 4Q.

         1. Drop was due to two factors: the decrease in reciprocal travel rate with Sprint, and a seasonal decline of in-bound traffic.

     G. Offsetting this decline was other PCS in-bound travel in the 1Q, which accounted for 28% of travel revenues, vs. 20% in the 4Q02.

     H. Traveling and roaming minutes totaled 340m in the 1Q, vs. 324m in the 4Q, and in-bount/out-bound travel ratio was approximately 1.1/1 vs. 1.1/1 in the 4Q.

     I. Total ARPU with travel included was $71 vs. $79 in 4Q02.

VII. Q03 Expenses Overview(K.C.)

     A. 1Q03 Cost of service and operations = $79m, vs. $87m in the 4Q.

         1. This decrease was primarily due to a reduction in bad debt expense, which was approximately 6% of subscriber revenues, vs. 7% in the 4Q and 13% in the 3Q.

         2. This level remains in the range of 6-8% guided in the 4Q conference call.

         3. It will likely follow the same trend as churn throughout the year.

     B. General Administrative expenses were lower in the 1Q, and totaled approximately $3.7m vs. $4.4m in 4Q02.

     C. Overall, cash costs per user, which now includes the cost of handset subsidies, was $46 for 1Q vs. $53 in the 4Q.

         1. When travel costs are excluded, $36 for the 1Q vs. $39 in the 4Q.

     D. The reduction was positively impacted by a $1 decrease per user for bad debt expense, and a $4 decrease per user for travel expenses, and another $2 decrease reflecting leverage on network expenses and G&A costs.

     E. Sales and marketing costs were $35.7m in the 1Q, vs. $39.4m in the 4Q.

         1. This was due to seasonal nature of the quarter, with lower gross adds than the 4Q.

         2. The resulting cost of gross adds, which now excludes the cost of handset subsidy, was approximately $342 vs. $356 in 4Q02, and $334 in 1Q02.

     F. This resulted in a $43 reduction in CPGA and a $2 increase in CCPU for the 1Q.

     G. Net loss was $30.5m, or $0.33 per share, vs. $28.1m or $0.30 per share for 1Q02.

     H. Co. continues to report positive earnings before EBITDA, $17m for the quarter.

         1. This compares to $12m in the 4Q, and $3m in 1Q02.

     I. Co. incurred about $9m in fixed asset additions, and had 1,512 sites on air, vs. 1,509 sites on air at the end of 4Q.

         1. Cumulative CAPEX for covered POP = $50.

VIII. Funding Position and Stock Exchange Overview(K.C.)

     A. Funding position remains good.

         1. Unrestricted cash increased $18.5m and when considering interest paid out of escrow on cash-paid bonds, total cash decreased $6.3m.

         2. Remaining restricted cash for interest on senior bonds was approximately $10m, and represents final payment on 13 5.8 bonds totaling $150m which will be paid in August.

     B. At quarter end, co. had $115m in funding availability, including approximately $80m in cash and equivalents, $10m in restricted cash, and $25 in available borrowing capacity.

     C. Co. was de-listed from New York Stock Exchange, and works diligently to get co. back to minimum standards.

         1. Was contemplating reverse stock split as a way to increase stock price to satisfy $1 minimum price, but the Board of Directors believes that the over-the-counter bulletin board exchange is the best place for stock at this time.

         2. It is now traded under the symbol ALMO, at around the same price and at similar volume levels.

     D. The change in trading venue has not and will not affect operational performance.

IX. FY03 Guidance(K.C.)

     A. It remains the same, and may be materially affected by competitive conditions, continued development of new 3G products, as well as general economic conditions.

     B. FY03 EBITDA = $80m.

         1. Free cash flow positive for FY03, excluding cash interest to be paid out of escrow.

     C. CAPEX = $40-50m.

     D. Penetration of markets should be in the range of 6.2-6.5% by year-end.

     E. Churn will avg. 3% for FY03.

     F. Co. has adopted new standard of requiring the recording of remediation costs for asset retirement obligations in the 1Q03, which did not have a material impact on the business.

     G. Co. re-established a valuation allowance against the deferred tax assets, which resulted in a significant decline of tax rate for the quarter, which should continue throughout 2003.