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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K

       
 
(Mark One)
   
 
x
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
   
      For the fiscal year ended December 31, 2003
   
  or
   
 
o
  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 001-31673


Cingular Wireless LLC

Formed under the laws of the State of Delaware

I.R.S. Employer Identification Number 74-2955068

5565 Glenridge Connector, Atlanta, Georgia 30342

Telephone Number: (404) 236-7895

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 þ          No o

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)     Yes o          No þ

The limited liability company ownership interests of the registrant are not publicly traded. Therefore, there is no aggregate market value for the registrant’s outstanding equity that is readily determinable.




TABLE OF CONTENTS

TABLE OF CONTENTS
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II (Dollars in Millions)
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7a. Quantitative and Qualitative Disclosure About Market Risk
Item 8. Financial Statements and Supplemental Data
PART II (Dollars in Millions)
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
Item 14. Principal Accountant Fees and Services (Dollars in Millions)
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
SIGNATURES
EX-10.56 SUBORDINATION AGREEMENT DATED 11-17-2003
EX-10.58 COMPENSATION ARRANGEMENT/RALPH DE LA VEGA
EX-10.59 TRANSITION AGREEMENT DATED 12-29-2003
EX-10.61 CINGULAR WIRELESS LONG TERM COMP PLAN
EX-10.62 BILLING AND COLLECTIONS SERVICES AGREEMEN
EX-10.63 WORK ORDER NO. 03027350
EX-10.64 INVESTMENT AGREEMENT DATED 02-17-2004
EX-12 STATEMENT OF COMPUTATION
EX-21 SUBSIDIARIES OF THE REGISTRANT
EX-24 POWERS OF ATTORNEY
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32.1 SECTION 906 CERTIFICATION OF THE CEO
EX-32.2 SECTION 906 CERTIFICATION OF THE CFO


Table of Contents

TABLE OF CONTENTS

             
Page

PART I
Item 1.
  Business     2  
Item 2.
  Properties     31  
Item 3.
  Legal Proceedings     32  
Item 4.
  Submission of Matters to a Vote of Security Holders     32  
PART II
Item 5.
  Market for Registrant’s Common Equity and Related Stockholder Matters     33  
Item 6.
  Selected Financial Data     33  
Item 7.
  Management’s Discussion and Analysis of Financial Condition and Results of Operations     39  
Item 7a.
  Quantitative and Qualitative Disclosure About Market Risk     67  
Item 8.
  Financial Statements and Supplemental Data     69  
Item 9.
  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure     127  
Item 9A.
  Controls and Procedures     127  
PART III
Item 10.
  Directors and Executive Officers of the Registrant     128  
Item 11.
  Executive Compensation     130  
Item 12.
  Security Ownership of Certain Beneficial Owners and Management     140  
Item 13.
  Certain Relationships and Related Transactions     140  
Item 14.
  Principal Accounting Fees and Services     150  
PART IV
Item 15.
  Exhibits, Financial Statement Schedules, and Reports on Form 8-K     151  
Signatures     158  

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CINGULAR WIRELESS LLC

PART I
 
Item 1. Business

Overview

Throughout this document, Cingular Wireless LLC and its subsidiaries are referred to as “we” or “Cingular”.

We are the second largest provider of wireless voice and data communications services in the United States (U.S.) in terms of customers. For the last two years, we reported:

•  U.S. wireless cellular service and personal communication services, or “PCS”, customers totaling 21.9 million at December 31, 2002 and 24.0 million at December 31, 2003;
 
•  revenues of $14.9 billion in 2002 and $15.5 billion in 2003; and
 
•  net income of $1.2 billion in 2002 and $1.0 billion in 2003.

As one of the largest digital wireless network operators in the United States, we have access to licenses, either through owned licenses or licenses owned by joint ventures and affiliates, to provide cellular or PCS wireless communications services covering an aggregate of 236 million in population (POPs), or approximately 81% of the U.S. population, including in 45 of the 50 largest U.S. metropolitan areas. We directly provide cellular or PCS services in 43 of the 50 largest U.S. metropolitan areas. We served customers in 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands as of December 31, 2003. All of our networks utilize digital technology; at December 31, 2003, 95% of our cellular and PCS customers were using digital service, and over 99% of our cellular and PCS minutes of use were digital in December 2003.

We provide a wide array of wireless services for individual, business and governmental users. Our data services are offered over our cellular/PCS networks and our separate Mobitex network, which on a combined basis had approximately 5.5 million and 6.6 million active users of our data services at December 31, 2002 and 2003, respectively.

On February 17, 2004, we entered into an Agreement and Plan of Merger to acquire AT&T Wireless Services, Inc. (AT&T Wireless) for an aggregate consideration of approximately $41 billion cash. The closing of the acquisition is expected to occur in late 2004 and is subject to the affirmative vote of AT&T Wireless’ shareholders, FCC, Hart Scott Rodino and other regulatory approvals and other customary closing conditions.

On a pro forma basis, the combined company would have had, at December 31, 2003, cellular and PCS spectrum coverage in 49 of the top 50 U.S. markets and operations in 97 of the top 100 U.S. markets (excluding only Richmond, Norfolk and Newport News, VA). Its licenses would encompass a population of 264 million people, and its network and operations would encompass a population of 225 million people. Both companies currently operate the same technologies. We plan that the combined company will provide service under the “Cingular” brand name.

Organizational Structure

 
The Company

Cingular Wireless LLC is a Delaware limited liability company and has its principal executive offices at Glenridge Highlands Two, 5565 Glenridge Connector, Atlanta, Georgia 30342 (telephone number 404-236-6000). We were formed in April 2000 by our members, SBC Communications Inc. (SBC) and BellSouth Corporation (BellSouth), as the operating company for their U.S. wireless communications joint venture. In October 2000, SBC and BellSouth contributed substantially all of their U.S. wireless businesses

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to us in exchange for economic ownership interests in us of approximately 60% and 40%, respectively. We began doing business under the “Cingular” brand name in January 2001.

Our Internet website is http://www.cingular.com. (This web site address is an inactive textual reference included for information only and is not intended to be an active link or to incorporate any web site information into this document.) We make available, free of charge, through our website our annual report on Form 10-K, our quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such reports are electronically filed with the SEC.

We have adopted a written code of conduct applicable to all directors, officers and employees. In addition, we have a separate Code of Ethics that is applicable to our principal executive, financial and accounting officers, or our “Senior Financial Officers”, responsive to Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC. The Senior Financial Officer Code of Ethics is available on our website. In the event that we make any substantive changes in, or provide any material waivers from, the provisions of this Code of Ethics, we intend to disclose such events on our website.

 
Management and Governance

SBC and BellSouth jointly control Cingular Wireless Corporation, a holding company with no material assets of its own other than a 0.0000001% economic interest in us. Its main purpose is to act as our manager and thereby control our management and operations. Our officers are appointed by its board of directors. We do not expect our management structure to change materially as a result of our planned acquisition of AT&T Wireless.

Our Business

We offer a comprehensive range of high-quality wireless voice and data communications services in a variety of pricing plans, including national and regional rate plans as well as prepaid service plans. Our voice and data offerings are tailored to meet the communications needs of targeted customer segments, including youth, family, active professionals, local and regional businesses and major national corporate accounts. The marketing and distribution plans for our services are further targeted to the specific geographic and demographic characteristics of each of our markets.

 
Voice Services

Postpaid Service. Consumer service is generally offered on a contract basis for one or two year periods. Under the terms of these contracts, service is provided and billed on a monthly basis according to the applicable pricing plan chosen. Our wireless services include basic local wireless communications service, long distance service and roaming services, which enable our customers to utilize other carriers’ networks when they are “roaming” outside our coverage area. We also bill other carriers for providing roaming services to their customers when they utilize our network outside the coverage area of their wireless service provider. We had approximately 19.8 million postpaid contract customers (excluding reseller customers) at December 31, 2002 and 21.3 million on December 31, 2003. In addition to basic wireless voice telephony services, we offer many enhanced features with many of our pricing plans. These features include caller ID, call waiting, call forwarding, three-way calling, no answer/busy transfer and voice mail. In some markets, we make available complementary services for a monthly fee, such as unlimited mobile-to-mobile calling, roadside assistance and handset insurance.

Our primary marketing emphasis is enrolling customers in postpaid service calling plans because such customers generate higher revenue usage and result in a lower customer churn rate than prepaid service customers. Accordingly, a significant component of our strategy consists of developing value-added plan

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features, ancillary services, unique devices and promotions to attract and retain postpaid customers. In 2003, we introduced an internally developed patent-pending FastForwardSM device that is unique to Cingular. When a Cingular handset is placed in the cradle, the FastForwardSM device automatically forwards all wireless calls to a designated wireline phone number and simultaneously charges the handset battery providing customers who are at a wireline location with the convenience of answering calls to their wireless phones on any wireline phone in that location. Our plans include options that allow off-peak hours to begin at 7:00 p.m. We began to target family members through our FamilyTalkSM promotions, which contributed to a significant portion of our postpaid customer growth, and we continue to promote a “RolloverSM” minutes feature, which allows our customers to carry over any unused “anytime” minutes from month to month for up to one year. We believe that these service offerings further enhance our brand message “Cingular Fits You BestSM” by providing customers with value-added services and the flexibility to tailor those services to fit their specific calling needs.

Prepaid Service. We offer prepaid service to meet the demands of distinct consumer segments, such as the youth market, families and small business customers, who prefer to pay in advance. As of December 31, 2003, prepaid users represented approximately 6% of our total customers. We believe that our prepaid service offering benefits from being part of a national brand, particularly with regard to distribution. Our prepaid strategy focuses on increasing the profitability of this customer segment through offering a wider array of services and features to increase the usage, revenue and retention of these customers. Our KICSM (Keep In Contact) prepaid plan offers features such as long distance, caller ID, call waiting, voicemail and off-network roaming, as well as enhanced features like short messaging, downloadable graphics and ringtones, games and information alerts. At the same time, it retains the benefits of no contract, no credit check, no monthly billing and enhanced ability to control spending. In addition, we continue to focus on increasing the distribution of our prepaid offering to include the Internet, automated replenishment services and strategic retail partners that will allow our prepaid service to truly be a product of convenience.

Consistent with the industry, we experience higher customer churn rates and lower revenue per customer with prepaid customers than our postpaid customers; however, these impacts are somewhat offset by the lower cost of acquiring new prepaid customers, including lower handset subsidies, higher revenue per minute earned and the absence of payment defaults.

Reseller Service. We offer wholesale services to resellers, who purchase wireless services from us for resale to their customers. As of December 31, 2003 the number of customers served through resellers represented approximately 5% of our total customers.

Equipment Sales. We sell a wide variety of handsets, or phones, manufactured by various suppliers for use with our service. We also sell accessories, such as handset faceplates and carrying cases, hands-free devices, batteries, battery chargers and other items. Handsets and accessories are also sold to agents and other third-party distributors for resale.

 
Data Services

General. Wireless data is the fastest growing area of our business, although its revenues are and for the foreseeable future are expected to be only a small portion of our overall revenue base. We are upgrading our network and coordinating with equipment manufacturers and applications developers to take advantage of continued growth in the demand for wireless data services.

We believe that we are the largest provider of wireless data in the industry in terms of annual revenue. We had approximately 6.6 million customers actively using our data services at December 31, 2003,

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approximately 789,000 of which we served with advanced applications over our separate Mobitex data network, with the rest using services we offer over our cellular and PCS networks.

Wireless Data Services Offered over our Mobitex Data Network. We believe that we are the largest provider of corporate messaging. We offer value-added wireless data applications to businesses and individuals who have a need for timely data communications to maintain a competitive advantage or increase personal productivity. We are a leader in providing wireless data services for complex businesses such as transportation, telecommunications, utilities and other businesses. Our Mobitex data network covers over 90% of the U.S. metropolitan population, and provides coverage in 99 of the 100 largest metropolitan areas.

We provide wireless access to corporate business applications for our customers who have mobile field personnel. Our wireless solutions allow sales managers to access corporate e-mail when away from the office and technicians to solve problems and access corporate databases from the field. These same businesses can also perform remote monitoring of devices as well as temporary or permanent wireless point-of-sale transaction processing.

We also provide individuals and mobile professionals with the ability to access information from web sites, conduct mobile commerce transactions (e.g., trade stocks, check bank statements and buy products) and send and receive Internet e-mail, all through a hand-held, wireless device.

We sell our customers terminal equipment, such as Blackberry™ hand-held pagers, and specialized devices for use in field/sales force automation, delivery truck and fixed location applications. In addition to collecting equipment fees, we enter into customer contracts with flat or usage-based fees.

Wireless Data Services Offered through our Cellular and PCS Networks. We currently offer wireless e-mail services, short messaging and other data services throughout our cellular and PCS networks. At December 31, 2003, we had over 19 million customers provisioned with wireless Internet and short messaging data services as part of their wireless service. An example of these services is XpressMailSM service, which allows businesses to access their Microsoft Exchange Server™ or Lotus Notes™ corporate e-mail and other desktop applications in real time from Internet-enabled wireless phones or from Blackberry™ handheld devices. We also offer wireless Internet access for use on our digital cellular and PCS networks through a variety of different devices including wireless phones, personal computer (PC) cards, and personal digital assistants (PDA).

Our wireless Internet service gives customers access to timely, personalized information such as news, weather, sports, stocks, directions, restaurant reviews, movie show times, yellow and white pages directories, games and graphics through their wireless handsets. We also offer a range of messaging services to our customers including short messaging and instant messaging with AOL™, multi-media messaging and mobile polling. In 2003, we have enabled our customers to download many applications like games and ringtones directly from their handsets using minimal keystrokes. By making the download process convenient and user-friendly, we make data more accessible to our customer base and hope to increase the penetration of customers using data services as well as repeat customers. Our goal is to provide an array of high quality, productivity-enhancing wireless data services across our cellular and PCS networks through the use of GPRS and EDGE technologies (see definitions of GPRS and EDGE in the following “Our Network” section), similar to and even more robust than those we currently offer across our Mobitex data network.

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Our Network

 
Licenses

We have access to licenses to provide cellular and PCS wireless services, both voice and data. We provide both analog and digital cellular services over the 850 megahertz (MHz) band and digital PCS services over the 1900 MHz band. We also have 900 MHz licenses to provide data services over the Mobitex data network. We obtained access to spectrum through application lotteries, mergers, acquisitions, exchanges, ventures, Federal Communications Commission (FCC) auctions and uncontested application grants of cellular licenses.

 
Coverage

We have access to cellular/PCS licenses in 45 of the 50 largest U.S. metropolitan areas, covering an aggregate of 236 million POPs, or approximately 81% of the of U.S. population, and operate in 43 of the top 50 markets across the country. In addition, we have signed numerous roaming agreements to ensure our customers can receive wireless service in virtually all areas in the United States where cellular/PCS wireless service is available. Our cellular/PCS networks are substantially constructed. Our Mobitex data network covers over 90% of the U.S. metropolitan POPs, including the 50 largest U.S. metropolitan areas.

See “— Regulatory Environment — Factors Relating to Our Industry” for FCC network system build requirements.

 
Technology

Cellular/PCS Technology. In the U.S. wireless telecommunications industry, there are two principal frequency bands currently licensed by the FCC for transmitting two-way voice and data signals — the 850 MHz band and the 1900 MHz band. The services provided over these two frequency bands are commonly referred to as cellular and PCS, respectively. PCS infrastructure is characterized by shorter transmission distances and closer spacing of cells and towers than in a cellular network to accommodate the different characteristics of the PCS radio signals. However, PCS service does not differ functionally to the user from digital cellular service.

Cellular systems initially provided service solely by means of analog transmissions, and, because of differing digital standards, the FCC requires that cellular radio licensees offer analog service until 2008. PCS systems have been constructed using only digital technology and are not required by the FCC to offer analog service.

Digital systems convert voice or data signals into a stream of digits that is compressed before transmission, thereby enabling a single radio channel to carry multiple simultaneous transmissions. Our experience has shown that digital technology offers many advantages over analog technology, including substantially increased network capacity, lower operating costs per unit, reduced susceptibility to fraud and the opportunity to provide improved data transmissions. Digital service also provides clear benefits to our customers, including improved voice quality, extended battery life, greater call security and lower per-minute costs. Digital service enables enhanced features and services, such as interactive messaging, facsimile, e-mail and wireless connections to computer/data networks and the Internet. A majority of our analog customers have migrated from analog to digital service. During December 2003, digital usage accounted for over 99% of our total usage based on minutes.

Because of the advantages of digital technology, cellular operators have been adding digital communications equipment to their systems for some time and are expected to increase both the footprint and the

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spectrum dedicated to digital service. We offer analog and digital service in our cellular markets and digital service in our PCS markets.

Third generation wireless communications standards are being developed in response to the expected consumer demand for high-speed data services. These technologies will allow high-speed wireless packet-switched data services and ultimately voice services using Internet protocol, thereby providing customers with greater connectivity and communications capabilities. Packet-switched technology allows for data to be sent and received in bursts, instead of requiring continuous transmission over the network for a duration of the communication, thereby providing the user “always on” connectivity. The introduction of packet-switched technology allows for devices that support simultaneous voice and data communications, e.g., receive voice calls while browsing the Internet. In addition, billing can be based on the quantity of data transmitted, not on the duration of the transmission. These technologies will also allow more robust features for voice communications and increased network capacity.

Currently the largest United States wireless communications providers use the following principal technologies:

•  Global System for Mobile Communications, or “GSM” — used by us, AT&T Wireless and T-Mobile USA, Inc. (T-Mobile). GSM is a digital wireless technology originally developed by the European operator community and later adopted by operators around the world to become by far the world’s most dominant wireless technology. Hardware and software enhancements, referred to as General Packet Radio Service, or “GPRS”, and Enhanced Data Rates for GSM Evolution, or “EDGE”, allow high-speed data communications.
 
•  Time Division Multiple Access, or “TDMA” — used by us and AT&T Wireless in some markets pending full deployment of, and customer migration to, GSM/GPRS/EDGE.
 
•  Code Division Multiple Access, or “CDMA” — used by Verizon Wireless and Sprint PCS. CDMA is a technology originally developed by the military, but adapted for commercial usage and licensed by Qualcomm Incorporated.
 
•  integrated Digital Enhanced Network, or “iDEN”® — used by Nextel.

TDMA, iDEN and GSM technologies work by dividing a single radio frequency into multiple time slots so it can support multiple calls. TDMA allows for up to three calls per frequency, GSM allows for up to eight and iDEN allows up to six. CDMA technology works by encoding individual conversations into a series of digits and then spreading the transmission of the sequence over available spectrum.

These technologies are not currently compatible or interchangeable with each other and require separate types of wireless phones and network infrastructure.

However, the GSM/ANSI-136 Interoperability Team, or “GAIT”, has developed standards promoting the ability to use one phone for both GSM and TDMA voice and data service. We are selling GAIT phones in some markets to facilitate the migration of customers from TDMA to GSM service.

Prior to 2002, our network consisted of both TDMA (approximately 70%) and GSM (approximately 30%) technologies. In October 2001 we announced a plan to overlay GSM/GPRS throughout our TDMA network and upgrade our data network to EDGE, our choice for third generation, or “3G”, wireless technology. EDGE, a faster version of GPRS technology, is expected to provide our customers with greater connectivity and communications capabilities, including faster speeds for accessing the wireless

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Internet. The following reasons underlie our decision to overlay GSM/GPRS/EDGE technology on our TDMA systems:

•  GSM has up to three times the voice capacity of the TDMA network.
 
•  We did not believe we could continue to offer competitive voice and data communications services over the long term unless we migrated from TDMA technology. TDMA was not a predominant global technology, and vendor support for this technology was less robust than for CDMA and GSM. With the decision of AT&T Wireless to overlay its TDMA network with, and gradually migrate its customer base to, GSM systems, the prospects for innovative research and development of TDMA systems seemed less likely than for CDMA and GSM systems.
 
•  Since TDMA systems comprised a relatively small percentage of wireless systems, more substantial economies of scale can be realized by using hardware and software that are more prevalent than TDMA.
 
•  TDMA technology, standing alone, would not support high-speed/capacity 3G, data systems.
 
•  GSM technology is compatible with all global GSM systems, and if a wireless handset is capable of operating on international frequencies as well as domestic frequencies, international roaming is possible with the same handset.

While we continue to utilize TDMA in the markets traditionally using this technology, we have substantially completed adding GSM/GPRS/EDGE in those markets and expect to complete this project in 2004.

We decided to overlay GSM/GPRS/EDGE instead of CDMA or iDEN for the following reasons;

•  Since approximately 30% of our network already utilized GSM technology, it would have been substantially more expensive to construct CDMA or iDEN over our entire network than GSM/GPRS/EDGE over about two-thirds.
 
•  We believe we will be able to offer our customers a greater variety of handset models and communications services by migrating our business offerings to the predominant GSM standard.
 
•  Technically simpler handsets compared to CDMA (less processing is required), combined with royalties payable to Qualcomm for the use of CDMA technology equate to a slight inherent cost advantage of GSM over CDMA technology.
 
•  Large commonality of handsets with the rest of the GSM community should result in enhanced development efforts and larger production runs, lowering costs further.
 
•  While the primary advantage of the iDEN technology is its support of a “push-to-talk” service, we believe that such services can also be supported on GSM technology, and we expect such services to be available from GSM vendors in the near future.

The disadvantages of GSM/GPRS/EDGE versus CDMA are:

•  Current CDMA systems offer greater voice capacities than GSM.
 
•  GSM/GPSR/EDGE offer higher data speeds than the currently available CDMA 1XRTT technology. Both GSM and CDMA will have technology evolution paths that will offer comparable higher speed throughputs and capacities in the future.

The predominant digital technologies, GSM and CDMA, are dynamic and evolutionary technologies in that a variety of technical enhancements are constantly being developed and implemented to extend the

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capacity and performance capabilities of each. Because the operation and performance of wireless communications networks and handsets is functionally identical on all digital technologies, we believe that wireless customers are generally unaware of or unconcerned with the particular technology of their chosen wireless carrier. Therefore, we believe that our chosen technology path is fully capable of supporting our business growth strategies in this competitive market.

Mobitex Technology. Our Mobitex data network operates over a 900 MHz network and uses packet-switched technology. We are currently the only U.S. operator of a Mobitex data network.

 
Spectrum Capacity

We currently own licenses for spectrum in the 850 MHz and 1900 MHz bands. We expect that the demand for our wireless services will grow over the next several years as the demand for both traditional wireless voice services and wireless data and Internet services increases significantly. We anticipate needing access to additional spectrum in selected densely populated markets to meet expected demand for existing services and throughout our network to provide full 3G services beyond EDGE. Some of this additional spectrum requirement would be met by the pending acquisition of 1900 MHz spectrum from NextWave Telecom, Inc. (NextWave) and the pending acquisition of AT&T Wireless. See also Item 7, Management Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Cash Requirements — Licenses Acquisition.

In order to acquire access to additional spectrum, we may participate in future FCC auctions and exchange spectrum with, and lease or purchase spectrum licenses from other wireless carriers. We may also obtain additional spectrum capacity through mergers and acquisitions, joint ventures and alliances. See “Regulatory Environment” and “Factors Relating to Our Business — If we fail to obtain access to additional spectrum, we may not be able to expand the geographic reach of Cingular-branded services, increase our customer base in areas we currently serve or meet the anticipated demand for new services”.

From time to time, we exchange or purchase licenses for spectrum and enter into joint ventures to share networks. Joint ventures such as those described below allow us to enter new markets more quickly and for substantially less capital costs. See also Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Cash Requirements for further information regarding such joint ventures.

Joint Ventures and Spectrum Exchanges / Acquisitions

 
Salmon PCS

In 2000, we and Crowley Digital Wireless, LLC (Crowley Digital) formed a joint venture, Salmon PCS LLC, (Salmon) to acquire PCS licenses being auctioned by the FCC. We do not control Salmon. Through the auction, Salmon obtained 45 licenses covering over 11 million POPs. Under the terms of this venture, we act as manager of the PCS systems, subject to Crowley Digital’s oversight and control. The management agreement has a term of eight years. In addition, pursuant to a trademark license agreement, Salmon has elected to use our trademarks in its business to offer Cingular-branded services.

Crowley Digital has the right to put its interest in Salmon to us at a price in cash equal to its initial investment plus a specified rate of return. The put right can only be exercised at certain times, and we estimate that the earliest exercise period will begin in February 2006 and the latest exercise period will end in April 2008. We estimate that the fair value of this put obligation was approximately $126 million and $139 million as of December 31, 2002 and 2003, respectively. This obligation is included in “Other noncurrent liabilities” in our consolidated balance sheets.

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We entered into a credit agreement with Salmon under which, until November 2006, we will provide through secured loans, upon Salmon’s request, substantially all of the capital Salmon will require to pay for the licenses, construct its system and fund working capital requirements. Loans are repayable no later than May 2008, with interest at a rate of 9% per annum, or 14% per annum if Salmon terminates the management agreement or trademark agreement.

 
Transactions with T-Mobile

In May 2001, we and T-Mobile exchanged FCC licenses covering approximately 36 million POPs each. We received licenses covering 10 MHz of spectrum for the five boroughs of New York City, all of Long Island as well as parts of upstate New York, northeast Pennsylvania, St. Louis, Detroit, Vermont, New Jersey and Connecticut. In exchange, we transferred to T-Mobile licenses covering 10 MHz of spectrum out of the 30 MHz of spectrum that we had in the California and Nevada markets. As a result of the exchange, we gained access to spectrum covering over 20 million additional POPs in the northeastern United States.

Subsequently, in November 2001, we and T-Mobile formed a jointly-controlled venture, GSM Facilities, LLC (GSMF), to allow the companies to share network infrastructure in the California, Nevada and New York City markets. Each of our respective existing networks in these markets, which use GSM technology and cover approximately 56 million POPs, has been contributed to the venture. Both companies have access to the venture’s network infrastructure, and pursuant to the terms of the venture’s commercial arrangements, are able to provide our respective customers access to a weighted average spectrum depth of 39 MHz in these markets. We and T-Mobile buy network services from the venture but each of us retained ownership and control of our own licenses. Funding for capital investments and cash operating expenses of the venture is generally made by us and T-Mobile on a pro rata basis based on network traffic. We also independently market our unique services to customers using our own brand name and utilize our own sales, marketing, billing and customer care operations. In July 2002, we began marketing and providing service in the New York City market and T-Mobile began providing service in California and Nevada through the venture. Our participation in this venture gives our customers access to more spectrum and is expected to result in more robust networks and lower operating expenses and capital expenditures than if we had constructed our own network.

 
Joint Venture with AT&T Wireless

In January 2002, we entered into an agreement with AT&T Wireless to form a jointly-controlled and equally-owned venture to construct a GSM voice network with GPRS/EDGE data technologies along a number of major highways in order to ensure availability of GSM/GPRS/EDGE service to our customers, and reduce roaming expenses we pay to other carriers when our customers travel on those highways. We and AT&T Wireless will each buy services from the venture and provide services under our own brand names. In March 2003, we and AT&T Wireless contributed licenses and assets of equal value. As of December 31, 2003, we had an investment in the venture of $21 million.

 
Spectrum Swap with AT&T Wireless

In December 2002, we announced an agreement to transfer to AT&T Wireless our wireless license and operations in Kauai, Hawaii and wireless licenses in Alabama, Idaho, Oklahoma, Mississippi and Washington. In return, we would receive wireless licenses in Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, Tennessee and Texas. This swap was completed in June 2003. As a result, our licensed coverage area increased by approximately one million POPs.

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Other Transactions

In December 2003, we acquired three PCS licenses in Florida from Sunshine PCS, for approximately $14 million.

In February 2004, we completed an exchange transaction with Dobson Cellular Systems, Inc. We transferred $22 million cash and wireless property in Michigan to Dobson in exchange for wireless property in Maryland.

In February 2004, we acquired an operational cellular system in Louisiana and other FCC licenses in Louisiana, Arkansas and Texas from Unwired Telecom Corporation. We expect the aggregate consideration for this transaction to be approximately $28 million cash.

 
Pending Transactions

Acquisition of NextWave licenses. In August 2003, we executed an agreement with NextWave and certain of its affiliates pursuant to which we would purchase FCC licenses for wireless spectrum for $1.4 billion cash. This pending acquisition is for 1900 MHz spectrum licenses in 34 markets covering 83.4 million POPs with all but 3.4 million POPs in existing Cingular licensed areas. The transaction is subject to various closing conditions, some of which are outside of the parties’ control. The transaction is expected to close in the first half of 2004.

Acquisition of AT&T Wireless. In February 2004, we executed an agreement to acquire AT&T Wireless by means of a merger for an aggregate consideration of approximately $41 billion cash. SBC and BellSouth have agreed to provide us all of the funds necessary to pay the merger consideration. The closing of the acquisition is expected to occur in late 2004 and is subject to the affirmative vote of AT&T Wireless’ shareholders, FCC, Hart Scott Rodino and other regulatory approvals and other customary closing conditions. The merger agreement provides that if the conditions to closing are not satisfied by December 31, 2004, it will be terminated, subject to extension to June 30, 2005 by either party if, as of December 22, certain regulatory approvals have not been obtained (in very limited circumstances it may be extended another 60 days). If AT&T Wireless enters into or consummates certain types of business combination transactions within 15 months after a designated termination of the merger agreement, AT&T Wireless would be obligated to pay to BellSouth and SBC an aggregate fee of $1.4 billion.

The agreement provides that Cingular and AT&T Wireless are required to use their best efforts to consummate the merger as promptly as reasonably practicable, and BellSouth and SBC are required to use reasonable best efforts to assist Cingular in obtaining regulatory approval. However, none of us, SBC nor Cingular will be required to take actions required by regulators as a condition to approval of the merger, and we will not be required to close the merger, if the aggregate adverse impacts of required sales of customers or spectrum or any conditions imposed on either BellSouth, SBC and/or Cingular would exceed $8.25 billion. For purposes of calculating the impacts regarding sales of customers or spectrum, the parties have agreed that the adverse impact of (a) any required divestitures of a market would be equal to the number of customers in the market required to be divested multiplied by $825 and (b) any required divestitures of spectrum only would be equal to the amount of spectrum required to be divested multiplied by $0.50 per MHz/POP. Any other adverse impacts on BellSouth, SBC and/or Cingular would be calculated at the time the conditions are imposed. Each of SBC and BellSouth has agreed not to take any action reasonably likely to prevent the closing of the merger.

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Competition

There is substantial and increasing competition in all aspects of the wireless communications industry. We expect this to continue even after our planned acquisition of AT&T Wireless. We compete for customers based principally on our call quality, service offerings, price, coverage area and customer service.

Our competitors are principally the other national providers of cellular, PCS and other wireless communications services — Verizon Wireless, AT&T Wireless (until the acquisition is consummated), Sprint PCS, Nextel and T-Mobile, which together with us serve almost 80% of the U.S. wireless customers. We also compete with smaller companies, resellers and wireline telephone service providers. Verizon Wireless ranks first among the six national carriers in terms of number of customers served as of December 31, 2003 and first in 2003 revenues and profitability. We ranked second among these carriers according to number of customers served. Although AT&T Wireless had fewer customers, their 2003 revenues slightly exceeded ours.

Some of our competitors have greater financial, technical, marketing, distribution and other resources than we do. In addition, some of the other large providers have more spectrum depth and extensive coverage areas than we do. Some of the indirect retailers who sell our services also sell our competitors’ services. Moreover, we may experience significant competition from companies that provide similar services using other communications technologies and services. Some of these technologies and services are now operational and others are being developed or may be developed in the future.

Consolidation, alliances and business ventures may increase competition. Consolidation and the formation of alliances and business ventures within the wireless communications industry have occurred and we expect that this trend will continue. We have numerous other competing wireless providers in our markets. Consolidation may create larger, better-capitalized competitors with substantial financial, technical, marketing, distribution and other resources to compete with our product and service offerings. Competitors with more complete nationwide footprints may be able to offer nationwide services and plans more economically due to economies of scale and less dependence on roaming arrangements. In addition, global combinations of wireless carriers — such as the alliance between AT&T Wireless and NTT DoCoMo Inc. of Japan, the joint venture between Sprint and Virgin Group, Verizon Wireless, which is a joint venture between Verizon and Vodafone plc, and mergers and acquisitions, such as the acquisition of T-Mobile by Deutsche Telekom — may give some domestic competitors better access to international technologies, marketing expertise and strategies and diversified sources of capital. Other large, national wireless carriers have affiliations with a number of smaller, regional wireless carriers that offer wireless services under the same national brand, thereby expanding the national carrier’s perceived national scope. In addition, infrastructure sharing ventures, while facilitating our entry into new markets, also allow our partners to compete with us in those markets.

Governmental policy at all levels favors robust competition. For example, under current FCC rules, six or more PCS licensees, two cellular licensees and one or more enhanced specialized mobile radio, or “ESMR”, licensees may operate in each geographic area. This structure has resulted in the presence of multiple competitors in our markets and makes it challenging for us to attract new customers and retain existing ones. In addition, specialized mobile radio, or “SMR”, dispatch system operators have constructed two-way ESMR digital mobile communications systems on existing SMR frequencies in many cities throughout the United States, including most of the markets in which we operate. Wireless number portability rules recently implemented by the FCC that enable customers to retain their wireless local numbers when switching carriers further increase competition.

Our ability to compete successfully will depend, in part, on the quality of our network and marketing efforts and on our ability to anticipate and respond to various competitive factors affecting the industry.

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These factors include the introduction of new services and technologies, changes in consumer preferences, demographic trends, economic conditions, pricing strategies of competitors and our ability to take advantage of our wireless/wireline service area overlap with SBC and BellSouth. As a result of competition, we have in the past and may in the future be required to:

•  reduce prices for our services and products;
 
•  restructure our service packages to provide more services without increasing prices;
 
•  further upgrade our network infrastructure and the handsets we offer;
 
•  increase our advertising, promotional spending, commissions and other customer acquisition costs; and
 
•  increase our spending to retain customers.

The primary advantages other carriers have over us are spectrum depth and population coverage. We address this by seeking additional licenses in areas where we are at a spectrum disadvantage, via the following options:

•  by participating in FCC auctions, such as the auction that ended in January 2001 that resulted in our acquiring access, through Salmon, to an additional 45 licenses;
 
•  by acquiring licenses from other carriers, either by direct purchases, as in Salt Lake City and the pending acquisition of licenses from NextWave, or by swaps for licenses, as in the New York metropolitan markets, in exchange for licenses for spectrum where we have excess capacity;
 
•  by joint venturing with other carriers to pool spectrum or share network infrastructure, as in our AT&T Wireless and T-Mobile ventures;
 
•  by leasing spectrum under the FCC’s new spectrum leasing rules; and
 
•  by acquiring companies that possess strategic assets, such as the planned acquisition of AT&T Wireless.

In addition, because we are in the process of overlaying our TDMA network with GSM/GPRS/EDGE technology and in the process of transitioning our TDMA customers to that new technology, we will operate at somewhat of a disadvantage to other carriers (e.g., Verizon Wireless, Sprint PCS, Nextel and T-Mobile) that utilize an established common technology throughout their networks. We are meeting these challenges by offering cellular and PCS phones that will operate on both TDMA and GSM networks as well as the standard GSM-only and TDMA-only handsets and negotiating roaming agreements to allow our customers to use TDMA or GSM networks of other carriers until our GSM network overlay is completed. At the end of 2003, we had 93% of our POPs currently with cellular or PCS service covered by GSM/GPRS and 20% covered by EDGE.

See “Factors Relating to Our Business — Substantial competition in all aspects of our business could continue to cause reduced pricing and have adverse effects on our profit margins”.

Business Strategies

Our business strategies are to:

•  Expand our Customer Base Profitably. Recent surveys indicate that we have firmly established our brand, showing total brand awareness of approximately 95% as of December 31, 2003, similar to the brand recognition of competitors who have been in the marketplace with their brand substantially longer than we have. We believe that we can capitalize on this brand recognition and our extensive distribution capabilities to attract new customers, including those customers switching service from other wireless

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carriers. We can offer new innovative product plans that provide both favorable economics and customer value such as our current “rollover” plans. We also benefit from having the largest wireless/wireline service area overlap in the United States as a result of our affiliation with SBC and BellSouth. We intend to further capitalize upon this strength and expand our distribution and bundled product offerings with SBC and BellSouth as well as explore future opportunities to integrate wireless/wireline services such as FastForwardTM. In October 2003, we introduced FastForwardTM, a patented cradle device that plugs into an electrical outlet and acts as charger but when “cradled”, calls to the wireless phone are forwarded to a designated wireline phone.
 
•  Reduce Costs and Enhance Service by Leveraging Our Large Scale and National Scope. Since our formation, we have made progress in realizing cost savings, including lowering of equipment costs resulting from our combined purchasing power, integration of support and billing systems, reduction of roaming rates and consolidation of customer care facilities, headquarter offices and distribution centers. With major integration projects completed, we are positioned to realize the savings from these efforts while deploying better tools to serve our customers.
 
•  Increase the Capacity, Speed and Functionality of our Cellular and PCS Networks by Deploying a Common Voice and Data Technology Throughout our Networks. We are currently completing a project of overlaying GSM/GPRS technology throughout our TDMA network to provide a uniform technology platform throughout our coverage area. At December 31, 2003, 93% of our POPs currently with cellular or PCS service had access to GSM voice and GPRS data technology, with the remaining coverage areas to be completed in 2004. In addition, we intend to upgrade our GPRS data capabilities to EDGE to significantly improve data speeds and spectral efficiency. As of the end of 2003, 20% of our POPs currently with cellular or PCS service had EDGE capabilities, with the remainder to be completed in 2004. This transition from GPRS to EDGE is primarily completed through software upgrades.
 
•  Develop and Promote Advanced Wireless Data Applications Over Multiple Communications Devices. We currently provide advanced data services over our Mobitex and cellular/PCS networks, including interactive messaging and wireless Internet access. Our Mobitex data network services also include specialized business applications for transportation, telecommunications, banking, utilities and other businesses, including mobile field personnel management, remote monitoring, point of sale and other mobile commerce applications. The deployment of GPRS and EDGE throughout the cellular/PCS networks enables us to further expand data applications to our broad base of voice customers using handsets, personal computers and personal digital assistants.
 
•  Expand our Existing Network Footprint and Capacity Where Economical. We will opportunistically expand our network and services. Where economical, we will pursue acquisition of spectrum from private ownership, as such our planned acquisition of spectrum licenses from NextWave and our planned acquisition of AT&T Wireless, or through FCC auctions. We can also gain access through innovative means such as leasing or spectrum swaps. We also have the ability to expand our service through network sharing ventures, such as our GSMF venture with T-Mobile. See “Our Network”. We are also actively working with other carriers to facilitate a strong GSM/GPRS/EDGE footprint across the continental United States through economical roaming agreements.

Marketing

We are focusing our marketing strategy on promoting the Cingular brand, providing compelling products and services, delivering high-quality service and customer care, leveraging our extensive distribution

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network and cross-marketing with SBC and BellSouth. With 24 million cellular and PCS customers at December 31, 2003, we also have the opportunity to provide value-added services to a large customer base.

Our advertising utilizes integrated, multi-media tools, including television, radio, newspaper, outdoor, Internet and point of sale. Our advertising objectives include:

•  increasing new customer growth by attracting prospective customers to a Cingular sales channel, and
 
•  aiding customer retention by reinforcing the value of an existing relationship with Cingular.

In February 2003, we repositioned the brand with “Cingular Fits You BestSM”, a campaign that gives potential customers tangible reasons to choose Cingular. In addition, we began co-branding with SBC and BellSouth in their respective markets. These changes have led to dramatic improvements in brand awareness and brand attributes. An example is our “rollover” advertising that has had great success in building awareness for our unique “rollover” feature where unused anytime minutes rollover from month to month for up to one year. It has also resulted in building important brand attributes that consumers consider when choosing a wireless carrier, such as trust and fairness. We will continue to leverage our brand identity by presenting more compelling and market specific reasons to choose Cingular.

Our marketing strategy is to aggressively sell our voice services based on three basic calling plan structures offered throughout our service areas: Cingular RegionSM and Cingular NationSM rate plans. The plans differ in terms of the geographic areas that are included as the local calling areas. The costs and terms of each plan depend on the customer’s location and the plan selected. We have targeted plans to specific customer segments: Family Talk®, a shared minutes plan; KICSM (Keep In Contact), our prepaid product for those preferring to pay as they use, and a host of plans targeted to various segments of the business-to-business market. In addition, our GSM/GPRS/EDGE migration is nearly complete, making advanced features, products and services available to customers around the country.

Our marketing plans also address the growing communications needs of our existing customers, thereby increasing customer retention. We target specific customer segments with tailored services and offer them a range of high-quality handsets and enhanced features, including wireless data services, additional wireless phones, accessories and new products.

Our strategy for data offerings is to leverage the marketing and operational experience that we have gained as a leader in wireless data services and match our customers’ needs with our existing data products or with customized solutions. We offer an entire suite of consumer data products aimed at enhancing the customer experience, including internet access, picture messaging through multimedia messaging services, short messaging services, games, graphics, polyphonic ringtones and supertones and instant messaging with AOLTM. We also offer a robust line-up of business data services from corporate messaging to customized wireless application access. We market our business data offerings to larger organizations, as well as small and medium-sized businesses.

Sales and Distribution

Our sales and distribution strategy seeks to tailor the mix of direct, indirect and resale distribution channels to match customer shopping preferences to increase customer growth and satisfaction while reducing customer acquisition and retention costs. As of December 31, 2003, we had over 88,000 distribution “points of presence”. These included approximately 1,700 company-owned stores and kiosks, 8,000 authorized agent locations, more than 77,000 national retail points of distribution, including those distributing prepaid services, and more than 1,500 direct business-to-business salespeople. In addition, we have access to the distribution channels of SBC and BellSouth as both sales channels and bundlers of our wireless services with their wireline product offerings. SBC’s Total ConnectionsSM and BellSouth AnswersSM

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product offerings offer a combination of local phone service and features, long distance, Internet access and Cingular Wireless services, with the customer receiving one consolidated bill. In addition to these traditional channels, we will continue to utilize and expand other channels, such as the Internet and telemarketing.

Customer Care and Satisfaction

The cost of adding new customers is one of the most significant cost elements in the wireless industry. Therefore, satisfying and retaining existing customers are critical to the financial performance of wireless operators. The goal of our customer care, retention and satisfaction programs is to ensure customer convenience and ease of use and to cultivate long-term relationships with our customers. We offer our customers a full range of options for making requests and inquiries to maximize convenience. We also offer complete customer care during extended business hours and emergency service after business hours, as well as a number of other services designed to enhance our relationship with our customers.

In 2004, we will continue to pursue opportunities to enhance customer satisfaction. Our key initiatives include continued expansion of our knowledge base tools, improved call routing initiatives and deployment of a contact management tool.

Environmental Matters

We are subject to various federal, state and local environmental protection and health and safety laws and regulations, and we incur costs to comply with those laws. Environmental laws hold current or previous owners or operators of businesses and real property potentially liable for contamination on that property, even if they did not know of and were not responsible for the contamination. Environmental laws may also impose liability on any person who disposes or arranges for the disposal of hazardous substances for contamination at the disposal site, regardless of whether the disposal site is owned or operated by such person. Although we do not currently anticipate that the costs of complying with environmental laws, including costs for remediating contaminated properties, if any, will materially adversely affect us, we cannot ensure that we will not incur material costs or liabilities in the future due to the discovery of new facts or conditions, the occurrence of new releases of hazardous materials or a change in environmental laws.

Employees

As of December 31, 2003, we had approximately 39,400 employees. Approximately 22,000 of our employees are represented by the Communications Workers of America, with contracts expiring on various dates between February 2004 and February 2007. Most of the contracts contain no-strike clauses. In most areas of the country and with most job titles, we are contractually required to maintain a position of neutrality and to allow card-check procedures with respect to unionization and will support the determination of our employees. In those areas where our employees are unionized, we have in place contracts that we believe provide us with the flexibility to run our business in an increasingly competitive environment. We consider our relationship with our employees and the Communications Workers of America to be very good.

Intellectual Property

We own the rights to the “Cingular” brand name. We rely on a combination of copyright, patent, trademark, trade secret and other intellectual property rights, together with confidentiality and/or license agreements with our employees, customers and others to protect our proprietary rights. Our trademarks

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cover our brand name and icon and names of our service and product offerings and have a duration of 10 years with renewal provisions. We also license trademarks for various products and services from either SBC or BellSouth for varying terms. For more information on licenses granted by our member companies to us and licenses we grant to them, see “Item 13. Certain Relationships and Related Transactions”. Our FCC licenses are discussed under “Regulatory Environment”.

Regulatory Environment

The FCC regulates the licensing, construction, operation, acquisition and transfer of wireless systems in the United States pursuant to the Communications Act of 1934 (Communications Act) and its associated rules, regulations and policies.

To obtain the authority to have the exclusive use of radio frequency spectrum in an area within the United States, wireless communications systems must be licensed by the FCC to operate the wireless network and wireless devices in assigned spectrum segments and must comply with the rules and policies governing the use of the spectrum as adopted by the FCC. These rules and policies, among other things, (1) regulate our ability to acquire and hold radio spectrum licenses or to lease spectrum, (2) impose technical obligations on the operation of our network, (3) impose requirements on the ways we provide service to and communicate with our customers, (4) regulate the interconnection of our network with the networks of other carriers, (5) obligate us to permit resale of our services by resellers, if we offer resale opportunities, and to serve roaming customers of other wireless carriers and (6) impose a variety of fees and charges on our business that are used to finance numerous regulatory programs and a substantial part of the FCC’s budget.

Licenses are issued for only a fixed period of time, typically 10 years. Consequently, we must periodically seek renewal of those licenses. The FCC will award a renewal expectancy to a wireless licensee that has provided substantial service during its past license term and has substantially complied with applicable FCC rules and policies and the Communications Act. The FCC has routinely renewed wireless licenses in the past. However, the Communications Act provides that licenses may be revoked for cause and license renewal applications denied if the FCC determines that a renewal would not serve the public interest. Violations of FCC rules may also result in monetary penalties or other sanctions. FCC rules provide that applications competing with a license renewal application may be considered in comparative hearings and establish the qualifications for competing applications and the standards to be applied in hearings.

Wireless systems are subject to Federal Aviation Administration and FCC regulations governing the location, lighting and construction of transmitter towers and antennas and are subject to regulation under federal environmental laws and the FCC’s environmental regulations, including limits on radio frequency radiation from wireless handsets and towers. Zoning and land use regulations, including compliance with historic preservation requirements, also apply to tower siting and construction activities.

Two-way Voice and Data Services. We hold geographic service area licenses granted by the FCC to provide cellular and PCS services. A cellular system operates on one of two 25 MHz frequency blocks in the 850 MHz band that the FCC allocates for cellular radio service. Cellular systems principally are used for two-way mobile voice applications, although they may be used for data applications and fixed wireless services as well. Cellular licenses are issued for either metropolitan statistical areas, or “MSAs”, or rural service areas, two in each area. At present, no entity may hold overlapping cellular licenses in the same rural service area without a waiver from the FCC.

A broadband PCS system operates under licenses issued in the 1900 MHz band. PCS systems generally are used for two-way voice applications, although they may carry two-way data communications and fixed wireless services as well. For the purpose of awarding PCS licenses, the FCC has divided the United

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States into 51 large regions called major trading areas, or “MTAs”, which are comprised of 493 smaller regions called basic trading areas, or “BTAs”. The FCC awarded two PCS licenses for each major trading area, known as the “A” and “B” blocks, and four licenses for each BTA known as the “C”, “D”, “E” and “F” blocks. Thus, generally, six PCS licenses are authorized in each area, together with two cellular licenses. The two MTA licenses authorize the use of 30 MHz of PCS spectrum. One of the basic trading area licenses is for 30 MHz of spectrum (the “C” block), and the other three are for 10 MHz each. The FCC permits a licensee to split its license and assign a portion, on either a geographic or frequency basis or both, to another party or parties.

We must satisfy a range of FCC-specified coverage requirements. For example, a cellular licensee was permitted five years following the grant of its license to provide service to its desired coverage area. The area it served with specified minimum signal strength became its licensed service area. Failure to provide that coverage to the boundaries of its initially licensed service area resulted in reduction of the relevant license area by the FCC. All 30 MHz PCS licensees must construct facilities that offer coverage to one-third of the population of the service area within five years of the original license grants and to two-thirds of the population within 10 years. All 15 MHz and 10 MHz PCS licensees must construct facilities that offer coverage to one-fourth of the population of the licensed area or “make a showing of substantial service in their license area” within five years of the original license grants. A licensee that fails to meet the coverage requirements may be subject to forfeiture of its license.

We use common carrier point-to-point microwave facilities and dedicated facilities leased from communications companies or other common carriers to connect our wireless cell sites and to link them to the main switching office. The FCC licenses point-to-point microwave facilities separately and they are subject to regulation as to technical parameters and service. Microwave licenses must also be renewed every 10 years.

Mobitex Wireless Data Services. We have separate licenses for each of the 900 MHz spectrum blocks that we use to provide most of our business data services. In 2003, the FCC approved our “substantial service” demonstration that we have met the network system build requirements of these licenses. Like other licenses, however, these are renewable every 10 years and require showings of continued “substantial service” and compliance with other license conditions, as described above.

Transfers and Assignments of Wireless Licenses. The Communications Act and the FCC rules require the FCC’s prior approval of the assignment or transfer of control of a license for a wireless system. Before we can complete any such purchase or sale, we must file appropriate applications with the FCC, and the public is by law granted a period of time, typically 30 days, to oppose or comment on them. In addition, the FCC has established transfer disclosure requirements that require licensees who assign or transfer control of a license acquired through an auction within the first three years of their license terms to file associated sale contracts, option agreements, management agreements or other documents disclosing the total consideration that the licensee would receive in return for the transfer or assignment of its license. Non-controlling minority interests in an entity that holds an FCC license generally may be bought or sold without FCC approval. However, notification and expiration or earlier termination of the applicable waiting period under Section 7A of the Clayton Act by either the U.S. Federal Trade Commission or the U.S. Department of Justice may be required, as well as notification of state or local regulatory authorities having competent jurisdiction, if we sell or acquire wireless systems.

Foreign Ownership. Under existing law, no more than 20% of an FCC licensee’s capital stock may be owned, directly or indirectly, or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation. If an FCC licensee is controlled by another entity, as is the case with our ownership structure, up to 25% of that entity’s capital stock may be owned

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or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation.

Foreign ownership above the 25% level may be allowed should the FCC find such higher levels not inconsistent with the public interest. The FCC has ruled that higher levels of foreign ownership, even up to 100%, are presumptively consistent with the public interest with respect to investors from certain nations, which are countries that are signatories to the World Trade Organization Agreement on Basic Telecommunications Services. However, the FCC, in adopting that strong presumption, did note the possibility exists that entry by a foreign carrier could be so detrimental as to require the imposition of conditions on entry by such a carrier or even a denial of entry. In addition, the FCC stated it would accord deference to legitimate national security, law enforcement, foreign policy and trade concerns raised by other federal agencies as part of the FCC’s analysis of whether to grant a particular authorization. The FCC has done that in certain cases where the U.S. Department of Justice and the U.S. Federal Bureau of Investigation have raised concerns, requiring the carrier to configure its network(s) to be capable of complying with lawful U.S. process and to make available in the United States certain call and customer data. Foreign ownership by entities from countries other than World Trade Organization member countries must meet a more stringent standard, and there is no assurance that the FCC would find a grant of such an application to be in the public interest. If our foreign ownership were to exceed the permitted level (through foreign ownership of our owners, their transfers of ownership in us or issuances of Class A common stock by our manager), the FCC could revoke our FCC licenses, although we could seek a declaratory ruling from the FCC allowing the foreign ownership or take other actions to reduce our foreign ownership percentage in order to avoid the loss of our licenses. We have no knowledge of any present foreign ownership that exceeds these limitations.

Spectrum Acquisitions and Leasing. Two of the ways by which we can attempt to meet our needs for additional spectrum are by acquiring spectrum licenses held by others or by accessing new spectrum being auctioned and licensed by the FCC. The Communications Act requires the FCC to award new licenses for commercial wireless services to applicants through a competitive bidding process. Therefore, if we need additional spectrum, we plan to acquire the spectrum, indirectly through joint arrangements, or directly in an auction for any new licenses that may become available or by purchasing existing licensed facilities and incorporating them into our system, provided that we are permitted to do so under FCC rules.

The FCC has announced that it will auction spectrum in the 700 MHz band. There are numerous television operators that currently occupy UHF television channels 52-69 in this band. Although these stations have been awarded a second channel to establish digital service, they also have the right to continue operation on the current channel through at least 2006, and potentially longer if various conditions are not met. Absent adoption of new federal legislation or rules that lead to “clearing” of the 700 MHz band earlier than current law requires, or the development of band-clearing mechanisms by these operators for relocation, this spectrum would be of limited use in the short-term for wireless services.

There are additional spectrum bands that may be suitable for our business, but this spectrum has not been allocated and auctions of this spectrum are not imminent.

In early 2004, the FCC’s new spectrum leasing rules become effective. These rules permit license holders to lease the use of their spectrum to others and provide that such holders can meet their network system build requirements through the facilities construction and operating activities of their lessees. The FCC has structured its rules such that it has minimal involvement in leasing activities. For these reasons, we view spectrum leasing as an attractive alternative to license acquisition in areas where we are spectrum constrained.

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Rates and Services. The FCC does not specify the rates we may charge for our services nor does it require us to file tariffs for our U.S. wireless operations. However, the Communications Act states that an entity, such as us, that provides commercial mobile radio services is a common carrier and is thus subject to the requirements of the Communications Act that it not charge unjust or unreasonable rates nor engage in unreasonable discrimination. The FCC may invoke these provisions to regulate the rates and related terms and conditions under which we provide service. In addition, the Communications Act defines a commercial mobile radio service provider as a common carrier, which makes it subject to a number of other regulatory requirements in its dealings with other carriers and customers. The following requirements impose restrictions on our business and increase our costs as well as the costs of other wireless carriers.

Recent Regulatory Developments. The FCC eliminated the rules limiting the amount of spectrum a wireless carrier can own in a market effective January 1, 2003. As yet, it has not replaced these spectrum limits with published rules or guidelines setting forth how the FCC will review carriers’ spectrum aggregations. The FCC also eliminated the prohibition on ownership of both cellular licenses by a single entity in metropolitan markets. Certain acquisitions of spectrum would remain subject to approval of the U.S. Department of Justice.

The FCC has imposed rules requiring carriers to provide emergency 911 services, including enhanced 911 services that provide to local public safety dispatch agencies the caller’s communications number and approximate location. Providers are required to transmit the geographic coordinates of the customer’s location within accuracy parameters set forth by the FCC, either by means of network-based or handset-based technologies. Providers may not demand cost recovery as a condition of doing so, although they are permitted to negotiate cost recovery if it is not mandated by the state or local governments. Because of the delayed availability of vendor equipment that could reasonably be relied upon to comply with the FCC’s location accuracy rules, we and other wireless carriers negotiated settlement arrangements with the FCC requiring payments to the U.S. Treasury and modified compliance standards and deadlines.

The FCC has established federal universal service requirements that affect commercial mobile radio service operators. Under the FCC’s rules, commercial mobile radio service providers are potentially eligible to receive universal service subsidies for the first time; however, they are also required to contribute to the federal universal service fund and may be required to contribute to state universal service funds. Contributions into the federal fund are based on the interstate and international revenues generated by the properties owned by a commercial mobile radio service provider. For 2003, we had payment obligations into the federal universal service fund of approximately $274 million. Because the amount that we are required to pay into the fund is based on revenues generated by our properties, we anticipate that this amount should continue to increase over time. We recover most of this expense from our customers. Many states also are moving forward to develop state universal service fund programs. A number of these state funds require contributions, varying greatly from state to state, from commercial mobile radio service providers. If these programs expand they will impose a correspondingly growing expense on our business.

The FCC has adopted rules regulating the use of telephone numbers by wireless and other providers as part of an effort to achieve more efficient number utilization. Wireless carriers were required to participate in this “number pooling”, beginning in November 2002.

On November 24, 2003, the FCC’s rules on wireless local number portability became operative, enabling wireless customers to keep their wireless number when switching to another carrier. These rules require wireless carriers to offer number portability to their customers in the top 100 MSAs now and to all other customers no later than May 24, 2004. These rules will likely increase competition, costs and customer churn.

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The FCC has adopted rules requiring wireless providers to provide functions to facilitate electronic surveillance by law enforcement officials pursuant to the Communications Assistance for Law Enforcement Act of 1995. These obligations are likely to result in significant costs to us for the purchase, installation and maintenance of network software and other equipment needed.

The Communications Act and the FCC’s rules grant various rights and impose various obligations on commercial mobile radio service providers when they interconnect with the facilities of local exchange carriers. Generally, commercial mobile radio service providers are entitled to “reciprocal compensation” in connection with the termination of wireline-originated local traffic, in which they are entitled to collect the same charges for terminating wireline-to-wireless local traffic on their system similar to the charges that the local exchange carriers levy for terminating wireless-to-wireline local calls. Interconnection agreements are typically negotiated by carriers, but in the event of a dispute, state public utility commissions, courts and the FCC all have a role in enforcing the interconnection provisions of the Communications Act. Although we have interconnection agreements in place with the major local exchange carriers in virtually all of our service areas, those agreements are subject to modification, expiration or termination in accordance with their terms. Moreover, we are negotiating and must continue to negotiate interconnection agreements with a number of independent telephone companies in our service areas. Until these agreements are concluded, we must accrue for contractual liabilities associated with the resulting unpaid invoices from those companies. Additionally, as we expand our coverage footprint, we will be required to negotiate interconnection arrangements with other wireline carriers.

The FCC has reallocated 30 MHz of spectrum from the 2 gigahertz (GHz) Mobile Satellite Service or MSS for fixed and mobile services. The FCC now proposes to combine part of the 1990-2000 MHz portion of that spectrum, which is adjacent to the upper limit of the base-to-mobile portion of the PCS C Block, with part of the currently unlicensed PCS spectrum at 1910-1920 MHz, which is adjacent to the upper limit of the mobile-to-base portion of the PCS C Block, to create a new PCS “G” Block. If adopted by the FCC, the new PCS “G” Block could be licensed to other wireless competitors. One plan would grant the PCS “G” block to Nextel in return for it relinquishing certain of its spectrum in the 700/800/900 MHz bands to alleviate public safety interference concerns. Another plan would grant the spectrum in specific locations to Multipoint Distribution Service licensees who are being displaced by the FCC to make room for new Advanced Wireless Service spectrum allocations in the 2 GHz band. Other possible allocations, including the auctioning of that paired spectrum, may be considered by the FCC in its decision making process.

The FCC has also decided to allow MSS licensees in three separate MSS bands to add an ancillary terrestrial component to their existing or proposed mobile satellite offering. The FCC has conditioned the deployment of the terrestrial offering such that it has to be integrated with the satellite offering of a licensee. In addition, satellites must be launched and operational before the terrestrial service can be initiated. It is likely that the satellite proponents will ask the FCC to minimize or eliminate these conditions which could permit them to forego their satellite service in favor of deploying a terrestrial network and offering service in direct competition with our cellular and PCS services.

State Regulation and Local Approvals. With the rapid growth and penetration of wireless services has come a commensurate surge of interest on the part of state legislatures and state public utility commissions and local governmental authorities in regulating our industry. This interest has taken the form of efforts to regulate customer billing, termination of service arrangements, advertising, filing of “informational” tariffs, certification of operation, use of handsets when driving, service quality, sales practices, and many other areas. We anticipate that this trend will continue. It will require us to devote legal and other resources to working with the states to respond to their concerns while minimizing any new regulation that could increase our costs of doing business.

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While the Communications Act generally preempts state and local governments from regulating entry of, or the rates charged by, wireless carriers, it also permits a state to petition the FCC to allow it to impose commercial mobile radio service rate regulation when market conditions fail adequately to protect customers and such service is a replacement for a substantial portion of the telephone wireline exchange service within a state. No state currently has such a petition on file. In addition, the Communications Act does not expressly preempt the states from regulating the “terms and conditions” of wireless service.

Several states have invoked this “terms and conditions” authority to impose or propose various consumer protection regulations on the wireless industry. California’s proposed rules are potentially quite costly. States also may impose their own universal service support requirements on wireless and other communications carriers, similar to the requirements that have been established by the FCC. At the local level, wireless facilities typically are subject to zoning and land use regulation. Neither local nor state governments may categorically prohibit the construction of wireless facilities in any community or take actions, such as indefinite moratoria, which have the effect of prohibiting construction. Nonetheless, securing state and local government approvals for new tower sites has been and is likely to continue to be difficult, lengthy and costly.

In addition, state commissions have become increasingly aggressive in their efforts to conserve telephone numbering resources. These efforts may impact wireless service providers disproportionately by imposing additional costs or limiting access to numbering resources. Examples of state conservation methods include number pooling, number rationing and code sharing. In many markets, the supply of new numbers is inadequate to meet growing customer demands, but states have been and continue to be reluctant to deploy new area codes.

Further, states have become more active in imposing new taxes on wireless carriers, such as gross receipts taxes, and fees for items such as the use of public rights of way. These taxes and fees are generally passed through to our customers and result in higher costs to our customers.

Factors Relating to Our Business

Substantial competition in all aspects of our business could continue to cause reduced pricing and have adverse effects on our profit margins. There is substantial and increasing competition in all aspects of the wireless communications industry. We expect this to continue even after our planned acquisition of AT&T Wireless. Competition continues to intensify as wireless carriers include more equipment discounts and bundled services in their offerings, including more minutes and free long distance and roaming services. This contributes to downward pressure on revenue growth and profit margins, and we expect this trend to continue.

Our competitors are principally five other national carriers doing business as Verizon Wireless, AT&T Wireless (until the acquisition is consummated), Sprint PCS, Nextel Communications and T-Mobile, respectively, and a large number of regional providers of cellular, PCS and other wireless communications services, resellers and wireline telephone service providers. NextWave holds a substantial number of radio spectrum licenses to provide PCS service, and it may sell the licenses to our competitors, form ventures and/or construct wireless data networks, which would increase competition for wireless data customers.

FCC regulations and government policy in general promote robust competition, and new rules or changes to existing rules, such as rules providing for spectrum leasing and requiring wireless local number portability for customers changing wireless local carriers, could increase this trend and result in higher churn and lower margins.

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Many of our competitors have substantial financial, technical, marketing, distribution and other resources. As a response to the intensifying competition, the need for cost reduction and the requirements for additional radio spectrum, we believe that the industry may consolidate to some extent in the next several years. This may produce larger and more formidable competitors with greater financial ability to continue to reduce prices to increase their customer base. As a result, our market share and profit margins may decrease.

New wireless data technologies, such as “Wi-Fi”, are being developed and deployed by competitors, which may make our wireless data offerings less attractive.

If we do not successfully complete the acquisition of AT&T Wireless, we will miss an opportunity to achieve significant growth in the near term. We agreed to acquire AT&T Wireless for a number of reasons, including the following:

•  AT&T Wireless fills in our spectrum and network footprints by covering areas where we do not have licenses or network infrastructure;
 
•  AT&T Wireless adds depth to our spectrum position, enhancing our ability to offer future high-speed data services and reduce capital expenditures;
 
•  AT&T Wireless’ customer base, which has a stronger business customer component than ours, adds a complementary customer mix to our customer base;
 
•  AT&T Wireless’ average revenue per user, or “ARPU”, is higher than our customers’ ARPU;
 
•  AT&T Wireless gives us added size and scale to compete more effectively in the industry and to procure more significant cost economies from vendors; and
 
•  the merger will reduce our incollect roaming costs that we incur because of our broader post-acquisition footprint.

While we believe we have the ability to compete vigorously in the marketplace now, we believe that we must grow, either internally or through acquisition, to achieve our goal of becoming the pre-eminent wireless carrier. Failure to consummate the AT&T Wireless acquisition would place additional challenges on us to reach this position through internal growth or other acquisitions. This result would be exacerbated by the combination of other of the major wireless competitors.

While there are risks in not closing the acquisition of AT&T Wireless, the consummation of the transaction poses significant challenges and risks. As a result of our acquisition agreement and efforts to close the transaction, our business could suffer over the near term as a result of factors, including:

•  customer churn could increase if customers experience or anticipate service deterioration arising from delayed or ineffective merger integration;
 
•  competition could increase as other carriers focus more on emphasizing and exaggerating potential service degradation;
 
•  required changes in the business to achieve regulatory approval for the acquisition could hinder our growth; and
 
•  although we expect to achieve significant capital and operating cost synergies after the next several years, the implementation of integration efforts, transaction-related costs and possible continued deterioration of AT&T Wireless’ operating results will initially reduce our operating performance and margins.

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We will not control the operations of AT&T Wireless prior to closing. Therefore, we cannot implement policies to improve its operating performance. If its management fails to execute its strategies and policies to optimize the value of its business, we could acquire a company with unsatisfactory performance and growth prospects.

Delays in closing the acquisition of AT&T Wireless would prevent us from owning it and implementing our policies and integration initiatives. Such delays could make the integration efforts more challenging, prolong the period before we begin realizing cost synergies from the combination of the two companies, increase our operating costs, increase customer churn, lower the value of the combined companies and, depending on the severity of the delays, could jeopardize the acquisition.

Factors that could delay the closing of the acquisition include:

•  prolonged proceedings before the FCC pertaining to license transfers or before the U.S. Department of Justice pertaining to anti-trust clearance; and
 
•  litigation challenging the acquisition agreement.

Because we cannot control the policies, strategies and operations of AT&T Wireless until the closing of the transaction, we are unable to take action to address previously disclosed problems at AT&T Wireless or otherwise maximize the value of the business that we will acquire. If the management of AT&T Wireless is not successful in meeting its own operational challenges, its customer growth and financial results could suffer and our ability to achieve cost reductions, efficiently integrate the two businesses and restore customer and financial growth after the closing could be significantly jeopardized. Actual or perceived operational problems at AT&T Wireless and adverse publicity about the timing of and issues pertaining to the acquisition could result in increased customer churn and decreased customer additions to both businesses.

Two other national wireless competitors could enter into an agreement to combine their operations, and if our regulatory approval process is significantly extended, circumstances could arise that could result in the FCC and the U.S. Department of Justice approving that transaction before reaching a decision with respect to ours. If that occurs, there would be a heightened risk that those regulatory authorities might disapprove our acquisition of AT&T Wireless.

In order to obtain regulatory consents to consummate the acquisition of AT&T Wireless, we and/or AT&T Wireless may be required to make divestures of assets or take other actions that would diminish the value of the acquisition to us. In general, we can terminate the merger agreement only for misrepresentations, breaches and developments prior to the closing that are material and adverse. We are excused from taking actions to satisfy regulatory conditions only if the aggregate adverse effects on us, SBC and BellSouth would be substantial.

There is no assurance we would be able to obtain what we consider fair value for any required divestitures. Consequently, we could be required to close the transaction and acquire a substantially less valuable AT&T Wireless than currently exits.

Furthermore, adverse effects on SBC and BellSouth are included in the calculation of net adverse effects. As a result, SBC and BellSouth could require us to terminate the acquisition even if there is no devaluation of the acquisition to us if they were required to take certain actions adverse to their own interests as a condition of regulatory approval.

Acquisitions, including AT&T Wireless, could be costly and time consuming to integrate. One element of our strategy is to expand the geographic coverage of our network, which we could achieve by obtaining

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access to additional spectrum through acquiring wireless carriers or forming joint ventures or alliances with the existing businesses of other wireless providers. Integrating existing operations that we could acquire into our own operations may be difficult, time consuming and costly.

The challenges to integrate AT&T Wireless into us include:

•  demonstrating to customers that the transaction will not result in adverse changes in client service standards or business focus;
 
•  integration and rationalization of separate analog, TDMA and GSM network systems;
 
•  consolidating and rationalizing corporate information technology (IT) and administrative infrastructures;
 
•  combining product offerings;
 
•  coordinating sales and marketing efforts to communicate our capabilities effectively;
 
•  preserving distribution, marketing or other important relationships and resolving potential conflicts that may arise;
 
•  coordinating and rationalizing research and development activities to enhance introduction of new products and technologies with reduced cost;
 
•  minimizing the diversion of management attention from ongoing business concerns;
 
•  persuading employees that business cultures are compatible, maintaining employee morale and retaining key employees; and

If we do not successfully address these integration challenges in a timely manner, we may not realize the anticipated benefits or synergies of the transaction to the extent, or in the timeframe, anticipated. The size and scale of the proposed merger with AT&T Wireless increase both the scope and consequences of ongoing integration risks.

Our initiatives to migrate customers to a new technology could result in heightened customer churn and lower profits. Our networks currently utilize two distinct digital voice technologies — GSM and TDMA. In order to adopt a single standard across our networks, we are concluding the process of adding GSM technology to all of our networks. GSM is the predominant global standard and offers substantial cost efficiencies to us and our customers. As we encourage customers to migrate from TDMA to GSM service, they may perceive shortcomings in the coverage and quality of GSM service, compared to TDMA service, which could cause them to switch from our service to the offerings of a competitor.

As we dedicate more resources to new GSM voice technology, our TDMA offerings could become less attractive, resulting in a loss of customers and reduced profitability. We expect to continue operating our TDMA network for the foreseeable future as customers migrate to GSM technology. Due to our decision to overlay our TDMA network with GSM technology and to encourage our customers to migrate to GSM service, we expect not to upgrade our TDMA network with the same robust features that we will provide on our GSM networks. Furthermore, as we dedicate more spectrum to GSM, our remaining TDMA customers may experience difficulties in using our services. In addition, as we introduce and market GSM service, we may price GSM products and services at more attractive levels than TDMA products and services to encourage our customers to migrate to GSM service. Manufacturers are not expected to produce innovative TDMA handsets with the same multiplicity of features and attractiveness of design as handsets using other technologies. All of these potential developments could drive our TDMA customers to our competitors instead of to our GSM offerings and thereby reduce our market share and profitability.

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If we fail to obtain access to additional spectrum, we may not be able to expand the geographic reach of Cingular-branded services, increase our customer base in areas we currently serve or meet the anticipated demand for new services. We expect to acquire substantial spectrum from the pending NextWave license and AT&T Wireless acquisitions in 2004. Over the long term, however, we may need more licensed spectrum to support high speed data and other advanced services, expand our geographic reach, to meet an expected increasing volume of customer usage and to increase our customer base. If we cannot obtain access to new markets through auctions, spectrum exchanges or leasing, acquisitions, joint ventures or other means, it could impede our growth. In addition, an inability to add spectrum in some of our existing markets could adversely affect the quality of service if the demand for wireless communications continues to increase at a rapid rate. There are no spectrum auctions scheduled in the near future at which we could obtain needed spectrum, and there can be no assurance that we will be able to obtain access to additional spectrum from secondary market sources on acceptable terms. Therefore, we cannot give assurance that we will be successful in obtaining access to the additional spectrum needed to expand our geographic coverage and meet the growing needs of our business.

If our roaming partners do not complete their GSM networks and remain viable operators, our ability to provide national GSM coverage could be jeopardized. As a result, our customers might conclude that our service is less satisfactory than that of a competitor with a more substantial national footprint, and our growth, churn rate and profit margin might suffer.

Even upon the completion of our GSM/GPRS overlay project, we will have to rely on roaming agreements with other GSM/GPRS service providers to provide national GSM/GPRS coverage. We have negotiated agreements with these carriers to provide roaming services in certain geographic areas at rates substantially more favorable than TDMA network roaming rates. Some of these carriers are still building their GSM/GPRS networks. If those carriers are delayed or prevented from completing their GSM/GPRS networks, or if they cease doing business, our GSM/GPRS customers might be unable to roam on those networks when out of their home service areas, or they may have to roam on carriers’ networks with which we have less favorable roaming agreements.

We are committing a substantial amount of capital to upgrade our wireless voice networks to offer advanced data services, but there can be no assurance that widespread demand for these services will develop. While demand for our advanced data services is growing, it is currently a small portion of our revenues. Continued growth in wireless data services is dependent on increased development and availability of popular applications and improved availability of handsets and other wireless devices with features, functionality and pricing desired by customers. EDGE is a new technology and a limited number of applications and devices designed to operate on this technology are currently available. If applications and devices are not developed and become commercially accepted, our revenues and competitive position would be materially and adversely affected. We cannot give assurance that in the near future there will be widespread demand for advanced wireless data services or that data revenues will constitute a significant portion of our total revenues, nor can we provide assurance that this demand will develop at a level that will allow us to earn a reasonable return on our investment.

Our choice for the next generation of technology, EDGE, is a new technology and could quickly become obsolete and/or not commercially accepted, which could result in a delay in offering new services. New high-speed 3G wireless services are now being offered by wireless carriers in the United States. We expect that 3G services will combine the attributes of faster speed, greater data capability, better portability and greater functionality than services provided over existing second-generation networks. We have chosen EDGE as our 3G technology, but we believe that there will be multiple, competing technological standards, several options within each standard, vendor-proprietary variations and rapid technological innovation. Other technologies could emerge as preferred data networks for some services and, if those

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technologies are widely accepted, we may miss the opportunity to offer those services because of our technology choice. There is a risk that EDGE could be inadequate or become obsolete. In addition, EDGE could receive less active support from equipment vendors and/or be less commercially accepted by users, which could be detrimental to our competitive position, financial condition and results of operations.

Because some of our operations are conducted through joint ventures with other companies, we cannot control all aspects of our business, and disputes with our partners may damage our reputation as a nationwide brand. Despite our commitments to provide substantial funds to joint venture affiliates, we do not have control of their managements. In addition, we have ventures to share infrastructure and save us a large portion of the cost of building and maintaining our own network in certain areas where we own wireless licenses, such as in California, Nevada and the New York metropolitan area. If we experience disagreements with our partners, it could adversely affect our ability to serve our customers in those areas and profitably grow our business.

Our network sharing ventures may impede our ability to compete effectively in the covered territories. We share network infrastructure in some areas, e.g., California, Nevada and New York City, with joint venture partners. As a result, both our customers and our partners’ customers use the same network infrastructure in these areas. If the combined demand for service through the joint ventures far exceeds the network capacity, temporary degradation of service and loss of customers may result until capacity is increased.

Our business expansion and network upgrade will require substantial additional capital, and we cannot assure you that we will be able to obtain funding at a satisfactory cost. We will require substantial capital for acquisitions of systems, construction of network infrastructure, concluding our technology migration and upgrade plan, expanding our network capacity, investing in joint venture affiliates and making other capital investments. In addition, we will be required to make distributions to SBC and BellSouth under our limited liability company agreement to cover their tax liabilities that may arise from their interests in us to the extent that we generate taxable income, which will deplete cash available for these projects.

The actual amount of capital required may vary materially from our current estimates. Unforeseen delays, cost overruns, regulatory changes, engineering and technological changes, legal costs and judgments and other factors may also require additional funds.

As a result of the cash needs described above, we may need to incur significant amounts of additional debt or to raise equity. Incurring substantial amounts of additional debt, failing to improve our operating performance and perceived uncertainties surrounding the acquisition, SBC and BellSouth financing and our integration of AT&T Wireless and the NextWave licenses could result in negative actions by the major credit rating agencies, which could increase our cost of borrowing. In addition, we may not be able to obtain debt or equity funds on satisfactory terms from the capital markets, from other sources or from SBC or BellSouth, neither of which has any obligation to provide us additional funding, besides the agreement to provide funding for the AT&T Wireless acquisition. The failure to obtain financing could result in, among other things:

•  delay or abandonment of our business development and expansion or network upgrade plans; or
 
•  failure to meet regulatory network system build requirements or to continue to provide service in all or portions of some of our markets, any of which could result in slower business growth and loss of competitive position.

Failure of certain of our key suppliers to deliver equipment and services could adversely affect our ability to operate our business. We depend upon various key suppliers to provide us with equipment and services that we need to continue our network upgrade and operate our business. Some of these suppliers have

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experienced financial and business difficulties, and if these or any of our other suppliers fail to provide equipment or service to us on a timely basis, we may be unable to provide services to our customers in a competitive manner. If we are unable to obtain the hardware and software we need to construct licensed territories, our licenses may be at risk of termination for failure to satisfy the requirements contained in our FCC licenses regarding the construction of our networks.

We have an agreement with Research in Motion Limited, or “RIM”, to purchase Blackberry™ hand-held devices for use in our data communications business. A trial court has held that, in litigation against RIM by various patent holders, these devices infringe several patents. If we cannot obtain these or comparable devices from RIM on a reasonable financial basis, it could impair our profit margins and disrupt our wireless data business.

The potential impact of unionization and organizing activities, which we expect to increase, could adversely affect our costs and results of operations. All of our businesses, excluding ventures, are subject to various agreements with the Communications Workers of America (CWA). These agreements contain provisions requiring us to maintain neutrality if the union conducts an organizing campaign and requiring us to allow employees to vote to unionize by presenting authorization cards rather than participating in a more difficult secret ballot process conducted by the National Labor Relations Board. In an effort to gain recognition in the areas not already covered by a contract, union activity may increase. We believe that no other national wireless provider currently employs a unionized workforce to any significant extent. We have major labor agreements with the CWA covering approximately 8,000 employees that expire in early 2004. At the expiration of the agreements, a work stoppage could prevent us from providing service to our customers in the areas covered by the expired contracts and possibly result in customer loss and a reduction in revenue.

Factors Relating to Our Industry

We may be adversely affected by the significant changes that we expect the wireless communications industry to undergo. The wireless communications industry is experiencing significant changes. These include evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new services, evolution to 3G standards, changes in end-user needs and preferences and high costs and customer churn due to implementation of wireless local number portability. Also, alternative technologies are developing for the provision of services to customers that may provide wireless communications services or alternative services superior to those available from us. Accordingly, there can be no assurance that technological changes will not materially adversely affect us.

Our industry will continue to be adversely affected if the economic slowdown persists. While the economies of the United States and many other nations are improving, they continue suffering from sluggish employment growth. There can be no assurance that this will not continue to adversely affect the industry.

Our operations are subject to substantial government regulation, which could significantly increase our costs and increase customer churn. Many aspects of our business are regulated to varying degrees by the FCC and some state and local regulatory agencies. The adoption or change of regulations could significantly increase our costs and increase customer churn. For example, the FCC, together with the Federal Aviation Administration, regulates tower marking and lighting. In addition, the FCC and the states are increasingly looking to the wireless industry to fund various initiatives, including universal service programs, local telephone number portability, services for the hearing-impaired and emergency 911 networks. Furthermore, many states have imposed significant taxes on the wireless industry and are regulating customer billing matters. We are also subject to environmental protection and health and safety regulation, including limits on radio frequency energy from wireless handsets and towers. The failure to

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comply with any of these regulations, even if hardware and software solutions are not readily available from manufacturers and suppliers, can result in significant penalties.

The FCCs local number portability regulations did not include specific rules governing the process, and the wireless carriers have had to negotiate inter-carrier agreements with each other addressing procedures for transferring numbers when customers change carriers. Because the software and automated processes are new and the procedures are non-standardized throughout the industry there have been and may continue to be delays or malfunctions in the process of transferring numbers when customers change carriers. This may continue to exacerbate churn and expenses and slow customer growth. It has and could continue to reduce revenues, since carriers are not allowed to condition number portability on bringing delinquent accounts current.

A high rate of customer churn would negatively impact our business. Wireless communications services providers, including us, experience varying rates of customer churn. We believe that customers change wireless providers for the following reasons: call quality, service offerings, price, coverage area and customer service. A high rate of churn would adversely affect our results of operations because of loss of revenue and because the cost of adding a new customer, which generally includes a commission expense and/or a handset subsidy, is a significant factor in income and profitability for participants in the wireless industry. We believe industry-wide churn has increased slightly with the implementation of wireless local number portability. Churn from this new regulatory initiative could increase substantially over time as service contracts expire and customers become more familiar and comfortable with the processes involved in changing carriers. Carriers are not allowed to condition number portability on bringing delinquent accounts current. We expect to incur significant expenses to improve customer retention and reduce churn by subsidizing product upgrades and/or reducing pricing to match competitors’ initiatives, upgrading our network and providing improved customer service.

Concern about alleged health risks relating to radio frequency energy may harm our prospects. A number of studies have been conducted to examine the health effects of wireless phone use, and some persons have construed some of the studies as indicating that wireless phone use causes adverse health effects or that wireless phones’ safety has not been established. Some media reports have also suggested that radio frequency energy from wireless handsets, accessories and cell sites may be associated with various health problems, including cancer. In addition, lawsuits have been filed against us and other participants in the wireless industry alleging actual and potential adverse health consequences as a result of wireless phone usage. Some of these lawsuits allege other related claims, including negligence, strict liability, conspiracy and the misrepresentation of or failure to disclose these alleged health risks. If consumers’ health concerns over radio frequency energy increase, they may be discouraged from using wireless handsets, and regulators may impose restrictions on the location and operation of cell sites. These concerns could have an adverse effect on the wireless communications industry and expose wireless providers to further litigation, which, even if not successful, can be costly to defend. Additional studies of radio frequency energy are ongoing and new studies are anticipated. Any negative findings in these studies could increase the risks described above. In addition, an adverse outcome or settlement in the existing and/or any further litigation against us or any other provider of wireless services could have a material adverse effect on our results of operations, financial condition and/or prospects.

State and local legislation regarding wireless phone use while driving may adversely affect us. Many states and municipalities have proposed, and several, including New York State, New Jersey and the District of Columbia have enacted, legislation that requires the use of a hands-free accessory while driving an automobile, which may discourage use and could decrease our revenues from customers who now use their phones when driving. Such legislation, if adopted and enforced throughout the areas we serve, may reduce, in the short term, sales, usage and revenues. In addition, allegations that using wireless phones

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while driving may impair drivers’ attention may lead to potential litigation relating to traffic accidents and further governmental regulation, which could adversely affect our results of operations.

A number of our FCC licenses to provide wireless services are subject to renewal and potential revocation in the event that we violate applicable laws. A number of our licenses are subject to renewal, generally some each year, upon the expiration of the 10-year period for which they are granted, and we cannot assure you that the FCC will renew them. In addition, FCC rules require all wireless licensees to meet specified network system build requirements, and failure to comply with these and other requirements in a given license area could result in termination or cancellation of our license for that license area or the imposition of fines by the FCC. If any of our licenses are forfeited or revoked, we would not be able to provide service in that area unless we contract to resell wireless services of another provider, utilize roaming agreements or lease spectrum from other carriers.

Equipment failure and disasters may adversely affect our operations. A major equipment failure or a disaster that affects our wireless telephone switching offices, microwave links, third-party owned local and long distance networks on which we rely, our cell sites or other equipment or the networks of other providers on which our customers roam could have a material adverse effect on our operations. While we have insurance coverage for some of these events, our inability to operate our wireless system, even for a limited time period, may result in a loss of customers or impair our ability to attract new customers, which would have a material adverse effect on our business, results of operations and financial condition.

The restricted supply of new telephone numbers could limit or delay our growth. The supply of new telephone numbers in some areas of the United States is near exhaustion due, in large part, to competitive wireline carriers having obtained large blocks of numbers and rapidly growing customer demand for additional numbers for wireless handsets and pagers as well as for second voice lines, Internet access and private branch exchange systems, or private telephone networks used within enterprises. Many states have imposed restrictions on carriers’ access to additional numbers, creating shortages and delay in obtaining needed number resources. If we are unable to obtain a sufficient supply of new telephone numbers, our ability to increase our customer base would be adversely affected.

Factors Relating to Our Arrangements with SBC and BellSouth

SBC and BellSouth may transfer their controlling interests in us and cease to be subject to certain obligations that benefit us, including exclusivity provisions. Under our limited liability company agreement and the stockholders’ agreement among our manager, SBC and BellSouth, each of SBC and BellSouth will cease to be subject to many of the restrictions imposed on it in the limited liability company agreement that benefit and protect us, such as restrictions on competition and acquisitions of other wireless businesses, once its ownership interest falls below 10%. Although both SBC and BellSouth are subject to a number of transfer restrictions, each of them may, under the circumstances described in our limited liability company agreement, sell its interests in us and its common stock in our manager to third parties, subject to a right of first refusal of the respective other party, or spin-off or split-off its interests in us or its stock in our manager to its shareholders. In addition, we may lose any competitive advantage we currently gain from our agency relationships and service bundling offerings with SBC and BellSouth.

SBC and BellSouth may compete with us in the areas of fixed wireless voice and data services and may resell our services under their own brand names inside their service territories after specified future dates. SBC and BellSouth have agreed in our limited liability company agreement to engage in the provision of U.S. mobile wireless voice and data services only through us and our subsidiaries, but the agreement is subject to significant exceptions, including an exception that permits them to market and sell fixed wireless

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Item 1. Business

voice and fixed wireless data services and to market and sell wireless services in areas in which we, our subsidiaries or Salmon are not providing services pursuant to FCC licenses. SBC and BellSouth may also amend the agreement to provide that they can engage in other competitive activities, such as “Wi-Fi” wireless data service. SBC and BellSouth are permitted to resell our services under their own brand names outside their service territories. In addition, if BellSouth or SBC terminates its wireless agency agreement, it may resell our wireless services in its respective service territories.

The arrangements that we have with SBC and BellSouth were established by SBC and BellSouth, and may not be as advantageous as similar agreements negotiated with unaffiliated third parties. We have entered into various agreements with SBC and BellSouth and their respective affiliates that are material to the conduct of our business, and we may enter into additional agreements with them in the future. For example, we have entered into agency agreements with SBC and BellSouth that include pricing and other terms. Although we believe that these agreements, as a whole, are as advantageous to us as those that could otherwise be obtained, we have no independent verification that these agreements are as advantageous as similar agreements negotiated with unaffiliated third parties.

Under the terms of agreements with SBC and BellSouth, the scope of our potential business is limited, which could hurt the growth of our business. We have agreed with SBC and BellSouth that, without their consent, we may not enter into any business other than the U.S. mobile wireless voice and data business. These restrictions could limit our ability to grow our business through initiatives such as expansion into international markets and acquisitions of wireless providers that are also engaged in other businesses outside of our permitted activities. These restrictions may also preclude us from pursuing other attractive related or unrelated business opportunities.

SBC and BellSouth control all important decisions affecting our governance and our operations and may fail to agree on important matters. Under the terms of our limited liability company agreement, our management is exclusively vested in our manager. Both the board of directors and the strategic review committee of our manager are comprised of four directors: two elected by SBC and two elected by BellSouth. Substantially all important decisions of our manager must be approved by its strategic review committee. It is possible that the committee may be deadlocked regarding matters that are very important to us. Although deadlocks are to be resolved by the chief executive officers of SBC and BellSouth, if they cannot agree, inaction or disputes may result, which could, among other things, result in us losing important opportunities.

SBC and BellSouth may have conflicts of interest with us. Conflicts of interest may arise between us and SBC and BellSouth when we are faced with decisions that could have different implications for us and SBC or BellSouth, including technology decisions, financial budgets, repayment of member loans from SBC and BellSouth, the payment of distributions by us and other matters. They may also take action that favors their businesses and the interests of their shareholders over our wireless business and the interests of our debt holders. Because SBC and BellSouth control us, conflicts of interest could be resolved in a manner adverse to us or our debt holders. Therefore, we may not always be able to use our resources in the best interest of advancing our business.

 
Item 2. Properties

We lease our corporate headquarters buildings in Atlanta, Georgia. We also maintain administrative and sales offices, customer care call centers, retail sales locations, switching centers, cell tower sites and data centers throughout the United States. Most locations are generally leased to provide maximum flexibility.

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Item 2. Properties

Switching centers and data centers are frequently owned due to their critical role in our operations and high set-up and relocation costs.

As of December 31, 2003, we operated a direct distribution channel comprised of approximately 1,700 company-operated stores and kiosks. We have one central handset and accessory distribution center located in Memphis, Tennessee. Network properties included 200 switches and 21,700 cell sites.

We believe that our facilities are in good operating condition and are currently suitable and adequate for our business operations.

 
Item 3. Legal Proceedings

In September 2003, an Administrative Law Judge of the California Public Utilities Commission issued a Presiding Officer’s Decision that recommended a fine of approximately $12 million, plus potentially significant restitution to customers, against Cingular for alleged violations of California’s consumer protection laws. Cingular has appealed that Decision to the full Commission.

We are a party to various legal actions and regulatory proceedings relating to matters that are incidental to the conduct of our business. These involve disputes with and inquiries by private parties and governmental entities over patent infringement, agency and reseller relationships, unfair competition, marketing, advertising, promotions, sales, billing and collection practices and potential health effects of wireless phones.

We are also subject to claims incidental to the normal conduct of our business, including actions by customers, vendors and employees and former employees. We believe that these matters will not be material to our financial position, results of operations or cash flows.

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

None

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Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

There is no established trading market for our ownership interests. SBC owns approximately 60% of our ownership interests and BellSouth owns approximately 40% of our ownership interests. Cingular Wireless Corporation, our manager, owns the remaining 0.0000001% ownership interest in us.

We are required to make periodic distributions to our members on a pro rata basis in accordance with each member’s ownership interest in amounts sufficient to permit members to pay the tax liabilities resulting from allocations of income tax items from us. During 2001, we made distributions to members of $47 related to 2000 tax liabilities and $592 related to 2001 tax liabilities. Since we did not generate taxable income to the members in 2002 and 2003, we made no distributions in either year.

Additionally, we are required to distribute to our members 50% of our “excess cash”, as defined in our operating agreement, at the end of each fiscal year. Excess cash consists of funds generated from our operations, less forecasted cash needs for the upcoming fiscal year and distributions made to the members for their tax payments. In all years presented, we were not required to make any distributions of excess cash to the members and do not anticipate being required to make any such distributions in 2004.

 
Item 6. Selected Financial Data

The following selected financial data should be read in conjunction with the Cingular Wireless LLC consolidated financial statements and the notes thereto contained herein in “Item 8. Financial Statements and Supplemental Data”, the information contained herein in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the information contained herein in “Item 1. Business — Factors Relating to our Business, — Factors Relating to our Industry and — Factors Relating to Our Arrangements with SBC and BellSouth”. Historical results are not necessarily indicative of future results.

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Item 6. Selected Financial Data

Selected Historical Financial Information — Cingular Wireless LLC

The following table presents selected historical consolidated financial and operating data of Cingular Wireless LLC from the date of its formation, April 24, 2000. The financial data presented in this table is derived from the historical financial statements and related notes, which are included in this document. The results for the period April 24, 2000 to December 31, 2000 presented below include the contributed SBC and BellSouth Domestic Wireless Groups’ wireless operations from October 2, 2000; there were no meaningful results of operations of Cingular Wireless LLC prior to that date.

To be consistent with emerging industry practices, the historical Cingular Wireless LLC consolidated statements of income for all periods presented have been reclassified to reflect billings to our customers for the Universal Service Fund (USF) and other regulatory fees as operating revenues and the costs related to payments into the associated regulatory funds as operating expenses. See also “Operating Expenses — Cost of Services” below. Operating income and net income for all periods have been unaffected.

                                 
Period from
April 24, 2000 Year Ended December 31,
to December 31,
2000 2001 2002 2003




(Dollars in millions, except for operating data)
Statements of Income Data
                               
Total operating revenues
  $ 3,085     $ 14,268     $ 14,903     $ 15,483  
Total operating expenses(1)
    2,704       11,720       12,382       13,194  
     
     
     
     
 
Operating income
    381       2,548       2,521       2,289  
Income before provision for income taxes and cumulative effect of accounting changes
    128       1,700       1,251       1,050  
Net income(2)
    127       1,692       1,207       1,022  
Balance Sheet Data
                               
Total assets
  $ 17,981     $ 22,530     $ 24,122     $ 25,526  
Total long-term debt
    11,280       12,466       12,546       12,592  
Cash Flow Data
                               
Net cash provided by operating activities
  $ 1,062     $ 3,665     $ 3,592     $ 3,686  
Net cash used in investing activities
    (1,218 )     (3,945 )     (3,585 )     (3,368 )
Net cash provided by financing activities
    282       721       334       (87 )
Capital expenditures(3)
    959       3,156       3,085       2,734  
Operating Data
                               
Licensed cellular/PCS POPs (in millions) (end of period)(4)
    189       219       219       236  
Total cellular/PCS customers (in millions) (end of period)(5)
    18.6       21.6       21.9       24.0  
Net additions, cellular/PCS customers (in millions)
    0.7       1.9       0.4       2.1  
Cellular/PCS customer churn(6)
    2.8 %     2.9 %     2.8 %     2.7 %
Average cellular/PCS revenue per user (ARPU)(7)
  $ 51.69     $ 52.91     $ 52.14     $ 51.32  
Ratio of earnings to fixed charges(8)
    1.49       2.73       2.12       2.00  

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Item 6. Selected Financial Data


(1)  Subsequent to November 2001, depreciation expense related to the assets transferred to GSMF is classified as a component of equity in net loss of affiliates and is no longer included in operating expenses.
 
(2)  For the year ended December 31, 2002, net income includes a cumulative effect of accounting change, net of tax, of $32 upon the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. See Note 4 to the Cingular Wireless LLC audited financial statements included in Item 8.
 
(3)  Capital expenditures do not include capital expenditures and cash contributions related to our infrastructure venture, GSMF. See Note 5 to the Cingular Wireless LLC audited financial statements included in Item 8.
 
(4)  Licensed POPs refers to the number of people residing in areas where we have licenses to provide cellular or PCS service.
 
(5)  Cellular/PCS customers include customers served through reseller agreements. In 2001, cellular/PCS customers include customers associated with additional wireless businesses subsequently contributed by our members.
 
(6)  Cellular/PCS customer churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period.
 
(7)  ARPU is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. This metric is used to compare the recurring revenue amounts generated on our network to prior periods and internal targets. We believe that this metric provides useful information concerning the performance of our initiatives to attract and retain high value customers and the use of our network.
 
(8)  Earnings consist of income before income taxes, extraordinary gain (loss), cumulative effect of accounting changes and fixed charges. Fixed charges include interest expense, capitalized interest and the portion of rent expense representing interest.

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Item 6. Selected Financial Data

Selected Historical Financial Information — SBC Domestic Wireless Group

The following table presents selected historical consolidated financial and operating data of the SBC Domestic Wireless Group. The statements of operations and cash flow data for the year ended December 31, 1999 and the period ended October 2, 2000 are derived from the audited financial statements of the SBC Domestic Wireless Group. We derived the operating data from unaudited financial reports of the SBC Domestic Wireless Group.

The historical financial information includes the results of operations and cash flows for the SBC Domestic Wireless Group for all periods, retroactively restated to reflect the mergers of SBC with the wireless businesses of Pacific Telesis Group, Southern New England Telecommunications Corporation and Ameritech Corporation (Ameritech) as poolings of interests. Historical financial information also includes the results of operations and cash flows for acquisitions from their dates of acquisition and includes the results of operations and cash flows from various disposed assets until their dates of disposition. The revenues and expenses presented below have not been adjusted for the USF and other regulatory fees as previously noted in the historical financial information for Cingular Wireless LLC as such amounts are immaterial.

                 
Year Ended Period Ended
December 31, October 2,
1999 2000


(Dollars in millions, except for
operating data)
Statements of Operations Data
               
Total operating revenues
  $ 7,376     $ 6,100  
Total operating expenses
    6,074       4,812  
     
     
 
Operating income
    1,302       1,288  
Income before provision for income taxes, extraordinary gain and cumulative effect of accounting changes
    929       917  
Net income(1)(2)(3)
  $ 1,921     $ 586  
Cash Flow Data
               
Net cash provided by operating activities(4)
  $ 1,861     $ 620  
Net cash provided by (used in) investing activities
    1,268       (2,528 )
Net cash provided by (used in) financing activities
    (3,083 )     1,965  
Capital expenditures
    988       704  
Operating Data
               
Total cellular/PCS customers (in millions) (end of period)(5)
    11.2       13.2  
Cellular/PCS customer churn(6)
    2.4 %     2.6 %
Average cellular/PCS revenue per user (ARPU)(7)
  $ 50.37     $ 51.23  


(1)  In October 1999, SBC completed the required disposition, as a condition of the Ameritech merger, of 20 Midwestern cellular properties, including the competing cellular licenses in Chicago, Illinois, and St. Louis, Missouri and other markets. The SBC Domestic Wireless Group recorded an extraordinary gain of $1,379 on this sale, net of taxes of $960.
 
(2)  In September 2000, adjustments related to calculations of the 1999 gain on the required disposition of the 20 Midwestern cellular properties following the Ameritech merger referred to in note (1) above resulted in an additional extraordinary gain of $36, net of taxes of $24.

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Item 6. Selected Financial Data

(3)  The SBC Domestic Wireless Group’s results in 1999 include the effect of conforming the adoption date for postretirement accounting between SBC and Ameritech. This change was recorded in the third quarter of 1999, retroactive to January 1, 1999, as a cumulative effect of accounting change of $14, net of taxes.
 
(4)  Net cash provided by operating activities for the period ended October 2, 2000 reflects a tax payment of $1,102 associated with the sale of the 20 Midwestern cellular properties referenced in note (1).
 
(5)  Cellular/PCS customers include customers served through reseller agreements.
 
(6)  Cellular/PCS customer churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period.
 
(7)  Average revenue per user (ARPU) is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. This metric is used to compare the recurring revenue amounts generated on our network to prior periods and internal targets. We believe that this metric provides useful information concerning the performance of our initiatives to attract and retain high value customers and the use of our network.

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Item 6. Selected Financial Data

Selected Historical Financial Information — BellSouth Domestic Wireless Group

The following table presents summary historical consolidated financial and operating data of the BellSouth Domestic Wireless Group. The statements of operations and cash flow data for the year ended December 31, 1999 and the period ended October 2, 2000 are derived from the audited financial statements of the BellSouth Domestic Wireless Group. We derived the operating data from unaudited financial reports of the BellSouth Domestic Wireless Group.

The historical financial information for the BellSouth Domestic Wireless Group includes the results of operations and cash flows for various significant acquisitions from their dates of acquisition and includes the results of operations and cash flows from various disposed assets until their dates of disposition. The revenues and expenses presented below have not been adjusted for the USF and other regulatory fees as previously noted in the historical financial information for Cingular Wireless LLC as such amounts are immaterial.

                 
Period
Year Ended Ended
December 31, October 2,
1999 2000


(Dollars in millions, except
for operating data)
Statements of Operations Data
               
Total operating revenues
  $ 3,573     $ 3,102  
Total operating expenses(1)
    3,680       2,723  
     
     
 
Operating income
    (107 )     379  
Income (loss) before provision for income taxes
    (132 )     194  
Net income
  $ (87 )   $ 114  
Cash Flow Data
               
Net cash provided by operating activities
  $ 545     $ 826  
Net cash used in investing activities
    (322 )     (1,347 )
Net cash provided by (used in) financing activities
    (295 )     553  
Capital expenditures
    590       461  
Other Operating Data
               
Total cellular/PCS customers (in millions) (end of period)(2)
    4.9       5.7  
Cellular/PCS customer churn(3)
    2.9 %     2.5 %
Average cellular/PCS revenue per user (ARPU)(4)
  $ 58.08     $ 58.47  


(1)  Total operating expenses include a provision for asset impairment in 1999. This provision represents non-cash charges associated with disposals of infrastructure equipment in 14 wireless markets in the southeastern United States. This charge of $320 was recorded to adjust these assets to their fair market value, as required under SFAS 121, and was estimated by discounting the expected future cash flows of these assets through the date of disposal. This equipment was replaced with new equipment.
 
(2)  Cellular/PCS customers include customers served through reseller agreements.
 
(3)  Cellular/PCS customer churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period.

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Item 6. Selected Financial Data

(4)  Average revenue per user (ARPU) is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. This metric is used to compare the recurring revenue amounts generated on our network to prior periods and internal targets. We believe that this metric provides useful information concerning the performance of our initiatives to attract and retain high value customers and the use of our network.

 
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

 
Our Business

We earn revenues and generate our primary source of cash through offering a comprehensive variety of high-quality wireless voice and data communications services. Our services are available in a variety of postpaid pricing plans and prepaid service arrangements. Our voice and data offerings are tailored to meet the communications needs of targeted customer segments, including youth, family, active professionals, local and regional businesses and major national corporate accounts. The marketing and distribution plans for our services are further targeted to the specific geographic and demographic characteristics of each of our markets.

We serve approximately 24.8 million voice and data customers, including customers served over our Mobitex network, and are the second-largest provider of wireless voice and data communications services in the United States, based on the number of wireless customers. We have access to licenses to provide cellular or PCS wireless communications services covering an aggregate population of 236 million, or approximately 81% of the U.S. population, including in 45 of the 50 largest U.S. metropolitan areas. We provide cellular or PCS services in 43 of the 50 largest U.S. metropolitan areas.

On February 17, 2004, we entered into an Agreement and Plan of Merger providing for the acquisition by our manager, Cingular Wireless Corporation, of AT&T Wireless Services, Inc. (AT&T Wireless) for an aggregate consideration of approximately $41,000 cash. The closing of the acquisition is expected to occur in late 2004 and is subject to the affirmative vote of AT&T Wireless’ shareholders, FCC, Hart Scott Rodino and other regulatory approvals and other customary closing conditions. On a pro forma basis, the combined company would have had, at December 31, 2003, cellular and PCS spectrum coverage in 49 of the top 50 U.S. markets and operations in 97 of the top 100 U.S. markets (excluding only Richmond, Norfolk and Newport News, VA). Its licenses would encompass a population of 264 million people and its network and operations would encompass a population of 225 million people. Both companies currently operate the same technologies. We plan that the combined company will provide service under the “Cingular” brand name.

 
Industry and Operating Trends

We compete for customers based principally on price, service offerings, call quality, coverage area and customer service. We face substantial and increasing competition in all aspects of our business. Our competitors are principally five national (Verizon Wireless, AT&T Wireless, Sprint PCS, Nextel Communications and T-Mobile) and a large number of regional providers of cellular, PCS and other wireless communications services, resellers and wireline service providers. In addition, we may experience significant competition from companies that provide similar services using other current or future communications technologies and services. Our management focuses on the key wireless industry drivers of customer penetration, ARPU, operating income and reputation within the wireless industry to evaluate our performance.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overall, intense industry competition and market saturation will likely cause the wireless industry’s customer growth rate to moderate in comparison with historical growth rates. While the wireless telecommunications industry does continue to grow, a high degree of competition exists among the six national carriers, their affiliates and smaller regional carriers. This competition and other factors, such as the implementation of wireless local number portability, will continue to put pressure upon pricing, margins and customer churn (See Note 6 to “Selected Historical Financial Information — Cingular Wireless LLC” for a definition of customer churn) as the carriers compete for potential customers. Future carrier revenue growth is highly dependent upon the number of net customer additions a carrier can achieve and the average revenue per user (ARPU) derived from its customers. The effective management of customer churn is also paramount in minimizing customer acquisition costs and maintaining and improving margins.

At the beginning of 2003, we reorganized our marketing and sales operations to more effectively address local market needs. We also increased the emphasis on our affiliation with our members, SBC Communications Inc. (SBC) and BellSouth Corporation (BellSouth), and increased co-branding our services with their offerings in areas where our wireless markets overlap with their wireline markets, thereby increasing our sales channels. As a result of these strategies, in combination with the introduction of a more meaningful brand message, “Cingular Fits You BestSM”, improved execution at the market level and promotion of service offerings such as “Family Talk” plans, we saw the number of our customer additions increase. During 2003, our cellular/PCS net customer additions were the highest since our formation and represent a significant improvement over our 2002 performance.

Our margins in 2003 were lower than the prior year as a result of a number of factors. We had increased operating expenses that were driven by acquisition costs related to higher cellular/PCS gross customer additions and extensive customer retention and customer service initiatives in anticipation of wireless local number portability. Also negatively impacting our margins were increased network system operating costs as a result of ongoing growth in customer usage and incremental costs related to our current network system upgrade. Additionally, as we continued to expand our network and further complete our network system upgrade to add Global System for Mobile Communication (GSM) technology in our Time Division Multiple Access (TDMA) networks, depreciation expense increased as a result of our ongoing capital spending and a reduction in our TDMA asset lives. Partially offsetting these expense increases were modest revenue growth, focused cost control efforts and the positive impacts of prior and ongoing system and process consolidations.

The impacts of competition and wireless service penetration will continue to pressure revenue growth and margins. We expect cost increases to continue due to higher network system usage and redundant expenses related to operating dual networks while migrating our customer base from TDMA to GSM. We also expect higher depreciation expense due to our ongoing capital spending. If we are successful in continuing to grow our customer base, our acquisition costs will increase. We also expect increased costs to maintain and support our existing customer base, including customer care initiatives to improve our level of service and support wireless local number portability. We expect these and other cost increases to be partially offset by ongoing efforts to reduce general and administrative expenses as well as decreased roaming costs as a result of lower negotiated roaming rates with other carriers.

We expect that our costs for 2004 will increase as a result of the preparation to complete the acquisition of AT&T Wireless and that the integration of and accounting for the transaction will result in higher costs for the next several years. Thereafter, we expect cost savings from the elimination of redundant facilities, staff, functions, capital expenditures and other resources.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Wireless local number portability was implemented on November 24, 2003 and, although we are seeing number porting transactions that are significantly less than many predicted, it is still early in the process of implementation. We have already incurred costs related to the preparation for and implementation of wireless local number portability, and we expect customer retention costs, consisting primarily of handset subsidies, selling costs and greater staffing of customer care centers, to be higher during the year following the inception of the new portability mandate. To the extent industry churn remains higher than in the past, we would expect those costs to continue at a significant level.

We face many challenges and opportunities in the future and are focused on the following key initiatives:

•  successfully completing the merger with AT&T Wireless and integrating its business operations;
 
•  growing our customer base profitably by offering wireless voice and data products and rate plans that provide both customer value and favorable economics;
 
•  increasing the capacity, speed and functionality of our network through the completion of our GSM/General Packet Radio Service (GPRS)/Enhanced Data Rates for GSM Evolution (EDGE) network overlay and improving overall network coverage and performance;
 
•  increasing wireless data penetration and usage through the development and promotion of advanced wireless data applications and interfaces;
 
•  improving the Cingular customer experience and our reputation in the industry by focusing on all customer-impacting aspects of our business including network performance, sales, billing and customer service;
 
•  maintaining effective cost controls by continually evaluating the cost structure of our business and driving efficiencies through our large size and national scope; and
 
•  continuing the expansion of our existing footprint and network capacity by obtaining access to additional spectrum, primarily through spectrum exchanges, purchases, spectrum leasing, mergers, acquisitions and joint ventures.

 
Operating Revenues

Service Revenues. Service revenues consist of revenues from the provision of wireless voice and data services. For all the periods presented, revenues from voice services accounted for more than 90% of our consolidated voice and data service revenue.

Service revenues, which we record when services are provided, include revenues from:

•  recurring monthly access charges;
 
•  airtime usage, including prepaid service;
 
•  long distance charges;
 
•  charges for optional features and services such as voice mail, unlimited mobile-to-mobile calling, roadside assistance, caller ID and data services;
 
•  roaming charges we bill to our customers for their use of our and other carriers’ networks, which we refer to as “incollect roaming” revenues; and
 
•  roaming charges we bill to other wireless service providers whose customers use our network, which we refer to as “outcollect roaming” revenues.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Revenues from data services, as a percent of total service revenues, have not been material in any of the periods presented. We expect that trend to continue, although revenues from our wireless data services did increase nearly 60% in 2003. We expect to see growth in wireless data services in the upcoming year as a result of the increased availability and usage of GPRS and EDGE across our network and the introduction of new data applications for business and consumer use, including access to e-mail, Internet content, mobile commerce and location-based services.

To be consistent with emerging industry practices, our consolidated statements of income for all periods presented have been reclassified to reflect billings to our customers for the Universal Service Fund (USF) and other regulatory fees as service revenues and the costs related to payments into the associated regulatory funds as cost of services expenses. See also “Operating Expenses — Cost of Services” below. Operating income and net income for all periods have been unaffected.

Equipment Sales. Equipment sales include revenues from the sale of handsets and accessories to new and existing customers and to agents and other third-party distributors. The trend in equipment sales is generally comparable to the trend in gross customer additions.

 
Operating Expenses

Our operating expenses include:

•  cost of services;
 
•  cost of equipment sales;
 
•  selling, general and administrative expenses; and
 
•  depreciation and amortization.

We must increasingly reduce expense growth in order to protect profit margins. We believe that our industry position enables us to negotiate roaming, long distance and local network connection fees and handset and network infrastructure purchase arrangements on favorable terms.

Cost of Services. Cost of services includes network costs related to voice and data transmissions and includes the costs to monitor, maintain and service our network and wireline facilities expense. In addition, cost of services includes the costs related to payments into the USF and other regulatory funds. Cost of services also includes roaming charges and long distance expense for services provided by other telecommunications carriers. Overall, we expect these third-party costs to continue to decrease as increased usage, stimulated by national rate plans’ inclusion of free roaming and long distance services, is more than offset by lower negotiated roaming and long distance rates.

Cost of Equipment Sales. Cost of equipment sales includes the cost of handsets and accessories. Some of our third party distributors purchase handsets and accessories from us, nominally above cost. However, we generally sell handsets below cost to customers who purchase through direct sales channels, such as our company stores, as an inducement to customers who agree to one-year and two-year subscription contracts or in connection with other promotions. As a result, revenues from equipment sales are more than offset by the related cost of equipment sales, resulting in a net subsidy to customers. In addition, we have actively focused on selling services to new customers and upgrading existing customers to digital handsets and service, which increase network capacity and lower our operating cost per minute. The trend in the cost of equipment sales generally follows the trend in gross customer additions but is also impacted by changes in the cost of handsets. Overall, we have seen the cost of handsets decline; however, as we complete our GSM/GPRS/EDGE network upgrade and introduce new data offerings, we expect to see an increase in higher cost, feature-rich handsets for both new and existing customers. As one of the largest

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purchasers of handsets in the United States, we believe we will be able to purchase handsets at attractive volume-discounted rates.

Selling, General and Administrative. Selling, general and administrative expenses include all operating costs and expenses not included in the other operating cost and expense categories, such as:

•  sales and marketing costs, including the costs of advertising and promotions;
 
•  distribution expenses, including the costs to maintain retail locations and the commissions paid to our own sales force as well as agents and other third party distributors; and
 
•  other administrative costs such as accounting and billing operations, customer service and other overhead costs.

Depreciation and Amortization. Depreciation and amortization expense includes non-cash expenses relating to the depreciation of property, plant and equipment and the amortization of intangibles, such as customer lists and, prior to 2002, FCC licenses and goodwill. Depreciation and amortization expense excludes depreciation related to assets used in our joint ventures. See “— Equity in Net Income (Loss) of Affiliates, Net” below. Depreciation expense pertaining to assets used in our business has been generally increasing as a result of our capital expenditures and recognition of shorter TDMA asset lives. We expect this expense to continue to increase in the foreseeable future as we make substantial capital expenditures to expand and upgrade our network and make other investments. See “— Liquidity and Capital Resources” below for a discussion of our capital expenditures and other investments.

 
Other Income (Expenses)

Interest Expense. Interest expense includes interest costs related primarily to our indebtedness and capital leases.

Minority Interest in Earnings of Consolidated Entities. Minority interest reflects the share of operating income (loss) allocated to members or partners in our consolidated entities.

Equity in Net Income (Loss) of Affiliates, Net. We have non-controlling equity investments in various entities. The largest of these are as follows:

•  In November 2000, we made an equity investment, and as of December 31, 2003 had a non-controlling equity interest, in Salmon PCS LLC, (Salmon). Because we do not control Salmon, through December 31, 2002, we accounted for this investment using the equity method and recorded profits or losses in our income statement as equity in net income (loss) of affiliates. However, in January 2003, we adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46) and consolidated the financial position, results of operations and cash flows of Salmon, effective January 1, 2003. We did not restate any previously issued financial statements. The FASB revised FIN 46 in December 2003, which did not impact us. For additional information regarding Salmon, see also Note 5, “Investments in and Advances to Equity Affiliates,” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC.
 
•  In November 2001, we formed a jointly-controlled infrastructure venture with T-Mobile, GSM Facilities, LLC (GSMF). In July 2002, we commenced commercial operations in New York City and T-Mobile commenced operations in California and Nevada. Because we do not independently control this venture, we account for this investment using the equity method. This venture is structured to generate operating losses approximating the amount of the depreciation on the assets that have been contributed to it and non-reimbursed interest expense.

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We expect to record a significant equity in net loss of affiliates over the next several years relating to our GSMF infrastructure venture.

 
Income Taxes

We are a limited liability company treated as a partnership for income tax purposes and therefore generally do not pay taxes on our income. Instead, income taxes are generally the responsibility of our members. However, we have corporate and LLC subsidiaries that are taxpayers in some jurisdictions and will record income tax expense. We do not expect that our income tax expense will be material in the near future.

Consolidated Results of Operations

 
Year Ended December 31, 2003, Compared with the Year Ended December 31, 2002
 
Customer Base
                                     
Year Ended
December 31, Change*


Customers 2002 2003 Fav(Unfav) %





(In thousands)
Cellular/PCS Customers
                               
Beginning of Period
    21,596       21,925       329       1.5 %
     
     
     
         
Gross Additions
                               
 
Postpaid
    6,162       7,161       999       16.2  
 
Prepaid
    1,313       1,343       30       2.3  
 
Reseller
    351       881       530       151.0  
     
     
     
     
 
   
Total Gross Additions
    7,826       9,385       1,559       19.9  
Net Additions (Losses)
                               
 
Postpaid
    827       1,526       699       84.7  
 
Prepaid
    (22 )     114       136       603.7  
 
Reseller
    (445 )     476       921       207.3  
     
     
     
     
 
   
Total Net Additions
    360       2,116       1,756       488.0  
Other Adjustments
    (31 )     (14 )     17       57.3  
     
     
     
     
 
End of Period
    21,925       24,027       2,102       9.6  
     
     
     
     
 
Mobitex Data Network Customers
                               
Beginning of Period
    733       817       84       11.5  
Gross Additions
    416       328       (88 )     (21.3 )
Net Additions (Losses)
    84       (28 )     (112 )     (133.7 )
     
     
     
     
 
End of Period
    817       789       (28 )     (3.5 )%
     
     
     
     
 


The percentage change is based on the actual whole numbers

We had over 24 million cellular/PCS customers at the end of 2003, representing a growth of 2.1 million cellular/PCS customers from the prior year end. The 2.1 million increase in our cellular/PCS customer

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base represents the highest annual increase since our formation. In addition, the number of cellular/PCS postpaid gross and net customer additions for the year, 7.2 million and 1.5 million, respectively, also represents our highest annual growth in these customer segments. We believe the significant improvement in customer growth, when compared with the prior year, resulted from the following business initiatives implemented in late 2002 and early 2003:

•  reorganization of our marketing and sales operations to more effectively address local market needs;
 
•  introduction of a more meaningful brand message — “Cingular Fits You BestSM”;
 
•  increased emphasis on our affiliation with our parent companies and co-branding and more effectively utilizing their sales channels in those areas where our wireless markets overlap with their wireline markets; and
 
•  more effective marketing execution such as the “Family Talk” rate plan offer introduced in the third quarter of 2003.

Prepaid and reseller customer growth also improved significantly over the prior year. Prepaid customer growth in 2003 was positively impacted by our KIC (Keep in Contact) prepaid plan launched in the fourth quarter of 2002. We also had a 68% growth in our reseller customer base during the year. The increase in reseller customers compared with the prior year can be attributed both to aggressive growth by our primary reseller during 2003 and to a loss of approximately 371,000 WorldCom Inc. (WorldCom) reseller customers in 2002, most of which occurred when WorldCom made the decision to exit the wireless reseller business in the second half of 2002.

Approximately 95% of our customers are now using our digital services, up from 92% at the end of the prior year. Our networks have 100% digital coverage and over 99% of our network traffic was digital at the end of 2003.

For the year ended December 31, 2003, the cellular/PCS churn rate was 2.7%, a slight improvement from the 2.8% churn rate for the prior year. Churn rates in 2003 were positively impacted by lower churn rates in our prepaid and reseller customer bases while our postpaid customer base churn rate remained essentially unchanged.

In addition to our cellular and PCS licenses, we own Federal Communications Commission (FCC) licenses to provide data services over a separate frequency band. Our network at this band utilizes a different technology called “Mobitex”. Although our Mobitex customer churn rate only increased modestly compared with 2002, gross customer additions were negatively impacted due to the availability of new competitive data products over our and other cellular/PCS networks. Additionally, our Mobitex customer churn rate was unfavorably impacted in 2003 as a result of the deactivation of over 40,000 customers by one of our resellers.

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Historical Consolidated Data — For the years ended December 31, 2002 and 2003.
                                     
Year Ended
December 31, Change


2002 2003 $ %




Operating Revenues
                               
 
Local service revenue — voice
  $ 11,814     $ 12,133     $ 319       2.7 %
 
Data revenue
    286       454       168       58.7  
     
     
     
     
 
   
Total local service revenue
    12,100       12,587       487       4.0  
 
Incollect roamer revenue
    776       757       (19 )     (2.4 )
 
Long distance
    209       171       (38 )     (18.2 )
     
     
     
     
 
   
Subscriber revenue
    13,085       13,515       430       3.3  
 
Outcollect revenue
    701       586       (115 )     (16.4 )
 
Other revenue
    136       122       (14 )     (10.3 )
     
     
     
     
 
   
Other service revenue
    837       708       (129 )     (15.4 )
     
     
     
     
 
 
Wireless service revenue
    13,922       14,223       301       2.2  
     
     
     
     
 
 
Equipment sales
    981       1,260       279       28.4  
     
     
     
     
 
 
Total operating revenues
    14,903       15,483       580       3.9  
     
     
     
     
 
Operating expenses
                               
 
Cost of services (excluding depreciation)
    3,571       3,652       81       2.3  
 
Cost of equipment sales
    1,535       2,031       496       32.3  
 
Selling, general and administrative
    5,426       5,422       (4 )     (0.1 )
 
Depreciation and amortization
    1,850       2,089       239       12.9  
     
     
     
     
 
   
Total operating expenses
    12,382       13,194       812       6.6  
     
     
     
     
 
Operating income
    2,521       2,289       (232 )     (9.2 )
     
     
     
     
 
Other income (expenses):
                               
 
Interest expense
    (911 )     (856 )     55       (6.0 )
 
Minority interest in earnings of consolidated entities
    (123 )     (101 )     22       (17.9 )
 
Equity in net loss of affiliates
    (265 )     (323 )     (58 )     21.9  
 
Other, net
    29       41       12       41.4  
     
     
     
     
 
   
Total other income (expenses)
    (1,270 )     (1,239 )     31       (2.4 )
     
     
     
     
 
Income before provision for income taxes and cumulative effect of accounting change
    1,251       1,050       (201 )     (16.1 )
Provision for income taxes
    12       28       16       133.3  
     
     
     
     
 
Income before cumulative effect of accounting change
    1,239       1,022       (217 )     (17.5 )
Cumulative effect of accounting change, net of tax
    (32 )           32       (100.0 )
     
     
     
     
 
 
Net income
  $ 1,207     $ 1,022     $ (185 )     (15.3 )%
     
     
     
     
 

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Operating Revenues

Total operating revenues, consisting of service revenues and equipment sales, increased $580, or 3.9%, to $15,483 for the year ended December 31, 2003, compared with $14,903 for the prior year. The growth in service revenues was driven by a larger average cellular/PCS customer base, robust growth in data revenues and increased regulatory fee revenues. Strong customer growth and a significant increase in handset upgrade activity in 2003 also contributed to increased equipment sales. These increases were offset by lower roaming revenues. The components of the change in operating revenues are described as follows:

Service revenues. Service revenues, comprised of local service, roaming, long distance and other revenues, increased $301, or 2.2%, compared with the prior year.

The local service component of total service revenues includes recurring monthly access charges, airtime usage, including prepaid service, and charges for optional features and services, such as voice mail, mobile-to-mobile calling, roadside assistance, caller ID, handset insurance and data services. It also includes billings to our customers for the USF and other regulatory fees.

Key drivers impacting the 2003 increase in local service revenues include a 3.6% increase in the average number of cellular/PCS customers, a 14.4% increase in local minutes of use per customer and a continuing shift toward all-inclusive rate plans that include roaming and long distance at no additional charge. In addition, local service revenues related to billings to our customers for the USF and other regulatory fees increased $161 over the prior year. However, we experienced an equivalent increase in Cost of services expenses for the associated costs into the appropriate regulatory funds. See also “Operating Expenses — Cost of services” below. Notwithstanding the positive revenue impact of the increase in average cellular/PCS customers, we saw a decrease in our cellular/PCS ARPU. This decrease was driven by the popularity and growth of our lower ARPU “Family Talk” rate plans and a 1.6% shift in the cellular/PCS customer base mix as of December 31, 2003, when compared with the prior year end, from higher ARPU postpaid customers to lower ARPU prepaid and reseller customers. Other factors negatively impacting local service revenues include increased revenue deferrals associated with our popular “rollover” rate plans and the impact of the July 1, 2003 adoption of Emerging Issues Task Force (EITF) 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. This adoption resulted in a reclassification of $35 in direct sales channel activation revenues from local service revenues to equipment sales for the year ended December 31, 2003. See also Note 1, “Summary of Significant Accounting Policies,” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC.

Increases in data revenues also continue to positively impact local service revenues. For the year ended December 31, 2003, data revenues, while less than 4% of total local service revenues, comprised over a third of the increase in total local service revenues compared with the prior year. In 2003, there was a 118% growth in cellular/PCS data revenues compared with 2002. The increase in data revenues is reflective of increased data service penetration and usage of SMS short messaging and other data services with our cellular/PCS customers, as well as increased revenue per customer in our Mobitex data business.

Roaming revenues, both incollect and outcollect revenues, declined for the year ended December 31, 2003 when compared with the prior year. Overall, reduced roaming revenues were a function of lower negotiated roaming rates which more than offset an increase in roaming minutes. Incollect revenues also continued to be negatively impacted as a result of roaming minutes being bundled with all-inclusive regional and national rate plans.

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Long distance revenues, for the year ended December 31, 2003, comprised only 1.2% of total service revenues and declined from the prior year primarily as a function of the inclusion of “free” long distance minutes in many of our regional and national rate plans.

Cellular/PCS ARPU for the year ended December 31, 2003 was $51.32, a decrease of $0.82, or 1.6%, compared with $52.14 for the year ended December 31, 2002. Increases in ARPU related to higher customer usage and increased regulatory fee revenues were more than offset by decreases discussed below, thereby resulting in an overall ARPU reduction. As noted above in the discussion of local service revenues, increased sales of lower ARPU “Family Talk” plans in the second half of the year, in combination with a higher percentage of lower ARPU reseller and prepaid customers in our 2003 customer base, negatively impacted our overall ARPU when compared with the prior year. Additionally, the impact of increased revenue deferrals associated with our “rollover” rate plans plus the impact of the adoption of EITF 00-21 also had a negative impact on ARPU. Other unfavorable impacts include on-going competitive pricing pressures and the reductions in roaming and long distance revenues, as previously noted.

Equipment sales. The increase in equipment sales were principally a result of higher unit sales reflecting a nearly 13.8% increase in cellular/PCS postpaid and prepaid gross customer additions and a significant increase in the sale of upgrade handsets to our existing customers compared with the prior year. The increased unit sales for upgrades was a function of both our GSM network conversions and our focused efforts to retain high value customers and to increase the number of our customers under contract prior to the implementation of wireless local number portability in late November 2003. As mentioned earlier in the discussion on local service revenues, for the year ended December 31, 2003, equipment sales also increased $35 due to the impact of the adoption of EITF 00-21.

 
Operating Expenses

Cost of services (exclusive of depreciation). The cost of services increase for the year ended December 31, 2003 compared with the prior year was due to an increase in local system costs of $215 partially offset by a $134 decrease in third party system costs (i.e, roaming and long distance costs). Local system cost increases were driven by a 19.1% growth in system minutes of use, system expansion and the increased costs of redundant TDMA and GSM networks required during the current GSM system overlay. Local system costs were also impacted by a $161 increase over the prior year in costs related to payments into the USF and other regulatory funds. As previously noted in the discussion on service revenues, revenues were also increased by an equivalent amount. The effect of this $161 increase in local system costs in 2003 is almost entirely offset by $151 in impairment losses recorded in the prior year related to long-lived assets utilized in our Mobitex data network and certain TDMA network assets. The primary contributor to lower third party system costs was a $132 decrease in incollect roaming costs compared with the prior year. This reduction was a result of lower negotiated roaming rates plus cost reductions associated with the Mobile Telecommunications Sourcing Act that more than offset increased volumes.

Cost of equipment sales. Consistent with the prior discussion related to equipment sales, for the year ended December 31, 2003, the increase in cost of equipment sales was driven primarily by higher unit sales associated with the large increase in non-reseller gross customer additions and upgrade unit sales. Upgrade costs increased over 55% for the year, driven not only by higher unit sales but also by higher per unit handset costs due to a shift to more advanced handsets, such as the dual mode TDMA/GSM handsets in use during our GSM system conversion and newly introduced feature-rich GSM-only handsets.

Selling, general and administrative expenses. Selling, general and administrative expenses for the year ended December 31, 2003 were flat when compared with the prior year as increases in selling expenses

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were offset by decreases in costs related to maintaining and supporting our customer base and other administrative costs.

Selling expenses, which include sales, marketing, advertising and commission expenses, for the year ended December 31, 2003, were $2,608, an increase of $103, or 4.1%, compared with $2,505 for the prior year. This increase was driven primarily by higher commission expenses and advertising costs partially offset by lower sales expenses. Higher commission expenses were consistent with the 13.8% increase in total cellular/PCS postpaid and prepaid gross additions compared with the prior year. Higher advertising costs were driven by increased costs in the latter part of the year related to wireless number portability implementation and the promotion of our “Fast Forward” product offering. The decrease in sales costs was principally due to reduced employee-related costs as a result of our sales operation reorganization in 2002.

Costs for maintaining and supporting our customer base decreased $67, or 3.5%, for the year ended December 31, 2003, compared with the prior year. This cost decrease was principally due to lower bad debt and billing expenses offset by increased residuals and upgrade commission expenses related to our existing customer base. Lower bad debt expense of $145 was primarily due to an overall improvement in customer account agings and collections results and the net impact of WorldCom bad debt write-offs of $39 in 2002 and a $20 WorldCom bad debt expense recovery in August 2003. Lower billing expenses reflect cost reductions in the current year as a result of system conversions and related consolidations in 2002. The increase in upgrade commissions was consistent with the increase in upgrade activity, as previously discussed.

Other administrative costs decreased $40, or 4.0%, for the year ended December 31, 2003, compared with the prior year. Cost decreases include lower compensation and benefits expenses and lower information technology and development expenses. These decreases were partially offset by higher legal settlement costs.

Depreciation and amortization. For the year ended December 31, 2003, depreciation expense increased by $266, compared with the prior year, primarily due to on-going capital spending, including our GSM overlay, in addition to increased depreciation on TDMA assets in 2003 as a result of a review of estimated service lives. See “Critical Accounting Policies and Estimates — Depreciation” and also Note 3, “Property, Plant and Equipment” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC. For the year ended December 31, 2003, amortization expense decreased by $27, primarily as a result of certain finite-lived intangible assets becoming fully amortized during the prior year.

 
Interest Expense

For the year ended December 31, 2003, interest expense on the debt to our members, SBC and BellSouth, was lower by $73 when compared with the prior year. This decrease was the result of a reduction in the fixed interest rate from 7.5% to 6.0% effective July 1, 2003. This $73 decrease was offset primarily by a reduction in capitalized interest and an increase in interest expense on higher capital lease obligations in 2003. For the year ended December 31, 2003, the impact of the interest rate swaps was minimal. See also Note 9, “Financial Instruments” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC.

 
Minority Interest in Earnings of Consolidated Entities

For the year ended December 31, 2003, the $22 decrease was due to lower overall net income of our consolidated entities compared with 2002, including a $10 minority interest impact related to a $22 partnership legal settlement in the first quarter of 2003.

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Equity in Net Loss of Affiliates

For the year ended December 31, 2003, the increase from the prior year in equity in net loss of affiliates was primarily due to an increased loss of $88, principally related to higher depreciation expense associated with our capital expenditures at the GSMF venture, offset by a reduction of $29 as a result of the consolidation of Salmon. Salmon was consolidated, effective January 1, 2003, as a result our early adoption of FIN 46. See also Note 6, “Salmon” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC.

 
Other, Net

For the year ended December 31, 2003, the $12 increase in Other, net from the prior year includes a $9 increase in interest income on marketable securities. A one-time $23 gain in 2003 was offset by a decrease of $23 in interest income from Salmon as a result of its consolidation in 2003.

 
Cumulative Effect of Accounting Change

The cumulative effect of a change in accounting principle during the year ended December 31, 2002 was a loss of $32, net of tax, and resulted from an impairment of goodwill related to the Mobitex data business upon the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142), effective January 1, 2002.

 
Year Ended December 31, 2002, Compared with the Year Ended December 31, 2001
 
Customer Base

In 2002, we experienced lower customer growth due in part to a slowing economy and increased wireless penetration and competition in the United States.

Cellular/PCS customers were 21.9 million at December 31, 2002, an increase of 1.4% from the 21.6 million customers at December 31, 2001. Net cellular/PCS customer additions in 2002 were 360,000, a decrease of 1,561,000, or 81.3%, from the 1,921,000 net customer additions in 2001. The decrease in net customer additions was primarily a function of a 1.1 million, or 12.3%, reduction in gross customer additions from 2001. The decrease in 2002 was a result of intense industry competition, impacts of the economic slowdown, and the continued decline in our analog, prepaid and reseller customer bases. We lost approximately 266,000 reseller customers after WorldCom exited the reseller business during the year, and an additional approximately 130,000 WorldCom customers became our direct customers. We believe that a number of internal business initiatives also contributed to our negative growth trends in 2002, including;

•  centralization of the marketing and sales organizations, which reduced our effectiveness in responding to regional and local product and service opportunities;
 
•  other merger-related changes, such as billing system integration and inventory and customer care consolidation, that may have impacted customers; and
 
•  a shift to sales plan initiatives designed to improve cash flow rather than overall market share.

During the year ended December 31, 2002, our postpaid customer base increased 928,000, or 4.9%, including the approximately 130,000 former WorldCom reseller customers who transferred to us after WorldCom exited the reseller business. The prepaid and reseller customer bases decreased by 23,000, or 1.6%, and 577,000, or 45.1% respectively, during the year.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the year ended December 31, 2002, the cellular/PCS churn rate was 2.8% compared with a 2.9% churn rate for 2001. The lower churn in 2002 was reflective of our efforts to acquire and maintain quality non-reseller postpaid customers. This lower churn was partially offset by the continued deterioration of our prepaid and reseller customer base, primarily as a result of WorldCom’s exiting the reseller business, which had a negative impact on churn in 2002.

We had approximately 5.5 million customers using our data services at December 31, 2002. The number of our Mobitex data network customers increased to approximately 817,000 at December 31, 2002, an 11.5% increase from 733,000 customers at year-end 2001. Net customer additions for the year ended December 31, 2002 were 84,000, a decrease of 47.5% from the 160,000 net customer additions in the prior year. Most of these customers are business customers, and the decline in net additions was primarily due to the economic slowdown.

 
Historical Consolidated Data — For the years ended December 31, 2001 and 2002.
                                     
Year Ended
December 31, Change


2001 2002 $ %




Operating Revenues
                               
 
Local service revenue — voice
    10,780       11,814       1,034       9.6 %
 
Data revenue
    193       286       93       48.2  
     
     
     
     
 
   
Total local service revenue
    10,973       12,100       1,127       10.3  
 
Incollect roamer revenue
    884       776       (108 )     (12.2 )
 
Long distance
    223       209       (14 )     (6.3 )
     
     
     
     
 
   
Subscriber revenue
    12,080       13,085       1,005       8.3  
 
Outcollect revenue
    940       701       (239 )     (25.4 )
 
Other revenue
    209       136       (73 )     (34.9 )
     
     
     
     
 
   
Other service revenue
    1,149       837       (312 )     (27.2 )
     
     
     
     
 
 
Wireless service revenue
    13,229       13,922       693       5.2  
     
     
     
     
 
 
Equipment sales
    1,039       981       (58 )     (5.6 )
     
     
     
     
 
Total operating revenues
    14,268       14,903       635       4.5  
     
     
     
     
 
Operating expenses
                               
 
Cost of services (excluding depreciation)
    2,912       3,571       659       22.6  
 
Cost of equipment sales
    1,652       1,535       (117 )     (7.1 )
 
Selling, general and administrative
    5,235       5,426       191       3.6  
 
Depreciation and amortization
    1,921       1,850       (71 )     (3.7 )
     
     
     
     
 
   
Total operating expenses
    11,720       12,382       662       5.6  
     
     
     
     
 
Operating income
    2,548       2,521       (27 )     (1.1 )
     
     
     
     
 
Other income (expenses):
                               
 
Interest expense
    (822 )     (911 )     (89 )     10.8  
 
Minority interest in earnings of consolidated entities
    (122 )     (123 )     (1 )     0.8  

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
                                     
Year Ended
December 31, Change


2001 2002 $ %




 
Equity in net loss of affiliates
    (68 )     (265 )     (197 )     289.7  
 
Other, net
    164       29       (135 )     (82.3 )
     
     
     
     
 
   
Total other income (expenses)
    (848 )     (1,270 )     (422 )     49.8  
     
     
     
     
 
Income before provision for income taxes and cumulative effect of accounting change
    1,700       1,251       (449 )     (26.4 )
Provision for income taxes
    8       12       4       50.0  
     
     
     
     
 
Income before cumulative effect of accounting change
    1,692       1,239       (453 )     (26.8 )
Cumulative effect of accounting change, net of tax
          (32 )     (32 )      
     
     
     
     
 
 
Net income
  $ 1,692     $ 1,207       (485 )     (28.7 )%
     
     
     
     
 
 
Operating Revenues

Total operating revenues, consisting of service revenues and equipment revenues, increased $635, or 4.5%, to $14,903 for the year ended December 31, 2002, compared with $14,268 for the prior year. An increase in 2002 service revenues, as a result of a higher average number of customers, was partially offset by reduced equipment revenues, primarily attributable to reduced gross customer additions. Although total operating revenues increased, the rate of increase declined during 2002, reflecting slower customer growth and lower prices for our services driven by increasing competition. The components of the change in operating revenues are described below.

Service Revenues. Service revenues are comprised of local service, roaming, long distance and other revenues. For the year ended December 31, 2002, service revenues were $13,922, an increase of $693, or 5.2%, compared with $13,229 for the prior year. Of the $693 increase, $203 can be attributed to the contribution of a Puerto Rico wireless business from SBC in September 2001.

Local service revenues for the year ended December 31, 2002 were $12,100, an increase of $1,127, or 10.3%, compared with $10,973 for the prior year. The increase was primarily driven by a 6.8% increase in the average number of cellular/PCS customers versus 2001 and the continued migration of our customers to all-inclusive rate plans that include roaming and long distance at no additional charge. The increase was also driven by a 26.2% increase in local minutes of use per customer, driven by plans offering increasing numbers of minutes of service for a flat, monthly fee. Additionally, $156 from the provision of handset insurance through a new subsidiary and $181 due to the September 2001 contribution by SBC of the Puerto Rico wireless business also contributed to the increase from the prior year. Data service revenues, a component of local service revenues, increased 48.2% in 2002, from $193 in 2001 to $286 in 2002.

The roaming component of total service revenues includes revenues that we collect from our customers who roam outside their selected home coverage area, referred to as “incollect” roaming revenues, and revenues from other wireless carriers for roaming by their customers on our network, referred to as “outcollect” roaming revenues.

Incollect revenues for the year ended December 31, 2002 were $776, a decrease of $108, or 12.2%, compared with $884 for the prior year. Incollect revenues declined as more of our customers adopted regional and national rate plans, which include free roaming in bundled minute plans.

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Outcollect revenues for the year ended December 31, 2002 were $701, a decrease of $239, or 25.4%, compared with $940 for the prior year. This decline was primarily a function of reductions in roaming rates with major roaming partners and the building out of other carriers’ networks, which reduces the need of their customers to roam on our network. The impact of our infrastructure venture, GSMF, also contributed $26 to the decrease from 2001.

Long distance revenues for the year ended December 31, 2002 comprised only approximately 1.5% of total service revenues. These revenues declined as our customers continued to migrate to all-inclusive rate plans that include long distance service in the monthly access charge.

Other revenues for the year ended December 31, 2002 were $136, a decrease of $73, or 34.9% compared with $209 for the prior year. The decrease in 2002 includes a reduction of $23 in administrative and program revenues related to the formation of a captive handset insurance company in 2002. Other decreases from 2001 include a $17 reduction in management fees as a result of the contribution of the Puerto Rico wireless business in September 2001 and a $13 decrease in local exchange carrier (LEC) reciprocal compensation revenues as a result of our infrastructure joint venture, GSMF.

ARPU for cellular/PCS service declined by $0.77 to $52.14, or 1.5%, from $52.91 for the year ended December 31, 2001. Our strategy of targeting, acquiring and retaining non-reseller postpaid customers resulted in an increase in customer revenues. This increase, however, was offset by reductions in revenues from bundled services and outcollect and other revenues, thereby reducing overall service ARPU. The consolidation of Puerto Rico operating results in our financial statements, beginning September 2001, also adversely affected ARPU as a result of the heavy concentration of prepaid customers in Puerto Rico. Of the $0.77 decline in ARPU, $0.18 of the decline can be attributed to the dilutive ARPU impact of the Puerto Rico consolidation.

Equipment sales. Equipment sales for the year ended December 31, 2002 were $981, a decrease of $58, or 5.6%, compared with $1,039 for the prior year. This decrease was primarily the result of a 5.0% decline in non-reseller gross additions from 2001.

 
Operating Expenses

Cost of services (exclusive of depreciation). Cost of services for the year ended December 31, 2002 was $3,571, an increase of $659, or 22.6%, compared with $2,912 for the prior year. Cost increases in 2002 were driven by a 36% increase in system minutes of use and higher roaming and long distance costs. These increases were a result of customer migration to digital rate plans that include more minutes, free long distance calling and free roaming. Increases in 2002 over the prior year also include $151 in impairment losses related to our long-lived assets utilized in our Mobitex data network and certain TDMA network assets and $93 related to the provision of handset insurance through the new captive insurance subsidiary. See “Critical Accounting Policies and Estimates” for further discussion of impairment losses related to property, plant and equipment. Although systems costs increased due to increased minutes of use, efficiencies attributable to digital networks contributed to decreasing per-minute costs.

Cost of equipment sales. Cost of equipment sales for the year ended December 31, 2002 was $1,535, a decrease of $117, or 7.1%, compared with $1,652 for the prior year. Consistent with the trend in equipment revenues, this decrease was primarily the result of a 5.0% decline in non-reseller gross additions compared with 2001. This year over year cost decrease was also driven by more favorable per-unit pricing in 2002 resulting from our combined purchasing power as well as industry trends. These decreases were offset to a limited degree by increased upgrade equipment costs in 2002.

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Selling, general and administrative expenses. Selling, general and administrative expenses for the year ended December 31, 2002 were $5,426, an increase of $191, or 3.6%, compared with $5,235 for prior year. The higher cost in 2002 was driven by increases of $135 in costs related to maintaining and supporting our customer base, $41 in administrative costs and $15 in selling expenses.

The $135 in cost increases for maintaining and supporting our customer base included higher residuals and upgrade commissions, customer retention costs and bad debt expense. Bad debt expense increased by $70, with over half of the increase attributable to WorldCom write-offs occurring in 2002. Within this same area of customer maintenance and support expenses, the overall $135 cost increase included lower billing and customer service expenses, reflecting cost reductions as a result of billing system and call center consolidations.

The increase of $41 in other administrative costs was primarily due to higher information technology (IT) and development costs.

Selling expenses, which include sales, marketing, advertising and commissions expenses, increased $15 from 2001. Increases in 2002 include $41 in advertising and agent costs associated with the launch of Cingular Wireless service in New York City and $28 related to the reorganization of the sales operation and related workforce reductions. Costs in 2001 included $70 related to the Cingular brand launch.

Depreciation and amortization. Depreciation and amortization for the year ended December 31, 2002 were $1,850, a decrease of $71, or 3.7%, compared with $1,921 for the prior year. Depreciation expense increased $148 and was comprised primarily of increased depreciation associated with new capital assets, partially offset by a reduction in depreciation as a result of the transfer of assets to our network infrastructure venture, GSMF. Beginning in November 2001, the operating losses of GSMF, which include depreciation, were reflected as a component of equity in net loss of affiliates. For the year ended December 31, 2002, amortization expense decreased by $219 compared with the prior year. This was primarily attributable to the cessation of amortizing goodwill and wireless licenses as a result of our January 1, 2002 adoption of SFAS No. 142.

 
Interest Expense

Interest expense for the year ended December 31, 2002 was $911, an increase of $89, or 10.8%, compared with $822 for the prior year. The increase in interest expense primarily resulted from the issuance in December 2001 of $2,000 in fixed-rate senior notes to refinance lower interest-bearing commercial paper and fund capital expenditures and working capital. The increased interest expense of $124 related to these fixed-rate senior notes was offset by a reduction of $39 related to minimal use of commercial paper in 2002, compared to 2001.

 
Equity in Net Loss of Affiliates, Net

Equity in net loss of affiliates for the year ended December 31, 2002 was $265, an increase of $197, compared with $68 for the prior year. The increase primarily reflects additional equity losses of $209 associated with the investment in our network infrastructure venture, GSMF, which was formed in the fourth quarter of 2001. This increase was partially offset by a $14 reduction in losses related to our Salmon joint venture.

 
Other, Net

Other, net for the year ended December 31, 2002 was $29, a decrease of $135, compared with $164 for the prior year. The decrease was primarily due to a $76 gain associated with the distribution of assets to us

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at fair value following a partnership dissolution in 2001, a reduction of $27 in interest income and gains from partitioning transactions and a $19 decrease in interest income on advances to Salmon.

 
Cumulative Effect of Accounting Change

Cumulative effect of change in accounting principle, net of tax, was a loss of $32 during the year ended December 31, 2002 and resulted from an impairment of goodwill related to the Mobitex data business upon the adoption of SFAS 142.

Liquidity and Capital Resources

 
Cash Flow Analysis
 
Cash Flows for the Year Ended December 31, 2003, Compared with the Year Ended December 31, 2002
                                 
Year Ended
December 31, Change


2002 2003 $ %




Net cash provided by operating activities
  $ 3,592     $ 3,686     $ 94       2.6 %
Net cash used in investing activities
    (3,585 )     (3,368 )     217       (6.1 )
Net cash provided by (used in) financing activities
    334       (87 )     (421 )     (126.0 )
     
     
     
     
 
Net increase in cash and cash equivalents
    341       231       (110 )     (32.3 )
Cash and cash equivalents at beginning of period
    567       908       341       60.1  
     
     
     
     
 
Cash and cash equivalents at end of period
  $ 908     $ 1,139     $ 231       25.4 %
     
     
     
     
 

Net cash provided by operating activities. The overall increase in net cash provided by operating activities was primarily due to working capital changes, driven mostly by lower vendor payments by us in the year ended December 31, 2003 versus the year ended December 31, 2002. Working capital was negatively impacted in 2003 by an increase in handset inventory as a result of higher gross customer additions, our GSM conversion and preparatory initiatives for local wireless number portability. Cash generated from operations was our primary source of funds in 2003 and 2002.

Net cash used in investing activities. The primary contributors to the overall decrease in net cash used in investing activities were a decrease of $351 in capital expenditures and a decrease of $50 due to a contractor engineering deposit in the prior year. These decreases were offset by a $166 increase in investments in and advances to equity affiliates and a $19 increase in license acquisitions.

The increase in investments in and advances to equity affiliates for the year ended December 31, 2003 primarily reflects a $248 decrease in capital expenditures and cash contributions to our GSMF venture as compared to 2002, offset by net advance repayments of $396 in 2002 from Salmon as a result of the return by the FCC of deposits related to the 34 challenged licenses. Capital expenditures and cash contributed to our venture with AT&T Wireless Services, Inc. totaled $18 for the year ended December 31, 2003. There were no contributions to this venture for the year ended December 31, 2002.

Cash needs for acquisitions of licenses increased by $19 in 2003 when compared with 2002. Acquisitions in 2003 consisted primarily of cash payments of $25 for spectrum in Kansas, Texas, Arizona and Florida. In 2002, there was limited acquisition activity of $6.

Net cash provided by (used in) financing activities. The primary contributor to the overall increase of net cash used in financing activities was a $489 decrease in contributions received from our members, SBC and BellSouth, for the year ended December 31, 2003, compared to year ended December 31, 2002. This

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was partially offset by a $46 decrease in net distributions to minority interests, principally due to the return of cash to fund GSM overlay construction in partnership markets, and a $27 decrease in commercial paper repayments. There was no commercial paper activity for the year ended December 31, 2003. There was also an increase of $4 in external debt repayments for the year ended December 31, 2003. The $4 increase is primarily attributable to an increase of $21 for capital lease payments, offset by a $17 payment made in 2002 to retire bonds issued by our Puerto Rico subsidiary.

We expect to have significant cash needs over the next several years, as described in “Cash Requirements.”

 
Cash Flows for the Year Ended December 31, 2002, Compared with the Year Ended December 31, 2001
                                 
Year Ended December
31, Change


2001 2002 $ %




Net cash provided by operating activities
  $ 3,665     $ 3,592     $ (73 )     (2.0 )%
Net cash used in investing activities
    (3,945 )     (3,585 )     360       (9.1 )
Net cash provided by financing activities
    721       334       (387 )     (53.7 )
     
     
     
     
 
Net increase in cash and cash equivalents
    441       341       (100 )     (22.7 )
Cash and cash equivalents at beginning of period
    126       567       441       350.0  
     
     
     
     
 
Cash and cash equivalents at end of period
  $ 567     $ 908     $ 341       60.1 %
     
     
     
     
 

Cash and cash equivalents for the year ended December 31, 2002 was $908, an increase of $341, or 60.1%, compared with $567 for the year ended December 31, 2001.

Net cash provided by operating activities. Net cash generated by operations for the year ended December 31, 2002, was $3,592, a decrease of $73, or 2.0%, compared with $3,665 for the year ended December 31, 2001. Cash generated from operations was our primary source of funds in 2002 and 2001.

Net cash used in investing activities. Net cash used in investing activities for the year ended December 31, 2002, was $3,585, a decrease of $360, or 9.1%, compared with $3,945 for the year ended December 31, 2001.

Capital expenditures, representing the largest component of cash used in investing activities, totaled $3,085 in 2002, a decrease of $71 from $3,156 in 2001.

The primary contributors to the overall decrease in 2002 of net cash used in investing activities were a $283 decrease in acquisition activity, a $135 reduction in advances and investments in equity affiliates and the $71 decrease in capital expenditures. These decreases were offset by a $79 decrease in cash inflows in 2002 related to dispositions and a $50 cash payment in 2002 for a contractor engineering deposit.

Advances and investments in equity affiliates of $450 in 2002 decreased $135 from $585 in 2001. In 2002, an increase of $641 for cash and funding of capital expenditures contributed to our infrastructure venture, GSMF, was offset by a $780 decrease related to our Salmon investment. In 2001, we made advances and investments in Salmon of $384. In 2002, Salmon made net advance repayments of $396, consisting of two repayments totaling $421 partially offset by $25 in additional advances. The $421 repayment by Salmon was as a result of the return to Salmon, by the FCC, of license deposits related to 34 challenged licenses.

Cash needs for acquisitions of businesses and licenses decreased by $283 in 2002 when compared with 2001. Acquisitions of $289 in 2001 consisted primarily of net cash payments of $146 for the remaining

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10% ownership stake in our Washington/Baltimore property and $140 for the Salt Lake/Provo license acquisition. In 2002, there was limited acquisition activity.

Net cash provided by financing activities. Net cash provided by financing activities for the year ended December 31, 2002, was $334, a decrease of $387, or 53.7%, compared with $721 for the year ended December 31, 2001.

The primary component of the $334 in cash provided by financing activities in 2002 was a $499 capital contribution by our members, SBC and BellSouth. This was partially offset in 2002 by $79 in net distributions to minority interests, $59 in external debt repayments and a $27 commercial paper repayment. The 2002 external debt repayment consisted primarily of capital lease payments of $42 and a $17 payment to retire bonds issued by our Puerto Rico company.

The $721 in cash provided by financing activities in 2001 consisted of net cash inflows of $1,973 related to the issuance of $2,000 in senior notes in December 2001 and $1,370 associated with the contribution of the Houston and Puerto Rico properties in January 2001 and September 2001, respectively. These cash inflows were partially offset by cash outflows in 2001 for the payment of $1,148 in affiliate debt, a net $672 repayment of borrowings under our commercial paper program, contractual distributions of $639 to SBC and BellSouth related to income tax obligations, $126 in net distributions to minority interests, and other external debt repayments of $37, primarily for capital leases.

 
Cash Requirements

Acquisition of AT&T Wireless. In February 2004, we agreed to acquire AT&T Wireless for an aggregate consideration of approximately $41,000 cash. SBC and BellSouth have agreed to provide us sufficient cash resources to fund the transaction.

Network Upgrades and Expansion. The operation, upgrade and expansion of our networks will continue to require substantial amounts of capital over the next several years. For the year ended December 31, 2003, we spent $2,734 for our GSM/GPRS/EDGE network upgrade plus other network and non-network capital expenditures and $619 for equity contributions to our network sharing ventures with T-Mobile and AT&T Wireless. We anticipate that our 2004 capital investments for completing our network upgrade and funding other ongoing capital expenditures and equity investments will not differ materially from our 2003 investments. As our GSM overlay is substantially complete at December 31, 2003, our primary focus in 2004 will be on improving network quality, expanding our GSM/GPRS/EDGE coverage and adding EDGE upgrades to our network. We anticipate only a minimal amount of expenditures on TDMA equipment.

Our GSM/GPRS/EDGE network upgrade is currently on schedule with 93% of our POPs currently with cellular or PCS service covered by GSM/GPRS at the end of 2003. At the end of the second quarter of 2003, we announced the world’s first commercial deployment of EDGE technology in our Indianapolis market. Subsequent to that launch, we launched EDGE in a number of other markets. We have approximately 20% of our POPs currently with cellular or PCS service covered at December 31, 2003. We expect 100% coverage of our POPs with GSM/GPRS/EDGE technology by the end of 2004.

To complement our current GSM/GPRS/EDGE network overlay, broaden our nationwide coverage and lower our roaming costs, we have negotiated numerous roaming agreements with GSM/GPRS carriers since beginning our overlay project. In 2003, these include agreements with AT&T Wireless, T-Mobile and Western Wireless Corporation. These agreements enable us to efficiently and immediately expand our GSM/GPRS footprint without incurring additional capital expenditures. By combining our GSM/GPRS footprint with those of other carriers through roaming agreements and joint ventures, GSM/GPRS was

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available in areas that contained approximately 90 percent of the total U.S. population at the end of 2003 and we anticipate coverage in areas containing almost 95% of the total U.S. population, where virtually all of our customer usage is, by the end of 2004.

Licenses Acquisition. In August 2003, we executed an agreement with NextWave Telecom, Inc. (NextWave) and certain of its affiliates pursuant to which we would purchase FCC licenses for wireless spectrum in 34 markets for $1,400 cash. The transaction is subject to various closing conditions, some of which are outside of the parties’ control. The transaction is expected to close in the first half of 2004.

Investment in Salmon. We and Crowley Digital Wireless, LLC (Crowley Digital) formed Salmon to bid for PCS licenses in an FCC auction that ended in January 2001. Salmon was successful in acquiring 45 licenses covering more than 11 million POPs. We have made secured loans to Salmon, which it used to make full payment on the 45 licenses it received from the FCC. See also Note 6, “Salmon” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC. We estimate the costs to build Salmon’s network system to be approximately $350 to $500, of which $9 was expended in 2003 and $23 to date, and expect it to be substantially completed by the end of 2006. In addition, we estimate our costs to fund system operating expenses and other operating losses to be approximately $200 to $300 through 2006. Approximately $29 has been incurred to fund system operating expenses and other operating losses from inception through December 31, 2003.

Investment in Venture with T-Mobile. In November 2001, we and T-Mobile formed a jointly-controlled infrastructure venture, GSMF, to allow the companies to share network infrastructures in the California, Nevada and New York City metropolitan area markets. We and T-Mobile buy access to the venture’s network infrastructure but each of us has retained ownership and control of our own FCC licenses. Although the networks we contributed to the venture are constructed and operational, we are required on a regular basis to invest additional capital to modify and expand the network and to fund cash operating expenses.

We and T-Mobile agreed to jointly fund capital expenditures of GSMF. Contributions to GSMF are generally determined by our proportionate share of the annual capital expenditure requirements based on each party’s incremental growth in network usage, and such contributions are accounted for as an increase to our investment. For the years ended December 31, 2002 and 2003, we made net capital contributions of cash and assets to GSMF of $707 and $612, respectively. We had contractual commitments to contribute cash of $225 to GSMF in both 2002 and 2003. The net capital contribution amounts above include these cash contributions made by us for the years ended December 31, 2002 and 2003, respectively, in full satisfaction of our contractual commitments.

Formation of Joint Venture with AT&T Wireless. In January 2002, we entered into an agreement with AT&T Wireless to form a jointly-controlled and equally-owned venture to construct a GSM voice network with GPRS/EDGE data technologies along a number of major highways in the United States in order to ensure availability of GSM/GPRS/EDGE service to our customers and reduce incollect roaming expenses we pay to other carriers when our customers use their wireless devices when they travel on those highways. We and AT&T Wireless each buy services from the venture and provide services under our own brand names. As of December 31, 2003, we had an investment in the venture of $21. In 2004, we expect to spend approximately $25 for capital expenditures.

Purchase of California/Nevada Tower Leasehold Interests. In February 2003, we acquired leasehold interests in 545 communications towers in California and Nevada from SpectraSite, Inc. (SpectraSite) for $81 in cash. SpectraSite had previously acquired these leasehold interests from an affiliate of SBC in 2000, and we leased a portion of the tower space indirectly from SpectraSite. GSMF’s financial statements

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include $247 of capital lease obligations and $208 of related leased assets. Subsequent to February 2003, the payments on the leases were assigned from the affiliate of SBC to a subsidiary of the company.

Contractual Obligations. The following table provides a summary of our contractual commitments as of December 31, 2003.

                                         
Payments Due by Period

Total 2004 2005-2006 2007-2008 After 2008





Long Term Debt(1)
  $ 16,323     $ 765     $ 1,927     $ 10,758     $ 2,873  
Capital Lease Obligations(2)
    2,830       130       180       185       2,335  
Operating Leases(3)
    2,363       431       711       459       762  
Purchase Obligations(4)
    628       371       156       73       28  
Other Long-term Obligations(5)
    1,586       1,400       186       0       0  
     
     
     
     
     
 
Total
  $ 23,730     $ 3,097     $ 3,160     $ 11,475     $ 5,998  
     
     
     
     
     
 


(1)  Long-term debt payouts include interest of $4,581. The “3-5 years” amount includes $9,678 of debt due to SBC and BellSouth with a maturity date of June 30, 2008. See Note 8 to the audited consolidated financial statements included in Item 8. We do not expect SBC and BellSouth to require any repayment if it would impair our debt ratings or impair our working capital or if we cannot advantageously raise debt or equity proceeds from external financing sources.
 
(2)  Capital lease obligations include executory costs and interest. See Note 8 to the Cingular Wireless LLC audited consolidated financial statements included in Item 8.
 
(3)  Operating lease payouts do not include payments due under renewals to the original lease term. See Note 16 to the audited Cingular Wireless LLC consolidated financial statements included in Item 8.
 
(4)  Purchase obligations exclude purchase orders entered into in the ordinary course of business for network equipment, handsets and other items.
 
(5)  Other Long-Term obligations include the purchase from NextWave of FCC licenses for wireless spectrum for $1,400 cash in 2004 and the expected payout of the Crowley put option of $186 in 2006. See Note 6 to the Cingular Wireless LLC audited consolidated financial statements included in Item 8 for further discussion of the Crowley put option.

We have vendor contracts for the acquisition and installation of infrastructure for our GSM/GPRS/EDGE overlay. Under these agreements, we have made good faith capital expenditure commitments for 2004. However, since there is no penalty for not achieving the contemplated levels of expenditures under these vendor agreements, we are not contractually obligated to spend these amounts and, therefore, these amounts are not included in the table above.

As of December 31, 2003, our defined benefit pension plans were fully funded. Therefore, we do not anticipate any cash funding needs to meet minimum required funding thresholds in 2004. We anticipate minimal funding in 2005 and approximately $60 – $90 of funding each year beginning in 2006. These amounts are not included in the table above. We do not fund our post-retirement benefit plans. See Note 15 to the Cingular Wireless LLC audited consolidated financial statements included in Item 8.

Debt Service. As of December 31, 2003, we had $12,687 of consolidated indebtedness and capitalized lease obligations. This debt includes $9,678 in unsecured, subordinated member loans from SBC and BellSouth, $2,000 in unsecured senior notes and $955 in capital lease obligations. We entered into $143 of capital lease obligations for the year ended December 31, 2003, primarily related to communication towers.

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Member loans are subordinated to our senior notes, any other capital markets debt and any debt outstanding under our bank credit facility. We may prepay the member loans or refinance them with senior debt (other than with the proceeds from our bank credit facility or senior loans from SBC or BellSouth) at any time if we are not in default under our senior debt.

As of July 1, 2003, we executed amended, restated and consolidated subordinated promissory notes to modify the terms of our member loans. These notes to SBC and BellSouth reduced the fixed interest rate from 7.5% to 6.0% and extended the maturity date to June 30, 2008. This change will result in a reduction of interest expense of approximately $145 per annum.

Off-Balance Sheet Arrangements. At December 31, 2003, we were obligated to pay certain capital leases assigned to the GSMF venture of $28. We have investments in unconsolidated affiliates, principally our joint ventures with T-Mobile and AT&T Wireless. As required by generally accepted accounting principles (GAAP), we have accounted for our joint venture activity using the equity method of accounting. As a result, the assets and liabilities of these ventures are not included on our consolidated balance sheets and the results of operations of the ventures are not included in our consolidated statements of income, other than as equity in earnings of unconsolidated affiliates.

Effective January 1, 2003, we began consolidating the financial position, results of operations and cash flows of Salmon due to our early adoption of FIN 46. For prior periods presented, Salmon was accounted for using the equity method of accounting.

 
Capital Resources

At December 31, 2003, we had a commercial paper program and a $1,000 unsecured 364-day revolving bank credit facility to support the commercial paper program. Depending upon the corporate credit ratings assigned to us from time to time by the various rating agencies, any amounts outstanding under our revolving credit facility would bear variable rate interest at a spread above LIBOR ranging from 0.24% to 1.30%. As a result of our current credit ratings, interest would currently accrue on any borrowings under our revolving credit facility at an average rate of LIBOR plus 28 basis points, assuming borrowings under the facility are less than 33% of the $1,000 credit facility, or 38 basis points, assuming higher borrowings. The credit facility contains customary events of default and covenants, including a covenant to maintain a specified leverage ratio, as therein defined, a limitation on mergers and sale of all or substantially all of our assets and a negative pledge. The credit agreement provides that each lender will have the option to terminate its commitment to make additional loans and declare all outstanding amounts to be due and payable upon a change in control (as defined) or upon the consummation of a merger or similar transaction involving us or Cingular Wireless Corporation, our manager, with any of the five other largest wireless carriers in the United States, determined based on the number of customers of such carrier as of June 30, 2003. Our acquisition of AT&T Wireless would trigger this option. We plan to renegotiate this provision with the banks prior to the closing of the acquisition. We cannot provide assurance as to the outcome of this initiative. We were in compliance with all covenants under our credit facility at December 31, 2003, and there are no other material covenants to which we are subject under other agreements. Based on our current business plans and projections, we believe we will have sufficient operating cash flow to enable us to continue to comply with the covenants in the credit facility and to not have to draw upon it.

On February 17, 2004, Standard & Poor’s placed both our long-term and short-term ratings on review for possible downgrade, while both Moody’s Investor Services and Fitch Ratings placed our long-term ratings on review for possible downgrade. To the extent the credit rating agencies downgrade our ratings, it may

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be more difficult to access the commercial paper market and our cost of borrowings from all sources may increase.

As of December 31, 2003, we had no commercial paper or revolving credit facility debt outstanding.

Accounts Receivable Secured Borrowing. In December 2003, we established an accounts receivable secured borrowing program that we can use to obtain financing not to exceed $400, collateralized by customer trade accounts receivable and related contract rights. The program is a 364-day financing arrangement that is renewable with the consent of the facility lenders. Under the program, designated Cingular entities can sell their customer trade accounts receivable and related contract rights on a non-recourse, revolving basis to our special-purpose, wholly owned, bankruptcy-remote subsidiary. The subsidiary has pledged its interest in these receivables to, and may borrow against these receivables from, asset-backed commercial paper conduit lenders, whose obligations to issue commercial paper and lend the proceeds to the subsidiary are backed by commitments from commercial banks. Loans will be made to the subsidiary at varying interest rates based on the ratings of our senior notes. These rates would range from .275% to 1.25% over the borrowing cost of the conduit lenders. As a result of our current credit ratings, interest would currently accrue on any borrowings under our accounts receivable secured borrowing at .275% over the borrowing cost of the conduit lenders. We intend to use the proceeds from this financing arrangement for general corporate purposes, including for the acquisition of the spectrum licenses from NextWave. This financing arrangement is subject to customary secured borrowing covenants, does not have a termination provision that is based on the credit ratings of Cingular’s senior unsecured long-term notes and will be recorded as an on balance sheet transaction. We are currently in compliance with the covenants and have no amounts outstanding under this financing arrangement.

We expect to rely on cash provided by operations to fund most of our ongoing operations, business development, debt service and distributions to our members. To the extent that additional cash is required from time to time for these purposes or for acquisitions or other business expansion initiatives, including the acquisition of NextWave spectrum anticipated in the first half of 2004, we may utilize the following sources of external funding: accounts receivable secured borrowing, commercial paper, long-term debt, short-term bank loans, equity investments and borrowings from SBC and BellSouth and bank borrowings under our revolving credit facility, which we do not expect to use as a normal source of funding. Neither SBC nor BellSouth is generally obligated or expected to provide additional financing to us, and there is no assurance that any additional loans, if made, would be on a subordinated basis. We believe that we can access the capital markets to the extent necessary to meet our external financing needs.

Current plans for the AT&T Wireless acquisition contemplate that we will not be required to raise cash or issue securities to fund the transaction. SBC and BellSouth have agreed to fund, from their internal sources, and potential asset sales, and, to the extent required, from third party borrowing provide our manager with, the cash required for the acquisition. However, because of uncertainties concerning the specific financing plans for the acquisition, potential changes to our capital structure, progress and success of integrating AT&T Wireless with us, realization of capital and cost synergies and other considerations, there can be no assurance that our credit ratings will not be lowered and our external financing ability adversely affected.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reflected in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the

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circumstances. Actual results may differ from those estimates under different assumptions or conditions. The various policies that are important to the portrayal of our financial condition and results of operations include:

 
Property, Plant & Equipment — Depreciation
 
Nature of Critical Estimate Item

The wireless communications industry is capital intensive. Depreciation of operating assets constitutes a substantial operating cost for us. The cost of our property, plant and equipment, principally wireless communications equipment, is charged to depreciation expense over estimated useful lives.

 
Assumptions/Approach Used

We depreciate our wireless communications equipment using the straight-line method over estimated useful lives. We periodically review changes in our technology and industry conditions, asset retirement activity and salvage values to determine adjustments to estimated remaining useful lives and depreciation rates.

Effective January 1, 2003, we implemented the results of a review of the estimated service lives of our remaining TDMA network assets. Useful lives were shortened to fully depreciate all such equipment by December 31, 2008. While we will continue to sell and market TDMA services for the foreseeable future, the amount of future projected cash flows to be derived from the TDMA network assets is highly dependent upon the rate of transition of existing customers using TDMA equipment to GSM/GPRS/EDGE-capable equipment, as well as other competitive and technological factors. We determined that a reduction in the useful lives of these assets is warranted based on the projected transition of network traffic to GSM/GPRS/EDGE. This change in estimate increased depreciation in 2003 by $91. TDMA equipment acquired after January 1, 2003 will be assigned estimated useful lives not to exceed six years.

 
Effect if Different Assumptions Used

Actual economic lives may differ from our estimated useful lives. Periodic reviews could result in a change in our depreciable lives and therefore our depreciation expense in future periods.

We continue to review the useful lives of the TDMA assets throughout the period of transition of customers to GSM/GPRS/EDGE-capable equipment to determine whether further changes are warranted. We believe useful lives of our TDMA assets are appropriate as of December 31, 2003.

 
Property, Plant & Equipment — Valuation of Long-Lived Assets
 
Nature of Critical Estimate Item

We review long-lived assets, consisting primarily of property, plant and equipment, for impairment based on the requirements of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). This impairment review is performed whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For assets we intend to hold and use, if the total of the expected future undiscounted cash flows from the asset group is less than the carrying amount of the asset group, a loss is recognized for the difference between the fair value and the carrying value of the asset group. For assets we plan to dispose of, a loss is recognized if the carrying amount of the assets in the disposal group is more than fair value, net of the costs of disposal.

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Assumptions/ Approach Used

In analyzing impairment, significant assumptions used in determining the undiscounted cash flows of our property, plant and equipment include:

•  identification of the asset group subject to the impairment;
 
•  cash flows attributed to the asset group;
 
•  future cash flows of the asset group which incorporate our views of growth rates for the related business and anticipated future economic conditions; and
 
•  period of time over which the assets will be held and used.

Similar assumptions are used to determine the fair value of our property, plant and equipment. In addition, an estimated discount rate is used to incorporate the time value of money and risk inherent in the future cash flows. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value.

 
Effect if Different Assumptions Used

The use of different estimates or assumptions within our undiscounted cash flow model (e.g., growth rates, future economic conditions, estimates of terminal values) could result in undiscounted cash flows that are lower than the current carrying value of our asset group, thereby requiring the need to compare the carrying values of the asset group to its fair value.

The use of different discount rates when determining the fair value of our property, plant and equipment would result in different values for our property, plant and equipment, and impact any related impairment charges.

In the fiscal year ended December 31, 2002, we recognized impairment charges associated with our Mobitex data business and with certain TDMA network infrastructure assets. No impairment charges were recognized in the fiscal year ended December 31, 2003.

 
Goodwill — Valuation
 
Nature of Critical Estimate Item

We review goodwill for impairment based on the requirements of SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142). In accordance with SFAS 142, goodwill is tested for impairment at the reporting unit level on an annual basis as of October 1st or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.

 
Assumptions/ Approach Used

In accordance with SFAS 142, we are required to test goodwill at the reporting unit level as defined by reference to our operating segment determined under SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. We have one reporting unit, wireless communications services, for which we test goodwill for impairment.

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In analyzing goodwill for potential impairment, we use projections of future cash flows from our reporting unit to determine whether its estimated value exceeds its carrying value. These projections of cash flows are based on our views of growth rates and anticipated future economic conditions and the appropriate discount rates relative to risk and estimates of residual values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value.

We were not required during 2003 to test goodwill for impairment at an interim date.

 
Effect if Different Assumptions Used

The use of different estimates or assumptions within our discounted cash flow model (e.g., growth rates, future economic conditions or discount rates and estimates of terminal values) when determining the fair value of the reporting unit could result in different values and may affect any related goodwill impairment charge.

For the 2003 goodwill impairment test performed as of October 1, the fair value of our reporting unit was significantly in excess of its carrying value.

 
FCC Licenses — Valuation of Indefinite-Lived Intangible Assets
 
Nature of Critical Estimate Item

We review indefinite-lived intangible assets for impairment based on the requirements of SFAS 142. Impairment tests for indefinite-lived intangible assets, consisting of FCC licenses, are required to be performed on an annual basis or on an interim basis if an event occurs or circumstances change that would indicate the asset might be impaired. We estimate the fair value of our FCC licenses in the aggregate, using a discounted cash flow model.

 
Assumptions/ Approach Used

In accordance with EITF 02-7, Unit of Accounting for Testing of Impairment of Indefinite-Lived Intangible Assets, impairment tests for FCC licenses are performed on an aggregate basis. We currently hold FCC licenses in 56 markets where we do not currently provide service. The majority of these licenses were granted to Salmon PCS in October 2001. As we plan to construct an operational network in these licensed territories in the near future, these licenses are included in the aggregate test based on their strategic importance to our future business plans. The carrying value of licenses in markets where we do not currently provide service at December 31, 2003 was $496.

We estimate the fair value of our FCC licenses using a discounted cash flow model. This approach used in determining the fair value of the FCC licenses includes the following assumptions:

•  start-up model assumption with FCC licenses as the only asset owned by us;
 
•  cash flow assumptions incorporated in regard to investment in a network, the development of distribution channels and customer base, and other critical inputs for making the business operational. These assumptions underlying these inputs are based upon a combination of historical results and trends, new industry developments and our business plans. As these inputs are included in determining free cash flows of the business, the present value of the free cash flows of the business, after investment in the network, customers, etc. is attributable to the licenses.
 
•  weighted average cost of capital for a start-up asset; and
 
•  long-term rate of growth for our business.

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We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. We corroborate our determination of fair value of the FCC licenses, using the discounted cash flow approach described above, with other market-based valuation metrics.

The fair value of any FCC licenses not included in the aggregation is determined by obtaining recent market data on recent FCC license transactions, if available, and deriving estimates of fair value for each license based on certain characteristics of the license and the related market, including geographic location, market size, megahertz frequency and population density.

 
Effect if Different Assumptions Used

If any legal, regulatory, contractual, competitive, economic, or other factors were to limit the useful life of our indefinite-lived FCC licenses, we would be required to test these intangible assets in accordance with SFAS 144.

The use of different estimates or assumptions within our discounted cash flow model when determining the fair value of our FCC licenses could result in different values for our FCC licenses and may affect any related impairment charge.

For the 2003 FCC license impairment test performed as of October 1, the fair value of the group of aggregated licenses was significantly in excess of its carrying value.

A change in management’s future business plans or disposition of one or more FCC licenses could result in the requirement to test certain FCC licenses for impairment on an individual basis rather than on an aggregate basis.

 
Accounts Receivable — Allowance for Doubtful Accounts
 
Nature of Critical Estimate Item

We maintain allowances for doubtful accounts for estimated losses resulting from the failure of our customers to make required payments.

 
Assumptions/ Approach Used

We base our estimates primarily on our historical write-off experience, net of recoveries, and the aging of accounts receivable balances. Our collection policies and procedures vary by credit class and prior payment history of customers.

 
Effect if Different Assumptions Used

Management believes that the allowance for doubtful accounts is adequate to cover estimated losses in customer accounts receivable balances under current conditions. However, changes to the allowances for doubtful accounts may be necessary in the event that the financial condition of our customers improves or deteriorates. Additionally, changes may be necessary if we adjust our credit standards for new customers. Either of these situations may result in write-off patterns that differ from our historical experience.

 
Service Revenues — Rollover
 
Nature of Critical Estimate Item

Certain customer rate plans include a rollover feature whereby unused anytime minutes do not expire each month but rather are available, under certain conditions, for future use for a period not to exceed one year

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from the date of purchase. We defer revenue based on an estimate of the portion of minutes expected to be utilized prior to expiration.

 
Assumptions/Approach Used

Historical customer usage patterns over the prior six month period, which have been demonstrated to be consistent and which we view to be reliable for purposes of gauging predictive behavior, allow us to estimate the number of minutes expected to be utilized, as well as those which are likely to expire or be forfeited. No deferral of revenue is recorded for the minutes that are expected to expire or be forfeited, as no future performance is expected to be required by us, nor is there any obligation to refund or redeem for value expired rollover minutes. We record an obligation for those rollover minutes we estimate will be utilized based on a weighted-average of the per minute airtime implicit in the price of our rollover rate plans.

The balance of the rollover deferral was $31 and $103 as of December 31, 2002 and 2003, respectively.

 
Effect if Different Assumptions Used

If there is a change in future calling behavior of our customers or rollover rate plan pricing, our estimate of the future obligation associated with rollover minutes to be deferred would change.


We have discussed the development and selection of these critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the disclosure of these critical accounting policies in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Related Party Transactions

We incurred the following related party charges:

                         
Year Ended December 31,

Type of Service 2001 2002 2003




Interconnect and long distance(1)(2)
  $ 385     $ 663     $ 815  
Agent commissions and compensation(1)
    33       46       103  
Transition services(1)
    267       17        
Other services(1)
    44       68       77  
Interest expense on debt due to affiliates(1)
    735       726       653  


(1)  These are charges from SBC and BellSouth, and their affiliates. See Note 8 to the Cingular Wireless LLC audited consolidated financial statements included in Item 8 for further discussion related to interest expense on debt due to affiliates.
 
(2)  The increase in interconnect and long distance in 2002 and in 2003 resulted primarily from redundant expenses related to operating dual networks while transitioning our network from TDMA to GSM and the selection of SBC and BellSouth as preferred long distance service providers.

For the year ended December 31, 2002, SBC and BellSouth made cash capital contributions to us of $499 for general corporate purposes.

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Recent Accounting Pronouncements

See the section, New Accounting Standards, in Note 1. “Summary of Significant Accounting Policies” in Item 8, Financial Statements and Supplemental Data — Historical Financial Statements — Cingular Wireless LLC.

 
Item 7a. Quantitative and Qualitative Disclosure About Market Risk

The majority of our financial instruments are medium- and long-term fixed rate notes and member loans. Fluctuations in market interest rates can lead to significant fluctuations in the fair value of these fixed rate instruments. In addition, we are exposed to market risks, primarily from changes in interest rates and to a lesser degree from foreign currency exchange rates. To manage exposure to these fluctuations, manage capital costs, control financial risks and maintain financial flexibility over the long term, we engage from time to time in hedging transactions that have been authorized by the board of directors of our manager. We do not anticipate any significant changes in our objectives and strategies with respect to managing such exposures. We do not use derivatives for trading purposes, to generate income or to engage in speculative activity.

At December 31, 2003, we had outstanding an aggregate of $9,678 in unsecured, subordinated member loans from SBC and BellSouth with a fixed interest rate of 6.0% and a stated maturity of June 30, 2008. In addition, we currently have outstanding $2,000 of unsecured senior notes with fixed interest rates ranging from 5.625% to 7.125% and with maturity dates between 2006 and 2031. As of December 31, 2003, we had $250 of fixed-to-floating interest rate swaps related to our five-year unsecured senior notes. A change in interest rates of 100 basis points would change our interest expense as a result of the swaps as of December 31, 2003 by $3 per annum. We also have capital leases outstanding of $908 primarily with a fixed interest rate of 8% and of $47 with fixed interest rates ranging from 4.86% to 7.08%.

As of December 31, 2003, we had $64 of floating rate borrowings. A change in interest rates of 100 basis points would change our interest expense on floating rate debt balances as of December 31, 2003 by less than $1 per annum.

We currently have no commercial paper outstanding and we have not borrowed any amounts under our revolving credit facility or accounts receivable secured borrowing facility. However, we may have future interest rate risk associated with the issuance of commercial paper or borrowings under our revolving credit facility or accounts receivable secured borrowing. Commercial paper and loans under the secured borrowing facility are issued at a pre-determined spread to LIBOR, depending on our credit ratings. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources”.

The fair values of our foreign currency derivatives are subject to fluctuations in foreign exchange rates. We use forward foreign currency exchange contracts to offset foreign exchange gains and losses on Japanese Yen-denominated capital lease obligations. As of December 31, 2003, the approximate fair value of these foreign currency hedging instruments was a loss of $15. The potential gain or loss in the fair value of such financial instruments from a hypothetical 10% decrease or increase in the Japanese Yen relative to the U.S. Dollar would be less than $10 as of December 31, 2003, although this would be primarily offset by the decrease or increase in the fair value of the capital lease obligations. The fair value is based on dealer quotes, considering current exchange rates. There is not a cash flow impact or earnings risk associated with changes in the fair value of the foreign currency hedging instruments and the underlying capital lease obligations.

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Item 7a. Quantitative and Qualitative Disclosure About Market Risk

The risk management discussion above, related to our market risks, contains forward-looking statements and represents, among other things, an estimate of possible changes in fair value that would occur assuming hypothetical future foreign currency fluctuations. Future impacts of market risk would be based on actual developments in the financial markets. See “Cautionary Language Concerning Forward-Looking Statements” following Part IV of this Annual Report.

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Item 8. Financial Statements and Supplemental Data
         
Historical Financial Statements
       
Cingular Wireless LLC
       
Report of Independent Auditors
    70  
Consolidated Statements of Income for the years ended December 31, 2001, 2002, and 2003
    71  
Consolidated Balance Sheets as of December 31, 2002 and 2003
    72  
Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2002, and 2003
    73  
Consolidated Statements of Changes in Members’ Capital for the years ended December 31, 2001, 2002, and 2003
    74  
Notes to Consolidated Financial Statements
    75  
GSM Facilities LLC
       
Report of Independent Auditors — Ernst & Young LLP
    112  
Report of Independent Auditors — PricewaterhouseCoopers LLP
    113  
Consolidated Statements of Operations for the period from November 1, 2001 (inception) through December 31, 2001 and for the years ended December 31, 2002 and 2003
    114  
Consolidated Balance Sheets as of December 31, 2002 and 2003
    115  
Consolidated Statements of Cash Flows for the period from November 1, 2001 (inception) through December 31, 2001 and for the years ended December 31, 2002 and 2003
    116  
Consolidated Statements of Changes in Members’ Capital for the period from November 1, 2001 (inception) through December 31, 2001 and for the years ended December 31, 2002 and 2003
    117  
Notes to Consolidated Financial Statements
    118  
Financial Statement Schedule
       
Cingular Wireless LLC
       
Schedule II — Valuation and Qualifying Accounts
    126  

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REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareowners

Cingular Wireless Corporation, Manager of
     Cingular Wireless LLC

We have audited the accompanying consolidated balance sheets of Cingular Wireless LLC as of December 31, 2002 and 2003 and the related consolidated statements of income, changes in members’ capital, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15a(2). These financial statements and schedule 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cingular Wireless LLC at December 31, 2002 and 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 4 to the financial statements, in 2002 the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

                                                         /s/ ERNST & YOUNG LLP

Atlanta, Georgia

February 6, 2004, except for
Note 18, as to which
the date is February 17, 2004

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Item 8. Financial Statements and Supplemental Data

CINGULAR WIRELESS LLC

CONSOLIDATED STATEMENTS OF INCOME

                             
Year Ended December 31,

2001 2002 2003



(Dollars in millions)
Operating revenues:
                       
 
Service revenues
  $ 13,229     $ 13,922     $ 14,223  
 
Equipment sales
    1,039       981       1,260  
     
     
     
 
Total operating revenues
    14,268       14,903       15,483  
Operating expenses:
                       
 
Cost of services (excluding depreciation of $1,291, $1,396 and $1,672, which is included below)
    2,912       3,571       3,652  
 
Cost of equipment sales
    1,652       1,535       2,031  
 
Selling, general and administrative
    5,235       5,426       5,422  
 
Depreciation and amortization
    1,921       1,850       2,089  
     
     
     
 
Total operating expenses
    11,720       12,382       13,194  
     
     
     
 
Operating income
    2,548       2,521       2,289  
Other income (expenses):
                       
 
Interest expense
    (822 )     (911 )     (856 )
 
Minority interest in earnings of consolidated entities
    (122 )     (123 )     (101 )
 
Equity in net loss of affiliates
    (68 )     (265 )     (323 )
 
Other, net
    164       29       41  
     
     
     
 
   
Total other income (expenses)
    (848 )     (1,270 )     (1,239 )
     
     
     
 
Income before provision for income taxes and cumulative effect of accounting change
    1,700       1,251       1,050  
Provision for income taxes
    8       12       28  
     
     
     
 
Income before cumulative effect of accounting change
    1,692       1,239       1,022  
Cumulative effect of accounting change, net of tax
          (32 )      
     
     
     
 
Net income
  $ 1,692     $ 1,207     $ 1,022  
     
     
     
 

See accompanying notes.

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Item 8. Financial Statements and Supplemental Data

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CONSOLIDATED BALANCE SHEETS

                   
December 31,

2002 2003


(Dollars in millions)
ASSETS
Current assets:
               
 
Cash and cash equivalents
  $ 908     $ 1,139  
 
Accounts receivable — net of allowance for doubtful accounts of $163 and $130
    1,520       1,592  
 
Inventories
    126       273  
 
Prepaid expenses and other current assets
    177       296  
     
     
 
Total current assets
    2,731       3,300  
Property, plant and equipment, net
    10,146       10,939  
FCC licenses, net
    7,387       7,769  
Goodwill
    844       849  
Other intangible assets, net
    307       155  
Investments in and advances to equity affiliates
    2,316       2,288  
Other assets
    391       226  
     
     
 
Total assets
  $ 24,122     $ 25,526  
     
     
 
 
LIABILITIES AND MEMBERS’ CAPITAL
Current liabilities:
               
 
Debt maturing within one year
  $ 45     $ 95  
 
Accounts payable
    1,043       904  
 
Due to affiliates, net
    45       54  
 
Advanced billing and customer deposits
    446       538  
 
Accrued liabilities
    1,208       1,596  
     
     
 
Total current liabilities
    2,787       3,187  
Long-term debt:
               
 
Debt due to affiliates
    9,678       9,678  
 
Other long-term debt, net of discount
    2,868       2,914  
     
     
 
Total long-term debt
    12,546       12,592  
Other noncurrent liabilities
    681       604  
     
     
 
Total liabilities
    16,014       16,383  
Minority interests in consolidated entities
    567       659  
Members’ capital:
               
 
Members’ capital
    7,721       8,664  
 
Receivable for properties to be contributed
    (178 )     (178 )
 
Accumulated other comprehensive loss
    (2 )     (2 )
     
     
 
Total members’ capital
    7,541       8,484  
     
     
 
Total liabilities and members’ capital
  $ 24,122     $ 25,526  
     
     
 

See accompanying notes.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

                             
Year Ended December 31,

2001 2002 2003



(Dollars in millions)
Operating activities
                       
Net income
  $ 1,692     $ 1,207     $ 1,022  
Adjustments to reconcile net income to net cash provided by operating activities:
                       
 
Depreciation and amortization
    1,921       1,850       2,089  
 
Provision for doubtful accounts
    333       404       259  
 
Asset impairments
          151        
 
Gain on disposition of businesses
    (97 )     (8 )     (3 )
 
Minority interest in earnings of consolidated entities
    122       123       101  
 
Equity in net loss of affiliates
    68       265       323  
 
Cumulative effect of accounting change, net of tax
          32        
 
Changes in operating assets and liabilities:
                       
   
Accounts receivable
    (541 )     (280 )     (331 )
   
Other current assets
    113       21       (230 )
   
Accounts payable and other current liabilities
    90       (420 )     290  
   
Pensions and post-employment benefits
    6       91       55  
 
Other, net
    (42 )     156       111  
     
     
     
 
Net cash provided by operating activities
    3,665       3,592       3,686  
Investing activities
                       
Construction and capital expenditures
    (3,156 )     (3,085 )     (2,734 )
Investments in and advances to equity affiliates, net
    (585 )     (450 )     (616 )
Dispositions of assets
    85       6       7  
Acquisitions of businesses and licenses, net of cash received
    (289 )     (6 )     (25 )
Contractor engineering deposit
          (50 )      
     
     
     
 
Net cash used in investing activities
    (3,945 )     (3,585 )     (3,368 )
Financing activities
                       
Net repayment of debt due to affiliates
    (1,148 )            
Proceeds from issuance of Senior Notes, net of issuance costs
    1,973              
Net repayment of commercial paper
    (672 )     (27 )      
Net repayment of long-term debt
    (37 )     (59 )     (64 )
Distributions to members
    (639 )            
Net distributions to minority interests
    (126 )     (79 )     (33 )
Contributions from members
    1,370       499       10  
     
     
     
 
Net cash provided by (used in) financing activities
    721       334       (87 )
     
     
     
 
Net increase in cash and cash equivalents
    441       341       231  
Cash and cash equivalents at beginning of period
    126       567       908  
     
     
     
 
Cash and cash equivalents at end of period
  $ 567     $ 908     $ 1,139  
     
     
     
 

See accompanying notes.

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CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

           
(Dollars in millions)
Balance at December 31, 2000
  $ 2,265  
 
Net income
    1,692  
 
Contributions from members
    2,534  
 
Distributions to members
    (639 )
 
Other comprehensive loss
    (2 )
     
 
Balance at December 31, 2001
    5,850  
 
Net income
    1,207  
 
Contributions from members, net
    484  
     
 
Balance at December 31, 2002
    7,541  
 
Net income
    1,022  
 
Distributions to members, net
    (79 )
     
 
Balance at December 31, 2003
  $ 8,484  
     
 

See accompanying notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2001, 2002 and 2003
(Dollars in Millions)

1.     Summary of Significant Accounting Policies

 
Basis of Presentation

Cingular Wireless LLC (the Company) is a Delaware limited liability company formed by SBC Communications Inc. (SBC) and BellSouth Corporation (BellSouth) as the operating company for their U.S. wireless joint venture. The parties entered into an agreement to form the Company in April 2000, subject to regulatory approvals. Cingular Wireless Corporation acts as the Company’s manager and controls the Company’s management and operations. The Company provides Cingular-branded wireless voice and data communications services, including local, long-distance, and roaming services using both cellular and personal communications services (PCS), and equipment to customers in 36 states. In addition, the Company provides enhanced and interactive data services over a proprietary “Mobitex” network utilizing base stations and satellite transmission facilities. All of the Company’s operations, which serve customers in 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, are conducted through subsidiaries or ventures.

On October 2, 2000, SBC and BellSouth (the members) and certain of their subsidiaries contributed substantially all of their U.S. wireless assets in exchange for approximately 60% and 40% economic interests, respectively, in the Company, and the Company began doing business under the “Cingular” brand name in January 2001. SBC and BellSouth share joint voting control of the Company’s operations by virtue of their 50/50 ownership of, and the terms of the stockholders’ agreement pertaining to, Cingular Wireless Corporation. All assets and liabilities contributed to the venture have been recorded at their historical basis of accounting. The Company recorded estimated receivables for wireless operations to be contributed to the Company after the formation date.

As provided for in the Contribution and Formation Agreement between the Company, SBC and BellSouth, additional contributions of wireless operations and assets in certain markets were made during 2001 (see Note 2). The contribution by SBC of wireless operations and assets in the Arkansas markets, or an equivalent amount in cash if such assets are not contributed, was still pending as of December 31, 2003. The Company has recorded amounts to be contributed as “Receivable for properties to be contributed” in the consolidated balance sheets. Until such time as the contribution is made, the Company continues to manage the properties for a fee. Fees received for managing the Arkansas markets for the years ended December 31, 2001, 2002 and 2003 were $28, $22 and $30, respectively. For the wireless businesses contributed in 2001, the Company received management fees in 2001 of $22 for services provided prior to the actual dates of contribution. These consolidated financial statements include charges from SBC and BellSouth for certain expenses pursuant to various agreements (see Notes 11 and 15). These expenses are considered to be a reasonable reflection of the value of services provided or the benefits received by the Company.

 
Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reflected in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, where applicable, and other assumptions that we believe are reasonable

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(Dollars in Millions)

under the circumstances. Actual results could differ from those estimates under different assumptions or conditions. Estimates are used when accounting for certain items such as revenue, allowance for doubtful accounts, depreciation and amortization, valuation of inventory, pensions and other benefits, investments and asset impairment.

 
Principles of Consolidation

The consolidated financial statements include the accounts of the Company, variable interest entities in which the Company is the primary beneficiary as defined by Financial Accounting Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46), and voting interest entities in which the Company exercises control. Other parties’ interests in consolidated entities are reported as minority interests. All significant intercompany transactions are eliminated in the consolidation process.

The equity method is used to account for investments that are not consolidated but in which the Company exercises significant influence.

 
Segments

The Company manages the business as one reportable business segment, wireless communications services, which also is a single operating segment. The Company operates only domestically.

 
FCC Licenses

The Federal Communications Commission (FCC) issues licenses that authorize wireless carriers to provide service in specific geographic service areas. The FCC grants licenses for terms of up to ten years. In 1993, the FCC adopted specific standards to apply to wireless renewals, concluding it will award a license renewal to a licensee that meets certain standards of past performance. Historically, the FCC has granted license renewals routinely. The licenses held by the Company expire at various dates. The Company believes that it will be able to meet all requirements necessary to secure renewal of its wireless licenses.

 
Revenue Recognition

The Company earns service revenues by providing access to its wireless network (access revenue) and for usage of its wireless system (airtime revenue). Access revenue from postpaid contract customers is billed in advance and recognized ratably over the service period. Airtime revenue, including roaming revenue and long-distance revenue, is billed in arrears based on minutes of use and is recognized when the service is rendered. Prepaid airtime sold to customers is recorded as deferred revenues prior to the commencement of services, and revenue is recognized when airtime is used or expires. Access and airtime services provided are billed throughout the month according to the bill cycle in which a particular subscriber is placed. As a result of bill cycle cut-off times, the Company is required to make estimates for service revenues earned but not yet billed at the end of each month. These estimates are based primarily upon historical minutes of use.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

Certain rate plans include a rollover feature whereby unused anytime minutes do not expire each month but rather are available, under certain conditions, for future use for a period not to exceed one year from the date of purchase. We defer revenue based on an estimate of the portion of minutes expected to be utilized prior to expiration. Historical subscriber usage patterns over the prior six month period, which have been demonstrated to be consistent and which the Company views to be reliable for purposes of gauging predictive behavior, allow the Company to estimate the number of minutes to be utilized, as well as those which are likely to expire or be forfeited. No deferral of revenue is recorded for the minutes that are expected to expire or be forfeited, as no future performance is expected to be required by the Company, nor is there any obligation to refund or redeem for value expired rollover minutes. The balance of the rollover deferral as of December 31, 2002 and 2003 was $31 and $103, respectively, and has been included in “Advanced billings and customer deposits” in the consolidated balance sheets.

Roaming revenues include revenues from Company customers who roam outside their selected home coverage area, referred to as “incollect” roaming revenues, and revenues from other wireless carriers for roaming by their customers on the Company’s network, referred to as “outcollect” roaming revenues.

The Company offers enhanced services including caller ID, call waiting, call forwarding, three-way calling, no answer/busy transfer, text messaging and voice mail. Generally, these enhanced features generate additional revenues through monthly subscription fees or increased wireless usage through utilization of the features. Other optional services, such as mobile-to-mobile calling, roadside assistance and handset insurance, may also be provided for a monthly fee. These enhanced features and optional services may be bundled with package rate plans or sold separately. Revenues for enhanced services and optional features are recognized as earned. Service revenues also include billings to our customers for Universal Service Fund (USF) and other regulatory fees (see also Reclassifications).

Equipment sales consist principally of revenues from the sale of wireless mobile telephone handsets and accessories to new and existing customers and to agents and other third-party distributors. The revenue and related expenses associated with the sale of wireless handsets and accessories through our indirect sales channel and accessories are recognized when the products are delivered and accepted by the agent or third-party distributor, as this is considered to be a separate earnings process from the sale of wireless services.

Effective July 1, 2003, the Company adopted Emerging Issues Task Force (EITF) No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables (see also New Accounting Standards). The Company is applying the provisions of this statement on a prospective basis subsequent to that date.

The Company determined that the sale of wireless services through our direct sales channel with an accompanying handset constitutes a revenue arrangement with multiple deliverables. Upon adoption of EITF No. 00-21, the Company began dividing these arrangements into separate units of accounting, including the wireless service and handset. Arrangement consideration received for the handset is recognized as equipment sales when the handset is delivered and accepted by the subscriber. Arrangement consideration received for the wireless service is recognized as service revenues when earned. As the non-refundable, up-front activation fee charged to the subscriber does not meet the criteria as a separate unit of accounting, the Company allocates the additional arrangement consideration received from the activation fee to the handset (the delivered item) to the extent that the aggregate handset and activation

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

fee proceeds do not exceed the fair value of the handset. Any activation fees not allocated to the handset would be deferred upon activation and recognized as service revenue over the expected customer relationship period, which is currently estimated to be three years. The Company determined that the sale of wireless services through our indirect sales channel (agents) does not constitute a revenue arrangement with multiple deliverables. For indirect channel sales, the Company continues to defer non-refundable, up-front activation fees and associated costs to the extent of the related revenues in accordance with Securities and Exchange Commission (SEC) Staff Accounting Bulletin Number 101 (SAB 101), Revenue Recognition in Financial Statements and EITF No. 00-21. SAB 101 was amended in December 2003 by Staff Accounting Bulletin Number 104 (SAB 104). These deferred fees and costs are amortized over the estimated customer relationship period. The Company has recorded deferred revenues and deferred expenses of equal amount in the consolidated balance sheets. As of December 31, 2002 and 2003, SAB 101 deferred revenues and expenses were $198 and $104, respectively.

     Income Taxes

Substantially all of the operating units controlled and consolidated by the Company are either limited liability companies or partnerships. Accordingly, in most tax jurisdictions, income tax items flow through to the members or partners who are taxed at their level pursuant to federal and state income tax laws. The members or partners are responsible for their tax liabilities resulting from income earned at the member or partner level. However, the Company has corporate subsidiaries and LLC subsidiaries that are income taxpayers in some jurisdictions and will record income tax expense.

     Required Distributions

The Company is required to make periodic distributions to its members on a pro rata basis in accordance with each member’s ownership interest in amounts sufficient to permit members to pay the tax liabilities resulting from allocations of income tax items from the Company. During 2001, the Company made distributions to members of $47 related to 2000 tax liabilities and $592 related to 2001 tax liabilities. Since the Company did not generate taxable income to the members in 2002 and 2003, the Company made no distributions for tax liabilities in 2002 and 2003.

Additionally, the Company is required to distribute to its members 50% of its “excess cash,” as defined in the operating agreement, at the end of each fiscal year. Excess cash consists of funds generated from the Company’s operations less forecasted cash needs for the upcoming fiscal year and distributions made to the members for their tax payments. In all years presented, the Company was not required to make any distributions of excess cash to the members.

     Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less. Outstanding checks and drafts of $202 and $74 have been included in “Accounts payable” in the consolidated balance sheets as of December 31, 2002 and 2003, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

     Accounts Receivable

Accounts receivable consist principally of trade accounts receivable from customers and are generally unsecured and due within 30 days. Credit losses relating to these receivables consistently have been within management’s expectations. Expected credit losses are recorded as an allowance for doubtful accounts in the consolidated balance sheets. Estimates of expected credit losses are based primarily on historical write-off experience, net of recoveries, and on the aging of the accounts receivable balances. The collection policies and procedures of the Company vary by credit class and prior payment history of customers.

     Inventories

Inventories consist principally of wireless handsets and accessories and are valued at the lower of weighted-average cost or market value. Market value is determined using replacement cost. The Company maintains inventory valuation reserves for obsolescence and slow moving inventory. Reserves for obsolescence are determined based on analysis of inventory agings.

     Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and amortization. The cost of additions and substantial improvements is capitalized. The cost of maintenance and repairs is charged to operating expenses. Property, plant and equipment are depreciated using the straight-line method over their estimated useful lives. Effective January 1, 2001, the Company conformed the estimated useful lives with those used by its predecessor entities. These useful lives are applied to all assets purchased after January 1, 2001. This change did not have a material effect on the Company’s results of operations. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized and included in operating results. Interest expense and network engineering costs incurred during the construction phase of the Company’s wireless network are capitalized as part of property, plant and equipment until the projects are completed and the assets are placed into service.

 
Software Capitalization

The Company capitalizes certain costs incurred in connection with developing or obtaining internal use software in accordance with American Institute of Certified Public Accountants Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. These capitalized software costs are included in “Property, plant and equipment, net” in the consolidated balance sheets and are being amortized ratably over a period not to exceed five years.

 
Intangible Assets

Intangible assets consist primarily of FCC licenses, the excess of consideration paid over the fair value of net assets acquired in purchase business combinations (goodwill) and customer lists. In 2001, goodwill and FCC licenses were amortized using the straight-line method over 40 years.

With the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets (SFAS 142), as of January 1, 2002, goodwill and other indefinite-lived intangible assets are not amortized. The Company has determined that FCC licenses should be treated as indefinite-lived

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

intangible assets (see Note 4). No amortization was taken on goodwill and FCC licenses in 2002 and 2003, with the exception of FCC licenses used in the Mobitex data business. Customer lists represent values placed on customers of acquired businesses and have a finite life. The Company’s customer lists are amortized over a five-year period primarily using the straight-line method.

The Company tests goodwill and indefinite-lived intangible assets for impairment on an annual basis. Additionally, goodwill will be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the Company’s fair value below its carrying value. Indefinite-lived intangible assets will be tested between annual tests if events or changes in circumstances indicate that the asset might be impaired. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. See Note 4 for discussion of the goodwill and indefinite-lived intangible asset impairment tests.

 
Valuation of Long-lived Assets

Long-lived assets, including property, plant and equipment and intangible assets with finite lives, are reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144), whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technological or other industry changes. In analyzing potential impairment, the Company uses projections of future cash flows from the asset group. These projections are based on the Company’s views of forecasted growth rates, anticipated future economic conditions, appropriate discount rates relative to risk, and estimates of residual values. For assets the Company intends to hold for use, if the total of the expected future undiscounted cash flows from the asset group is less than the carrying amount of the asset group, a loss is recognized for the difference between the fair value and carrying amount of the asset group. For assets the Company intends to dispose of, a loss is recognized if the carrying amount of the assets in the disposal group is more than fair value, net of the costs of disposal. The Company principally uses the discounted cash flow method to estimate the fair value of its long-lived assets. The discount rate applied to the undiscounted cash flows is consistent with the Company’s weighted-average cost of capital. See Note 12 for discussion of impairment losses recognized in 2002.

The Company periodically evaluates the useful lives of its wireless network equipment and other equipment and finite-lived intangible assets based on technological and other industry changes to determine whether events or changes in circumstances warrant revisions to the useful lives (see Notes 3 and 12).

 
Valuation of Investments

The Company holds equity interests in certain entities (see Note 5). These investments are accounted for under the equity method of accounting. In accordance with Accounting Principles Board (APB) Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock, the Company periodically reviews its equity method investments for impairment. These reviews are performed to determine whether a decline in the fair value of an investment below its carrying value is deemed to be other than temporary.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)
 
Deferred Financing Costs

In connection with the issuance of Senior Notes in December 2001 described in Note 8, the Company recorded $20 of deferred costs for underwriting fees and other related debt issuance costs. The net deferred financing costs were $19 and $17 at December 31, 2002 and 2003, respectively. These deferred financing costs are included in “Other assets” in the consolidated balance sheets and are amortized over the related terms of the notes using the straight-line method, which approximates the interest method.

 
Advertising Costs

Costs for advertising are expensed as incurred. Total advertising expenses were $509, $549 and $643 for the years ended December 31, 2001, 2002 and 2003, respectively.

 
Derivative Financial Instruments

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. Gains and losses resulting from changes in the fair values of those derivative instruments will be recorded to earnings or other comprehensive income depending on the use of the derivative instrument and whether it qualifies for hedge accounting.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions.

The Company also assesses, both at the inception of the hedge and on an on-going basis, whether the derivatives that are used in hedging transactions are effective. Should it be determined that a derivative is not effective as a hedge, the Company would discontinue the hedge accounting prospectively.

 
New Accounting Standards

In January 2003, the FASB issued FIN 46. This standard clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to address the consolidation of certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated support from other parties. FIN 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries. For variable interest entities for which an enterprise holds a variable interest acquired before February 1, 2003, FIN 46 may be applied by restating previously issued financial statements or prospectively from the date of adoption. The Company adopted this new pronouncement effective January 1, 2003 and consolidated Salmon PCS LLC (Salmon). The Company did not restate any previously issued financial statements. The FASB revised FIN 46 in December 2003, which did not impact the Company. See Note 6 for further discussion of the consolidation of Salmon.

In November 2002, the EITF reached a consensus on Issue No. 00-21. The consensus addresses how to account for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. Revenue arrangements with multiple deliverables are required to be divided into separate units of accounting if the deliverables in the arrangement meet certain criteria. Arrangement consideration should be allocated among the separate units of accounting based on their relative fair

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

values. The consensus also supersedes certain guidance set forth in SAB 101, which was amended in December 2003 by SAB 104. The final consensus is applicable to agreements entered into in quarters beginning after June 15, 2003. The Company adopted this new pronouncement effective July 1, 2003 and is applying the provisions of this statement on a prospective basis subsequent to that date. The impact to the Company’s financial position, results of operations, and cash flows would not have been materially different had the Company adopted this new pronouncement on January 1, 2001. The impact to the Company’s ongoing results of operations and cash flows as a result of adopting this statement is not material.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150). This statement establishes standards for how an issuer classifies and measures financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that instruments that are redeemable upon liquidation or termination of an issuing subsidiary that has a limited life are considered mandatorily redeemable shares in the financial statements of the parent. Accordingly, those non-controlling interests are required to be classified as liabilities and recorded at settlement value by SFAS 150. This statement was effective beginning July 1, 2003. As a result of concerns over implementation and measurement issues, on November 7, 2003, FASB Staff Position (FSP) FAS 150-3 was issued deferring the effective date for the measurement provisions of paragraphs 9 and 10 of SFAS 150, as they apply to mandatorily redeemable non-controlling interests (e.g., minority interests) of limited-life entities that are consolidated in the financial statements.

Certain of our consolidated entities with minority partners have finite lives. While there are no provisions in the entity charter agreements that require liquidation upon expiration of the entities’ stated lives, the guidance in SFAS 150 requires the minority interest to be recorded on the balance sheet at settlement value as if the minority interest will be liquidated at that time. The impact on the Company’s results of operations, financial position and cash flows is not material.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations (SFAS 143). This statement requires the Company to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and capitalize that amount as part of the book value of the long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss. This statement is effective for financial statements for fiscal years beginning after June 15, 2002. The Company adopted this new pronouncement effective January 1, 2003.

The Company has certain legal obligations related to network infrastructure, principally tower assets, which fall within the scope of SFAS 143. These legal obligations include obligations to remediate leased land on which the Company’s network infrastructure assets are located.

The significant assumptions used in estimating our asset retirement obligations include the following: a 50% probability that our network infrastructure assets with asset retirement obligations will be remediated at the lessor’s directive, expected settlement dates that coincide with lease expiration dates plus estimates of lease extensions, remediation costs that are indicative of what third party vendors would charge the Company to remediate the sites, expected inflation rates that are consistent with historical inflation rates,

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and credit-adjusted risk-free rates that approximate the Company’s incremental borrowing rates. The adoption of SFAS 143 did not have a material impact on the Company’s individual financial statement line items or its consolidated financial statements taken as a whole. Accordingly, the Company did not record asset retirement obligations for network infrastructure assets given the insignificance of the Company’s estimated liability and related accretion and depreciation expense. The Company will continue to evaluate on a quarterly basis whether the estimated asset retirement obligations and related financial statement amounts continue to be immaterial in relation to the Company’s individual financial statement line items or its consolidated financial statements taken as a whole.

In December 2003, the FASB revised SFAS No. 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits (SFAS 132). This statement revised employers’ disclosure about pension plans and other postretirement benefit plans. It requires additional disclosures to those in the original SFAS 132 about the plan assets, benefit obligations, cash flows and net periodic benefit cost of defined benefit plans and other defined postretirement plans. This statement is effective for financial statements with fiscal years ending after December 15, 2003 and quarters beginning after December 15, 2003 (see Note 15). The Company adopted the statement in 2003.

     Comprehensive Income

Comprehensive income for the Company approximates net income for all periods presented. There are no significant components of other comprehensive income.

     Reclassifications

Certain amounts have been reclassified in the 2001 and 2002 consolidated financial statements to conform to the current year presentation.

The income statement for all periods presented has been reclassified to reflect billings to our customers for the USF and other regulatory fees as “Service revenues” and the related payments into the associated regulatory funds as “Cost of services” expenses. Operating income and net income for all prior periods have been unaffected. The amounts reclassified for 2001, 2002 and 2003 were $160, $176 and $337, respectively.

2.     Contributions, Acquisitions, Disposition and License Exchange

 
      Contributions

In September and December of 2002, SBC and BellSouth made cash capital contributions to the Company totaling $499 for general corporate purposes.

In September 2001, SBC contributed its controlling 50% equity interest in Cellular Communications of Puerto Rico. In May 2001, an SBC affiliate contributed a minority interest in a Washington/Baltimore cellular operation. In March 2001, SBC contributed its interest in the operations and assets of a Michigan wireless business and certain assets of an SBC affiliate. The aggregate net book value of these contributions totaled $831.

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In December 2000, BellSouth exercised its option to redeem the 55.6% limited partnership interest of AT&T Wireless Services, Inc. (AT&T Wireless) in AB Cellular by distributing to AT&T Wireless the Los Angeles area cellular business. Following this transaction, BellSouth held the remaining assets of the AB Cellular partnership, which included 100% of the Houston area cellular market, 87.35% of the Galveston area cellular market and $1,163 in cash. In January 2001, BellSouth contributed the operations and assets of the AB Cellular partnership to the Company; the aggregate net book value of the contribution was $1,727. The majority of the cash contributed was used to pay the Company’s debt due to affiliates in accordance with terms of the Contribution and Formation Agreement. The results of operations of these contributed entities are included in the consolidated statements of income as of their respective contribution dates.

As stipulated by the Contribution and Formation Agreement, amounts may be due to/from SBC or BellSouth to the extent that the carrying amounts of the net assets as of the contribution date are more/less than the agreed upon amount at formation. In 2001, the Company paid a net amount of $186, plus accrued interest from the date of contribution, to the members under these provisions.

     Acquisitions

On August 4, 2003, the Company executed an agreement with NextWave Telecom, Inc. (NextWave) and certain of its affiliates pursuant to which the Company would purchase FCC licenses for wireless spectrum in 34 markets from NextWave and its affiliates for $1,400 in cash. In September 2003, the U.S. Bankruptcy Court for the Southern District of New York approved the sale. The transaction is subject to various closing conditions, some of which are outside of the parties’ control. The transaction is expected to close in the first half of 2004.

In April 2002, the Company and an affiliate of SBC completed a transaction with T-Mobile USA, Inc. (T-Mobile) in which T-Mobile contributed assets for a 6% equity interest in the Company’s Puerto Rico wireless communications operations. No gain or loss was recognized on this transaction. This transaction resulted in a decrease in the Company’s ownership interest in the Puerto Rico business from 50% to 47%. Due to the fact that all existing control provisions have been retained by the Company, consolidation of the financial statements of the Puerto Rico business will continue. On each of the fifth, seventh and tenth anniversaries of this transaction, T-Mobile and the Company have fair market value put and call options, respectively, related to T-Mobile’s 6% equity interest.

In May 2001, the Company purchased from SBC for $151 a 10% minority interest in the Washington/Baltimore wireless business. Concurrent with this purchase, SBC also contributed a minority interest in the Washington/Baltimore operations held by an SBC affiliate. As a result of the purchase and contribution of minority interests from SBC, the Company holds a 100% interest in the Washington/Baltimore wireless business.

The minority interest acquisition was accounted for under the purchase method of accounting. Prior to the adoption of SFAS 142 on January 1, 2002, the purchase price in excess of the proportionate interest in the underlying fair value of identifiable net assets acquired was amortized using the straight-line method over a 20-year period. The acquisition of the minority interest did not have a significant impact on the

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consolidated results of operations for 2001, nor would it had it occurred on October 2, 2000, the original contribution date.

In November 2001, the Company acquired two 15-MHz licenses in the Salt Lake City and Provo Basic Trading Areas (BTAs) in Utah for $140 in cash.

     Disposition

In March 2001, the Company and ALLTEL Corporation agreed to dissolve a wireless partnership and distributed the related partnership assets. The Company recognized the partnership assets received at fair value and a related gain of $76, which is included in “Other, net” in the consolidated statement of income.

     License Exchange

In May 2001, the Company and T-Mobile exchanged licenses covering approximately 36 million people, referred to as “POPs,” each. The Company received licenses covering 10-MHz of spectrum for the New York major trading area (MTA) and for each of the St. Louis and Detroit BTAs. In exchange, the Company transferred to T-Mobile licenses covering 10-MHz out of the 30-MHz of spectrum that it owned in the Los Angeles and San Francisco MTAs, which include most of California and Nevada. This transaction was accounted for as a like-kind exchange at historical cost.

3.     Property, Plant and Equipment

Property, plant and equipment is summarized as follows:

                         
December 31,
Estimated
Useful Lives 2002 2003



(In years)
Land
        $ 60     $ 55  
Buildings and building improvements
    10-25       3,118       3,426  
Operating and other equipment
    5-10       12,097       14,797  
Furniture and fixtures
    3-10       1,595       1,395  
Construction in progress
          1,175       364  
             
     
 
              18,045       20,037  
Less: accumulated depreciation and amortization
            (7,899 )     (9,098 )
             
     
 
Property, plant and equipment, net
          $ 10,146     $ 10,939  
             
     
 

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Depreciation expense and capitalized interest and network engineering costs incurred during the construction phase of the Company’s wireless network are summarized as follows:

                         
Year Ended December 31,

2001 2002 2003



Depreciation expense
  $ 1,514     $ 1,662     $ 1,927  
Capitalized interest costs
    13       19       15  
Capitalized network engineering costs
    87       127       103  

The net book value of assets recorded under capital leases was $740 and $928 at December 31, 2002 and 2003, respectively. These capital leases principally relate to communications towers and other operating equipment. Amortization of assets recorded under capital leases is included in depreciation expense. Capital lease additions for the years ended December 31, 2001, 2002 and 2003 were $389, $121 and $143, respectively.

The Company’s cellular/PCS networks are currently equipped with digital transmission technologies known as Time Division Multiple Access (TDMA) technology and Global System for Mobile Communication (GSM) technology. The Company is currently in the process of overlaying GSM equipment throughout its TDMA markets to provide a common voice standard. At the same time, the Company is adding high-speed technologies for data services known as General Packet Radio Service (GPRS) and Enhanced Data Rates for GSM Evolution (EDGE). The GSM network overlay is substantially complete with 93% of the Company’s POPs currently with cellular or PCS service having access to GSM service at December 31, 2003. While the Company will continue to sell and market TDMA services for the foreseeable future, the amount of the future cash flows to be derived from the TDMA network assets is highly dependent upon the rate of transition of existing customers using TDMA equipment to GSM-capable equipment, as well as other competitive and technological factors. The TDMA network assets were generally depreciated over an eight-year period. Effective January 1, 2003, the Company implemented the results of a review of the estimated service lives of its remaining TDMA network assets. The Company determined that a reduction in the useful lives of TDMA assets was warranted based on the projected transition of network traffic to GSM technology. Useful lives were shortened to fully depreciate all TDMA equipment by December 31, 2008. TDMA equipment acquired after January 1, 2003 will have useful lives not to exceed six years. Depreciation expense increased by $91 for the year ended December 31, 2003 as a result of the change in estimate.

During 2002, the Company provided a $50 security deposit to a contract engineering vendor that is being utilized to construct the Company’s network. The security deposit bears interest at LIBOR plus 10 basis points and is collateralized by a bank letter of credit. The security deposit is included in “Other assets” in the consolidated balance sheets.

 
4. Intangible Assets

Effective January 1, 2002, the Company adopted SFAS 142. In conjunction with this adoption, the Company reassessed the useful lives of previously recognized intangible assets. A significant portion of its intangible assets are FCC licenses that provide the Company with the exclusive right to utilize certain radio frequency spectrum to provide wireless communications services. While FCC licenses are issued for

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only a fixed time, generally ten years, such licenses are subject to renewal by the FCC. Renewals of FCC licenses have occurred routinely and at nominal cost. Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of its FCC licenses. As a result, the FCC licenses are treated as an indefinite-lived intangible asset under the provisions of SFAS 142 and are not amortized but rather are tested for impairment annually or when events and circumstances warrant. The Company continues to reevaluate the useful life determination for FCC licenses each reporting period to determine whether events and circumstances continue to support an indefinite useful life.

The Company completed the transition impairment test of its indefinite-lived intangible assets as of January 1, 2002 and determined that no impairment existed. In accordance with EITF 02-7, Unit of Accounting for Testing Impairment of Indefinite-Lived Intangible Assets, this impairment test was performed on an aggregate basis, consistent with the Company’s management of the business on a national scope. The Company utilized a fair value approach, incorporating discounted cash flows, to complete the test. This approach determines the fair value of the FCC licenses and accordingly incorporates cash flow assumptions regarding the investment in a network, the development of distribution channels and other inputs for making the business operational. As these inputs are included in determining free cash flows of the business, the present value of the free cash flows is attributable to the licenses. The discount rate applied to the cash flows is consistent with the Company’s weighted-average cost of capital.

The Company completed the transition impairment test of goodwill as of January 1, 2002 using a two-step process. The first step screens for potential impairment, while the second step measures the amount of the impairment, if any. In the first quarter of 2002, the Company completed the first step of the goodwill impairment transition tests as of January 1, 2002 for its reporting units. For goodwill related to the Company’s cellular/PCS business, the first step indicated no impairment in value. For goodwill related to the Mobitex data business, the first step indicated an impairment in value. To measure any impairment, in the second quarter of 2002, the Company completed the second step of the goodwill impairment transition test for the Mobitex data business using a discounted cash flow approach. Based on the results of this test, the Company recognized an impairment of the entire goodwill balance related to its Mobitex data business, with a carrying value of $32, and reflected the impairment as a cumulative effect of a change in accounting principle in the first quarter of 2002. The Company believes that the decline in the fair value of its Mobitex business is due to the development of new wireless data technologies.

Using methodologies consistent with those applied for its transitional impairment tests performed as of January 1, 2002, the Company completed its annual impairment tests for goodwill and indefinite-lived intangible assets during the fourth quarter of 2002 and 2003. These annual impairment tests, prepared as of October 1, resulted in no impairment of the Company’s goodwill or indefinite-lived FCC licenses.

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Summarized below are the carrying values for the major classes of intangible assets that will continue to be amortized under SFAS 142, as well as the carrying values of those intangible assets which will no longer be amortized:

                                             
December 31, 2002 December 31, 2003


Gross Gross
Carrying Accumulated Carrying Accumulated
Useful Lives Amount Amortization Amount Amortization





Intangible assets subject to amortization:
                                       
 
FCC licenses used in Mobitex business
    4 years     $ 28     $     $ 28     $ (7 )
 
Customer lists
    5 years       1,070       (771 )     1,070       (920 )
 
Other
    3-5 years       145       (137 )     147       (143 )
             
     
     
     
 
   
Total
          $ 1,243     $ (908 )   $ 1,245     $ (1,070 )
             
     
     
     
 
Intangible assets not subject to amortization:
                                       
 
FCC licenses
          $ 7,359     $     $ 7,748     $  
             
     
     
     
 
 
Goodwill
            844             849        
             
     
     
     
 

The weighted average estimated useful lives of intangible assets subject to amortization was 4.8 years for the year ended December 31, 2003, with remaining useful lives of approximately one year.

There was no significant change in the carrying value of goodwill for the year ended December 31, 2003.

The following table presents current and estimated amortization expense for each of the following periods:

           
Aggregate amortization expense for the year ended:
       
 
2002
  $ 188  
 
2003
    162  
Estimated amortization expense for the years ending:
       
 
2004
    115  
 
2005
    49  
 
2006
    11  

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The following table presents the Company’s 2001 results, which are presented on a basis comparable to the 2002 and 2003 results, adjusted to exclude amortization expense related to goodwill and indefinite-lived FCC licenses.

                           
Year Ended December 31,

2001 2002 2003



Net income — as reported
  $ 1,692     $ 1,207     $ 1,022  
 
Add back: Goodwill amortization
    28              
 
Add back: License amortization
    202              
     
     
     
 
Net income — as adjusted
  $ 1,922     $ 1,207     $ 1,022  
     
     
     
 

In addition to the SFAS 142 intangible assets noted above, the Company recorded in 2003 $1 of intangible assets in connection with the recognition of an additional minimum liability for its Supplemental Retirement Plans as required by SFAS No. 87, Employers’ Accounting for Pensions (see Note 15).

 
5. Investments in and Advances to Equity Affiliates

Prior to January 1, 2003, Salmon was accounted for as an equity method investment. See Note 6 for a discussion of the consolidation of Salmon. The Company has other investments in affiliates which do not meet the criteria for consolidation under FIN 46, nor for which the Company has a controlling interest. These investments are accounted for under the equity method of accounting. The most significant of these investments is GSM Facilities, LLC (GSMF), a jointly-controlled infrastructure venture with T-Mobile for networks in the New York City metropolitan area, California and Nevada.

Investments in and advances to equity affiliates consist of the following:

                 
December 31,

2002 2003


Investment in GSMF
  $ 1,966     $ 2,253  
Investment in Salmon
    236        
Advances to Salmon, including accrued interest
    101        
Other
    13       35  
     
     
 
    $ 2,316     $ 2,288  
     
     
 

GSMF

In November 2001, the Company and T-Mobile (the parties) formed GSMF and contributed portions of their existing network infrastructures in the California, Nevada and New York City metropolitan area markets. Management control of GSMF is vested in a four-member management committee, to which each company has the right to appoint two members. GSMF is not a variable interest entity as defined by FIN 46 nor does the Company have the unilateral ability to control any actions of GSMF. As a result, the Company’s interest in GSMF is accounted for as an equity investment. At formation, the Company contributed network assets to GSMF with a carrying value of $1,119, including capital lease obligations of

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$167. Both companies buy network services from GSMF but retain ownership and control of their own licenses in those markets. The Company and T-Mobile independently market their services to customers using their respective brand names and utilizing their own sales, marketing, billing and customer care operations. In July 2002, the Company began marketing its commercial service in the New York City market and T-Mobile began service in California and Nevada.

GSMF may be dissolved by its parties under a number of circumstances. Dissolution may occur at any time as a result of the unanimous decision by its parties; automatically upon the bankruptcy of one of its parties; upon the occurrence of certain material breaches of the venture agreements; upon a decree of judicial dissolution; or in the event of an acquisition transaction (as defined) involving one of the parties, at the election of the party that is involved in the acquisition transaction.

In the event of dissolution prior to May 1, 2005, for reasons other than mutual agreement or judicial decree, the party causing the dissolution event would be required to pay the other party $250. Additionally, if dissolution occurs prior to November 1, 2004, T-Mobile may elect to exchange certain spectrum licenses, or in lieu of such exchange, make a cash payment. If dissolution occurs after November 1, 2004, T-Mobile is required to exchange certain spectrum with Cingular.

In the event of dissolution after May 1, 2005, with the exception of dissolution upon mutual agreement, the party responsible for the dissolution event would be required to pay the other party $250. Under all dissolution circumstances after November 1, 2004, parties will have obligations to exchange certain spectrum licenses.

Additionally, in the event of dissolution, all outstanding capital settlements owed to the GSMF by the parties would require payment, the New York City market network assets would be distributed to T-Mobile, and the California/Nevada market network assets would be distributed to Cingular. Following these distributions, a determination would be made of each party’s capital account deficit or surplus, and a settlement would be made between the parties.

The Company and T-Mobile agreed to jointly fund capital expenditures of GSMF. Pursuant to the operating agreements, the Company and T-Mobile procure services and network equipment on behalf of GSMF in the respective markets. Network equipment is sold to GSMF at prices which are mutually agreed upon by the parties and which approximate fair value. The Company defers any resulting profits and records them as part of the Company’s investments in and advances to equity affiliates. The Company recognizes the intercompany profit over the estimated useful lives of the related assets as a reduction of equity in net loss of affiliates.

Capital contributions to GSMF are generally determined by the Company’s proportionate share of the annual capital expenditure requirements based on each party’s incremental growth in network usage, and such contributions are accounted for as an increase to the Company’s investment. During 2002 and 2003, the Company made net capital contributions to GSMF of $707 and $612, respectively. The Company had contractual commitments to contribute cash of $225 to GSMF in both 2002 and 2003. The contribution amounts above include $225 of cash contributions made by the Company in 2002 and 2003 in satisfaction of the Company’s contractual commitments.

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The Company incurs and charges to GSMF certain network operating costs. The monthly operating expenses of GSMF, including monthly cash payments made on tower capital lease obligations, are then charged back to the Company and T-Mobile based upon each party’s proportionate share of licensed spectrum in each market. Through a separate reciprocal home roaming agreement, the Company and T-Mobile charge each other for usage that is not in the same proportion as the spectrum-based allocations. This usage charge is primarily based upon the Company’s and T-Mobile’s share of the total minutes of use on the respective networks. These charges for network services are included in “Cost of services” in the consolidated statements of income. These transactions are summarized as follows:

                         
Year Ended December 31,

2001 2002 2003



Network operating costs charged to GSMF
  $ 33     $ 225     $ 320  
Network services received based on usage
    36       216       254  

At December 31, the “Due to affiliates, net” caption in the consolidated balance sheets included the following amounts related to the transactions between the Company and GSMF:

                 
December 31,

Due (to) from for: 2002 2003



Settlement of Capital Obligations
  $ 28     $ (17 )
Settlement of Operating Expenses
    (13 )     20  

GSMF is expected to incur net losses due to depreciation and interest expense, which are not reimbursed by the Company or T-Mobile. For the years ended December 31, 2001, 2002 and 2003, the Company recorded equity in the net loss of GSMF of $32, $241, and $325, respectively. At December 31, 2003, the Company’s economic interest in GSMF approximated 70%.

At December 31, 2003, the Company remains obligated with respect to $28 of capital lease obligations included in the non-current liabilities caption of GSMF’s summarized balance sheet information below. These capital lease obligations relate to tower space leased from an affiliate of SBC (see Note 17).

Summarized financial information with respect to GSMF is as follows:

                 
December 31,

Balance Sheet Information 2002 2003



Current assets
  $ 122     $ 9  
Noncurrent assets
    2,955       3,588  
Current liabilities
    122       9  
Noncurrent liabilities
    222       247  
Net equity
    2,733       3,341  

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Year Ended December 31,

Income Statement Informations 2001(a) 2002 2003




Revenues
  $ 50     $ 325     $ 451  
Costs and expenses (excluding depreciation)
    49       315       438  
Depreciation expense
    41       324       454  
Operating loss
    (40 )     (314 )     (441 )
Interest expense
    2       17       19  
Net loss
    (42 )     (331 )     (465 )


(a)  Period from November 1, 2001 (inception) through December 31, 2001.

6.     Salmon

In November 2000, the Company and Crowley Digital Wireless, LLC (Crowley Digital) entered into an agreement, pursuant to which Salmon was formed to bid as a “very small business” for certain 1900 MHz band PCS licenses auctioned by the FCC. The auction ended in January 2001. Salmon was the successful bidder for, and at the conclusion of the auction proceedings was granted, 45 licenses, for which Salmon paid $241. Salmon was also the successful bidder for 34 other licenses reclaimed from carriers in bankruptcy and auctioned by the FCC. In December 2002, following protracted bankruptcy court proceedings the FCC released Salmon from its purchase obligation and returned Salmon’s remaining down payment on the 34 licenses. In January 2003, after a protracted legal challenge by Nextwave, the U.S. Supreme Court invalidated the auction results related to the challenged licenses. The FCC’s grant of the 45 unchallenged licenses was not affected by this decision.

The Company made secured loans to Salmon to fund the purchase of the 45 licenses. Net advances and loans made for the years ended December 31, 2001 and 2002 were $240 and $25, respectively. In 2002, the FCC refunded to Salmon the auction deposits pertaining to the 34 challenged licenses referred to in the preceding paragraph and Salmon used these proceeds to repay $421 in principal and interest to the Company. The Company recognized interest income on the loan balances of $41 and $22 for the years ended December 31, 2001 and 2002, respectively.

Crowley Digital has the right to put its approximate 20% interest in Salmon to the Company at a cash price equal to Crowley Digital’s initial investment plus a specified rate of return. The put right can be exercised at certain times, and the Company estimates that the earliest exercise period will begin in February 2006 and the latest exercise period will end in April 2008. The fair value of this put obligation, estimated at $126 and $139 as of December 31, 2002 and 2003, respectively, is included in “Other noncurrent liabilities” in the consolidated balance sheets.

Management control of Salmon is vested in Crowley Digital under the terms of Salmon’s limited liability company agreement as Crowley Digital appoints three of the five members of Salmon’s management committee. The Company does not have the unilateral ability to control any actions by Salmon. As a result, the Company’s approximate 80% non-controlling voting interest in Salmon had historically been accounted for as an equity method investment through December 31, 2002. For the years ended

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December 31, 2001 and 2002, the Company recorded equity losses of $43 and $29, respectively, associated with its investment in Salmon.

As described in Note 1, the Company adopted the provisions of FIN 46, effective January 1, 2003. The Company determined that Salmon meets the definition of a variable interest entity and that the Company is the primary beneficiary of the Salmon variable interests. Accordingly, the Company consolidated the financial position, results of operations and cash flows of Salmon, effective January 1, 2003. Consolidation of Salmon in the Company’s financial statements is solely for purposes of complying with FIN 46 and does not reflect any change in voting control over Salmon. The Company initially measured the assets, liabilities and noncontrolling interests of Salmon at their carrying amounts. The equity interest of Crowley Digital is included in minority interests in the accompanying consolidated financial statements. The Company did not restate any previously issued financial statements. The following pro forma information presents the financial position of the Company as if Salmon had been consolidated, effective January 1, 2002.

                         
Impact of Consolidated
Balance Sheet Information as of Cingular Salmon with
December 31, 2002 Wireless LLC Consolidation Salmon




Current assets
  $ 2,731     $ 1     $ 2,732  
FCC licenses, net
    7,387       358       7,745  
Investments in and advances to equity affiliates
    2,316       (337 )     1,979  
Other long-term assets
    11,688       13       11,701  
Liabilities
    16,014       1       16,015  
Minority interests in consolidated entities
    567       34       601  
Members’ capital
    7,541             7,541  

The income statement and cash flow impacts of the Salmon consolidation for the year ended December 31, 2002 would not have been material.

7.     Accrued Liabilities

Accrued liabilities are summarized as follows:

                 
December 31,

2002 2003


Accrued fixed asset purchases
  $ 443     $ 498  
Taxes, other than income
    231       355  
Payroll and other related liabilities
    169       256  
Agent commissions
    158       170  
Advertising
    38       88  
Other
    169       229  
     
     
 
Total accrued liabilities
  $ 1,208     $ 1,596  
     
     
 

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8.     Debt

 
Commercial Paper Program and Revolving Credit Facility

At December 31, 2002 and 2003, the Company had a commercial paper program and an unsecured 364-day revolving bank credit facility of $1,500 and $1,000, respectively, to support the commercial paper program. The credit facility gives the Company the option to convert any revolving loans outstanding on the maturity date to one-year term loans. JPMorgan Chase Bank serves as administrative agent for the facility. The bank credit facility contains customary events of default and covenants, including a covenant to maintain a specified leverage ratio (as defined), a limitation on mergers and sale of all or substantially all of the Company’s assets and a negative pledge. The Company is in compliance with all such ratios and covenants under the bank credit facility. The credit agreement provides that each lender will have the option to terminate its commitment to make additional loans and declare all outstanding amounts to be due and payable upon a change in control (as defined) of the Company or upon the consummation of a merger or similar transaction involving the Company or Cingular Wireless Corporation, the Company’s manager, with any of the five other largest wireless carriers in the United States, determined based on the number of customers of such carriers as of June 30, 2003. The current credit facility expires November 15, 2004. At December 31, 2002 and 2003, the Company had no outstanding borrowings under the commercial paper program or the credit facility.

 
      Accounts Receivable Secured Borrowing

In December 2003, the Company established an accounts receivable secured borrowing program that it can use to obtain financing not to exceed $400, collateralized by customer trade accounts receivable and related contract rights. The program is a 364-day financing arrangement that is renewable with the consent of the facility lenders. Under the program, designated Company entities can sell their customer trade accounts receivable and related contract rights on a non-recourse, revolving basis to the Company’s special-purpose, wholly owned, bankruptcy-remote subsidiary. This subsidiary has pledged its interest in these receivables to, and may borrow against these receivables from, asset-backed commercial paper conduit lenders, whose obligations to issue commercial paper and lend the proceeds to the subsidiary are backed up by commitments from commercial banks. Loans will be made to the subsidiary at varying interest rates based on the ratings of the Company’s senior notes. The Company intends to use the proceeds from this financing arrangement for general corporate purposes, including the acquisition of the spectrum licenses from NextWave. This financing arrangement is subject to customary securitization covenants, does not have a termination provision that is based on the credit ratings of the Company’s senior unsecured long-term notes and will be recorded as an on-balance sheet transaction. As of December 31, 2003, the Company was in compliance with the covenants and had no amounts outstanding under this financing arrangement.

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Long-Term Debt

Long-term debt is summarized as follows:

                   
December 31,

2002 2003


Due to affiliates
  $ 9,678     $ 9,678  
Due to external parties:
               
 
5.625% Senior Notes, due December 2006
    500       500  
 
6.5% Senior Notes, due December 2011
    750       750  
 
7.125% Senior Notes, due December 2031
    750       750  
 
Capital leases, 6.0% to 9.6%
    778       908  
 
Capital leases, Japanese Yen and U.S. Dollar denominated, 4.55% — 7.08% in 2002 and 4.86% — 7.08% in 2003
    83       47  
 
Other
    64       64  
     
     
 
Total long-term debt, including discount and current maturities
    12,603       12,697  
Unamortized discount on Senior Notes
    (12 )     (11 )
Debt maturing within one year
    (45 )     (95 )
Interest rate swap fair value adjustment (see Note 9)
          1  
     
     
 
Total long-term debt
  $ 12,546     $ 12,592  
     
     
 
 
      Debt due to Affiliates

The debt due to affiliates represents the net amount of debt due to SBC and BellSouth. Interest accrues and is payable monthly. Interest expense on the affiliate loans for the years ended December 31, 2001, 2002 and 2003 was $735, $726 and $653, respectively. As of July 1, 2003, the Company executed amended, restated and consolidated subordinated promissory notes to modify the terms of the Company’s member loans. The amendment reduced the fixed interest rate from 7.5% to 6.0% and extended the maturity date to June 30, 2008. The Company may, however, prepay the affiliate loans at any time, subject to the provisions described below, or further extend their maturity to the extent required in connection with the credit facility, if approved by SBC and BellSouth.

SBC and BellSouth have agreed to subordinate their repayment rights applicable to the affiliate loans to the repayment rights of the Company’s senior debt. Senior debt includes the Company’s Senior Notes, commercial paper, any debt outstanding under its bank credit facility, as well as bank notes and other borrowings from external parties designated as such and to which SBC and BellSouth have specifically agreed to be subordinate. The payment of principal and interest on the subordinated affiliate loans by the Company is prohibited in the event of bankruptcy or an event of default in the payment or prepayment of any principal of or interest on any senior debt, or in the event of an acceleration of the subordinated debt upon its default, until the senior debt has been repaid in full. The payment of principal and interest on the subordinated affiliate loans is also prohibited, with limited exceptions, during a covenant or other non-

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payment default under the credit facility (unless waived by the banks), but may continue during a non-payment default on the Senior Notes or other senior debt.

 
      Senior Notes

In December 2001, the Company completed the private placement of $2,000 of Senior Notes under Regulation D of the Securities Act of 1933. The Senior Notes are unsecured obligations and rank equally with all other unsecured and unsubordinated indebtedness. In 2002, the Company filed with the SEC a registration statement on Form S-4 pertaining to the exchange of the private placement Senior Notes for Senior Notes that are registered under the securities laws in identical principal amounts and with substantially identical terms. Interest on the Senior Notes is payable in arrears semi-annually on June 15 and December 15.

The Senior Notes are governed by an indenture with J.P. Morgan Trust Company, N.A., which acts as trustee. The indenture provides that the Company will not subject its property or assets to any mortgage or other encumbrance unless the Senior Notes are secured equally and ratably with other indebtedness that is secured by that property or assets. There is no sinking fund or mandatory redemption applicable to the Senior Notes. The Senior Notes are redeemable, in whole or in part, at any time at a price equal to their principal amount plus any accrued interest and any “make-whole” premium, which is designed to compensate the investors for early payment of their investment. The premium is the excess of (i) the present value of all future scheduled principal and interest payments of the Senior Notes to be redeemed, calculated by discounting the aggregate amount of such payments by a percentage factor related to the yield to maturity on U.S. Treasury securities equal to the then remaining maturity of the Senior Notes being prepaid, over (ii) the principal amount of the Notes to be redeemed.

 
      Capital Leases

The Company has entered into capital leases primarily for the use of communications towers. See Note 17 for further discussions regarding these towers.

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      Maturities of Long-Term Debt

Maturities of long-term debt outstanding, including capital lease obligations, at December 31, 2003 are summarized below:

                           
Debt Capital Leases Total



Maturities:
                       
 
2004
  $ 51     $ 130     $ 181  
 
2005
    3       91       94  
 
2006
    503       89       592  
 
2007
    3       91       94  
 
2008
    9,681       94       9,775  
 
Thereafter
    1,501       2,335       3,836  
     
     
     
 
Total minimum payments
    11,742       2,830       14,572  
 
Less capital lease imputed interest
          1,444       1,444  
 
Less capital lease executory costs
          431       431  
     
     
     
 
Total obligations
  $ 11,742     $ 955     $ 12,697  
 
Less current portion
    51       44       95  
     
     
     
 
Total long-term obligations
  $ 11,691     $ 911     $ 12,602  
     
     
     
 
 
      Fair Value of Long-Term Debt

At December 31, 2002 and 2003, the fair value of the Senior Notes was $2,121 and $2,156, respectively, based on their quoted market prices. The carrying value of the long-term debt due to affiliates approximates fair value since the Company may prepay the debt at any time, without penalty.

 
      Cash Paid for Interest

Cash paid for interest on debt for the years ended December 31, 2001, 2002 and 2003 was $883, $905 and $862, respectively. These amounts include cash paid for interest on debt due to affiliates of $805, $726 and $665 for the years ended December 31, 2001, 2002 and 2003, respectively.

9.     Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, advanced billing and customer deposits and other current liabilities are reasonable estimates of their fair value due to the short-term nature of these instruments.

In March 2003, the Company entered into two interest rate swap contracts with banks to convert a portion of the fixed rate exposure on its five year senior notes due December 15, 2006 to variable rates without an exchange of the underlying principal amount. The Company uses interest rate swaps to manage its interest rate exposure on its debt obligations. Under the terms of the interest rate swap contracts, the Company

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receives interest at a fixed rate of 5.625% and pays interest at a variable rate equal to the six-month LIBOR plus a specified margin, based on an aggregate notional amount of $250. The six-month LIBOR rate on each semi-annual reset date determines the variable portion of the interest rate swaps. For the year ended December 31, 2003, the effective interest rate associated with this notional amount was 4.02%.

The Company has designated the swaps as fair value hedges of its fixed rate debt. The terms of the interest rate swap contracts and hedged items are such that effectiveness can be measured using the short-cut method defined in SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). Hedge ineffectiveness, as determined in accordance with SFAS 133, had no impact on results of operations for the year ended December 31, 2003.

In accordance with SFAS 133, the Company recorded a fair value adjustment to the portion of its fixed rate long-term debt that is hedged. This fair value adjustment was recorded as an increase to Long-term debt, with the related value for the interest rate swaps’ non-current portion recorded in “Other assets”. Interest rate differentials associated with these interest rate swaps are recorded as an adjustment to a current asset or liability, with the offset to interest expense over the life of the interest rate swaps. The Company does not invest in derivative instruments for trading purposes.

The Company maintains foreign exchange-forward contracts to hedge exposures to foreign exchange risk associated with Japanese Yen-denominated capital lease obligations. The contracts generally require the Company to exchange U.S. dollars for Japanese Yen at maturity at rates agreed to at the inception of the contracts. The contracts, which have an aggregate notional amount of $110 and $62, respectively, at December 31, 2002 and 2003, expire at various dates through 2005. The notional amount of the foreign exchange-forward contracts equals the future minimum lease payments required to be paid in Japanese Yen. The contracts are designated as cash flow hedges in accordance with SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Instruments. The fair values of the foreign exchange-forward contracts were losses of $35 and $15 at December 31, 2002 and 2003, respectively, and are included in “Accrued liabilities” and “Other noncurrent liabilities” depending on the timing of the future contract payments. The impact to other comprehensive income for all years presented was not material.

The Company could be at risk if the counterparties to the foreign exchange-forward contracts do not contractually comply. Should the counterparties not comply, the ultimate impacts will be a function of the difference, if any, in the cost of acquiring Japanese Yen at maturity versus the contractually agreed upon price.

10.     Concentrations of Risk

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

The Company relies on roaming agreements with other wireless carriers to permit the Company’s customers to use their GSM/GPRS and TDMA networks in areas not covered by the Company’s networks. If these providers decide not to continue those agreements due to a change in ownership or other circumstance, this could cause a loss of service in certain areas and possible loss of customers.

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As discussed in Note 5, the Company has entered into a network infrastructure venture with T-Mobile to share infrastructure and save on the cost of building and maintaining its own network. If the Company experiences disagreements with T-Mobile, it could adversely affect the Company’s ability to serve customers in certain geographic markets.

Although the Company attempts to maintain multiple vendors to the extent practicable, its handset inventory and network infrastructure equipment, which are important components of its operations, are currently acquired from only a few sources. If the suppliers are unable to meet the Company’s needs as it continues to build out and upgrade its network infrastructure and sell service and handsets, delays and increased costs in the expansion of the Company’s network infrastructure or losses of potential customers could result, which would adversely affect operating results.

Financial instruments that potentially subject the Company to credit risks consist principally of trade accounts receivable. Concentrations of credit risk with respect to these receivables are limited due to the composition of the customer base, which includes a large number of individuals and businesses. No customer accounted for more than 10% of consolidated revenues in all years presented.

Approximately 22,000, or 56%, of the Company’s employees are represented by the Communications Workers of America, with contracts expiring on various dates between February 2004 and February 2007. Approximately 20% of the Company’s employees are covered by contracts that will expire within one year of December 31, 2003. Most of the contracts contain no-strike clauses. In most areas of the country and with most job titles, the Company is contractually required to maintain a position of neutrality and to allow card-check balloting with respect to unionization and support the determination of its employees.

11.     Related Party Transactions

In addition to the affiliate transactions described elsewhere in these financial statements, other significant transactions with related parties are summarized in the succeeding paragraphs.

On October 2, 2000, the Company entered into a transition services agreement with BellSouth and SBC, pursuant to which BellSouth and SBC each provided transition services and products for a limited period of time. The services provided by both BellSouth and SBC included government and regulatory affairs, finance, compensation and benefit accounting, human resources, internal audit, risk management, technical support, marketing, research and development, procurement, real estate, legal, security and tax. The fees were determined based upon the costs of providing the expected level of services. As of December 31, 2001, the Company had terminated most of these arrangements and assumed the services internally. These charges are primarily included in “Selling, general and administrative” in the consolidated statements of income.

The Company also entered into wireless agency agreements with subsidiaries of SBC and BellSouth. Such subsidiaries and any of their affiliates that make an election to do so may act as authorized agents exclusively on the Company’s behalf for the sale of its wireless services to customers in SBC’s and BellSouth’s respective incumbent service territories. The Company is free to contract with other agents, including retailers and other distributors, for the sale of its wireless services in these territories and elsewhere throughout the United States. In addition to the unilateral rights of SBC and BellSouth and their affiliates to terminate and to the Company’s right to terminate in certain events, each wireless agency

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agreement terminates upon breach, mutual agreement of the parties or on December 31, 2050. Agent commissions and compensation charges are included in “Selling, general and administrative” in the consolidated statements of income.

The Company incurred local interconnect and long distance charges from SBC and BellSouth and their affiliates, which are included in “Cost of services” in the consolidated statements of income.

The Company incurred telecommunication and other charges from SBC and BellSouth and their affiliates. These charges are primarily included in “Selling, general and administrative” in the consolidated statements of income.

Related party charges incurred by the Company are summarized as follows:

                         
Year Ended December 31,

Type of Service 2001 2002 2003




Transition services
  $ 267     $ 17     $  
Agent commissions and compensation
    33       46       103  
Interconnect and long distance
    385       663       815  
Other services
    44       68       77  

The Company had receivables from affiliates of $97 and $81 and payables to affiliates of $142 and $135 at December 31, 2002 and 2003, respectively, primarily with SBC and BellSouth (see Note 5).

 
12. Impairment of Long-lived Assets

During the fourth quarter of 2002, the Company evaluated the recoverability of the long-lived assets, including property, plant, and equipment and FCC licenses, of its Mobitex data business. While the business continues to generate positive operating cash flows, the timing of the Company’s migration to data services over its cellular/PCS networks, as well as other competitive and technological factors, have decreased the cash flows that the Company expected to generate from continuing to operate the Mobitex data network. In the fourth quarter of 2002, the Company determined that the estimated future undiscounted cash flows were less than the carrying value of the Mobitex data business long-lived assets. Accordingly, the Company adjusted the carrying value of the Mobitex data business long-lived assets to their estimated fair value, resulting in a non-cash impairment loss of $104. Fair value was determined using a discounted cash flow approach. The impairment loss is included in “Cost of services” in the consolidated statement of income. The impairment loss was comprised of $71 of property, plant and equipment and $33 of FCC licenses. In conjunction with the impairment test, the Company reviewed the remaining useful lives of the Mobitex data business long-lived assets and determined the lives to be appropriate. During the fourth quarter of 2003, the Company evaluated the recoverability of the long-lived assets of its Mobitex data business and determined no additional impairment existed.

The Company’s cellular/PCS networks utilize two digital transmission technologies, TDMA and GSM. Additionally, the TDMA technologies are deployed over two different spectrum frequencies, 850 MHz (cellular) and 1900 MHz (PCS). As discussed in Note 3, the Company is currently in the process of adding GSM equipment throughout its TDMA markets to provide a common voice standard and to add technologies for high-speed data services. In the fourth quarter of 2002, the Company finalized market

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specific execution strategies concurrent with the development and approval of the 2003 capital budget. In general, the Company believes it has adequate spectrum depth in its 850 MHz markets to operate both technologies.

In several smaller PCS markets, where the Company has only 10 MHz of available spectrum, it does not have adequate spectrum depth to concurrently provide wireless services using both technologies. In these markets the Company must retire the TDMA network assets in order to deploy GSM technology. The TDMA technology assets used in 1900 MHz markets are frequency specific and cannot be redeployed for use in the Company’s other 850 MHz markets. Due to the anticipated near-term removal of these assets from service during the period ranging from the third quarter of 2003 to the fourth quarter of 2004, the Company performed an impairment test as required by SFAS 144 to determine whether the future cash flows of these markets were sufficient to recover the carrying value of the related TDMA assets as of December 31, 2002. In the fourth quarter of 2002, the Company recognized a non-cash impairment charge of $47 related to its 1900 MHz TDMA assets in ten markets located in the southeastern and southwestern United States. The impairment loss was measured as the difference between the carrying value of these assets at December 31, 2002 and their fair value. Fair value was determined using a discounted cash flow approach. The impairment loss is included in “Cost of services” in the consolidated statement of income. Additionally, the Company shortened the remaining useful lives of the assets in these markets effective January 1, 2003.

 
13. Reorganization Costs

In August 2002, the Company announced plans to reorganize its sales operations and to reduce its workforce in these and other functional areas of the business. It was expected that approximately 2,500 to 3,000 positions (employees, contractors and temporary personnel) would be eliminated, with more than one-third occurring through the elimination of temporary positions and normal attrition. Substantially all employees affected received notification in September 2002. Approximately 1,600 employees were terminated under this reorganization plan. Employee severance costs were accounted for in accordance with SFAS No. 112, Employers’ Accounting for Postemployment Benefits. For other costs of the reorganization, the Company adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, in 2002 and accounts for the costs of the reorganization when the liability is incurred. The costs associated with the reorganization were not expected to exceed $70. As of June 30, 2003, substantially all activities associated with this reorganization had been completed. Reorganization costs for the years ended December 31, 2002 and 2003 were $41 and $21, respectively. A historical summary of

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total expected costs to be incurred and the amounts incurred during the six months ended June 30, 2003 and cumulative through June 30, 2003 is presented in the table below.

                           
Original Costs Incurred
Estimate of During Six Cumulative Costs
Costs Expected Months Ended Incurred through
to be Incurred June 30, 2003 June 30, 2003



Termination Benefits:
                       
 
Severance and related costs
  $ 31     $ 1     $ 30  
 
Outplacement
    1       2       2  
 
OPEB curtailment gain
    (1 )           (1 )
Contract Termination Costs:
                       
 
Lease terminations
    14       9       13  
 
Write-offs of leasehold improvements
    11       5       9  
Other Associated Costs:
                       
 
Relocation and other
    14       4       9  
     
     
     
 
Total
  $ 70     $ 21     $ 62  
     
     
     
 

Costs incurred in 2002 and 2003 in connection with this reorganization plan are principally reflected in “Selling, general and administrative” expenses in the consolidated statements of income.

At December 31, 2003, $9 remains unpaid and is recorded in current liabilities in the consolidated balance sheet.

14.     Income Taxes

Substantially all of the operating units controlled and consolidated by the Company are either partnerships or limited liability entities that are disregarded entities or taxed as partnerships under federal and state income tax laws. Therefore, income tax items flow through to the members or partners. However, the Company has corporate subsidiaries and LLC subsidiaries that are income taxpayers in some jurisdictions and will record income tax expense. Income tax expense for the years ended December 31, 2001, 2002, and 2003 was $8, $12 and $28, respectively.

The Company is required to make periodic distributions to its members on a pro rata basis in accordance with each member’s ownership interests in amounts sufficient to permit members to pay the tax liabilities resulting from allocations of income tax items from the Company (see Note 2).

At December 31, 2002 and 2003, the reported amounts of the Company’s net assets exceeded their tax bases by approximately $10,100 and $12,400, respectively. This basis differential is principally attributable to the tax rules used to determine depreciation and amortization of property, plant and equipment and intangible assets.

At December 31, 2002 and 2003, deferred tax liabilities of $180 and $190 are included in “Other noncurrent liabilities” in the consolidated balance sheets. Of these amounts, $169 and $177 are attributable

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to the Puerto Rico wireless operations. These Puerto Rico deferred tax liabilities principally relate to book and tax basis differences on intangible assets.

 
15. Employee Benefits

In conjunction with the contribution of their U.S. wireless assets and operations to the Company, SBC and BellSouth transferred their respective wireless employees and related obligations and liabilities to one or more of their wholly-owned subsidiaries, which were leasing companies. Under employee leasing agreements, the leasing companies agreed to lease all of their employees and any employees hired after October 2, 2000 to the Company until the leasing companies were contributed to the Company. During this period, the employees were solely employed by the leasing companies and participated in their respective member company employee benefit plans. The leasing companies assumed from each of BellSouth and SBC and their respective affiliates certain employment-related obligations and liabilities relating to the member companies’ compensation and benefit plans prior to their contribution. For the year ended December 31, 2001, prior to their contribution to the Company, the leasing companies billed the Company $1,452 for payroll costs including payroll taxes, benefits and relocation costs. In October and December 2001, the leasing companies were contributed to the Company.

 
Pensions and Post-Retirement Benefits

Substantially all of the Company’s employees are covered by one of two noncontributory qualified pension plans. Participation in the Company’s plans commenced November 1, 2001, following the initial contribution of leasing companies to the Company. In connection with this contribution of the leasing companies to the Company, SBC and BellSouth transferred pension assets from the qualified trusts to the trusts established for the Company’s pension plans.

Nonbargained and some bargained employees participate in a cash balance plan, under which they can elect to receive their pensions in a lump sum. The pension benefit formula for most bargained employees is based on a flat dollar amount per year of service according to job classification, and these benefits are typically paid as an annuity.

The projected benefit obligation of the Company’s pension plans is the actuarial present value of all benefits attributed by the pension benefit formula to previously rendered employee service. It is measured based on assumptions concerning future interest rates, employee compensation levels, retirement date and mortality. Actual experience may differ from the actuarial assumptions, and the benefit obligation will be affected. The Company uses a December 31 measurement date for its plans.

Nonbargained employees and their covered dependents who meet certain eligibility requirements will be provided access to post-retirement medical and dental benefits at no cost to the Company. For bargained employees and a closed group of nonbargained transitional employees, the Company provides certain retiree medical, dental and life insurance benefits under various plans and accrues actuarially determined post-retirement benefit costs as active employees earn these benefits. These post-retirement plans are not funded.

In January 2004, the FASB issued preliminary guidance (FSP FAS 106-1) on how employers should account for provisions of the recently enacted Medicare Act. The Medicare Act allows employers who

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sponsor a post-retirement health care plan that provides a prescription drug benefit to receive a subsidy for the cost of providing that drug benefit. The Company elected to defer recognizing the effects of the Medicare Act in accounting for its post-retirement benefit plans, therefore, the net periodic post-retirement benefit cost and accumulated post-retirement benefit obligation in the financial statements and accompanying notes do not reflect the effects of the Medicare Act. Specific authoritative guidance on the accounting for the federal subsidy is pending and that guidance, when issued, could require the Company to change previously reported information.

 
      Obligations and Funded Status

The pension plan and post-retirement benefit plan funded status and amounts recognized in the consolidated balance sheets at December 31, 2002 and 2003 are as follows:

                                 
Pension Post-Retirement
December 31, December 31,


2002 2003 2002 2003




Change in Benefit Obligation
                               
Benefit obligation at beginning of year
  $ 345     $ 413     $ 65     $ 84  
Service cost
    62       61       6       9  
Interest cost
    24       24       4       6  
Amendments
    1       (1 )           (2 )
Actuarial loss
    1       18       10       17  
Curtailments
                (1 )      
Benefits paid
    (20 )     (59 )            
     
     
     
     
 
Benefit obligation at end of year
  $ 413     $ 456     $ 84     $ 114  
     
     
     
     
 
                                 
Pension Post-Retirement
December 31, December 31,


2002 2003 2002 2003




Change in Plan Assets
                               
Fair value of plan assets at beginning of year
  $ 508     $ 450     $     $  
Plan assets due from members
    6                    
Actual return on plan assets
    (44 )     103              
Employer contribution
          16              
Benefits paid
    (20 )     (59 )            
     
     
     
     
 
Fair value of plan assets at end of year
  $ 450     $ 510     $     $  
     
     
     
     
 

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(Dollars in Millions)
                                 
Pension Post-Retirement
December 31, December 31,


2002 2003 2002 2003




Funded status
  $ 37     $ 54     $ (84 )   $ (114 )
Unrecognized transition asset
                1        
Unrecognized prior service cost
    20       15       9       6  
Unrecognized net actuarial loss
    51       3       14       31  
     
     
     
     
 
Prepaid pension cost and accrued post-retirement benefit obligation
  $ 108     $ 72     $ (60 )   $ (77 )
     
     
     
     
 

The accumulated benefit obligation for the pension plans was $391 and $435 at December 31, 2002 and 2003, respectively.

 
      Components of Net Periodic Pension Cost

Net pension expense and post-retirement benefit expense recognized subsequent to the contribution of the leasing companies is composed of the following:

                                                 
Pension Post-Retirement


2001 2002 2003 2001 2002 2003






Service cost
  $ 3     $ 62     $ 61     $ 1     $ 6     $ 9  
Interest cost
    2       24       24             4       6  
Expected return on plan assets
          (27 )     (36 )                  
Amortization of prior service cost
          3       3             2       1  
Recognized actuarial gain
                                  1  
     
     
     
     
     
     
 
Net expense
  $ 5     $ 62     $ 52     $ 1     $ 12     $ 17  
     
     
     
     
     
     
 
Curtailment and termination benefits
                                    (1 )      
                                     
     
 
Adjusted net post-retirement benefit expense
                                  $ 11     $ 17  
                                     
     
 
 
      Assumptions

Significant weighted-average assumptions used in developing pension and post-retirement benefit obligations at December 31 include:

                                 
Post-
Pension Retirement


2002 2003 2002 2003




Discount rate
    6.75 %     6.25 %     6.75 %     6.25 %
Composite rate of compensation increase
    7.00 %     6.00 %     7.00 %     6.00 %

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Significant weighted-average assumptions used to determine net periodic pension and post-retirement cost for the years ended December 31 include:

                                                 
Pension Post-Retirement


2001 2002 2003 2001 2002 2003






Discount rate
    7.75 %     7.25 %     6.75 %     7.75 %     7.25 %     6.75 %
Expected long-term return on plan assets
    8.50 %     8.50 %     8.50 %                  
Composite rate of compensation increase
    7.00 %     7.00 %     6.00 %     7.00 %     7.00 %     6.00 %

The expected long-term rate of return on assets was derived using data from investment managers and actuaries and reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the projected benefit obligations. The Company considers many factors that include, but are not limited to current market information on long-term returns (e.g., long-term bond rates) and current and target asset allocations between asset categories. The target asset allocation is determined based on consultations with external investment advisors.

Assumed health care cost trend rates at December 31 are as follows:

                                 
2002 2003


Pre-age Post-age Pre-age Post-age
65 65 65 65




Health care cost trend rate assumed for next year
    10.00 %     11.00 %     10.00 %     11.00 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
    5.00 %     5.00 %     5.00 %     5.00 %
Year the rate reaches the ultimate trend rate
    2010       2010       2011       2011  

The assumed dental cost trend rate is 5.0% in 2004 and future years. A one percentage-point change in the assumed health care cost trend rate would have the following effects:

                 
One Percentage- One Percentage-
Point Increase Point Decrease


Effect on total of service and interest cost components
  $ 3     $ (2 )
Effect on post-retirement benefit obligation
    21       (16 )

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Plan Assets

The Company’s pension plans asset allocations at December 31, by asset category are as follows:

                     
Plan Assets at
December 31,

2002 2003


Asset Category
               
 
Equity securities
    55 %     66 %
 
Debt securities
    30       28  
 
Cash
    15       1  
 
Other
          5  
     
     
 
   
Total
    100 %     100 %
     
     
 

The investment goal of the plans is to ensure the availability of funds for the liabilities as they become due and to meet the objectives with a prudent risk profile, diversification and diligent management in accordance with applicable statutory and regulatory constraints. Target allocations for the pension plans are 35% large cap equity (range of 30 — 40%), 10% small/mid cap equity (range of 5 — 15%), 15% international equity (range of 10 — 20%), 30% domestic fixed income (range of 25 — 30%), 10 % alternative investments (range 5 — 15%) and 0% cash (0 — 2%) range. The alternative investment allocation is comprised of absolute return strategies. Absolute return strategies are designed to return cash plus a premium regardless of market direction and are included in the portfolio for diversification purposes. Prohibited investments are outlined in each individual manager agreement and derivatives are allowed if in compliance with internal derivative policy. Derivatives may be used as a substitute for physical investing or to manage duration and currency risk. Performance is reviewed on a monthly basis.

 
      Contributions

The Company does not expect to make any contributions to its pension plans and its post-retirement benefit plans in 2004.

 
      Defined Contribution Plans

The Company maintains several contributory savings plans that cover substantially all employees. Effective December 31, 2002, the plan covering bargained employees was merged into the plan covering nonbargained employees. Participation in the plans commenced November 1, 2001, following the contribution of leasing companies to the Company. Contributions made by the Company and the related costs are determined as a percentage of covered employees’ eligible contributions to the plans and totaled $56 in 2002 and $46 in 2003.

 
      Supplemental Retirement Plans

The Company has also assumed the liabilities related to nonqualified, unfunded supplemental retirement plans for senior executives previously employed by SBC affiliates. Expenses related to these plans were less

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than $2 in all years presented. Liabilities of $7 and $8 related to these plans, which include an additional minimum pension liability of $2, have been included in “Other noncurrent liabilities” in the consolidated balance sheets at December 31, 2002 and 2003, respectively. The consolidated balance sheet also includes $1 in “Other intangible assets, net” at December 31, 2003 related to these plans.

 
      Deferred Compensation Plan

The Company also provides certain management employees with a nonqualified, unfunded deferred compensation plan. The plan allows eligible participants to defer some of their compensation on a pre-tax basis and receive a market-based interest rate of return. In addition, the plan provides for a stated matching contribution by the Company based on a percentage of the compensation deferred. Deferred compensation expenses for all years presented was not significant. The long-term portion of liabilities related to this plan of $18 and $22 has been included in “Other noncurrent liabilities” in the consolidated balance sheets at December 31, 2002 and 2003, respectively.

 
      Long-Term Compensation Plan

The Cingular Wireless Long-Term Compensation Plan (the Plan), as amended in the first quarter of 2003, provides for grants of both performance units and stock appreciation units to eligible participants. Such grants are ultimately settled in cash. Performance units are tied to the achievement of specified financial objectives related to revenue growth and return on capital. The number of performance units granted under the plan total approximately 1.2 million units in 2002 and 540,000 units in 2003, with units having a stated value of $50 (whole dollars). As of December 31, 2003, the Company has approximately 1.5 million outstanding units. Performance units granted at inception of the three-year performance period are payable in the first quarter following the performance period, with payouts ranging from 0% to 200% of the stated value of the performance units. Expense is accrued ratably throughout the performance period based upon management’s estimate of the compensation that will ultimately be earned under the plan. As performance is monitored against the financial objectives that have been established throughout the respective three-year performance periods, management may revise its estimate of the compensation that will ultimately be earned under the plan and adjust its accrual accordingly.

Stock appreciation units granted under the amended plan, which approximate 3.3 million in total, are linked to the respective stock price performance of BellSouth and SBC. As of December 31, 2003, the Company has approximately 3.3 million outstanding units. Each stock appreciation unit has a grant price equal to the closing price of BellSouth or SBC stock, as the case may be, based on the closing New York Stock Exchange price on the grant date. Such stock appreciation units were granted to eligible employees on April 1, 2003, 50% of which vest two years after the grant date and the remaining 50% of which vest three years following the grant date. The stock appreciation units expire 10 years from the grant date. Compensation cost is recognized over the vesting period based upon increase in the fair value of the stock appreciation units at the end of each reporting period.

For the years ended December 31, 2002 and 2003, the Company recognized compensation expense of $20 and $14, respectively, associated with the Plan.

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16.     Commitments and Contingencies

 
      Leases

The Company has entered into significant capital leases primarily for the use of communications towers (see Note 17). Capital lease obligations are included in Note 8.

The Company has also entered into operating leases for facilities and equipment used in operations. These leases typically include renewal options and escalation clauses. Rental expense under operating leases for the years ended December 31, 2001, 2002 and 2003 was $370, $430 and $477, respectively.

The following table summarizes the approximate future minimum rentals under noncancelable operating leases in effect at December 31, 2003:

         
2004
  $ 431  
2005
    386  
2006
    325  
2007
    257  
2008
    202  
Thereafter
    762  
     
 
Total
  $ 2,363  
     
 
 
      Commitments

The Company has unconditional purchase commitments for advertising and marketing, computer equipment and services, roaming, network equipment and related maintenance, and software development and related maintenance. These commitments totaled approximately $628 at December 31, 2003.

 
      Claims

The Company is subject to claims arising in the ordinary course of business involving allegations of personal injury, breach of contract, anti-competitive conduct, employment law issues, regulatory matters and other actions. While complete assurance cannot be given as to the outcome of any legal claims, the Company believes that any financial impact would not be material to its results of operations, financial position or cash flows.

17.     Communications Towers

In June 1999, BellSouth subsidiaries leased to Crown Castle International (Crown) all unused space on 2,623 of their communications towers in exchange for $927 to be paid in a combination of cash and Crown common stock. All cash proceeds and the majority of stock proceeds resulting from this agreement were retained by BellSouth. The subsidiaries were contributed to the Company on October 2, 2000.

Under these transactions, Crown manages and maintains the towers. The Company (as lessor) has the right to withdraw from any lease on the tenth anniversary of the lease date and on each five-year anniversary thereafter. The Company has retained, outside of the leases, a portion of the towers for use in

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(Dollars in Millions)

operating its wireless network and continues to own the towers and related communications components including switching equipment, shelters and communications facilities. During 2001, 2002 and 2003, the Company paid $37, $51 and $36, respectively, to Crown for its monitoring and maintenance services. Monitoring and maintenance fees are escalated by 5% on the anniversary of each site commencement date.

In August 2000, Southwestern Bell Mobile Systems, Inc., which was transferred to the Company on October 2, 2000, agreed to transfer approximately 3,900 of its communications towers (later reduced to 3,306), including those owned by consolidated partnerships, to another SBC affiliate, in connection with an agreement whereby the SBC affiliate would lease its rights to use and lease space on the towers to SpectraSite Inc. (SpectraSite, formerly SpectraSite Holdings, Inc.). Under the arrangement, SpectraSite then subleases back to the SBC affiliate space on the towers the Company uses. The SBC affiliate further subleases that space to the Company or its affiliates. The annual rent is escalated by 5% as of December 14 of every year. The term of the sublease is unique to each tower and ranges from 13 to 32 years. The Company (as lessee) has the right to withdraw from any lease on the tenth anniversary of the lease date and on each five-year anniversary thereafter. The Company accounts for its subleases of the tower space from the SBC affiliate as capital leases.

As part of the Crown and SpectraSite agreements, the Company had entered into build-to-suit (BTS) agreements that provided for the development and construction of towers on BTS sites and the performance of other services. In May and September 2002, the Company terminated its BTS agreements with SpectraSite and Crown, respectively. Under the BTS agreement, thirty-four towers were completed and became capital leases with SpectraSite. Certain other towers under construction and other work-in-progress were transferred to the Company during the transition period.

In February 2003, a subsidiary of the Company acquired leasehold interests in 545 communication towers in California and Nevada from SpectraSite, Inc. (SpectraSite) for $81 in cash. SpectraSite had previously acquired these leasehold interests from an affiliate of SBC in 2000, and the Company had leased a portion of the tower space indirectly from SpectraSite. The portion leased by the Company was accounted for as a capital lease and used in its GSMF venture. Subsequent to February 2003, the GSMF venture leases a portion of the space on these towers directly from a subsidiary of the Company. As a result of the transaction, lease rentals related to GSMF’s capital lease obligations of $197 are no longer owed to SBC or Spectrasite and the amounts received from GSMF are retained by the Company.

In 2001, 2002 and 2003, the Company transferred to the SBC affiliate 1,461, 33 and 94 towers, respectively, having an aggregate net book value of $114. As of December 31, 2003, 226 towers remain to be transferred by the Company to the SBC affiliate. These transfers will occur during 2004 upon the completion of legal requirements, including receiving consents from certain limited partners. For towers not yet transferred to the SBC affiliate, the Company pays monthly monitoring and maintenance fees to the SBC affiliate. During 2001, 2002 and 2003, the Company paid $9, $8 and $11, respectively, related to these fees.

18.     Subsequent Event

On February 17, 2004, the Company entered into an Agreement and Plan of Merger to acquire AT&T Wireless for an aggregate consideration of approximately $41,000. The closing of the acquisition is

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(Dollars in Millions)
 
expected to occur in late 2004 and is subject to the affirmative vote of AT&T Wireless’ shareholders, FCC, Hart Scott Rodino and other regulatory approvals and other customary closing conditions. SBC and BellSouth have committed to provide funding for the purchase. Proportionate equity ownership and management control of Cingular will remain unchanged after the acquisition. The form and terms of any funding have yet to be determined. This transaction will be accounted for as a purchase in accordance with SFAS No. 141, Business Combinations.
 
19. Selected Quarterly Financial Data (Unaudited)

The table below sets forth summarized quarterly financial data for the years ended December 31, 2002 and 2003.

                                 
First Second Third Fourth
2002 Quarter Quarter Quarter Quarter





Total operating revenues(a)
  $ 3,587     $ 3,791     $ 3,821     $ 3,704  
Operating income
    667       722       616 (b)     516 (c)(d)
Income before provision for income taxes and cumulative effect of accounting change
    372       399       296       184  
Net income
    338       395       293       181  
                                 
First Second Third Fourth
2003 Quarter Quarter Quarter Quarter





Total operating revenues(a)
  $ 3,638     $ 3,874     $ 4,059     $ 3,912  
Operating income
    716 (e)     756       488       329  
Income before provision for income taxes and cumulative effect of accounting change
    421       422       183       24  
Net income
    419       410       177 (f)     16 (f)


 
(a) Includes a reclassification to reflect billings to our customers for the USF and other regulatory fees as “Operating revenues”. The amounts reclassified for the first, second, third and fourth quarters of 2002 were $44, $43, $42 and $47, respectively. The amounts reclassified for the first, second and third quarters of 2003 were $48, $88 and $105, respectively (see Note 1).
 
(b) Includes a reduction of $32 due to reorganization costs (see Note 13).
 
(c) Includes a reduction of $151 due to non-cash impairment losses (see Note 12).
 
(d) Includes a reduction of $9 due to reorganization costs (see Note 13).
 
(e) Includes a reduction of $24 due to reorganization costs (see Note 13).
 
(f) Net income in the third and fourth quarters of 2003 was impacted by increased customer acquisition costs associated with the highest two quarters of gross customer additions since the inception of Cingular. Additionally, other cost increases impacting results included higher customer retention costs in preparation for wireless local number portability in the later part of 2003. Service revenues in the fourth quarter of 2003 were $142 lower than the third quarter due primarily to reduced roaming revenues as a result of lower negotiated rates and expected seasonality.

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REPORT OF INDEPENDENT AUDITORS

Members

GSM Facilities, LLC

We have audited the accompanying consolidated balance sheet of GSM Facilities, LLC as of December 31, 2003, and the related consolidated statements of operations, changes in members’ capital, and cash flows for the year then ended. 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 audit. We did not audit the financial statements of Omnipoint Facilities Network II, LLC, a wholly-owned subsidiary, which statements reflect total assets of $1.1 billion as of December 31, 2003 and total revenues of $125.5 million for the year then ended. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Omnipoint Facilities Network II, LLC, is based solely on the report of the other auditors.

We conducted our audit 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 audit and the report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of GSM Facilities, LLC at December 31, 2003, and the consolidated results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

  /s/     ERNST & YOUNG LLP

Atlanta, Georgia

February 6, 2004, except for
Note 7, as to which
the date is February 17, 2004

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REPORT OF INDEPENDENT AUDITORS

To the Members and Board of Directors of GSM Facilities, LLC:

In our opinion, the accompanying balance sheet and the related statements of operations, of member’s equity and of cash flows (not presented separately herein) present fairly, in all material respects, the financial position of Omnipoint Facilities Network II, LLC (the Company) at December 31, 2003, and the results of its operations and its cash flows for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. 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 of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Notes 1 and 5, the Company’s transactions are substantially with related parties, who are the Company’s member owners. Additionally, as described in Note 1, the Company relies on its member owners for funding requirements.

  /s/     PRICEWATERHOUSECOOPERS LLP

Seattle, Washington

February 6, 2004

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GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

                           
Period From Year Ended
November 1, 2001 December 31,
(Inception) through
December 31, 2001 2002 2003



(Unaudited) (Unaudited)
(Dollars in millions)
Revenues:
                       
 
Network service revenues
  $ 49     $ 310     $ 439  
 
Other revenues
    1       15       12  
     
     
     
 
Total revenues
    50       325       451  
Operating expenses:
                       
 
Network services
    33       194       271  
 
Interconnection
    16       121       167  
 
Depreciation and amortization
    41       324       454  
     
     
     
 
Total operating expenses
    90       639       892  
     
     
     
 
Operating loss
    (40 )     (314 )     (441 )
Interest expense
    (2 )     (17 )     (19 )
Other expense
                (5 )
     
     
     
 
Total other expenses
    (2 )     (17 )     (24 )
     
     
     
 
Net loss
  $ (42 )   $ (331 )   $ (465 )
     
     
     
 

See accompanying notes to consolidated financial statements.

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GSM FACILITIES, LLC

CONSOLIDATED BALANCE SHEETS

                   
December 31,

2002 2003


(Unaudited)
(Dollars in millions)
Assets
               
Current assets:
               
 
Cash
  $     $  
 
Due from T-Mobile USA, Inc.
    122       9  
     
     
 
Total current assets
    122       9  
Property, plant and equipment, net
    2,955       3,588  
     
     
 
Total assets
  $ 3,077     $ 3,597  
     
     
 
Liabilities and members’ capital
               
Current liabilities:
               
 
Due to Cingular Wireless LLC
  $ 120     $ 3  
 
Property tax payable
    2       6  
     
     
 
Total current liabilities
    122       9  
Capital lease obligations
    222       247  
     
     
 
Total liabilities
    344       256  
Total members’ capital
    2,733       3,341  
     
     
 
Total liabilities and members’ capital
  $ 3,077     $ 3,597  
     
     
 

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

                             
Period from
November 1, 2001
(inception) through Year Ended December 31,
December 31,
2001 2002 2003



(Unaudited) (Unaudited)
(Dollars in millions)
Operating activities
                       
Net loss
  $ (42 )   $ (331 )   $ (465 )
Adjustments to reconcile net loss to net cash used in operating activities:
                       
 
Depreciation and amortization
    41       324       454  
 
Loss on disposal of property, plant and equipment
                5  
 
Interest accretion on capital lease obligations
    1       6       6  
 
Changes in operating assets and liabilities:
                       
   
Due from (to) affiliates, net
    4       (5 )     (4 )
   
Property tax payable
    (4 )           4  
     
     
     
 
Net cash used in operating activities
          (6 )      
Investing activities
                       
Purchases of property, plant and equipment
    (252 )     (1,287 )     (1,114 )
     
     
     
 
Net cash used in investing activities
    (252 )     (1,287 )     (1,114 )
Financing activities
                       
Capital contributions
    252       1,293       1,114  
     
     
     
 
Net cash provided by financing activities
    252       1,293       1,114  
     
     
     
 
Change in cash
                 
Cash at beginning of year
                 
     
     
     
 
Cash at end of year
  $     $     $  
     
     
     
 
Supplemental disclosure
                       
Interest paid
  $ 2     $ 11     $ 13  
     
     
     
 
Non-cash investing and financing activities
                       
Capital lease additions
  $     $ 48     $ 19  
     
     
     
 
Initial contribution of net assets by members at inception
  $ 1,561     $     $  
     
     
     
 

See accompanying notes to consolidated financial statements.

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GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

                           
Period From Year Ended
November 1, 2001 December 31,
(inception) Through
December 31, 2001 2002 2003



(Unaudited) (Unaudited)
(Dollars in millions)
Balance, beginning of period
  $     $ 1,771     $ 2,733  
 
Initial contributions
    1,561              
 
Contributions, net
    252       1,293       1,073  
 
Net loss
    (42 )     (331 )     (465 )
     
     
     
 
Balance, end of period
  $ 1,771     $ 2,733     $ 3,341  
     
     
     
 

See accompanying notes to consolidated financial statements.

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Item 8.     Financial Statements and Supplemental Data

GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Millions)

Period from November 1, 2001 (inception) through December 31, 2001

and Years Ended December 31, 2002 and 2003

1.     Organization

GSM Facilities, LLC (“GSM Facilities” or the “Company”), a Delaware limited liability company, is a jointly controlled venture of Cingular Wireless LLC (“Cingular”) and T-Mobile USA, Inc. (“T-Mobile”) (collectively the “members”). GSM Facilities was formed in November 2001 (inception date) and serves as a holding company for Pacific Bell Wireless LLC (“PBW”) and Omnipoint Facilities Network II, LLC (“OFN”). The Company allows Cingular and T-Mobile to share network infrastructures in the Los Angeles and San Francisco Major Trading Areas (“MTA’s”), which cover most of California and parts of Nevada (“California/Nevada Market”) and the New York Basic Trading Area (“BTA”) (“New York City Market”). Both Cingular and T-Mobile have access to the Company’s network infrastructure, and pursuant to the terms of the Company’s commercial arrangements, are able to provide their respective customers access to the network. In July 2002, Cingular began marketing its commercial service in the New York City Market and T-Mobile began service in the California/Nevada Market. The Company’s network operations are managed by Cingular and T-Mobile through PBW and OFN, respectively, and each member funds their daily cash operating needs (see further discussion in Note 6).

PBW and OFN are economically dependent on Cingular and T-Mobile, respectively, since neither PBW nor OFN have access to funding and do not separately own spectrum licenses which are essential to their businesses. Accordingly, the Company is economically dependent upon Cingular and T-Mobile to provide funding for the operating expenses and capital expenditures of the Company and access to spectrum licenses for the Company’s network operations. Both Cingular and T-Mobile have agreed to fund the operations of the Company during the next year.

The Company sells only network services to Cingular and T-Mobile. Amounts charged to each member are based on monthly operating expenses and are allocated to each member based on spectrum ownership (see Note 6). Although the networks of the Company are constructed and operational, Cingular and T-Mobile are required on a regular basis to contribute additional capital to GSM Facilities to modify and expand the networks.

Management control of the Company is vested in a four-person management committee (the “Management Committee”), to which each member has the right to appoint two persons (the “managers”). The Management Committee has complete and exclusive discretion and authority in the management and control of the business and affairs of the Company. A decision by the Management Committee is made by the unanimous vote of the managers. The operating agreement provides for certain actions or decisions by the Management Committee. These include, but are not limited to, approval of the annual operating and capital budget, amendments to the documents concerning formation of the Company, and entering into any agreements or amendments that provide for payments by or to the Company in excess of $5 that is not an arms length transaction or in the ordinary course of business. Neither Cingular nor T-Mobile has the unilateral ability to control the Company or its actions.

Net assets contributed at formation by Cingular and T-Mobile were valued at their historical costs and had carrying values of approximately $1,119 and $442, respectively. No spectrum licenses were contributed

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GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

to GSM Facilities at the time of, or subsequent to, formation. The capital interests of Cingular and T-Mobile at the time of formation were approximately 70% and 30%, respectively. See Note 5 for further discussion of members’ capital. The Company is expected to incur non-cash losses due to depreciation and interest expense, which are not reimbursed by the members.

The members’ liability is limited as set forth in the Limited Liability Company Agreement (“LLC Agreement”) of GSM Facilities and other applicable law. The Company shall continue in existence in perpetuity or until the Company is dissolved in accordance with the LLC Agreement (see Note 5). Additionally, the LLC Agreement sets forth the basis for capital contributions, allocations and distributions to the members including the allocations of profits and losses, special allocations for tax purposes and distributions of cash flows from the members.

2.     Summary of Significant Accounting Policies

 
Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

 
Cash

The members support the cash operating needs of the Company.

 
Revenue Recognition

The Company earns network service revenues by providing the members access to its network infrastructure. Network service revenues are based on monthly operating expenses and are recognized monthly when earned and charged to the members. The amount charged to each member of GSM Facilities is allocated based on each member’s respective ownership of the licensed spectrum in each market. Reimbursable monthly operating expenses are recorded as network service and interconnection expenses and include professional services consisting primarily of salaries and wages, site related, facility related and interconnection costs. Reimbursable costs also include payments made under the capital lease obligations.

Other revenues primarily consist of revenue earned from the local telephone company for land line calls terminated on the Company’s wireless switches, and are recognized when calls are terminated. These revenues are included as a reduction to the reimbursable monthly operating expenses described above.

 
Property, Plant and Equipment

Property contributed at formation of the Company was recorded at the net book value of the member who contributed the property. Subsequent to the formation date, the members sell property to the Company at prices that are mutually agreed upon by the members and which approximate fair value. Furthermore, these prices are subject to adjustment from time to time, by unanimous agreement of the members, to reflect general changes in price levels.

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GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

The Company periodically evaluates the useful lives of its wireless communication systems based on technological and other industry changes to determine whether events or changes in circumstances could warrant revisions to useful lives or result in the impairment of long-lived assets.

Assets are depreciated using the straight-line method over their estimated useful lives. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized and included in the statement of operations. Network engineering costs incurred on the Company’s behalf by the members during the construction phase of the Company’s wireless network are capitalized as part of property and equipment.

 
New Accounting Standard

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, (SFAS 143). This statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and capitalize that amount as part of the book value of the long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss. The Company adopted this new pronouncement effective January 1, 2003.

The Company has certain legal obligations related to network infrastructure, principally tower assets, which fall within the scope of SFAS 143. These legal obligations include obligations to remediate leased land on which the Company’s network infrastructure assets are located. The significant assumptions used in estimating the Company’s asset retirement obligations include the following: a probability that each of the Company’s network infrastructure assets will be remediated at the lessor’s directive, expected settlement dates that coincide with lease expiration dates plus estimates of lease extensions, remediation costs that are indicative of what third party vendors would charge the Company to remediate the sites, expected inflation rates that are consistent with historical inflation rates, and credit-adjusted risk-free rates that approximate the members’ incremental borrowing rates. The adoption of SFAS 143 did not have a material impact on the Company’s individual financial statement line items or its consolidated financial statements taken as a whole. Accordingly, the Company did not record asset retirement obligations for network infrastructure assets given the insignificance of the Company’s estimated liability and related accretion and depreciation expense. The Company will continue to evaluate whether the estimated asset retirement obligations and related financial statement amounts continue to be immaterial in relation to the Company’s individual financial statement line items or its consolidated financial statements taken as a whole.

 
Taxes

The Company is a limited liability company. Accordingly, income tax items flow through to its members who would be subject to tax at their level pursuant to federal and state income tax laws. The members are responsible for its tax liabilities resulting from income earned at the member level. The Company is not subject to income taxes at the limited liability company level. The Company’s obligations for property taxes are accrued in the “Property tax payable” line item on the consolidated balance sheets.

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Item 8.     Financial Statements and Supplemental Data

GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)
 
Use of Estimates

The preparation of the accompanying financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingencies at the date of the financial statements. The Company bases its estimates on historical experience, where applicable, and other assumptions the Company believes are reasonable under the circumstances. Significant estimates include useful lives of network assets. Actual results could differ from such estimates under different assumptions or conditions.

 
Comprehensive Income

Comprehensive income for the Company is the same as net loss for all periods presented.

3.     Property, Plant and Equipment

Property, plant and equipment is summarized as follows:

                         
December 31,
Estimated
Useful Lives 2002 2003



(in years) (Unaudited)
Buildings and building improvements
    10-25     $ 45     $ 64  
Wireless communication systems
    5-15       2,790       3,788  
Site acquisition costs
    20       304       371  
Tower capital leases
    13-32       210       229  
Construction in progress
          354       354  
             
     
 
              3,703       4,806  
Less: accumulated depreciation
            (748 )     (1,218 )
             
     
 
Property, plant and equipment, net
          $ 2,955     $ 3,588  
             
     
 

The net book value of assets recorded under capital leases was $196 (unaudited) and $208 at December 31, 2002 and 2003, respectively. The capital leases relate to communication towers (see Note 4). Amortization of assets recorded under capital leases is included in depreciation expense. Capitalized network engineering and overhead costs incurred during the construction phase of the Company’s wireless networks for the years ended December 31, 2002 and 2003 were $36 (unaudited) and $40, respectively. Such amounts for the period ended December 31, 2001 were not significant.

4.     Commitments and Contingencies

 
Capital Leases

PBW, which was contributed to the Company in November 2001, has certain leases related to approximately 640 communications towers that are accounted for as capital leases. Under the terms of these agreements, these towers are leased directly from an affiliate of SBC Communications Inc. (“SBC”), 60% owner of Cingular, who in turn had leased the rights to certain space on 545 of these towers from SpectraSite, Inc. (“SpectraSite”). In February 2003, a subsidiary of Cingular acquired

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

leasehold interests from SpectraSite in all of the space on these 545 towers. For the years ended December 31, 2002 and 2003, the Company reimbursed Cingular for lease payments made on its behalf amounting to $11 (unaudited) and $13, respectively. The Company charges its members for the amounts of the monthly lease payments in accordance with the methodology for monthly operating expenses as discussed in Note 6.

The annual rent is escalated by 5% as of December 14 of every year. The term of the lease is unique to each tower and ranges from 13 to 32 years. The Company (as lessee) has the right to withdraw from any lease on the tenth anniversary of the lease date and on each five-year anniversary thereafter.

Minimum lease payments under capital lease obligations at December 31, 2003 are summarized below:

         
2004
  $ 16  
2005
    17  
2006
    18  
2007
    19  
2008
    19  
Thereafter
    786  
     
 
Total minimum payments
    875  
Less imputed interest
    (514 )
Less executory costs
    (114 )
     
 
Total long-term obligations
  $ 247  
     
 
 
Operating Leases

The Company has also entered into operating leases for ground, facilities and equipment used in operations. These leases typically include renewal options and escalation clauses. Rental expense under operating leases for the period ended December 31, 2001 and the years ended December 31, 2002 and 2003 were $12 (unaudited), $88 (unaudited) and $115, respectively. Included in the 2002 and 2003 amounts are $4 and $5, respectively, related to certain network facilities leased from SBC. The following table summarizes the approximate future minimum rentals under noncancelable operating leases in effect at December 31, 2003:

         
2004
  $ 108  
2005
    106  
2006
    99  
2007
    84  
2008
    72  
Thereafter
    231  
     
 
Total
  $ 700  
     
 

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GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)
 
Litigation

The Company is not currently a party to any pending litigation, which, if decided adversely to the Company, would have a material adverse effect on the business, financial condition, results of operations or cash flows of the Company.

5.     Members’ Capital

Cingular and T-Mobile agreed to jointly fund capital expenditures of GSM Facilities. Contributions to GSM Facilities are generally determined by the proportionate share of the annual capital expenditure requirements based on each member’s incremental growth of network usage. Such contributions are accounted for as an increase to the members’ capital of GSM Facilities. The LLC Agreement also provides for periodic capital settlements that can either increase or decrease each member’s capital account. In addition to the periodic capital settlements, Cingular made additional contributions of $225 to GSM Facilities in both 2002 and 2003 on behalf of T-Mobile as required under the terms of the LLC Agreement. No member is entitled to withdraw any part of its capital contributions without unanimous approval by the Management Committee. The total ownership interest of GSM Facilities as of December 31, 2003 is approximately 70% for Cingular and 30% for T-Mobile.

GSM Facilities may be dissolved by its members under a number of circumstances. Dissolution may occur at any time as a result of the unanimous decision by its members; automatically upon the bankruptcy of one of its members; upon the occurrence of certain material breaches of the venture agreements; upon a decree of judicial dissolution; or in the event of an acquisition transaction (as defined) involving one of the members, at the election of the member that is a party to the acquisition transaction.

In the event of dissolution prior to May 1, 2005, for reasons other than mutual agreement or judicial decree, the member causing the dissolution event would be required to pay the other member $250. Additionally, if dissolution occurs prior to November 1, 2004, T-Mobile may elect to exchange certain spectrum licenses, or in lieu of such exchange, make a cash payment. If dissolution occurs after November 1, 2004, T-Mobile is required to exchange certain spectrum with Cingular.

In the event of dissolution after May 1, 2005, with the exception of dissolution upon mutual agreement, the member responsible for the dissolution event would be required to pay the other member $250. Under all dissolution circumstances after November 1, 2004, members will have obligations to exchange certain spectrum licenses.

Additionally, in the event of dissolution, all outstanding capital settlements owed to the Company by the members would require payment, the New York City Market network assets would be distributed to T-Mobile, and the California/Nevada Market network assets would be distributed to Cingular. Following these distributions, a determination would be made of each member’s capital account deficit or surplus, and a settlement would be made between the members.

6.     Related Party Transactions

The monthly operating expenses of the Company are charged to Cingular and T-Mobile based on each member’s proportionate share of the licensed spectrum in each market. During all periods presented,

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GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

Cingular and T-Mobile held weighted-average spectrum of 53% and 47%, respectively, in the California/Nevada Market, and 25% and 75%, respectively, in the New York City Market. Through a separate reciprocal home roaming agreement, Cingular and T-Mobile charge each other for usage that is not in the same proportion as the spectrum-based allocations. The consolidated statements of operations include network service revenues from the members as follows:

                           
Period from
November 1,
2001 (inception) Year Ended
through December 31,
December 31,
2001 2002 2003



(Unaudited) (Unaudited)
Network service revenues:
                       
 
Cingular
  $ 21     $ 141     $ 199  
 
T-Mobile
    28       169       240  
     
     
     
 
    $ 49     $ 310     $ 439  
     
     
     
 

Concurrent with its formation, GSM Facilities entered into operating agreements with Cingular and T-Mobile for them to manage and maintain the network assets of the California/Nevada Market and the New York City Market, respectively. The Company purchases all services from the members and has no direct employees. Direct operating costs incurred by the members on behalf of the Company include salaries and wages, site related, facility related and interconnection costs.

Pursuant to the terms of the operating agreements, services provided during the periods ended December 31, 2001, 2002, and 2003 by Cingular to the Company for network services and local interconnection charges were $35 (unaudited), $216 (unaudited) and $305, respectively, and are included in operating expenses in the consolidated statements of operations. Pursuant to the terms of the operating agreements, services provided during the periods ended December 31, 2001, 2002, and 2003 by T-Mobile to the Company for network services and local interconnection charges were $13 (unaudited), $83 (unaudited) and $121, respectively, and are included in operating expenses in the consolidated statements of operations.

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GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in Millions)

At December 31, 2002 and 2003, the consolidated balance sheets include the following amounts due (to)/from the members:

                   
December 31,

2002 2003


(Unaudited)
Due (to)/from T-Mobile USA, Inc.:
               
 
Capital settlements
  $ 100     $ (17 )
 
Operating expense settlements
    22       26  
     
     
 
    $ 122     $ 9  
     
     
 
Due (to)/from Cingular Wireless LLC:
               
 
Capital settlements
  $ (100 )   $ 17  
 
Operating expense settlements
    (20 )     (20 )
     
     
 
    $ (120 )   $ (3 )
     
     
 

The capital settlements presented in the table above represent amounts due to/from the members for third and fourth quarter settlements in 2002 and for the estimated fourth quarter settlement in 2003.

7.     Subsequent Event

On February 17, 2004, Cingular entered into an Agreement and Plan of Merger to acquire AT&T Wireless Services, Inc. (“AT&T Wireless”). The closing of the acquisition is expected to occur in late 2004 and is subject to the affirmative vote of AT&T Wireless’ shareholders, Federal Communications Commission, Hart Scott Rodino and other regulatory approvals, and other customary closing conditions.

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Item 8.     Financial Statements and Supplemental Data

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

ALLOWANCE FOR DOUBTFUL ACCOUNTS

                                         
Col. A Col. B Col. C Col. C Col. D Col. E






Balance at Charged to Charged to Balance
Beginning Costs and Other at End
Description of Period Expenses Accounts Deductions of Period






Year 2003
  $ 163       259       (24 )(c)     (268)(b)     $ 130  
Year 2002
  $ 131       404             (372)(b)     $ 163  
Year 2001
  $ 67       333       6 (a)     (275)(b)     $ 131  


(a)  Includes allowance balances received from contributions made by SBC and BellSouth of their Puerto Rico and Houston wireless operations.
 
(b)  Includes amounts written off as uncollectible, net of recoveries.
 
(c)  Allowance for Affiliate Accounts Receivable included in Due to Affiliates, net, on the balance sheet at December 31, 2003.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

 
Item 9A. Controls and Procedures

(a) As of the end of the period covered by this annual report, management concluded its evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. As of the end of the period, our President and Chief Executive Officer and our Chief Financial Officer concluded that we maintain disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed in our reports under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including our President and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives. We also have investments in certain unconsolidated entities. As we do not control or manage these entities, our disclosure controls and procedures with respect to such entities are necessarily more limited than those we maintain with respect to our consolidated subsidiaries.

(b) During the evaluation referred to in Item 9A(a) above, we have identified no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART III
 
 
Item 10. Directors and Executive Officers of the Registrant

Directors and Executive Officers

The following table presents information regarding persons who serve as directors of our manager and executive officers of us and our manager as of February 24, 2004.

             
Name Age Position



Ronald M. Dykes
    56     Class B Director (Member of Audit Committee)
Richard A. Anderson
    45     Class B Director
Randall L. Stephenson
    43     Chairman of the Board and Class B Director (Member of Audit Committee)
Rayford Wilkins, Jr.
    52     Class B Director
Stanley T. Sigman
    56     President and Chief Executive Officer
Ralph de la Vega
    52     Chief Operating Officer
Richard G. Lindner
    49     Chief Financial Officer
F. Thaddeus Arroyo
    40     Chief Information Officer
Rickford D. Bradley
    52     Executive Vice President — Human Resources
Joaquin R. Carbonell, III 
    51     Executive Vice President and General Counsel — Legal and Regulatory
Gregory T. Hall
    48     Controller
Carol L. Tacker
    55     Vice President and Assistant General Counsel, Corporate Secretary and Chief Compliance Officer
 
Directors

Richard A. Anderson, Class B Director, Cingular Wireless Corporation. Richard Anderson is president — customer markets of BellSouth and has served in various positions with BellSouth since 1981. He was elected to the board of directors of Cingular Wireless Corporation in February 2003. Mr. Anderson is also a director of Adtran, Inc.

Ronald M. Dykes, Class B Director, Cingular Wireless Corporation. Ronald Dykes is chief financial officer of BellSouth and has served in various positions with BellSouth since 1971. He was elected to the board of directors of Cingular Wireless Corporation in October 2000. Mr. Dykes is also a director of St. Joseph’s Hospital Atlanta.

Randall L. Stephenson, Chairman of the Board and Class B Director, Cingular Wireless Corporation. Randall Stephenson is senior executive vice president and chief financial officer of SBC and has served SBC in high level managerial positions for more than the past five years. He was elected to the board of directors of Cingular Wireless Corporation in July 2001 and Chairman of the Board in February 2003.

Rayford Wilkins, Jr., Class B Director, Cingular Wireless Corporation. Rayford Wilkins is group president — SBC marketing and sales and has served SBC and its predecessors in various capacities since 1974. He was selected to the board of directors of Cingular Wireless Corporation in November 2002. He also serves on the board of directors of H&R Block, Inc.

Audit Committee Financial Expert. We have an audit committee comprised of Messrs. Dykes and Stephenson. The board of directors of Cingular Wireless Corporation, our manager, has determined that both audit committee members qualify as audit committee financial experts under the Sarbanes-Oxley Act

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Item 10. Directors and Executive Officers of the Registrant

of 2002 and the rules of the Securities and Exchange Commission. Because of their affiliations with SBC and BellSouth, they are not independent of management.

 
Executive Officers

Executive officers are elected by the board of directors of our manager and serve until their successors have been duly elected and qualified or until their resignation or removal. Our executive officers also constitute the executive officers of our manager, each holding the same office with both entities.

Stanley T. Sigman, President and Chief Executive Officer. Stanley Sigman was elected to the board of directors of Cingular Wireless Corporation in October 2000 and resigned that position and became President and Chief Executive Officer in November 2002. He has held high level managerial positions with SBC or its subsidiaries for more than the past five years. Previously, he had served as group president and chief operating officer of SBC from April 2001 until November 2002. Prior to that, he was president and chief executive officer of Southwestern Bell Telephone Company and served as group president of SBC National Operations since 1999.

Ralph de la Vega, Chief Operating Officer. Ralph de la Vega came to Cingular from BellSouth, where he most recently served as President — BellSouth Latin America. Prior to that, he was BellSouth’s President of Broadband and Internet Services. Mr. de la Vega held numerous positions of increasing responsibility since beginning with BellSouth in 1974.

Richard G. Lindner, Chief Financial Officer. Richard Lindner came to Cingular from SBC Wireless, where he served as senior vice president and chief operating officer, responsible for the headquarter operations of SBC’s domestic wireless business until August 2000. Prior to that he served as president and chief executive officer of Southwestern Bell Wireless, where he was in charge of all wireless operations in five states. Mr. Lindner held a variety of senior management positions since joining SBC in 1986, including vice president and chief financial officer for Southwestern Bell Telephone Company in 1996. Mr. Lindner is also a director of Sabre Holdings Corporation.

F. Thaddeus Arroyo, Chief Information Officer. Thaddeus Arroyo came to Cingular from Sabre Corporation, where he served as senior vice president of product marketing and development since June 2000. He also served as senior vice president of information technology services in 1999, vice president of global outsourcing from 1997 to 1999, vice president of strategic infrastructure and in a number of other positions for Sabre from 1992 to 1997. Prior to joining Sabre, Mr. Arroyo worked in Southwestern Bell’s information technology organization.

Rickford D. Bradley, Executive Vice President — Human Resources. Rickford Bradley came to Cingular from SBC Telecommunications, Inc., where he most recently served as president of interconnection services. He has held a variety of senior and executive positions in sales, network services and corporate development. He also served as president of public communications in 1999 for SBC. Prior to SBC’s merger with Pacific Telesis in 1997, Mr. Bradley served as vice president and general manager of operator services at Pacific Bell.

Joaquin R. Carbonell III, Executive Vice President and General Counsel — Legal and Regulatory. Joaquin Carbonell came to Cingular from BellSouth Enterprises, Inc., where he served as vice president and group counsel and was responsible for the legal operations of wireless services since 1997. Prior to that, he held positions as president of BellSouth International for Latin America from 1992 to 1994 and then as president of BellSouth Europe from 1994 to 1997, overseeing operations in those regions. He joined BellSouth in 1980 as an attorney with the Southern Bell Telephone & Telegraph Company.

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Gregory T. Hall, Controller. Gregory Hall came to Cingular from SBC Wireless, Inc., where he served as vice president and chief financial officer from October 1999 until the formation of Cingular. He joined SBC in 1984 and has served in numerous financial and corporate development positions with it and its subsidiaries.

Carol L. Tacker, Vice President and Assistant General Counsel, Corporate Secretary and Chief Compliance Officer. Carol Tacker came to Cingular from SBC Wireless where she served as vice president — general counsel since 1996. Prior to that, Ms. Tacker served in several positions of increasing responsibility, including general attorney of Southwestern Bell Yellow Pages, and general attorney of Southwestern Bell Mobile Systems. Ms. Tacker joined SBC in 1984 as an attorney with Southwestern Bell Telephone Company.

There are no family relationships among any of the above-named directors of our manager or executive officers of our manager and us, or any arrangement or understanding between any of these directors and executive officers and any other person pursuant to which such director or officer was selected. See “Certain Relationships and Related Transactions — Stockholders’ Agreement” for more information regarding the agreement between the stockholders of our manager with respect to the election of the directors of our manager.

Item 11.     Executive Compensation

Executive Compensation

Other than Mr. Arroyo, the six executive officers whose compensation is described in this section (the “named executive officers”) came to the Company from SBC or BellSouth. Effective December 31, 2003, Mr. Feidler resigned as Chief Operating Officer to return to BellSouth and Mr. de la Vega was elected to that office (see related employment agreements under “Agreements with Management”).

All of our named executive officers participate in our benefit plans. In addition, the named executive officers have and will continue to have interests in selected compensation and benefit plans of SBC or BellSouth in which they participated prior to the time they became our employees or in connection with joining the Company.

Executive compensation is established by our manager, Cingular Wireless Corporation, through action of its board of directors. All of the directors of our manager are executive officers of SBC or BellSouth. Neither we nor our manager has a compensation committee, and there are no interlocks between any executive officer of us or of our manager and another company, one of whose executive officers serves on our manager’s board of directors. None of the directors of our manager is compensated by us or our manager, nor do any of them have any material financial or business transactions or relationships with, or any indebtedness to, us or our manager.

Summary of Cash and Other Compensation

 
Overview

As further described in the summary compensation table below, the compensation structure for the named executive officers consists of:

•  salary;
 
•  short-term performance-based incentives paid in cash; and

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•  long-term compensation in the form of cash, stock appreciation units, stock options to purchase common stock of SBC or BellSouth and performance-based incentives, as applicable.

SBC and BellSouth have stated that they do not intend to grant stock options or awards to our officers or employees in the future and that our officers and employees will no longer participate in their long-term incentive plans, except to the extent of future payments for past performance periods and grants. We have developed long-term incentive arrangements in which our named executive officers participate. See “Long-Term Compensation Plans”.

Annual Compensation. Salaries and bonuses listed in the table below are the total annual salaries and bonuses for all years, including:

•  the salary and bonus paid to each named executive officer by the applicable predecessor company; and
 
•  the salary and bonus paid to each named executive officer by us.

Award values under short-term incentive plans are based on the achievement of company financial goals and other performance goals.

Long-Term Compensation. Long-term compensation awards in the table below consist of the annual target grant of stock appreciation units in 2003 by us for each named executive officer and the annual target grant of stock options and restricted stock pursuant to the applicable SBC or BellSouth long-term incentive plan. Payout amounts reflected below were paid from the respective predecessor company long-term incentive plan.

                  Summary Compensation Table

                                                                   
Long-term Compensation

Awards Payouts
Annual Compensation


Securities
Other Annual Restricted Underlying LTIP All Other
Salary Bonus Compensation Stock Options/SAUs Payouts Compensation
Name and Principal Position Year ($) ($)(G) ($)(H) Awards ($) (#) ($) ($)









Stanley T. Sigman(A)
    2003     $ 900,000     $ 1,876,000     $ 686,565     $ 0       322,889     $ 567,521     $ 130,608  
 
President/CEO
    2002       900,000       1,081,000       179,483       5,000,000 (I)     301,743       239,076       180,968  
        2001                                            
Ralph de la Vega(B)
    2003       410,319       716,000       11,212       2,855,646 (J)     122,624       0       36,211  
 
Chief Operating Officer
    2002                                            
        2001                                            
Richard G. Lindner(C)
    2003       383,635       407,550       25,169       0       80,574       75,300       40,942  
 
Chief Financial Officer
    2002       370,327       152,500       22,754       0       3,051       53,116       56,808  
      2001       366,267       222,705       25,629       0       62,305       89,804       573,872  
F. Thaddeus Arroyo(D)
    2003       346,500       332,250       7,590       0       47,542       0       10,368  
 
Chief Information Officer
    2002       333,769       303,800       109,051       0       0       0       12,701  
      2001       267,798       398,500       74,302       0       65,000       0       62,771  
Joaquin Carbonell(E)
    2003       314,277       286,000       74,927       0       50,413       0       129,845 (K)
 
Executive Vice President
    2002       292,277       102,500       1,773       0       0       0       50,305  
 
and General Counsel
    2001       276,200       148,200       13,607       0       37,100       122,752       39,600  
Mark L. Feidler(F)
    2003       555,654       730,600       89,716       0       369,009       0       12,614,653 (K)
 
Chief Operating Officer
    2002       536,442       1,071,750       6,221       0       0       0       99,255  
        2001       524,000       391,300       15,074       0       160,700       215,040       80,800  


 
(A) For 2003, Mr. Sigman’s Long-Term Incentive Plan payout was made by SBC under SBC’s 1996 Stock and Incentive Plan and is for the 2000-2002 performance period. Mr. Sigman’s “All Other Compensation” for 2003 includes (a) benefits imputed with respect to premiums on SBC-owned life

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  insurance, as determined in accordance with IRS guidelines, of $2,136; (b) the value of company-paid life insurance premiums of $4,386; (c) above-market interest on deferred compensation of $36,678; and (d) employer matching contributions made to employee benefit plans of $87,408. Mr. Sigman became President and CEO in November 2002.
 
(B) For 2003, Mr. de la Vega’s “All Other Compensation” includes (a) above-market interest on BellSouth deferred compensation plans of $5,111; (b) employer matching contributions made to BellSouth employee benefit plans of $11,800; (c) benefits substantially equal to matching contributions that could not be provided under BellSouth employee savings plans because of limitations under the Internal Revenue Code of $10,522; and (d) value of life insurance premiums paid by BellSouth of $8,778. Mr. de la Vega became Chief Operating Officer in December 2003.
 
(C) For 2003 Mr. Lindner’s Long-Term Incentive Plan payout was made by SBC under SBC’s 1996 Stock and Incentive Plan and is for the 2000-2002 performance period. Mr. Lindner’s “All Other Compensation” for 2003 includes (a) above-market interest on deferred compensation plans of $13,676; (b) the value of company-paid life insurance premiums of $1,003; (c) benefits imputed with respect to premiums on Cingular-owned life insurance as determined in accordance with IRS guidelines of $529; and (d) employer matching contributions made to employee benefit plans of $25,734.
 
(D) For 2003, Mr. Arroyo’s “All Other Compensation” includes (a) the value of company-paid life insurance premiums of $768 and (b) employer matching contributions made to certain employee benefit plans of $9,600.
 
(E) For 2003, Mr. Carbonell’s “All Other Compensation” includes (a) above-market interest on deferred compensation plans of $15,224; (b) the value of company-paid life insurance premiums of $2,625; (c) employer matching contributions made to employee benefit plans of $20,005; and (d) benefits imputed with respect to a split dollar life insurance policy of $483.
 
(F) For 2003, Mr. Feidler’s “All Other Compensation” includes (a) above-market interest on deferred compensation plans of $22,705; (b) the value of company-paid life insurance premiums of $6,473; (c) employer matching contributions made to certain employee benefit plans of $39,715; (d) benefits imputed with respect to split dollar life insurance policies of $429; and (e) a payment of $12,447,297 for the approximate value Mr. Feidler would have received from the exercise of certain BellSouth options assuming a $60 exercise price, paid by BellSouth pursuant to his agreement with BellSouth. Mr. Feidler resigned from the Company, effective December 31, 2003, to return to BellSouth.
 
(G) These amounts were earned under the Cingular Executive Short-Term Incentive Plan, except for Mr. de la Vega’s 2003 amount which was earned under the comparable BellSouth executive short-term incentive plan. The amounts reported in 2003 and 2002 for Mr. Sigman include an incentive payment of $160,000 paid by us in connection with his employment agreement and $825,000 paid by SBC under their applicable short-term incentive plan, respectively. The amount reported in 2002 for Mr. Feidler includes $800,000 paid by BellSouth in connection with his transition agreement. The amounts reported for Mr. Arroyo include special bonuses of $42,000 ($150,000 less gross-ups paid on his 2002 bonus), $200,000, and $250,000 for 2003, 2002, and 2001 respectively, as part of his employment offer.
 
(H) Includes, if applicable, (a) any tax “gross-ups” for the named executive officer and (b) payment of dividend equivalents on long-term performance shares. For Mr. Sigman, the 2003 amount includes perquisites in excess of reporting thresholds, including $29,971 for the personal use of corporate aircraft. No other named executive officer had perquisites and other personal benefits that, in the aggregate, exceeded reporting thresholds with respect to the applicable year.

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(I) This item includes the grant date value of restricted stock units granted to Mr. Sigman by us, in connection with his Cingular employment agreement, which will vest 100% on the third anniversary of the grant. At December 31, 2003, Mr. Sigman held 113,507 and 73,073 equivalent share units of SBC and BellSouth restricted stock valued at $5,027,093 based on the closing price of $26.07 and $28.30 of SBC and BellSouth common stock, respectively, on December 31, 2003. These units are payable in cash based on the relative value of the underlying stock at vesting. Dividends are paid on all restricted share units at the same rate as the dividend rate received by all SBC and BellSouth shareholders, respectively.
 
(J) This item includes the grant date value of restricted stock awards granted to Mr. de la Vega by BellSouth, 50% of which will vest on December 31, 2004 and the remaining 50% of which will vest on December 31, 2005. At December 31, 2003, Mr. de la Vega held 49,234 shares of BellSouth restricted stock valued at $1,393,322 based on the closing price of $28.30 of BellSouth common stock on December 31, 2003. Dividends are paid on all restricted shares at the same rate as the dividend rate received by all shareholders. In addition, Mr. de la Vega received grants of 92,873 restricted stock units valued at $2,500,000 pursuant to his compensation package with us in amounts giving effect to the weighted (at 60/40) average stock price of SBC and BellSouth common stock on December 31, 2003. These restricted units will vest in full on December 31, 2006, and are payable in cash based on the relative value of the underlying stock at vesting. Dividend equivalents will be paid quarterly at the same rate as the dividend rate received by all SBC and BellSouth shareholders, respectively.
 
(K) In 2003, the Company terminated the split dollar life insurance arrangements previously maintained for Messrs. Feidler and Carbonell due to changes in the tax law. Under these arrangements, the Company had an interest in the policies’ cash values equal to the premiums paid by the Company. Upon termination of the arrangements, the Company recovered a portion of this interest from the policies’ cash surrender values. The Company’s remaining interest in the policies was transferred to the executives so the policies would have sufficient value to continue to provide promised insurance coverage. The amounts reported for Messrs. Feidler and Carbonell include the amounts transferred by the Company in connection with these transactions of $98,034 and $91,508, respectively.
 
Grants of Stock Options/SAUs

The following table contains information concerning the grants of stock appreciation units and stock options to the named executive officers during 2003. The Company utilized the Black-Scholes option pricing model to develop the theoretical values set forth under the “Grant Date Present Value” column. The officer realizes value from the stock appreciation units and stock options only to the extent that the price of the underlying stock on the date the officer exercises the options exceeds the price of the stock on the grant date. Consequently, there is no assurance the value realized by an officer will be at or near the value estimated below.

Stock appreciation units (“SAUs”) were awarded under the Cingular Wireless 2003 Long Term Compensation Plan to certain levels of management, including the named executive officers. Each SAU enables the participant to receive a cash payment at the exercise date equal to the increase in the market value of an underlying share of BellSouth or SBC common stock between the grant date and the exercise date. SAUs do not provide for dividend payments. Participants will vest in 50% of the SAUs in two years

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from the date of grant. The remaining 50% will vest in three years from date of grant. Each SAU has a term of 10 years from the grant date and any unexercised SAUs at the end of the term are cancelled.

                                         
Individual Grants Grant Date Value


Number of % of Total
Securities Options/SAUs
Underlying Granted to Exercise or Grant Date
Options/SAUs Employees in Base Price Expiration Present Value
Name Granted (#) Fiscal Year ($/Sh) Date ($)






Stanley T. Sigman
    156,642 (A)     9.77 %   $ 22.46       04/01/13     $ 718,987 (F)
      152,068 (B)     9.26       21.38       04/01/13       512,469 (G)
      14,179 (C)     0.10 (K)     25.28       11/24/07       57,312 (H)
Ralph de la Vega
    118,500 (D)     0.82 (L)     21.75       03/03/13       490,021 (I)
      4,124 (E)     0.03 (L)     24.25       04/28/13       20,441 (J)
Richard G. Lindner
    39,690 (A)     2.47       22.46       04/01/13       182,177 (F)
      40,884 (B)     2.49       21.38       04/01/13       137,779 (G)
F. Thaddeus Arroyo
    23,419 (A)     1.46       22.46       04/01/13       107,493 (F)
      24,123 (B)     1.47       21.38       04/01/13       81,295 (G)
Joaquin Carbonell
    24,833 (A)     1.55       22.46       04/01/13       113,983 (F)
      25,580 (B)     1.56       21.38       04/01/13       86,205 (G)
Mark L. Feidler
    90,937 (A)     5.67       22.46       04/01/13       417,401 (F)
      93,672 (B)     5.70       21.38       04/01/13       315,675 (G)


 
(A) Stock appreciation units granted under the Cingular Wireless Long-Term Compensation Plan representing an underlying share of BellSouth common stock.
 
(B) Stock appreciation units granted under the Cingular Wireless Long-Term Compensation Plan representing an underlying share of SBC common stock.
 
(C) Mr. Sigman received a stock option grant from SBC under a stock purchase plan where middle level and above managers received options based on the number of SBC shares they purchased while participating in the plan in 2002. Each option provides for the purchase of SBC common stock at a price equal to the fair market value of the stock on the date of the grant. These options are immediately exercisable.
 
(D) Mr. de la Vega received a nonqualified stock option grant by BellSouth under the BellSouth Corporation Stock Plan to purchase shares of BellSouth common stock at a price equal to the fair market value of the stock on the date of the grant. These options become exercisable on 3/3/2006.
 
(E) Mr. de la Vega was awarded incentive stock options from BellSouth based on the achievement of ownership of specified levels of BellSouth stock as established by the BellSouth Board of Directors. These options, which have exercise prices equal to the fair market value of the stock on the date of the grant, are exercisable six months from the date of grant.
 
(F) This value was determined using a standard application of the Black-Scholes option pricing methodology using the following assumptions: volatility of 29%, dividend yield of 3.14% and a risk-free rate of return of 2.32%, based on SAUs being outstanding for a 5-year term.
 
(G) This value was determined using a standard application of the Black-Scholes option pricing methodology using the following assumptions: volatility of 24.90%, dividend yield of 4.38% and a risk-free rate of return of 2.81%, based on SAUs being outstanding for a 6-year term.
 
(H) This value was determined using a standard application of the Black-Scholes option pricing methodology using the following assumptions: volatility of 23.18%, dividend yield of 4.27% and a risk-free rate of return of 3.46%, based on options being outstanding for a 7-year term.

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(I) This value was determined using a standard application of the Black-Scholes option pricing methodology using the following assumptions: volatility of 29%, dividend yield of 3.90% and a risk-free rate of return of 2.64%, based on options being outstanding for a 5-year term.
 
(J) This value was determined using a standard application of the Black-Scholes option pricing methodology using the following assumptions: volatility 29%, dividend yield 3.44% and a risk-free rate of return of 2.84%, based on options being outstanding for a 5-year term.
 
(K) Percentage is based on total options granted to SBC employees in 2003.
 
(L) Percentages are based on total options granted to BellSouth employees in 2003.
 
      Option/SAU Exercises and Holdings

The following table provides information for the named executive officers regarding exercises of SBC and BellSouth options during 2003. Additionally, the table provides the values of unexercised options held on December 31, 2003 that are based on the fair market value of the shares of common stock of SBC and BellSouth.

Aggregated Option Exercises in 2003

and Fiscal Year-End Option Values
                                                 
Value of Unexercised
Number of Unexercised In-the-Money Options at
Options at FY-End FY-End
Shares Value

Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Name Exercise(#) ($) (#) (#) ($) ($)







Stanley T. Sigman(A)
    0     $ 0       927,219       0     $ 11,201     $ 0  
Ralph de la Vega(B)
    0       0       199,451       331,000       355,372       770,466  
Richard G. Lindner(A)
    0       0       241,965       0       70,455       0  
F. Thaddeus Arroyo(B)
    0       0       65,000       0       0       0  
Joaquin Carbonell(B)
    8,000       87,398       285,756       0       1,045,508       0  
Mark L. Feidler(B)
    158,600       1,011,136       160,700       184,400       0       424,120  


(A) “Value of Unexercised In-the-Money Options” figures are based on the year end, December 31, 2003 SBC common stock price of $26.07.

(B) “Value of Unexercised In-the-Money Options” figures are based on the average of the high and low price of $28.20 of BellSouth common stock on December 31, 2003.

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The following table provides information for the named executive officers regarding the values of unexercised SAUs held on December 31, 2003 that are based on the fair market values of an underlying share of common stock of SBC and BellSouth. No SAUs were exercised during 2003.

Aggregated SAU Exercises in 2003

and Fiscal Year-End Option Values
                                                 
Value of Unexercised
Number of Unexercised In-the-Money SAUs at
SAUs at FY-End FY-End (A)
Units Value

Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Name Exercise(#) ($) (#) (#) ($) ($)







Stanley T. Sigman
    0     $ 0       0       308,710     $ 0     $ 1,627,988  
Ralph de la Vega
    0       0       0       0       0       0  
Richard G. Lindner
    0       0       0       80,574       0       423,536  
F. Thaddeus Arroyo
    0       0       0       47,542       0       249,904  
Joaquin Carbonell
    0       0       0       50,413       0       264,995  
Mark L. Feidler
    0       0       0       184,609       0       970,394  


(A) “Value of Unexercised In-the-Money SAUs” figures are based on the year end, December 31, 2003 SBC and BellSouth common stock price of $26.07 and $28.30, respectively.

 
      Long-Term Compensation Plans

The following table lists the performance units granted in 2003 to the named executive officers under the 2003 Cingular Long-Term Compensation Plan (“the LTIP Plan”). The LTIP Plan provides for incentive compensation based upon the achievement of certain performance objectives over performance periods that are two years or longer. For 2003, a targeted number of performance units, valued at $50 each, were granted to certain employees, including the named executive officers. The determination of the actual award earned is based on the achievement of certain company objectives regarding revenue growth and return on capital during the three-year performance period from 2003-2005. The actual number of performance units that can be earned at the end of the performance period ranges from 0 percent to 200 percent of a participant’s performance unit award.

                 
Performance or
Other Period
Number of Until
Shares, Units or Maturation
Name Other Rights or Payout



Stanley T. Sigman
    50,063 (A)     2003-2005  
Ralph de la Vega
    18,850 (B)     2003-2005  
Richard G. Lindner
    13,050 (A)     2003-2005  
F. Thaddeus Arroyo
    7,700 (A)     2003-2005  
Joaquin Carbonell
    8,165 (A)     2003-2005  
Mark L. Feidler
    29,900 (A)     2003-2005  


(A) Performance units granted under the Cingular LTIP Plan. The actual number of performance units that can be earned ranges from 0 percent to 200 percent of the performance unit award.
 
(B) Represents an award of BellSouth performance shares made during 2003 under the BellSouth Corporation Stock Plan. The determination of the actual number of performance shares earned is

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based on BellSouth’s annualized Total Shareholder Return (“TSR”) over a three-year performance period in comparison to the TSR of a peer group of telecommunications companies. The actual number of performance shares that can be earned ranges from 0 percent to 150 percent of a participant’s performance share award. For each performance share earned, participants receive a cash payment equal to the average fair market value of a share of BellSouth stock for the last five trading days preceding, and the first five trading days following, the last day of the performance period. This cash payment is made in two equal installments: the first installment is paid after the end of the performance period, and the second installment is paid six months later. In addition, after the end of the performance period, participants receive a cash payment equal to the amount of cash dividends paid on one share of BellSouth stock during the performance period multiplied by the number of performance shares earned.

Effective January 1, 2004, the long-term compensation plan was amended to provide for grants of Restricted Stock Units (“RSUs”). RSUs result in a cash payment to participants determined by the stock prices of common stock of BellSouth and SBC on the valuation date determined under the long-term compensation plan. The plan also provides for cash dividend equivalent payments. To date, no RSUs have been granted under this plan.

 
Pension and Other Retirement Benefits

We adopted a non-contributory pension plan that covers all employees not covered by a collective bargaining agreement and a limited group of employees covered by such an agreement, known as the Cingular Wireless Pension Plan. Beginning November 1, 2001, participants, including the named executive officers, are entitled to receive monthly service credits of 5% of base pay and interest credits, compounded monthly, determined by reference to 30-year U.S. Treasury rates. The Cingular Wireless Pension Plan provides for certain transition benefits which are intended to transition current employees from the SBC or BellSouth benefit levels to our ongoing benefit level over a period of five years or less.

In addition to the Cingular Wireless Pension Plan, each of the named executive officers participates in certain non-qualified supplemental pension plans that provide benefits in excess of amounts permitted in qualified benefit plans by certain Internal Revenue Code provisions. For Mr. Lindner, we adopted a supplemental retirement income plan (“Cingular Mirror SRIP”) that mirrors the substantive terms of the SBC Supplemental Retirement Income Plan (“SBC SRIP”). The Cingular Mirror SRIP establishes a target annual retirement benefit for certain officers, stated as a percentage of their annual salaries and annual incentive bonuses averaged over a specified period, offset by our pension plan and any other Cingular nonqualified plan, if adopted. The Cingular Mirror SRIP will provide benefits identical to those of the SBC SRIP but with the accrual of benefits freezing on and as of December 31, 2006. Mr. Sigman will not accrue benefits under the Cingular Mirror SRIP so long as he is accruing benefits under the SBC SRIP. Mr. Sigman’s SBC SRIP benefit will be reduced by the amount of any vested benefit that he receives from our qualified pension plan. See “Agreements with Management — Agreement with Stanley Sigman” below. For Messrs. de la Vega, Carbonell and Feidler, BellSouth will maintain existing accounts and remain liable for accrued benefits under the BellSouth Supplemental Executive Retirement Plan (“SERP”), along with certain other senior managers transferred to Cingular. BellSouth will continue to accrue benefits under the SERP to eligible participants through December 31, 2006, or indefinitely in the case of Mr. de la Vega per his BellSouth agreement. The net SERP benefit payable from BellSouth will equal the gross benefit amount determined by the SERP formula, offset by Cingular’s qualified pension plan and social security, and further offset by any Cingular nonqualified plan, if adopted. Mr. Arroyo was not a covered participant under the BellSouth SERP.

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The total estimated annual combined pension amounts based on pay and completed years of service as of December 31, 2003 payable beginning at the assumed commencement age from qualified and non-qualified plans to Messrs. Sigman, de la Vega, Lindner, Arroyo, Carbonell and Feidler would be $1,445,517, $264,447, $216,667, $11,661, $175,858 and $208,634, respectively. The assumed commencement age is 65 for Messrs. Feidler, Arroyo and Carbonell, 61 for Mr. de la Vega and 60 for Messrs. Sigman and Lindner.

 
Agreements with Management

Stanley Sigman. In connection with his election as President and Chief Executive Officer of the Company, Mr. Sigman and Cingular agreed to the compensation arrangement summarized below:

•  base pay of not less than $900,000 per year (established as $900,000 for 2003);
 
•  short-term award target of not less than $1,144,000 per year (established as $1,144,000 for 2003), which shall be paid subject to achievement of performance criteria;
 
•  long-term award target of not less than $5,000,000 per year (established as $5,000,000 for 2003), which shall be paid subject to achievement of performance criteria of the LTIP Plan;
 
•  a retention benefit valued on date of grant at $5,000,000 and payable in cash, unless terminated for cause or by retirement or resignation, at the end of three years (subject to accelerated vesting in the case of death, permanent disability or termination by Cingular other than for cause), in an amount giving effect to the weighted (at 60/40) stock price performance of, and dividends on, SBC and BellSouth common stock over the vesting period;
 
•  annual incentive cash payments on November 24, 2002, 2003 and 2004 of $160,000 if then employed by the Company;
 
•  enhanced pension benefits to be accrued under the SBC SRIP; and
 
•  Georgia and federal income tax gross-ups on designated compensation payments.

Mark Feidler. In connection with his joining our company, Mr. Feidler and BellSouth entered into an agreement providing certain retention incentives and making modifications to certain benefits to which he was entitled as a BellSouth executive officer. The agreement provides for:

•  the payment by BellSouth to him of a special bonus in the amount of $800,000 in respect of his performance for the transition period during which BellSouth’s wireless interests were being transferred to Cingular;
 
•  the payment by BellSouth to him of $2,000,000 in the event of voluntary or involuntary termination of employment with Cingular on or prior to December 31, 2003 if BellSouth does not offer him a comparable position at BellSouth to which to return;
 
•  vesting of executive benefits in the event of voluntary or involuntary termination of employment with Cingular or change of control of BellSouth or a substantial diminution of BellSouth’s interest in Cingular;
 
•  the payment by BellSouth to him of an amount representing the approximate value he would have received if he exercised BellSouth options granted prior to June 9, 2000 at a market price of $60 per share, less what value he actually received from exercising those options, in the event of a voluntary or involuntary termination of employment with Cingular, death or disability, change of control of BellSouth or a substantial diminution of BellSouth’s interest in Cingular; and

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•  the payment by BellSouth to him of an amount representing the prorated short-term bonus award, as applicable to him under a comparable Cingular short-term bonus plan, in the event of a voluntary or involuntary termination of employment with Cingular (we would not be required to pay him any amount under our plan).

Thaddeus Arroyo. In connection with his joining our company, Mr. Arroyo and we agreed to the compensation arrangement summarized below:

•  short-term award target of $200,000 in 2001, which shall be paid subject to achievement of performance criteria;
 
•  a grant of 65,000 BellSouth stock options effective March 1, 2001, granted at the fair market value on the date of grant;
 
•  four special bonus payments payable as follows: $250,000 at the time of hire, $200,000 on the first anniversary with the company, $150,000 on the second anniversary and $100,000 on the third anniversary;
 
•  a special bonus payment of $74,000, offset by any bonus payment earned in 2000 and paid in 2001 by his previous employer; and
 
•  a separation payment of 1 times salary plus standard bonus payable if involuntarily terminated within 36 months of date of hire, other than for cause, contingent upon executing a transition agreement containing non-compete and non-solicitation provisions.

In addition, in a separate retention and separation payment agreement, we have agreed to pay Mr. Arroyo:

•  a one-time retention payment of $400,000 if Mr. Arroyo remains employed with the Company with a satisfactory performance rating through September 2006 (with a pro-rated amount payable if his employment terminates prior to September 2006 due to death, disability or involuntary termination, other than for cause);
 
•  a separation payment of one times salary plus standard bonus, payable if involuntarily terminated, other than for cause; and
 
•  payment of a pro-rated bonus for the year of termination based upon actual Cingular results and payable at the normal bonus payment date, unless involuntarily terminated for cause.

Ralph de la Vega. In connection with his joining our company, Mr. de la Vega and Cingular agreed to the compensation package summarized below:

•  2004 base pay of $500,000;
 
•  2004 short-term award target of $500,000;
 
•  2004 long-term award target of $2,250,000;
 
•  a retention benefit valued on the date of grant at $2,500,000 in the form of restricted stock units which shall vest 100% on December 31, 2006, giving effect to the weighted (at 60/40) average stock price performance of, and dividends on, SBC and BellSouth common stock over the vesting period.

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In addition, Mr. de la Vega and BellSouth entered into a transition agreement providing certain retention incentives and making modifications to certain benefits to which he was entitled as a BellSouth executive officer. The agreement provides for:

•  the payment by BellSouth to him of two times base pay in effect on the date of termination from Cingular plus two times the standard bonus award for the year in which the termination occurs, if Cingular initiates termination other than for cause, or if Mr. de la Vega initiates termination from Cingular for good reason and BellSouth does not offer him a comparable position at BellSouth to which to return;
 
•  continued participation in the BellSouth Supplemental Executive Retirement Plan (SERP). BellSouth will continue to accrue benefits under the SERP recognizing service and compensation attributable to the period of service with Cingular.

 
Item 12. Security Ownership of Certain Beneficial Owners and Management

SBC and BellSouth own approximately 60% and 40% ownership interests in us, and Cingular Wireless Corporation, our manager, owns a 0.0000001% ownership interest in us. Our directors and officers do not own any interest in us.

 
Item 13. Certain Relationships and Related Transactions

We have provided below a summary of the significant agreements that we have executed with SBC or BellSouth, or one of their respective subsidiaries, or that relate to our formation. These descriptions are not complete and only summarize the material terms of the agreements.

Our Limited Liability Company Agreement

Our limited liability company agreement governs our management and operations. Its parties are certain SBC and BellSouth entities and Cingular Wireless Corporation — our manager. Their economic interests in us are represented by units.

Our manager has two classes of common stock:

•  Class A common stock, par value $0.01 per share, which entitles the holder to one vote per share and generally has voting rights identical to those of holders of Class B common stock, except for the low-vote structure and the differences in the right to vote for directors described below; and
 
•  Class B common stock, par value $0.01 per share, which entitles its holder to ten votes for each underlying unit in us.

Of the two outstanding shares of Class B common stock, one share is held by SBC and the other share is held by BellSouth. Our manager also has six billion shares of Class A common stock authorized, none of which are currently outstanding. In addition, our manager has one billion authorized shares of preferred stock, issuable in one or more series. However, no series has been designated and no shares are currently outstanding.

Our structure gives SBC and BellSouth equal control of our management and ownership interests of approximately 60% and 40%, respectively. It also gives us the flexibility to raise equity in the capital markets. If we wish to raise new equity, our manager would need to obtain the consent of its strategic review committee, then sell shares of its Class A common stock and contribute the net proceeds to us in

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return for units. Our parents may only sell their equity interests as described in “— Transfers of LLC Units and Common Stock” below.

Our Management. Our management is vested in Cingular Wireless Corporation, whose powers are established by the terms of its amended and restated certificate of incorporation, which we refer to as the “manager’s charter”. As our manager, that corporation has control over all of our affairs and decision-making. The same persons are officers of both us and our manager, but our manager has no employees of its own. Operational and administrative decisions and the day-to-day management of our affairs are accomplished at our Company and at the various operating entities that we own. Substantially all important decisions must be approved by the manager’s strategic review committee, which is currently comprised of all of its Class B directors. At all times, as long as any shares of Class B common stock remain outstanding, the Class B common stockholders will be entitled to control the manager’s board of directors, even if only one of SBC or BellSouth holds Class B common stock. Substantially all important decisions made by our manager are subject to the affirmative vote of at least two-thirds of the strategic review committee of its board of directors. These decisions include approval of a business plan, appointment of executive officers, capital calls, declaration of dividends, purchases of new technology, public stock offerings, changes to the manager’s certificate of incorporation and by-laws and many others. SBC and BellSouth each may elect two members to the board of directors so long as each remains a holder of Class B common stock of the manager and holds 10% or more of the sum of

  (1)  the total number of our units outstanding (excluding units owned by our manager); and
 
  (2)  shares of our manager’s Class A and Class B common stock outstanding (excluding any treasury shares).

At present, the committee is composed of the individuals who constitute our manager’s board of directors. Deadlocks between the Class B directors of SBC and those of BellSouth will be resolved by the chief executive officers of SBC and BellSouth. Upon an underwritten public offering of shares of Class A common stock, our manager’s board will appoint one Class A director as an additional member of the strategic review committee. SBC and BellSouth have agreed in a stockholders’ agreement to vote their Class B common stock in favor of any matter approved by the strategic review committee.

Scope of our Business. The limited liability company agreement and our manager’s charter generally limit our business to the domestic provision of mobile wireless voice and data services that use radio frequencies licensed by the FCC for the provision of cellular service, PCS service, wireless data service, satellite services and related services. “Domestic” means the 50 states of the United States, the District of Columbia, the U.S. Virgin Islands and Puerto Rico, but excludes other U.S. territories and possessions. In Puerto Rico and the U.S. Virgin Islands, we may also conduct paging services.

Network Preferences. When we or our subsidiaries require network services of wireline carriers to provide service in the incumbent service territories of SBC and BellSouth, we and our subsidiaries must use their network services, except where we and our subsidiaries would be materially disadvantaged to do so. For purposes of the limited liability company agreement, the incumbent service territory of SBC consists of the states of California, Nevada, Connecticut, Texas, Missouri, Arkansas, Oklahoma, Kansas, Illinois, Indiana, Ohio, Michigan and Wisconsin, and the incumbent service territory of BellSouth consists of the states of Georgia, Florida, South Carolina, North Carolina, Alabama, Mississippi, Kentucky, Louisiana and Tennessee, together with any additional service territories that may be acquired by either party, as described below.

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In addition, SBC and BellSouth may not market or sell mobile wireless products and/or services other than ours. However, this does not prevent them from:

•  continuing to market and sell wireless services other than ours to customers who were joint billing customers as of October 2, 2000;
 
•  allowing our competitors to bundle and sell SBC’s and BellSouth’s products and services together with such competitors’ wireless services;
 
•  marketing and selling fixed wireless voice and data products other than ours; and
 
•  marketing and selling wireless services other than ours in geographic areas designated by the FCC, which include the entire United States, except for PCS service offered in the Gulf of Mexico, in which:

  •  neither we nor our subsidiaries provide wireless services pursuant to FCC licenses; or
 
  •  Salmon PCS does not provide wireless services pursuant to FCC licenses.

Competition. SBC and BellSouth are generally not permitted to compete with us regarding mobile wireless products and/or services, as described under the “exclusivity” provisions above. However, SBC and BellSouth may compete with each other and us to the extent described above and with respect to resale and packaging of wireless services. SBC and BellSouth may also act as our agents, and may resell our services, as described below under “— Wireless Agency Agreements” and “— Resale Agreements”.

Volume Discounts. We must use reasonable best efforts to offer to SBC and BellSouth any vendor volume discounts available to us, and SBC and BellSouth must use reasonable best efforts to offer to us or to our subsidiaries or Salmon, any vendor or volume discounts available to them.

Change of Control. If a company with a mobile wireless business acquires control of SBC or BellSouth and a regulatory conflict results, that company must dispose of any resulting overlapping properties, which may include its interest in us, and we would have no obligation to make a disposition of any of our properties or to take any other action to eliminate any resulting overlaps or regulatory conflicts. A change of control, as defined, of SBC or BellSouth would occur if any person becomes the beneficial owner of voting securities of that company resulting in the acquiring person having the power to cast at least 50% of the votes for the election of directors of that company.

Divestiture of Wireless Business. In general, SBC, BellSouth and their subsidiaries must divest any domestic mobile wireless businesses they own, other than wireless interests that, because of insubstantial economic or passive management interests, are considered de minimis.

Divestitures would be carried out as follows:

•  if SBC or BellSouth owns and controls a mobile wireless business and has the power to control its disposition, it would be required to offer the wireless business to us before selling to a third party.
 
•  if SBC or BellSouth owns a mobile wireless business but cannot offer it to us because it cannot control its disposition, it would be required to dispose of the wireless business or reduce its ownership and/or management interest therein, such that the wireless business becomes a de minimis interest.
 
•  if the ownership of the mobile wireless business requires a disposition of licenses under applicable law that would be material to SBC or BellSouth, then that company may, but is not required to, sell the wireless business to us but may instead transfer all of its units and our manager’s Class A common stock through a spin-off or split-off or sale to third parties in accordance with the procedures described under “Transfers of LLC Units and Common Stock” below.

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Distributions. Except as described below, distributions by us require the consent of all of our members and no member is entitled to withdraw any portion of its capital account without the consent of the other members. We will make periodic distributions to our members on a pro rata basis in an amount equal to the greatest of each member’s taxes (calculated using the highest corporate marginal tax rate as if we were a corporation for U.S. federal, state and local income tax purposes) as a result of our operations due for the fiscal quarter for which estimated income tax payments are due, divided by the member’s percentage interests in us. In addition, we will distribute to our members at the end of a fiscal year, on a pro rata basis in accordance with each member’s percentage interest in us, an amount equal to the excess of the greater of:

•  50% of our “excess cash”, and
 
•  the greatest of each members’ taxes (calculated using the highest corporate marginal tax rate as if we were a corporation for U.S. federal, state and local income tax purposes) resulting from allocations of tax items from us for the preceding fiscal year, divided by the member’s percentage interest in us over the amount of tax distributions made with respect to that fiscal year.

“Excess cash” means, with respect to any fiscal year, the excess, if any, of:

(A) the sum of (x) the amount of all cash received by us (including any amounts allocated to our subsidiaries) during such fiscal year and (y) any cash and cash equivalents held by us at the start of such fiscal year, over

(B) the sum of (x) all cash amounts paid or payable (without duplication) in such fiscal year incurred by us (including any amounts allocated to our subsidiaries) and (y) the net amount of cash needs for us set forth in our budget for the following fiscal year.

The amount of the tax distributions to be made regarding the federal estimated income tax payment on September 15 of a year will be adjusted for the amount by which the total of the quarterly tax distributions for the prior fiscal year was less than or exceeded the amount that would have been distributed had our members’ taxes been calculated using our final results for the prior fiscal year, as opposed to using estimates.

Our manager intends to reinvest any funds distributed in excess of those it needs to pay taxes. The limited liability company agreement does not provide a mechanism for additional capital contributions by our manager, other than capital calls for pro rata contributions by all of our members. Accordingly, a reinvestment of distributions that our manager receives from us in exchange for an increased interest in us will require the approval of all of our members, in addition to the approval of our manager’s strategic review committee.

Exchange of LLC Units and Transfer and Conversion of Shares of Class B Common Stock. Each of our members may exchange any or all of its units for our manager’s Class A common stock on a one-for-one basis. Our manager is required to acquire a number of our units corresponding to any shares of Class A common stock it issues.

If either SBC or BellSouth wishes to transfer its shares of our manager’s Class B common stock, except for permitted transfers described under “— Transfers of LLC Units and Common Stock” below, it is required to convert those shares of Class B common stock into shares of our manager’s Class A common stock. Shares of Class B common stock may be converted into shares of Class A common stock at any time. If either SBC or BellSouth reduces its total ownership to less than 10% of the “total outstanding shares”, that party must convert its remaining shares of Class B common stock into Class A common stock, and it loses its Class B directors on our manager’s board and strategic review committee. Because of

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the economic equivalence with units, the limited liability company agreement bases several of its provisions on the concept of “total outstanding shares”, which means the sum of the total number of shares of our manager’s Class A and Class B common stock issued and outstanding and the total number of our units outstanding, excluding units owned by our manager.

Transfers of LLC Units and Common Stock. The limited liability company agreement generally prohibits transfers of units or common stock of our manager (collectively referred to as “securities”), except transfers with the consent of each member owning more than 10% of the total outstanding shares. However, there are several exceptions to this general rule for transfers by SBC and BellSouth, including:

•  transfers of our manager’s Class A common stock in a broad public offering of Class A common stock underwritten on a firm commitment basis, including transfers in any offering;
 
•  each member may transfer our manager’s Class A common stock or the stock of a company that owns units or the stock of a company that owns Class A common stock in our manager in up to two spin-offs or split- offs. A “spin-off” would be a wide, SEC-registered distribution of units or Class A common stock of our manager or of all of the equity securities of a subsidiary of a member that owns units or Class A common stock of our manager to all of the common stockholders of a series or class of the member or its ultimate parent. In a “split-off”, each such common stockholder would be offered the right to exchange common stock of our members or their ultimate parent entities for our manager’s Class A common stock or the stock of a subsidiary of the member that owns units or our manager’s Class A common stock, which exchange offer would also be widely distributed and registered with the SEC. Spin-offs and split-offs can involve the sale of all or a portion of a member’s interest; and
 
•  a sale of all, but not less than all, of a member’s units and any of our manager’s common stock to third parties, subject to, among other things, a right of first refusal and a requirement that the third-party or its ultimate parent become a party to the limited liability company agreement and the stockholders’ agreement in the place of the selling party. Upon any transfer of all of SBC’s or BellSouth’s units, the transferring member will have no continuing rights or obligations under the limited liability company agreement, but will remain bound by the terms of any ancillary operating agreements it entered into in accordance with the terms of those agreements.

Withdrawal of a Member. A member automatically ceases to be a member of us when it no longer owns any units.

Preemptive Rights. If our manager issues shares of its Class A common stock solely for cash, except for issuances in a public offering underwritten on a firm commitment basis or pursuant to the exercise of options granted under employee benefit plans, each member has the right to purchase from us a number of units such that its percentage ownership in us will not be reduced.

Incentive Plans. If our manager issues any Class A common stock pursuant to any employee benefit plan of our manager, we will issue one unit to our manager for each share issued by it and we will receive the net proceeds for the shares that were received by our manager.

Tower Transactions. We lease or pay a monthly fee for the maintenance of the tower or the use of the tower space on which many of our antennas are located, including the antennas, microwave dishes and other wireless equipment, together with the land surrounding the tower, instead of owning or controlling the tower. Before contributing their wireless properties to us, SBC and BellSouth each entered into separate transactions with different tower management companies to lease on a long-term basis many of their communications towers and related assets to SpectraSite Inc. (formerly SpectraSite Holdings, Inc.) in the case of SBC, and Crown Castle International, in the case of BellSouth. In connection with these transactions, SBC and BellSouth entered into master leases to sublease portions of their towers in

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exchange for a monthly rental or site maintenance payment and/or reserved antenna space on the towers. Crown Castle is generally required to build, manage, maintain and remarket, including to competitors, the remaining space on future towers on which our antennas will be located. With respect to the towers to be built in the markets where SpectraSite is managing sites, we plan to hire different tower companies to perform these functions. See Notes 16 and 17 to our consolidated financial statements for more information on communications tower transactions with SBC and BellSouth.

Stockholders’ Agreement

There are four Class B directors. Under a stockholders’ agreement, each of SBC and BellSouth has agreed to vote shares beneficially owned by it for:

•  the election of the Class B directors nominated by each of SBC and BellSouth, for so long as each such party is then entitled to have its nominees elected as Class B directors;
 
•  following any such issuance of Class A common stock of our manager, the election of one independent director to our manager’s board of directors selected by SBC and the election of one independent director selected by BellSouth, for so long as each such party is then entitled to have its nominees elected as Class B directors;
 
•  the removal of any Class B director as determined by the stockholder who nominated that director;
 
•  the appointment of a new Class B director upon any vacancy of a Class B directorship on the board or any committee of our manager’s board, as determined by the stockholder who nominated the Class B director whose departure caused the vacancy; and
 
•  approval of any matter submitted to the stockholders of our manager that has been previously approved by the strategic review committee of our manager.

Following the issuance of Class A common stock of our manager, each of SBC and BellSouth shall be entitled to nominate one person to serve as an independent director. If there is an initial public offering of Class A common stock, Class A stockholders will be entitled to elect three independent directors. SBC, BellSouth and our manager have agreed that one of the independent directors shall be nominated by SBC and one by BellSouth. Within 12 months following the closing of such offering, a third independent director will be nominated by our manager’s board of directors. Our manager, which is also a party to the agreement, has agreed that it will use its best efforts to cause the holders of Class A common stock to vote in favor of the nomination as independent directors on the board of the nominees of SBC and BellSouth. In addition, SBC and BellSouth have agreed that the chairman of our manager’s board shall, for so long as SBC and BellSouth together hold at least 50% of the total voting power, other than for the election of directors, be elected from among the Class B directors nominated by SBC and BellSouth.

The agreement contains transfer restrictions with respect to the transfer of a stockholder’s Class A and Class B common stock substantially similar to those set forth above under “— Our Limited Liability Company Agreement — Transfers of LLC Units and Common Stock”. Conversions of Class B common stock into Class A common stock are not considered transfers. In the event of a transfer, the stockholders have agreed that the party to whom the shares are transferred will become a party to the stockholders’ agreement. In addition, no stockholder may transfer any of its Class B common stock unless it transfers all of the shares it holds to the same person.

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Marketing, New Products and Services, Marks and Intellectual Property

As specified in more detail under separate agreements that are described below, our limited liability company agreement sets out the following principles:

•  we have primary responsibility for marketing our products and services;
 
•  SBC and BellSouth may market our products and services as agents and resellers, as further specified in the agency and resale agreements that are described below;
 
•  with respect to intellectual property other than the SBC and BellSouth marks, consisting of patents, trade secrets, copyrights, technology and know-how, we have entered into intellectual property agreements with SBC and BellSouth and certain of their subsidiaries;
 
•  we may create new products and services and associated intellectual property rights; and
 
•  we have agreed that we may in our sole discretion grant each of SBC and BellSouth licenses in the intellectual property that we are developing or that we acquire after October 2, 2000.

Intellectual Property

With respect to intellectual property consisting of patents, trademarks, trade secrets, copyrights, technology and know-how, we have entered into intellectual property agreements with SBC and BellSouth and certain of their subsidiaries, as described in more detail below. Moreover, we may create new products and services and we will own the associated intellectual property rights.

Intellectual Property License Agreements. We have granted SBC and BellSouth perpetual, royalty-free, non-exclusive licenses to use certain technology, the ownership of which was transferred by BellSouth and SBC to us at the contribution closing, and to sell any products that are covered by that technology and certain other rights necessary for our parents to utilize the technology they transferred to us in order to continue their business without interruption. Similarly, SBC and BellSouth have each granted us a perpetual, royalty-free, non-exclusive license to certain copyrights, technology and know-how, which were not transferred to us at the contribution closing but are used in the operation of our business, as well as patents and patent applications.

Trademark License Agreements. SBC and BellSouth have granted us royalty-free, non-exclusive licenses to use their respective trademarks as part of Cingular’s tag line in advertising our products and services.

Intellectual Property Licensing Support Agreement. We have entered into a Master Agreement with BellSouth in which we will assist each other in licensing our respective intellectual property and technology to third parties. Each transaction will comprise a separate agreement under this Master Agreement and will include an allocation of monetary consideration received from such transactions.

Wireless Agency Agreements

Under our wireless agency agreements with subsidiaries of SBC and BellSouth, such subsidiaries and any of their affiliates that make an election to do so act as authorized agents exclusively on our behalf for the sale of wireless services to customers in SBC’s and BellSouth’s respective incumbent service territories. We are free to contract with other agents for wireless services in both of our parents’ incumbent service territories, including retailers and other distributors. All customers contracted through SBC and BellSouth agents are our own customers, except where the agents sell packages, in which case a customer is a customer of one of the agents for all portions of the package other than our wireless services. All affiliates of SBC and BellSouth may act as agents for us and, when electing to act as agents, will be bound by one

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of the wireless agency agreements. Each agent has agreed that it will not, directly or indirectly, offer or promote wireless services of our competitors in the agent’s service territory; however, services typically referred to as “reflex paging”, which is a two-way messaging service that adds a response channel to traditional pager devices, is not considered a competing service for these purposes. See “Factors Relating to Our Arrangements with SBC and BellSouth” for further information on wireless data services.

Each agent may elect to cease acting solely as our agent and begin to act as a reseller under a resale agreement, as described below. The election has to be made for all package customers, but does not affect an agent’s right to act as our agent in selling wireless services that are not included in a package. Package customers are those customers that buy combinations of wireless services and other communications services offered by our parents. In addition, the agent has a corresponding right to choose to cease acting as agent with respect to national accounts.

Each agent has a unilateral right of termination. We may terminate the agreement with respect to any type of wireless service in the event of a change in the law relating to that type of wireless service that materially and adversely impacts our ability to conduct our business in an agent’s service territory. We may also terminate with respect to a specific wireless service if we do not get regulatory approval to sell that service in an agent’s service territory. Each wireless agency agreement also terminates upon breach, mutual agreement of the parties or on December 31, 2050. Once the agreement terminates, a former agent still has the rights under the resale agreement described below and may sell within its service territory wireless services that are not part of a package. In addition, in the event an agent terminates the agreement because we are in breach, the former agent would have the right to offer competing service purchased from third parties as an agent or reseller for those third parties. Upon termination, we may offer any communications services of the types that were previously exclusively offered through our parents, network services or other services bought from one of the agents or from third parties.

The wireless agency agreements provide that the agents receive a commission from us for each new customer enrolled by the agent in its service territory, which varies depending on the average three-month churn rate. Where we, instead of the agents, provide handsets and other equipment, we only pay a commission. In addition, the fees may be different where we participate in the sales process. Furthermore, we pay residual compensation supplementing the commissions equal to a percentage rate multiplied by monthly charges to the customer from accessing and using our network, but only where a customer has completed a minimum of 180 days of service. Pursuant to the agency agreements, we paid $103 million for the year ended December 31, 2003.

Resale Agreements

We agreed to sell to SBC and BellSouth and their affiliates, as resellers, both existing and future wireless services and features providing access to our wireless systems or any wireless services to which we have access under roaming agreements. The resellers will resell those services to their customers, both separately and packaged with other communications services. The reseller may sell any new service offerings that we develop both in its own service territories and outside of that service territory. We are not required to provide any customer service or billing services to the resellers’ users.

Generally, the resellers may only sell our wireless services outside their own service territory. However, if the reseller terminates its wireless agency agreement, as described above under “Wireless Agency Agreements”, it may resell our wireless services in its respective service territories. Each agreement terminates on October 2, 2050 or upon mutual agreement of the parties.

Under the resale agreements, we charge the resellers a fixed monthly charge per wireless customer. In addition, the resellers also pay charges based on usage of our network and separate charges for roaming

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and a number of other services. Neither SBC nor BellSouth is acting as a reseller nor had any revenues from these agreements in 2003.

Contribution and Formation Agreement

We entered into an amended and restated contribution and formation agreement with SBC and BellSouth dated as of April 4, 2000, governing the contributions that were made to us on October 2, 2000 and some other contributions that were scheduled to be made later.

We, our subsidiaries and other affiliates and our and their directors, officers, employees, shareholders and agents may seek indemnification for breaches of representations and warranties made by SBC or BellSouth in the contribution agreement, subject to certain thresholds and deductibles. The indemnification is subject to the following limitations:

•  any indemnifiable losses are subject to a minimum threshold of $2 million for individual losses, and only the amount in excess of that amount will be deemed a loss;
 
•  any breaches that relate to matters set forth on the respective party’s disclosure schedule shall not be deemed a loss until the amount of loss exceeds $4 million;
 
•  a party will not be liable for an indemnifiable loss until the total amount of the losses exceeds $250 million. For the purpose of calculating this deductible, our losses and those of SBC and BellSouth may not be counted twice for the same breach. A party is only liable for the amount of an indemnifiable loss in excess of the $250 million deductible; and
 
•  the maximum that SBC or BellSouth must pay for indemnifiable losses is $3 billion. Breaches of the representations on capitalization, subsidiaries, financial statements, taxes, brokers and finders and after-acquired properties are not subject to this limitation.

Each party’s representations generally expired on April 2, 2002, except those representations relating to:

•  tax matters, which survive until the expiration of the applicable statute of limitations;
 
•  environmental matters, which survived until October 2, 2003; and
 
•  organization, good standing and qualification; capitalization; subsidiaries; corporate authority and approval; brokers and finders; after acquired properties; and BellSouth’s representations relating to the value of certain credits granted to BellSouth by Ericsson, which have no expiration date.

There were no significant payments under this agreement during the year ended December 31, 2003.

Registration Rights Agreements

Our manager has granted registration rights to SBC and BellSouth through which they may require our manager to register under the Securities Act shares of its Class A common stock issued or issuable to them. These registration rights expire one year after a holder ceases to hold at least 10% of the total outstanding shares.

Under the registration rights agreement, our manager is required to use its best reasonable efforts to register any of the shares of its common stock for sale in accordance with the intended method of disposition, subject to customary deferral rights. Each of SBC and BellSouth will have the right to demand two registrations in any calendar year, but no demand may be made unless the shares to be registered (1) constitute at least 1% of our manager’s Class A common stock outstanding, or (2) have a market value on the demand date of at least $250 million. In addition, SBC and BellSouth have the right to

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include their shares in other registrations of our manager’s equity securities other than an initial public offering and offerings on Form S-4 or S-8 and other than in connection with rights offerings or dividend reinvestment plans, subject to customary cutback provisions. However, SBC and BellSouth are cut back only after all other holders, including holders exercising their own demand rights, are cut back. SBC and BellSouth may also piggyback on the demand registration of another holder, but will be subject to the cutback provisions applicable to demand registrations, pursuant to which the securities to be registered by the demand holders will be considered first, then the securities to be registered by our manager and last, the securities of the holder piggybacking on the demand registration.

Once our manager is eligible to file a shelf registration statement on Form S-3, it is required to file a shelf registration statement if so requested by SBC or BellSouth and to use its reasonable best efforts to have it declared effective and to keep it effective until the earlier of the date on which the registering holder no longer holds any of our common stock or the date on which its common stock may be sold under Rule 144(k). As long as our manager has a shelf registration statement outstanding, it is not required to file additional demand registration statements, provided that the number of securities to be registered can be sold under the shelf.

In addition, the agreement provides that our manager is required to pay all registration expenses, including all filing fees and our fees and expenses, other than underwriting discounts and commissions and any transfer taxes incurred by the holders. Customary indemnification and contribution provisions would be applicable to any registered sale.

Interconnection and Long Distance Agreements

We are also a party to local interconnect and long distance agreements with subsidiaries of SBC and BellSouth. Pursuant to these agreements, we incurred expenses of $815 million for the year ended December 31, 2003.

SNET Diversified Group Name Delivery Service Agreement

We and SNET Diversified Group (SNET DG), an affiliate of SBC, entered into an agreement in October 2001 to provide Calling Name Delivery (CNAM) service and to receive a share of the fees generated by the provision of this service. CNAM service allows Local Exchange Carrier (LEC) customers with caller ID to view the name of a Cingular customer calling an LEC customer. LECs pay a fee to SNET DG each time a customer uses this service, which SNET DG will share with us on a percentage basis, beginning at 50% of revenues, and increasing to a maximum of 65%, with the addition of customers and/or additional markets adding CNAM service. For the year ended December 31, 2003, we recorded approximately $13 million in revenue from SNET DG under this agreement.

Subordinated Member Loans

A portion of our capital structure consists of subordinated member loans payable to SBC and BellSouth in the principal amounts of approximately $5.9 billion and $3.8 billion, respectively. The loans have an interest rate of 6% and a stated maturity of June 30, 2008.

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Item 14. Principal Accountant Fees and Services (Dollars in Millions)

The following table sets forth the aggregate fees rendered to us by Ernst & Young LLP for professional services rendered for the fiscal years ended December 31, 2002 and December 31, 2003.

                 
Year Ended
December 31,

2002 2003


Audit Fees(1)
  $ 2.1     $ 2.8  
Audit-Related Fees(2)
    0.3       0.3  
Tax Fees(3)
    0.5       0.4  
All Other Fees(4)
    1.3       0.4  
     
     
 
Total Fees
  $ 4.2     $ 3.9  
     
     
 


(1)  Consists of fees rendered for professional services for the audit of our annual financial statements and review of financial statements included in our quarterly Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
 
(2)  Consists of fees rendered for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees”. These services primarily include pension and benefit plan audits.
 
(3)  Consists of fees rendered for tax compliance, tax advice, and tax planning. These services primarily include assistance regarding sales and use tax planning.
 
(4)  Consists of fees rendered for products and services other than the services reported above. These services primarily include process and contract reviews.

Audit Committee Pre-Approval Policies and Procedures. All services provided by our independent auditors, Ernst & Young LLP, are subject to pre-approval by our two-member audit committee. The audit committee charter does provide the delegation of pre-approval for certain particular services to either member of the audit committee in the event that there is a need for such approval prior to the next full audit committee meeting. However, a full report of any such interim approvals must be given at the next audit committee meeting.

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Item 15.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K

             
Page(s)
in This
Form 10-K

a. Documents filed as part of the report
       
(1) Financial Statements
       
 
Cingular Wireless LLC
       
 
Report of Independent Auditors
    70  
 
Consolidated Statements of Income for the years ended December 31, 2001, 2002, and 2003
    71  
 
Consolidated Balance Sheets as of December 31, 2002 and 2003
    72  
 
Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2002, and 2003
    73  
 
Consolidated Statements of Changes in Members’ Capital for the years ended December 31, 2001, 2002, and 2003
    74  
 
Notes to Consolidated Financial Statements
    75  
 
GSM Facilities LLC
       
 
Report of Independent Auditors — Ernst & Young LLP
    112  
 
Report of Independent Auditors — PricewaterhouseCoopers LLP
    113  
 
Consolidated Statements of Operations for the period from November 1, 2001 (inception) through December 31, 2001 and for the years ended December 31, 2002 and 2003
    114  
 
Consolidated Balance Sheets as of December 31, 2002 and 2003
    115  
 
Consolidated Statements of Cash Flows for the period from November 1, 2001 (inception) through December 31, 2001 and for the years ended December 31, 2002 and 2003
    116  
 
Consolidated Statements of Changes in Members’ Capital for the period from November 1, 2001 (inception) through December 31, 2001 and for the years ended December 31, 2002 and 2003
    117  
 
Notes to Consolidated Financial Statements
    118  
(2) Financial Statement Schedule as set forth under Item 8 of this Report
       
 
Cingular Wireless LLC
       
   
Schedule II — Valuation and Qualifying Accounts
    126  
All other financial statements and schedules not listed are omitted because they are not required, or the required information is included in the consolidated financial statements
       
(3) Exhibits. The following exhibits are either provided with this Form 10-K or are incorporated by reference
       
         
Exhibit
Number Description


      *     Incorporated by reference
  #     Management contract or compensatory plan or arrangement
 
  2 .1*   Amended and Restated Contribution and Formation Agreement among SBC Communications, Inc., BellSouth Corporation and Alloy LLC, dated as of April 4, 2000 (Exhibit 2.1 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)

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Exhibit
Number Description


  2 .1.1*   Second Amendment to Amended and Restated Contribution and Formation Agreement among SBC Communications, Inc., BellSouth Corporation and Cingular Wireless (Exhibit 2.1.1 to Annual Report on Form 10-K for the year ended December 31, 2002)
  3 .1*   Certificate of Formation of the Company, dated April 19, 2000, as amended by Certificate of Merger, dated November 1, 2000, Certificate of Merger, Dated February 21, 2001, and Certificate of Amendment, dated March 1, 2001 (Exhibit 3.1 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  3 .2*   Limited Liability Company Agreement of Alloy LLC by and among SBC Communications Inc., SBC Alloy Holdings, Inc., BellSouth Corporation, BellSouth Mobile Data, Inc., BSCC of Houston, Inc., ACCC of Los Angeles, Inc., BellSouth Cellular Corp., RAM Broadcasting Corporation and Alloy Management Corp., dated as of October 2, 2000, as amended by Amendment No. 1, dated January 1, 2001, Amendment No. 2, dated April 3, 2001 and Amendment No. 3, dated April 3, 2001 (Exhibit 3.2 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  3 .2.1*   Amendment No. 4 to Limited Liability Company Agreement dated December 31, 2001 (Exhibit 3.3 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)
  4 .1*   Indenture between the Company and Bank One Trust Company, N.A., as Trustee, dated as of December 12, 2001 (Exhibit 4.1 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  4 .1.1*   First Supplemental Indenture between the Company and Bank One Trust Company, N.A., as Trustee, dated December 31, 2002. (Exhibit 4.1.1 to Annual Report on Form 10-K for the year ended December 31, 2002)
  4 .2*   $500,000,000 5.625% Senior Notes Due December 15, 2006 (Exhibit 4.2 to Annual Report on Form 10-K for the year ended December 31, 2002)
  4 .3*   $750,000,000 6.5% Senior Notes Due December 15, 2011 (Exhibit 4.3 to Annual Report on Form 10-K for the year ended December 31, 2002)
  4 .4*   $750,000,000 7.125% Senior Notes Due December 15, 2031 (Exhibit 4.4 to Annual Report on Form 10-K for the year ended December 31, 2002)
  10 .1*   Wireless Agency Agreement between Alloy LLC and BellSouth Telecommunications Inc., dated October 2, 2000 (Exhibit 10.1 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .2*   Wireless Agency Agreement between Alloy LLC and SBC Operations, Inc., dated October 2, 2000 (Exhibit 10.2 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .3*   Resale Agreement between Alloy LLC and BellSouth Telecommunications, Inc., dated October 2, 2000 (Exhibit 10.3 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .4*   Resale Agreement between Alloy LLC and SBC Communications Inc., dated October 2, 2000 (Exhibit 10.4 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .5*   Intellectual Property License Agreement between Alloy LLC and BellSouth Corporation, dated October 2, 2000 (Exhibit 10.5 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)

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Exhibit
Number Description


  10 .6*   Intellectual Property Agreement between Cingular Wireless LLC and BellSouth Intellectual Property Marketing Corporation, dated October 17, 2001 (Exhibit 10.6 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .7*   Intellectual Property License Agreement between Alloy LLC and SBC Communications Inc., dated October 2, 2000 (Exhibit 10.7 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .8*   Intellectual Property License Agreement between BellSouth Corporation and Alloy LLC, dated October 2, 2000 (Exhibit 10.8 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .9*   Intellectual Property License Agreement between SBC Communications Inc. and Alloy LLC, dated October 2, 2000 (Exhibit 10.9 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .10*   Authorized Sales Representative Agreement by and among SBC Communications Inc., Southwestern Bell Telephone Company, Pacific Bell Telephone Company, Ameritech Illinois, Ameritech Indiana, Ameritech Michigan, Ameritech Ohio, Ameritech Wisconsin, Nevada Bell Telephone, Southern New England Telephone Company and Alloy LLC, dated October 2, 2000, completed pursuant to the Wireline Agency Signature Agreement between SBC Communications Inc. and Alloy LLC, dated October 2, 2000 (Exhibit 10.10 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .11*   Marketing Representative Agreement between BellSouth Telecommunications, Inc. and BellSouth Cellular Corp., dated July 17, 1998 (Exhibit 10.11 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .12*   Assignment and Assumption Agreement between BellSouth Cellular Corp. and Alloy LLC (Exhibit 10.12 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .13*   Capital Markets Debt Subordination Agreement, dated as of November 21, 2000, among SBC Communications Inc., BellSouth Corporation and any Subsidiary Lender (Exhibit 10.13 to Annual Report on Form 10-K for the year ended December 31, 2002)
  10 .14*   Subordinated Notes of SBC and BellSouth (Exhibit 10.14 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)
  10 .14.1*   Amended, Restated and Consolidated Subordinated Promissory Notes of the Company to SBC, BellSouth and Cellular Credit Corporation dated July 1, 2003 (Exhibit 10.14.1 of Quarterly Report on Form 10-Q for the quarter ended September 30, 2003)
  10 .15*   Agreement to Sublease, dated August 25, 2000, by and among SBC Wireless, Inc., for itself and on behalf of the Sublessor Entities, SpectraSite Holdings Inc. and Southern SpectraSite Towers, Inc. (Exhibit 10.1 of SpectraSite Holdings Inc. Current Report on Form 8-K, dated August 25, 2000)
  10 .16*#   Cingular Wireless Cash Deferral Plan (Exhibit 10.16 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  10 .17*#   Cingular Wireless Pension Plan (Exhibit 10.17 to Amendment No. 1 to the Registration Statement on Form S-4 filed April 25, 2002, Registration No. 333-81342)
  10 .18*#   Cingular Wireless Savings Plan (Exhibit 10.18 to Amendment No. 1 to the Registration Statement on Form S-4 filed April 25, 2002, Registration No. 333-81342)
  10 .19*#   Agreement between Mark Feidler and BellSouth Corporation (Exhibit 10.19 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)

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Item 15.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K
         
Exhibit
Number Description


  10 .20*#   The Amended and Restated BellSouth Corporation Stock Plan effective April 24, 1995, as amended (Exhibit 10v-1 of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 2000)
  10 .21*#   BellSouth Corporation Stock Plan, as amended on September 23, 1996 and November 24, 1996 (Exhibit 10v of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 1996)
  10 .22*#   BellSouth Corporation Trust Under Executive Benefit Plan(s), as amended April 28, 1995 (Exhibit 10u-1 of BellSouth Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 1995)
  10 .22.1*#   Amendment, dated May 23, 1996, to the BellSouth Corporation Trust Under Executive Benefit Plan(s) (Exhibit 10s-1 of BellSouth Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 1996)
  10 .23*#   BellSouth Retirement Savings Plan, as amended and restated effective July 1, 2001(Exhibit 10-w of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 2001)
  10 .30*#   BellSouth Corporation Executive Long-Term Incentive Plan (Exhibit 10e of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 1991)
  10 .31*#   BellSouth Corporation Executive Incentive Award Deferral Plan, as amended and restated effective September 23, 1996 (Exhibit 10g of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 1996)
  10 .32*#   BellSouth Corporation Supplemental Executive Retirement Plan, as amended on March 23, 1998 (Exhibit 10i of BellSouth Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 1998)
  10 .33*#   BellSouth Corporation Nonqualified Deferred Compensation Plan, as amended and restated effective November 25, 1996 (Exhibit 10h of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 1996)
  10 .34*#   SBC Communications Inc. 1996 Stock and Incentive Plan (Exhibit 10-p of SBC Communications Inc. Annual Report on Form 10-K for the year ended December 31, 2001)
  10 .35*#   SBC Communications Inc. 2001 Incentive Plan (Exhibit 10-w of SBC Communications Inc. Annual Report on Form 10-K for the year ended December 31, 2001)
  10 .36*#   SBC Communications Inc. Stock Savings Plan, as amended through September 28, 2001(Exhibit 10-m of SBC Communications Inc. Annual Report on Form 10-K for the year ended December 31, 2001)
  10 .38*#   SBC Communications Inc. Short-Term Incentive Plan (Exhibit 10-a of SBC Communications Inc. Annual Report on Form 10-K for the year ended December 31, 2000)
  10 .39*   SBC Communications Inc. Supplemental Retirement Income Plan (Exhibit 10-d of SBC Communications Inc. Annual Report on Form 10-K for the year ended December 31, 2000)
  10 .40*#   SBC Communications Inc. 1992 Stock Option Plan, as amended through June 19, 2001 (Exhibit 10-n of SBC Communications Inc. Annual Report on Form 10-K for the year ended December 31, 2001)
  10 .41*#   Pacific Telesis Group 1994 Stock Incentive Plan (Attachment A of Pacific Telesis Group’s Definitive Proxy Statement, dated March 11, 1994, and amended March 14 and March 25, 1994)
  10 .42*#   Cingular Wireless SBC Transition Executive Benefit Plan (Exhibit 10.42 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)

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Item 15.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K
         
Exhibit
Number Description


  10 .43*#   Cingular Wireless Long-Term Incentive Plan (Exhibit 10.43 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)
  10 .45*#   Cingular Wireless Executive Short Term Incentive Award Plan (Exhibit 10.45 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)
  10 .46*#   Cingular Wireless BLS Transition Executive Benefit Plan (Exhibit 10.46 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)
  10 .47*#   Cingular Wireless Executive Financial Services Plan (Exhibit 10.47 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)
  10 .48*#   Officer Communication Plan (Exhibit 10.48 to Annual Report on Form 10-K for the year ended December 31, 2002)
  10 .49*   Employment Agreement with Stanley T. Sigman (Exhibit 10.49 to Annual Report on Form 10-K for the year ended December 31, 2002)
  10 .51*   Employment Agreement with Thaddeus Arroyo (Exhibit 10.51 to Annual Report on Form 10-K for the year ended December 31, 2002)
  10 .52*   Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2003 (Exhibit 10.52 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2003)
  10 .53*   Licensing Support Agreement between BellSouth Intellectual Property Marketing Corporation and Cingular Wireless, LLC, effective April 21, 2003 (Exhibit 10.53 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2003)
  10 .54*   Purchase Agreement, dated August 4, 2003, by and between NextWave Telecom Inc., NextWave Personal Communications Inc., NextWave Partners Inc., NextWave Power Partners Inc. and Cingular Wireless LLC (Exhibit 10.54 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2003)
  10 .55*   Stockholders’ Agreement by and among SBC Communications Inc., BellSouth Corporation and Alloy Management Corp. dated October 2, 2000 (Exhibit 10.55 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2003)
  10 .56   Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003
  10 .57*#   Agreement dated December 16, 2003, between BellSouth Corporation and Mark L. Feidler. (Exhibit 10kk of BellSouth Corporation Annual Report on Form 10-K for the year ended December 31, 2003)
  10 .58#   Compensation arrangement with Ralph de la Vega
  10 .59#   Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003
  10 .60*   Agreement and Plan of Merger, dated as of February 17, 2004, by and among AT&T Wireless Services, Inc., Cingular Wireless Corporation, Cingular Wireless LLC and Links I Corporation, and solely for the purposes of certain sections of the Merger Agreement, SBC Communications Inc. and BellSouth Corporation (Exhibit 99.1 to Form 8-K/A dated February 18, 2004)
  10 .61#   Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004

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Item 15.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K
         
Exhibit
Number Description


  10 .62   Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003
  10 .63   Work Order No. 03027350 Between Cingular Wireless LLC and SBC Services, Inc.
  10 .64   Investment Agreement, dated as of February 17, 2004, between BellSouth Corporation and SBC Communications Inc.
  12     Statement of Computation of Ratios of Earnings to Fixed Charges
  21     Subsidiaries of the Registrant
  24     Powers of Attorney
  31 .1   Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31 .2   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32 .1(1)   Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
  32 .2(1)   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
  99 .1*   Amended and Restated Certificate of Incorporation of Cingular Wireless Corporation, dated October 2, 2000, as amended on October 23, 2000 and April 16, 2001 (Exhibit 99.4 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  99 .2*   Amended and Restated Bylaws of Cingular Wireless Corporation, dated October 2, 2000, as amended on January 19, 2001 and November 28, 2001 (Exhibit 99.5 to Registration Statement on Form S-4 filed January 24, 2002, Registration No. 333-81342)
  99 .2.1*   Amendment to Bylaws dated April 30, 2002 (Exhibit 99.6 to Amendment No. 1 to the Registration Statement on Form S-4 filed May 31, 2002, Registration No. 333-81342)


(1)  This exhibit is hereby furnished to the SEC as an accompanying document and is not to be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

b.  Reports on Form 8-K

(1)  On October 21, 2003, we furnished a Form 8-K, reporting on Item 9, Regulation FD Disclosure, and Item 12. Results of Operations and Financial Condition, our financial results for the quarter ended September 30, 2003 and selected financial statements and operating data at and for the three and nine months ended September 30, 2003 for Cingular Wireless LLC and at and for the comparable date and period in 2002.

    No other reports on Form 8-K were filed during the fourth quarter of 2003.

c. We hereby file or furnish as part of this Form 10-K the Exhibits listed in Item 15(a)(3) above

d.  The following financial statement schedule is filed herewith: Schedule II — Valuation and Qualifying Accounts

Schedules not listed above are omitted because they are not required, or the required information is included in our consolidated financial statements or notes thereto.

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PART IV
 
Item 15.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

In addition to historical information, this document contains forward-looking statements regarding events, financial trends, critical accounting policies, off-balance sheet arrangements, contractual obligations and estimates that may affect our future operating results, financial position and cash flows. These statements are based on assumptions and estimates and are subject to risks and uncertainties.

There are possible developments that could cause our actual results to differ materially from those forecasted or implied by our forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are current only as of the date of this filing. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

While the below list of cautionary statements is not exhaustive, some factors, in addition to those contained throughout this document, that could affect future operating results, financial position and cash flows and could cause actual results to differ materially from those expressed or implied in the forward-looking statements are:

•  the pervasive and intensifying competition in all markets where we operate;
 
•  failure to quickly realize capital and expense synergies from the acquisition of AT&T Wireless as a result of technical, logistical, regulatory and other factors;
 
•  problems associated with the transition of our network to higher speed technologies caused by delayed deliveries of infrastructure equipment and handsets, cost overruns, perceived service degradation as more spectrum is devoted to new technologies, customer dissatisfaction with new handsets that operate on multiple networks to accommodate our technology migration, equipment malfunctions and other factors;
 
•  slow growth of our data services due to lack of popular applications, terminal equipment, advanced technology and other factors;
 
•  shortages and unavailability of spectrum for new services and geographic expansion;
 
•  pervasive and prolonged adverse economic and employment conditions in the markets we serve;
 
•  changes in available technology that make our existing technology obsolete or expensive to upgrade;
 
•  the final outcome of FCC proceedings, including rulemakings, and judicial review, if any, of such proceedings;
 
•  impact of local number portability on our growth and churn rates, revenues and expenses;
 
•  enactment of additional state and federal laws, regulations and requirements pertaining to our operations;
 
•  availability and cost of capital;
 
•  impact of any industry consolidation; and
 
•  the outcome of pending or threatened complaints and litigation.

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PART IV
 

SIGNATURES

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

  CINGULAR WIRELESS LLC
  By:  CINGULAR WIRELESS CORPORATION,
  as Manager

  By:  /s/ RICHARD G. LINDNER
 
  Richard G. Lindner
  Chief Financial Officer
  (Principal Financial Officer)

Date: February 24, 2004

         
Signature Title


 
/s/ STANLEY T. SIGMAN*

Stanley T. Sigman*
  President and Chief Executive Officer
(Principal Executive Officer)
 
/s/ RICHARD G. LINDNER*

Richard G. Lindner*
  Chief Financial Officer
(Principal Financial Officer)
 
/s/ GREGORY T. HALL*

Gregory T. Hall*
  Controller
(Principal Accounting Officer)
 
/s/ RICHARD A. ANDERSON*

Richard A. Anderson*
  Class B Director
 
/s/ RONALD M. DYKES*

Ronald M. Dykes*
  Class B Director
 
/s/ RANDALL L. STEPHENSON*

Randall L. Stephenson*
  Chairman of the Board and
Class B Director
 
/s/ RAYFORD WILKINS JR.*

Rayford Wilkins Jr.*
  Class B Director
 
*By:   /s/ RICHARD G. LINDNER*

Richard G. Lindner
(Individually and As Attorney-In-Fact)
February 24, 2004
   

158

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 SUBORDINATION AGREEMENT SUBORDINATION AGREEMENT, dated as of November 17, 2003, among SBC COMMUNICATIONS INC., a Delaware corporation ("SBC"), BELLSOUTH CORPORATION, a Georgia corporation ("BellSouth"), and CELLULAR CREDIT CORPORATION, a Delaware corporation wholly-owned by BellSouth ("Cellular Credit"), (each of SBC, BellSouth and Cellular Credit is referred to herein as a "Subordinated Creditor" and, collectively, the "Subordinated Creditors"), and CINGULAR WIRELESS LLC, a Delaware limited liability company (the "Borrower"). W I T N E S S E T H: WHEREAS, the Borrower has entered into a 364-day Credit Agreement, dated as of November 17, 2003, among the Borrower, the Lenders party thereto, and JPMorgan Chase Bank, as Administrative Agent (as the same may be amended, modified, supplemented or restated from time to time, and any replacement, substitution, refunding or refinancing of all or any portion thereof which by its terms is stated to be entitled to the benefits hereof, whether with the same or different lenders, the "Credit Agreement"); and WHEREAS, the term "Debt" as defined in the Credit Agreement, excludes financial obligations of the Borrower that constitute "Shareholder Loans" within the meaning of the Credit Agreement; and WHEREAS, each of the Subordinated Creditors has extended credit, and may in the future extend credit, to the Borrower, and WHEREAS, by entering into, or agreeing to be bound by, the terms of this Subordination Agreement each Subordinated Creditor desires to agree, for the benefit of the Lenders, to certain subordination and related terms that shall apply to any such credit, provided that such credit is identified on Schedule A hereto, in the case of SBC or any Subsidiary of SBC, or Schedule B hereto, in the case of BellSouth or any Subsidiary of BellSouth (all such indebtedness identified on such schedules, as such schedules they may from time to time be supplemented in accordance with the terms hereof, the "Shareholder Loans"); and NOW, THEREFORE, in consideration of the premises, the parties hereto hereby agree as follows:

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 SECTION 1. DEFINITIONS 1.1 Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. 1.2 The following terms shall have the following meanings: "Agreement": This Subordination Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Credit Agreement": The Credit Agreement as defined in the preamble hereto. "Senior Capital Markets Debt": all obligations payable from time to time by the Borrower pursuant to (i) each commercial paper note issued from time to time by the Borrower pursuant to the terms of the Issuing and Paying Agent Agreement, dated as of November 15, 2000, between the Borrower and Chase Manhattan Bank, as issuing and paying agent, as amended, modified, supplemented or restated from time to time, (ii) each other commercial paper note, commercial note or similar indebtedness for borrowed money having an original maturity of 390 days or less (but the maturity of which may be extendible, either automatically unless the holder elects to the contrary or on some other basis), and (iii) each other obligation of the Borrower to creditors other than the Subordinated Creditors (A) that each of SBC and BellSouth has approved as Senior Capital Markets Debt by executing a notice substantially in the form of Exhibit B hereto and delivering a signed counterpart thereof to the Borrower and (B)(I) which by its terms is expressly stated to be "Senior Capital Markets Debt" under this Agreement or (II) which the Borrower from time to time after the issuance thereof has notified in writing the creditors for such obligation or their trustee, agent or other representative is "Senior Capital Markets Debt" under this Agreement, in each case with respect to obligations referred to in clauses (i) - (iii) above including, without limitation, all obligations for the payment of principal of and interest (including interest accruing on or after, or which would accrue but for, the filing of any petition in bankruptcy or for reorganization relating to the -2-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Borrower, whether or not a claim for post-petition interest is allowed in such proceeding) on any amounts due thereunder. "Senior Debt": all obligations payable from time to time by the Borrower pursuant to the Credit Agreement and the notes issued thereunder (including, without limitation, all obligations for the payment of principal of and interest (including interest accruing on or after, or which would accrue but for the filing of any petition in bankruptcy or for reorganization relating to the Borrower, whether or not a claim for post-petition interest is allowed in such proceeding) on the Loans). "Senior Pari Passu Debt": all Senior Debt and all Senior Capital Markets Debt, together with any other obligations of the Borrower to other creditors the payment of which by their terms is expressly stated to be senior to payment of the Subordinated Obligations and which is expressly entitled to pro rata payment by the Borrower (on the basis of then outstanding unpaid obligations) on a pari passu basis with all payments by the Borrower to the holders of Senior Debt required hereunder. "Subordinated Obligations": the collective reference to the unpaid obligations with respect to the Shareholder Loans, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with the Shareholder Loans, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Subordinated Creditors that are required to be paid by the Borrower pursuant to the terms of any Shareholder Loans). 1.3 The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. 1.4 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. -3-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 SECTION 2. TERMS OF SUBORDINATION 2.1 Subordination. (a) Each Subordinated Creditor agrees, for itself and each future holder of the Subordinated Obligations, that the Subordinated Obligations are expressly subordinate and junior in right of payment to all Senior Debt. (b) As used herein, "subordinate and junior in right of payment" shall mean that: (i) No payment or prepayment of any principal, premium (if any) or interest on account of a Subordinated Obligations and no repurchase, redemption or other retirement (whether at the option of the holder or otherwise) of a Subordinated Obligations shall be made so long as this Agreement is effective; provided that (A) payments of interest may be made from any source, and (B) payments or prepayments of principal may be made from any source other than the proceeds (whether used directly or indirectly, and whether the purpose of such use is immediate, incidental or ultimate) of Loans, in each case, if, at the time of such payment of interest or payment or prepayment of principal and immediately after giving effect thereto (x) there shall not exist a default in the payment or prepayment of any principal of or interest on any Senior Debt and (y) there shall not have occurred a default (other than a default in the payment or prepayment of principal of or interest on any Senior Debt) permitting (or which, with the giving of notice or lapse of time or both, would permit) the holder or holders of Senior Debt to accelerate the maturity thereof (unless such default shall have been cured or waived) (it being understood that for purposes of determining whether a default has occurred under Section 5.09 of the Credit Agreement, such payment or prepayment shall be deemed to have occurred, and any related Debt shall be deemed to have been incurred, on the last day of the most recent period for which a certificate was required to have been delivered pursuant to Section 5.01(c) of the Credit Agreement, and compliance with Section 5.09 shall be retested as of such date); (ii) In the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings, relative to the Borrower or to its creditors, as such, or to its property, or in the event of any proceeding for voluntary liquidation, dissolution or other winding up of the -4-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Borrower, whether or not involving insolvency or bankruptcy, then the holders of all Senior Pari Passu Debt shall be entitled to receive payment in full in cash of all Senior Pari Passu Debt before the holders of the Subordinated Obligations are entitled to receive any payment on account of the Subordinated Obligations, and to that end the holders of the Senior Pari Passu Debt shall be entitled to receive pro rata distributions of any kind or character, whether in cash or property or securities, which may be payable or deliverable in any such proceedings in respect of the Subordinated Obligations; (iii) If any Subordinated Obligation is declared or otherwise becomes due and payable (under circumstances when the provisions of the foregoing paragraphs (i) or (ii) are not applicable, whether as a result of the occurrence of an event of default under such Subordinated Obligations or otherwise), the holders of Senior Pari Passu Debt outstanding at the time such Subordinated Obligations so become due and payable shall be entitled to receive payment in full of all Senior Pari Passu Debt before the holders of the Subordinated Obligations are entitled to receive any payment on account of the Subordinated Obligations; (iv) If, notwithstanding the occurrence of any of the events described in paragraphs (i) (other than a payment permitted by the proviso thereto), (ii) and (iii), any such payment or distribution of assets of the Borrower of any kind or character, whether in cash, property or securities, shall be received by the holders of Subordinated Obligations before all Senior Pari Passu Debt is paid in full in cash, or provision made for such payment in a manner satisfactory to the Administrative Agent on behalf of the Lenders and each other holder of Senior Pari Passu Debt (or such holder's representative), such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of such Senior Pari Passu Debt or their representative or representatives, as their respective interests may appear, for application to the payment of all Senior Pari Passu Debt remaining unpaid to the extent necessary to pay such Senior Pari Passu Debt in full in cash, in accordance with its terms, after giving effect to any concurrent payment or distribution to all holders of such Senior Pari Passu Debt; and (v) No holder of Senior Debt shall be prejudiced in its right to enforce subordination of the Subordinated Obligations by any act or failure to act on the part of the Borrower; provided that the foregoing provisions are solely for the -5-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 purpose of defining the relative rights of the holders of Senior Debt, on the one hand, and the holders of Subordinated Obligations, on the other hand, and that nothing herein shall impair, as between the Borrower and the holders of the Subordinated Obligations, the obligation of the Borrower, which shall be unconditional and absolute, to pay to the holders of the Subordinated Obligations the principal and premium (if any) thereof and interest thereon in accordance with its terms, nor shall anything therein prevent the holders of the Subordinated Obligations from exercising all remedies otherwise permitted by applicable law or the instruments pursuant to which the Subordinated Obligations were issued upon default thereunder, subject to the rights under paragraphs (i), (ii), (iii), and (iv) above of a holder of Senior Pari Passu Debt to receive cash, property or securities otherwise payable or deliverable to the holders of the Subordinated Obligations. (c) The expressions "prior payment in full," "payment in full," "paid in full", "fully paid and satisfied" and any other similar terms or phrases when used in this Agreement with respect to the Senior Debt shall mean (i) the full and final payment in cash, in immediately available funds, of all of the Senior Debt, and (ii) the termination of the Credit Agreement. To the extent any payment of Senior Debt (whether by or on behalf of the Borrower, as proceeds of security or enforcement of any right of set-off or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to a trustee, receiver or other similar party under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar laws, then if such payment is recovered by, or paid over to, such trustee, receiver or other similar party, the Senior Debt or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred. To the extent the obligation to repay any Senior Debt is declared to be fraudulent, invalid or otherwise set aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar laws, then the obligations so declared fraudulent, invalid or otherwise set aside (and all other amounts that would become due with respect thereto had such obligations not been so affected) shall be deemed to be reinstated and outstanding as Senior Debt for all purposes hereof as if such declaration, invalidity or setting aside had not occurred. (d) Notwithstanding any other provision of this Agreement, the Borrower shall have the right to make, and the Subordinated Creditors shall have the right to receive and to retain, any payment or voluntary prepayment by the Borrower of any -6-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Subordinated Obligation as contemplated by the proviso to paragraph (i) of subsection 2.1(b) if, immediately after giving effect thereto, there shall not exist a default in the payment or prepayment of any principal of or interest on any Senior Debt. 2.2 Additional Subordinated Obligations. A Subordinated Creditor may cause Schedule A or Schedule B hereto, as the case may be, to be supplemented from time to time to add additional obligations of the Borrower to the Subordinated Creditor (or its Subsidiary) as Subordinated Obligations by executing a notice substantially in the form of Exhibit A hereto and delivering a signed counterpart thereof to the Borrower and to the Administrative Agent. Schedule A and Schedule B, as the case may be, will be deemed modified as of the date such signed notices have been delivered. 2.3 Agreement to Cooperate. Each Subordinated Creditor hereby agrees, under the circumstances set forth in paragraph (ii) of subsection 2.1(b), duly and promptly to take such action as may be requested at any time and from time to time by the Senior Creditors (or their representative), to file appropriate proofs of claim in respect of the Subordinated Obligations, and to execute and deliver such powers of attorney, assignments of proofs of claim or other instruments as may be requested by the Senior Creditors (or their representative), in order to enable the Senior Creditors to enforce any and all claims upon or in respect of the Subordinated Obligations and to collect and receive any and all payments or distributions which may be payable or deliverable at any time upon or in respect of the Subordinated Obligations. 2.4 Subrogation. (a) No Subordinated Creditor shall be entitled to enforce its rights of subrogation to receive payments or distributions of assets of the Borrower on the Senior Debt until the Senior Debt has been paid in full. (b) Subject to the payment in full of all Senior Debt, until all amounts owing on the Subordinated Obligations shall be paid in full the Subordinated Creditors shall be subrogated to the rights of the holder(s) of the Senior Debt (to the extent of payments or distributions previously made to such holders pursuant to the provisions of subsection 2.1(b)). 2.5 Capital Markets Debt Subordination Agreement. It is intended that the Senior Debt constitutes "Senior Pari Passu Debt" for purposes of the Capital Markets -7-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Debt Subordination Agreement, dated as of November 21,2000, among SBC, BellSouth, any Subsidiary Lender and the Borrower. SECTION 3. REPRESENTATIONS. Each Subordinated Creditor represents and warrants as follows: 3.1 Power and Authority; Authorization; No Violation. The Subordinated Creditor has corporate power, authority and legal right to execute, deliver and perform this Agreement, and the execution, delivery and performance of this Agreement have been duly authorized by all necessary action on its part, do not require any approval or consent of any trustee or holders of any indebtedness or obligations of the Subordinated Creditor and will not violate any provision of law, governmental regulation, order or decree or any provision of any material indenture, mortgage, contract or other agreement entered into by the Subordinated Creditor or by which the Subordinated Creditor is bound. 3.2 Consents. No consent, license, approval or authorization of, or registration or declaration with, any governmental instrumentality, domestic or foreign, is required in connection with the execution, delivery and performance by the Subordinated Creditor of this Agreement. 3.3 Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Subordinated Creditor enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and to the availability of equitable remedies. SECTION 4. MODIFICATIONS OF SENIOR DEBT; RELIANCE. Each Subordinated Creditor consents that, without the necessity of any reservation of rights against the Subordinated Creditors, and without notice to or further assent by the Subordinated Creditors, (a) any demand for payment of any Senior Debt may be rescinded in whole or in part, and any Senior Debt may be continued, and the Senior Debt, or the liability of any other party upon or for any part thereof, or any collateral security or guaranty therefor, or right of offset with respect thereto, may, from -8-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 time to time, in whole or in part, be renewed, extended, modified, accelerated, compromised, waived, surrendered, or released and (b) the Credit Agreement and any other document or instrument evidencing or governing the term of any other Senior Debt or any other collateral security documents or guaranties or documents in connection with the Credit Agreement or the Senior Debt (other than this Agreement) may be amended, modified, supplemented or terminated, in whole or in part, as the Senior Creditors may deem advisable from time to time, the manner, place or terms of payment or time of payment of the Senior Debt may be amended or supplemented, any collateral security at any time held by the Senior Creditors for the payment of any of the Senior Debt may be sold, exchanged, waived, surrendered or released, in each case, except as provided above, all without notice to or further assent by either Subordinated Creditor, and all without impairing, abridging, releasing or affecting the subordination provided for herein, notwithstanding any such renewal, extension, modification, acceleration, compromise, amendment, supplement, termination, sale, exchange, waiver, surrender or release. Each Subordinated Creditor waives any and all notice of the creation, modification, renewal, extension, alteration, supplement or accrual of any of the Senior Debt and notice of or proof of reliance by the Senior Creditors upon this agreement, and the Senior Debt and any of them shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Agreement. Each Subordinated Creditor acknowledges and agrees that the Senior Creditors have relied upon the subordination provided for herein in entering into the Credit Agreement and in making funds available to the Borrower thereunder. Except as otherwise provided in this Agreement, each Subordinated Creditor waives notice or proof of reliance on this Agreement and protest, demand for payment and notice of default. SECTION 5. MISCELLANEOUS. 5.1 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 5.2 Further Assurances. Each Subordinated Creditor, at its own expense and at any time from time to time, upon the written request of Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Borrower reasonably may request for the purposes of assuring that the holders of Senior Debt obtain or preserve the full benefits of this Agreement and of the rights and powers herein granted. -9-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 5.3 Provisions Define Relative Rights. This Agreement is intended solely for the purpose of defining the relative rights of the Senior Debt, on the one hand and the Subordinated Creditors on the other, and no other Person shall have any right, benefit or other interest under this Agreement. 5.4 Notices. All notices, requests and demands hereunder to or upon the Senior Creditors, the Subordinated Creditors or the Borrower to be effective shall be in writing (or by fax or similar electronic transfer confirmed in writing) and shall be deemed to have been duly given or made (a) when delivered by hand or (b) if given by mail, when deposited in the mails by certified mail, return receipt requested, or (c) if by fax or similar electronic transfer, when sent and receipt has been confirmed, addressed as follows: If to the SBC: 175 East Houston Street San Antonio TX 78205 Attention: Vice President-Treasurer Fax: 210-351-3849 If to BellSouth: 1155 Peachtree Street Atlanta, Georgia 30309-4599 Attention: Vice President & Treasurer Fax: 404-249-2658 If to the Borrower or to the Senior Creditors, to the addresses specified in the Credit Agreement. The parties to this Agreement may change their addresses and transmission numbers for notices by notice to the other parties in the manner provided in this Section. 5.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 5.6 Severability. All rights, powers and remedies provided herein may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended to be limited to the extent necessary so that they will -10-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 not render this Agreement invalid or unenforceable. If any term of this Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Agreement and any other application of such term shall not be affected thereby. 5.7 Controlling Agreement; Termination. (a) Unless and until all Senior Debt has been paid in full and all commitments to lend terminated, notwithstanding the provisions in the Subordinated Obligations, the provisions of this Agreement shall be controlling as to the matters set forth herein. This Agreement shall terminate and have no further force or effect on and as of the date that the Senior Debt has been paid in full. (b) The Subordination and Extension Agreement dated as of November 18, 2002 among SBC, BellSouth, certain BellSouth Subsidiaries and the Borrower is hereby terminated and of no further force or effect. 5.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 5.9 Limitations on Amendment. So long as any Senior Debt is outstanding, no modification, supplement or waiver of any provision of this Agreement shall be effective with respect to the Senior Debt unless expressly agreed to in writing by the Administrative Agent (with the approval of the Required Lenders). 5.10 Representatives. Each Subsidiary Lender that is a subsidiary of SBC hereby appoints SBC as its agent and attorney-in-fact (a) for all purposes under this Agreement, including agreement to waivers and amendments, and (b) to execute and deliver other agreements pertaining to subordination of Shareholder Loans. Each Subsidiary Lender that is a subsidiary of BellSouth hereby appoints BellSouth as its agent and attorney-in-fact (a) for all purposes under this Agreement, including agreement to waivers and amendments, and (b) to execute and deliver other agreements pertaining to subordination of Shareholder Loans. -11-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly executed, all as of the date and year first above written. CINGULAR WIRELESS LLC By: Cingular Wireless Corporation By: /s/ Sean Foley ---------------------------- Name: Sean Foley Title: Vice President - Treasurer -12-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 BELLSOUTH CORPORATION By: /s/ Lynn Wentworth ----------------------------- Name: Lynn Wentworth Title: Vice President and Treasurer -13-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 CELLULAR CREDIT CORPORATION By: /s/ Linda S. Bubacz ----------------------------- Name: Linda S. Bubacz Title: Vice President -14-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 SBC COMMUNICATIONS INC. By: /s/ Michael J. Viola ----------------------------- Name: Michael J. Viola Title: Vice President-Treasurer -15-

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Schedule A <TABLE> <CAPTION> DEBTOR PAYEE/HOLDER DATE OF NOTE MATURITY DATE PRINCIPAL AMOUNT ------ ------------ ------------ ------------- ---------------- <S> <C> <C> <C> <C> Cingular Wireless LLC SBC Communications Inc. 7/1/03 6/30/08 $5,884,906,986.10 </TABLE> A-1

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Schedule B <TABLE> <CAPTION> DEBTOR PAYEE/HOLDER DATE OF NOTE MATURITY DATE PRINCIPAL AMOUNT ------ ------------ ------------ ------------- ---------------- <S> <C> <C> <C> <C> Cingular Wireless LLC BellSouth Corporation 7/1/03 6/30/08 $ 886,706,000 Cingular Wireless LLC Cellular Credit Corporation 7/1/03 6/30/08 $ 11,000,000 Cingular Wireless LLC Cellular Credit Corporation 7/1/03 6/30/08 $ 2,895,383,350 </TABLE> A-1

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Exhibit A [FORM OF NOTICE OF ADDITIONAL SUBORDINATED DEBT] Cingular Wireless LLC [Address] Re: Designation of Additional Subordinated Obligations Ladies and Gentlemen: The undersigned hereby designates the following loan which has been extended by the undersigned to you as a Subordinated Obligation under the Subordination Agreement, dated as of November 17, 2003: [describe debt] The foregoing description is hereby deemed added to Schedule [A] [B] of the Subordination Agreement. [The undersigned hereby agrees that it shall be deemed a Subsidiary Lender under the Subordination Agreement with respect to the above-referenced debt.]* Very truly yours, [SBC COMMUNICATIONS INC.] [BELLSOUTH CORPORATION] [SUBSIDIARY LENDER] cc: JPMorgan Chase Bank as Administrative Agent ---------------- * Insert if delivered with respect to loan by subsidiary of SBC or BellSouth.

CINGULAR WIRELESS LLC EXHIBITS - Subordination Agreement among SBC Communications Inc., BellSouth Corporation, Cellular Credit Corporation and Cingular Wireless LLC dated November 17, 2003 EXHIBIT 10.56 Exhibit B [FORM OF NOTICE OF ADDITIONAL SENIOR CAPITAL MARKETS DEBT] Cingular Wireless LLC [Address] Re: Approval of Additional Senior Capital Markets Debt Ladies and Gentlemen: The undersigned hereby approves the following obligation that you propose to issue or have issued as "Senior Capital Markets Debt" under the Subordination Agreement, dated as of November 17, 2003 and the Capital Markets Debt Subordination Agreement, dated as of November 21, 2000: [describe obligation] Very truly yours, [SBC COMMUNICATIONS INC.] [BELLSOUTH CORPORATION]

CINGULAR WIRELESS LLC EXHIBITS - Compensation arrangement with Ralph de la Vega. EXHIBIT 10.58 RALPH DE LA VEGA COMPENSATION PACKAGE POSITION: Chief Operating Officer EFFECTIVE DATE: December 31, 2003 SALARY: $500,000 2004 EXECUTIVE SHORT-TERM INCENTIVE AWARD TARGET: $500,000 2004 LONG-TERM TARGET: $2,250,000 Grants will be based on plan design as approved by the Cingular Board of Directors. Grant date: April 1, 2004 A component of the annual long term grant will be non-performance full value shares (e.g. restricted stock or equivalent) at least equal to the BellSouth Band A officers percentage RETENTION GRANT: $2,500,000 of restricted stock units (value mix of 60% SBC/40% BLS). Dividend equivalents paid quarterly. 3-year cliff vesting. Number of shares will be determined by the closing stock prices on December 31, 2003. PTO DAYS: 38 days

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 TRANSITION AGREEMENT THIS AGREEMENT is made and entered into this 29 day of December, 2003, by and between BellSouth Corporation, a Georgia corporation ("Company"), and Rafael de la Vega ("Executive") (each, a "Party" and, collectively, the "Parties"): REASONS FOR THIS AGREEMENT. Executive has been employed by Company and its Affiliated Companies since 1974. During his tenure, Executive has served in a variety of senior capacities and currently serves as Company's President - Latin America Operations with overall responsibility for Company's operations in Argentina, Uruguay, Colombia, Venezuela, Chile, Peru, Ecuador, Panama, Nicaragua and Guatemala. Executive's previous assignments include having served as Company's President of Broadband and Internet Services with overall responsibility for the deployment, marketing and operations of broadband services, internet services and data support. Prior to that assignment, Executive was responsible for BellSouth Telecommunications, Inc.'s network operations in selected states. Company and SBC Communications Inc. combined their respective domestic mobile wireless voice and data services businesses in 2000 into the newly-formed entities Cingular Wireless LLC and Cingular Wireless Management Corp. (together with their subsidiary companies, collectively referred to herein as "Cingular"). Company now desires to have Executive join Cingular as its Chief Operating Officer, a move that will require termination of Executive's employment with Company. Through this Agreement, Company desires, in part, to provide certain transition benefits and severance protections to Executive. Executive has agreed to accept this assignment to Cingular and now intends to separate from employment with Company on December 30, 2003, and thereafter to join Cingular. Executive acknowledges that Company and Affiliated Companies have disclosed or made available and in the future will disclose and make available Confidential Information to Executive, which could be used by Executive to Company's or Affiliated Companies' detriment. Executive further acknowledges that the covenant not to compete and other restrictive covenants in this Agreement are fair and reasonable, that enforcement of the provisions of this Agreement will not cause him undue hardship, and that the provisions of this Agreement are reasonably necessary and commensurate with the need to protect Company and Affiliated Companies and their business interests and property from irreparable harm. 1. RESIGNATION FROM BELLSOUTH. Executive separates and resigns from employment with Company and any position Executive holds with any Affiliated Company effective December 30, 2003. 2. BELLSOUTH SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 (a) Executive's transition to Cingular shall not be deemed to trigger a termination of employment with Company for purposes of the BellSouth Corporation Supplemental Executive Retirement Plan ("SERP"). Furthermore, Executive shall not be deemed to have terminated employment for purposes of SERP until such time as Executive's employment with Cingular terminates (or, if Executive leaves Cingular to accept employment without a break in service with another Participating Company, Affiliate or Interchange Company (as such terms are defined in SERP), Executive's employment shall not be deemed to have terminated for purposes of SERP before the earliest date on which Executive is no longer employed by any such entity). (b) Executive shall continue to participate in SERP for purposes of all benefits provided by SERP and to accrue benefits under SERP for his full period of service with Cingular as if he remained employed by Company. Company shall calculate Executive's SERP benefits by reference to his combined period of service otherwise recognized under SERP plus his period of Cingular service; by reference to compensation paid to Executive by Cingular with respect to his period of service at Cingular; and, to the extent applicable, by reference to compensation paid to him by Company with respect to his period of service with Company and other Affiliated Companies. In addition to offsets provided in SERP, Executive's benefits under SERP shall also be reduced by any benefits payable to him under any one or more tax-qualified or non-qualified defined benefit pension plans, excess plans, make-up plans or supplemental executive retirement plans at Cingular. In determining Executive's SERP benefits accrued while at Cingular, Company shall make such additional adjustments in the administration of SERP and the calculation of Executive's benefits thereunder as shall be necessary and appropriate to take into account Cingular's compensation and employment practices. 3. TERMINATION ALLOWANCE. (a) In the event Executive's employment with Cingular is terminated under circumstances described in Section 3(b) below, Company shall pay to Executive (or, in the event of Executive's death, to his estate) a termination allowance. The termination allowance shall be an amount equal to the sum of (i) two hundred percent (200%) of Executive's Base Salary in effect on the date of Executive's termination of employment, plus (ii) two hundred percent (200%) of the standard award amount applicable to Executive under his employer's short term bonus plan for the year in which his date of termination occurs, less all applicable withholdings, payable in a single lump sum payment. Payment of the termination allowance shall be made as soon as practicable following Executive's termination of employment under circumstances entitling him to such payment, and satisfaction of all conditions described in this Agreement on Executive's entitlement to such payment. For purposes of this Agreement, "Base Salary" shall refer to the gross annual base salary payable to Executive including (A) the amounts of any before-tax contributions made by Executive from such salary to any tax-qualified cash or deferred arrangement sponsored by his employer, and (B) the amount of any other deferrals of such salary under any nonqualified deferred compensation plan(s) maintained by his employer. 2

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 (b) Executive's employment shall be deemed to have been terminated under circumstances described in this Section 3(b) only if: (i) (A) Executive's employment is terminated either by Cingular other than for Cause, or by Executive for Good Reason; (B) Executive shall within thirty (30) days following such termination of employment have notified Company of his desire to return to Company, and within thirty (30) days following such notification Company shall have failed to offer to Executive employment with Company or a subsidiary or affiliate of Company in a "comparable" position (as defined below); and (C) Executive executes a supplemental release, substantially in the form of the release agreement attached to this Agreement as Exhibit "A" (the "Release Agreement"), which is incorporated herein by this reference; (ii) Executive's employment is terminated by reason of Executive's Disability, and Executive executes a Release Agreement; or (iii) Executive's employment is terminated by reason of Executive's death. For purposes of clause (i) above, a "comparable" position shall mean a position (1) providing Base Salary and a standard or target short term bonus no less than those provided to Executive immediately prior to his termination of employment with Cingular (and disregarding any previous diminution in such amounts which did or would have constituted Good Reason under this Agreement); (2) reporting to Company's Chief Executive Officer; (3) providing types and amounts of other compensation and benefits comparable to those provided to other similarly situated Company officers; and (4) not requiring relocation outside the Atlanta, Georgia, metropolitan area. 4. DISCHARGE AND WAIVER. Executive fully releases and forever discharges Company and Affiliated Companies, and any employee, officer, director, representative, agent, successor or assign of Company and Affiliated Companies (both in their personal and official capacities), and all persons acting by, through and under or in concert with any of them, from any and all claims, demands, causes of action, remedies, obligations, costs and expenses of whatever nature, whether under the common law, state law, federal law (including but not limited to the Age Discrimination in Employment Act of 1967) or otherwise, through the date of this Agreement, including those arising from or in connection with the terms and conditions of employment with Company (and Affiliated Companies). This paragraph is not intended to and shall not affect benefits to which Executive may be entitled under any pension, savings, health, welfare, or other benefit plan in which Executive is a participant. 5. COVENANT NOT TO SUE. Executive covenants and agrees not to make or file any claim, demand or cause of action or seek any remedy of whatever nature, whether under the common law, state law, federal law or otherwise, arising from or in connection with the matters 3

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 discharged and waived in Section 4, above. Notwithstanding the foregoing, in the event Executive files a charge or lawsuit under the Age Discrimination in Employment Act of 1967 (ADEA), and thereby challenges the validity of the release described in Section 4, such charge or lawsuit will not be considered a breach of this Section 5. 6. CONFIDENTIAL INFORMATION. Executive agrees to protect Confidential Information from misuse or unauthorized disclosure. In addition to complying with all applicable laws governing trade secret and confidential information disclosure, Executive will not (i) use, except in connection with work for Company or Affiliated Companies, or threaten to use, or (ii) disclose, communicate or give others access to (orally, in writing, electronically or digitally) or threaten to disclose, communicate or give other access to any Confidential Information. For purposes of this Agreement, "Confidential Information" shall mean information, whether generated internally or externally, whether in written, oral, digital, electronic or any other form or format, relating to Company's or Affiliated Companies' businesses that derives economic value, actual or potential, from not being generally known to other Persons and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality, including, but not limited to, studies and analyses, technical or nontechnical data, programs, patterns, compilations, devices, methods, models (including cost and /or pricing models and operating models), techniques, drawings, processes, employee compensation data, and financial data (including marketing information and strategies and personnel data). For purposes of this Agreement, Confidential Information does not include information that is not a trade secret three (3) years after termination of Executive's employment with Company, but shall continue to include trade secrets as long as information remains a trade secret under applicable law. Executive acknowledges that any use of, reliance upon, disclosure or other misappropriation of Confidential Information inconsistent with the terms of this Agreement (including without limitation acceptance by Executive of a position in which the inevitability of such use, reliance, disclosure or misappropriation is reasonably anticipated) would result in material and irreparable damage and injury to Company or Affiliated Companies. 7. LIMITATION ON COMPETITION. In consideration of the additional payments, benefits and other rights that are being provided to Executive under this Agreement, during the one (1) year period following the Effective Date, Executive agrees not to provide any "Services" (as defined in the third paragraph of this Section 7) to any Person that competes directly with Company or any Affiliated Companies, whether Executive provides the Services as an employee, consultant, independent contractor, advisor or director. After the termination of Executive's employment, the foregoing covenant shall restrict Executive's actions only with respect to competition in the Territory. For purposes of this Agreement, the term "Territory" shall mean the geographical territory consisting of (i) those territories in the countries of Argentina, Uruguay, Colombia, Venezuela, Chile, Peru, Ecuador, Panama, Nicaragua and Guatemala described in Exhibit "B" attached hereto and incorporated by reference herein and (ii) those counties and parishes in the states of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South 4

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 Carolina, and Tennessee listed on Exhibit "B", which the Parties acknowledge represents geographical territories in which Executive, as of the Effective Date, has (or has had) responsibility for providing Services to Company or Affiliated Companies. The Parties also acknowledge that the entire Territory consists of geographical territories in which Company and Affiliated Companies, directly or indirectly, are conducting business on the Effective Date. In an effort to impose reasonable limitations on the scope of the Territory, Company has not required that Executive comply with the covenant in this Section 7 in all geographical areas where Company and Affiliated Companies are licensed to conduct business and are conducting business, even though the Parties acknowledge that Executive is performing Services throughout that entire area. Executive agrees that because of the widespread nature of Company's business, Executive's engaging in competitive activity anywhere in the Territory would irreparably injure Company or Affiliated Companies and that, therefore, a more limited geographic restriction is neither feasible nor appropriate. For purposes of this Agreement, the term "Services" shall mean services which Executive as of the Effective Date is responsible for providing to Company and Affiliated Companies, which Executive acknowledges consists of providing management, administrative and advisory services related to business planning and operations with respect to the communications services business, consisting of wireline (local exchange, exchange access and intraLATA toll) telecommunications services, systems and products, wireless (cellular, personal communications service, and mobile data) communications services, systems and products, electronic commerce or communications (internet and web based applications), data transmission and networking, entertainment services, systems and products, paging services, systems and products, and telecommunications directory advertising and publishing. Executive represents and warrants that Executive's education, training and experience are such that this Section 7 will not jeopardize or significantly interfere with Executive's ability to secure other gainful employment. 8. INTERPRETATION; SEVERABILITY OF INVALID PROVISIONS. Executive acknowledges and agrees that the limitations described in this Agreement, including specifically the limitations upon his activities, are reasonable in scope, are necessary for the protection of Company's and Affiliated Companies' business, and form an essential part of the consideration for which this Agreement has been entered into. It is the intention of the Parties that the provisions of this Agreement be enforced to the fullest extent permissible under applicable laws and public policies. Nonetheless, the rights and restrictions contained in this Agreement may be exercised and shall be applicable and binding only to the extent they do not violate any applicable laws and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid or unenforceable. If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect. The provisions of this Agreement do not in any way limit or abridge Company's or Affiliated Companies' rights under the laws of unfair competition, trade secret, copyright, patent, trademark or any other applicable law(s), all of which are in addition to and cumulative of 5

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 Company's or Affiliated Companies' rights under this Agreement. Executive agrees that the existence of any claim by Executive against Company or any Affiliated Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to enforcement by Company or any Affiliated Company of any or all of such provisions or covenants. 9. CONSEQUENCES OF BREACH OF AGREEMENT BY EXECUTIVE. Executive agrees that he will reimburse Company and Affiliated Companies for any and all attorneys' fees incurred by Company and Affiliated Companies arising out of Executive's breach or threatened breach of any provision of this Agreement. Executive also understands that his entitlement to and retention of the benefits provided to Executive under this Agreement are expressly conditioned upon his fulfillment of the terms and conditions of the Agreement, and Executive agrees, to the extent permitted or required by law, immediately to return or repay the amounts he has received under this Agreement from Company in excess of One Hundred Dollars ($100.00) upon Executive's breach of any provision of this Agreement. Although, as provided in Section 5 of this Agreement, the filing of a charge or a lawsuit under the Age Discrimination in Employment Act (ADEA) to challenge the validity of the Agreement will not be considered a breach, the severance and other benefits paid to Executive under this Agreement may serve as restitution, recoupment, and/or setoff in the event Executive prevails on the merits of such claim. 10. RELIEF. The Parties acknowledge that a breach or threatened breach by Executive of any of the terms of this Agreement would result in material and irreparable damage and injury to Company or Affiliated Companies, and that it would be difficult or impossible to establish the full monetary value of such damage. Therefore, Company and Affiliated Companies shall be entitled to injunctive relief in the event of Executive's breach or threatened breach of any of the terms contained in this Agreement. 11. ARBITRATION. Except for the right to seek temporary restraint or interim injunctive relief from a court of competent jurisdiction (as provided in Section 10, any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity of any provision hereof (collectively, a "Claim") shall be settled by arbitration pursuant to the National Rules for the Resolution of Employment Disputes of the American Arbitration Association. Any such arbitration shall be conducted by one arbitrator, with experience in the matters covered by this Agreement, mutually acceptable to the Parties. If the Parties are unable to agree on the arbitrator within thirty (30) days of one party giving the other party written notice of intent to arbitrate a Claim, the American Arbitration Association shall appoint an arbitrator with such qualifications to conduct such arbitration. The decision of the arbitrator in any such arbitration shall be conclusive and binding on the Parties. Any such arbitration shall be conducted in Atlanta, Georgia. The Parties indicate their acceptance of the foregoing arbitration requirement by initialing below: RDS RDV 6

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 Company Executive 12. AGREEMENT BINDING. This Agreement shall be binding upon and inure to the benefit of Company and Affiliated Companies, and their successors, assignees, and designees, and Executive and Executive's heirs, executors, administrators, personal representatives and assigns. 13. ENTIRE AGREEMENT; PREVIOUS AGREEMENT. This Agreement and all exhibits to this Agreement (which are incorporated into the Agreement by reference) contain the entire agreement between the Parties and no statements, promises or inducements made by either Party, or agent of either Party, which are not contained in this Agreement shall be valid or binding; provided, however, that the matters dealt with herein supersede the terms of Company benefit plans and agreements between the Parties entered into pursuant to such plans only to the extent the provisions of such plans and related agreements are inconsistent with this Agreement and other provisions of such plans and related agreements not inconsistent with this Agreement are not affected. This Agreement may not be enlarged, modified or altered except in writing signed by the Parties. 14. NONWAIVER. The failure of Company or any Affiliated Companies to insist upon strict performance of the terms of this Agreement, or to exercise any option herein, shall not be construed as a waiver or a relinquishment for the future of such term or option, but rather the same shall continue in full force and effect. 15. NOTICES. All notices, requests, demands and other communications required or permitted by this Agreement or by any statute relating to this Agreement shall be in writing and shall be deemed to have been duly given if delivered or mailed, first-class, certified mail, postage prepaid, addressed to Company or Executive at the address reflected on Exhibit "C" attached hereto and incorporated by herein by this reference. 16. NONDISCLOSURE. Executive shall not disclose the existence or terms of this Agreement to any third party (excluding Executive's spouse and children), except to receive advice of legal counsel, financial advisors or tax advisors (who shall also be required to maintain its confidentiality) or to comply with any statutory or common law duty; provided that these restrictions on disclosure shall not apply to the extent that the existence of this Agreement are disclosed by Company or any Affiliated Company as part of its periodic public filings and disclosures or otherwise. 17. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. 7

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 18. GOVERNING LAW; CONSULTATION WITH COUNSEL. This Agreement shall be construed under and governed by the laws of the State of Georgia. Executive has been advised to consult with an attorney, acknowledges having had ample opportunity to do so and fully understands the binding effect of this Agreement. In this regard, Executive acknowledges that a copy of this Agreement was provided to Executive for review and consideration for up to twenty-two (22) days. Further, Executive understands that this Agreement may be revoked by Executive within seven (7) days from the date of execution of this Agreement. Executive further acknowledges that he is a sophisticated businessperson and that given his opportunity to review, negotiate and reject this Agreement, has bargaining power equal to that of Company. Therefore, the provisions of this Agreement shall not be construed against Company. 19. DEFINITIONS. For purposes of this Agreement, the following terms shall have the meaning specified below: (a) "AFFILIATED COMPANIES" shall mean those subsidiaries and affiliates of Company listed on Exhibit "D" attached hereto and incorporated herein by this reference and any direct successors to those companies through acquisition or merger or by way of name change. (b) "BASE SALARY" shall have the meaning ascribed to such term in Section 3 of this Agreement. (c) "CAUSE" shall mean Executive's (i) engaging in an act (or acts) of willful dishonesty involving Cingular, Company or other Affiliated Companies or their business(es) that is demonstrably injurious to Cingular, Company or other Affiliated Companies; or (ii) conviction of a crime classified as a felony. (d) "CONFIDENTIAL INFORMATION" shall have the meaning ascribed to such term in Section 6 of this Agreement. (e) "DISABILITY" shall mean an illness, injury or other incapacity which qualifies Executive for long-term disability benefits under the principal management long-term disability plan of Company. (f) "EFFECTIVE DATE" shall mean the date on which this Agreement is executed by the Parties as set forth on page 1 hereinabove. (g) "GOOD REASON" shall mean, without Executive's express written consent, any of the following circumstances: (i) a material diminution in the status or responsibilities of Executive's position from those which existed immediately prior to such diminution; (ii) a reduction in Executive's Base Salary as in effect immediately prior to such reduction, or the failure to pay a bonus award to which Executive is otherwise entitled under any of the short term or long term incentive plans in which Executive participates (or any successor incentive compensation plans) at the time such awards are usually paid; (iii) Executive becoming entitled 8

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 to types or amounts of other compensation and benefits which are materially less (or materially less valuable) than the types or amounts of such compensation and benefits provided to other similarly situated officers; or (iv) a change in the principal place of Executive's employment requiring relocation outside the Atlanta, Georgia, metropolitan area. (h) "PERSON" shall mean any individual, corporation, limited liability entity, bank, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental or other legal or business entity. (i) "SERP" shall mean the BellSouth Corporation Supplemental Executive Retirement Plan, as amended from time to time. (j) "SERVICES" shall have the meaning ascribed to such term in Section 7 of this Agreement. (k) "TERRITORY" shall have the meaning ascribed to such term in Section 7 of this Agreement. IN WITNESS WHEREOF, Company has caused this Agreement to be executed by its duly authorized representative, and Executive has executed this Agreement, as of the date written above. EXECUTIVE: BELLSOUTH CORPORATION Rafael de la Vega By: Richard D. Sibbernsen -------------------------- ----------------------------------- Rafael de la Vega Title: Vice President - Human Resources 9

CINGULAR WIRELESS LLC EXHIBITS - Transition Agreement by and between BellSouth Corporation and Rafael de la Vega dated December 29, 2003 EXHIBIT 10.59 EXHIBIT "A" RELEASE AGREEMENT For and in consideration of the mutual promises contained in the Agreement entered into on the __ day of __________, 2003, between Rafael de la Vega ("Executive") and BellSouth Corporation ("Company"), Executive does hereby, for himself, his heirs, executors, administrators, and assigns, release and forever discharge Company, its subsidiary, affiliated and associated companies, and any employee, officer, director, representative, agent, successor or assign of any such entity, and all persons acting by, through and under or in concert with any of them (both in their personal and official capacities), from any and all claims, demands, actions, causes of action, remedies, suits, obligations, damages, losses, costs and expenses, of whatever kind or nature, whether under common law, state law, federal law or otherwise, including without limitation the Age Discrimination in Employment Act of 1967, as amended, through the date of this Release Agreement, including without limitation those arising from or in connection with the terms and conditions of Executive's employment with Company and any subsidiary, affiliated and associated companies, or the termination of Executive's employment. This Release is not intended to affect benefits to which Executive may be entitled under any pension, savings, health, welfare or other benefit plan in which Executive is a participant. Executive covenants and agrees not to make or file any claim, demand or cause of action or seek any remedy of whatever nature, whether under common law, state law, federal law or otherwise arising from or in connection with the matters discharged and waived above. Notwithstanding the foregoing, in the event Executive files a charge or lawsuit under the Age Discrimination in Employment Act of 1967 ("ADEA") and thereby challenges the validity of the release described herein, such charge or lawsuit will not be considered a breach of this provision. Executive has been advised to consult with an attorney, acknowledges having had ample opportunity to do so, and fully understands the binding effect of this Release Agreement. Executive acknowledges that a copy of this Release Agreement was provided to him on __________, 20__, for review and consideration for up to twenty-two (22) days. Executive understands that this Release may be revoked by him within seven (7) days from the date of execution of this Release Agreement. Executive agrees that this Agreement shall be construed under and governed by the laws of the State of Georgia. Executive now states that the only consideration for his signing this Release Agreement is the mutual promises and payment of the sum described above; that no other promises or agreements of any kind or nature have been made to, or with, him by Company or its agents to cause him to sign this Release Agreement, and that Executive fully understands the meaning and intent of this instrument. WITNESS my hand and seal this ____ day of __________, 20___. ________________________________ RAFAEL DE LA VEGA A-1

EXHIBIT "B" GEOGRAPHIC TERRITORY LATIN AMERICA Argentina (Nationwide) Chile (Nationwide) Colombia (Nationwide) Ecuador (Nationwide) Guatemala (Nationwide) Nicaragua (Managua and the Pacific Coast) Panama (Nationwide) Peru (Nationwide) Uruguay (Abiatar - Coastal Corridor) Venezuela (Nationwide) UNITED STATES Alabama: Jefferson and Shelby Counties (Birmingham) Mobile County (Mobile) Florida: Broward and Dade Counties (Miami-Ft. Lauderdale) Palm Beach County (West Palm Beach) Georgia: Fulton, DeKalb, Cobb and Gwinnett Counties (Atlanta) Kentucky: Jefferson County (Louisville) Louisiana: Jefferson and Orleans Parishes (New Orleans) East Baton Rouge, Ascension and Livingston Parishes (Baton Rouge) Mississippi: Hinds, Madison and Rankin Counties (Jackson) North Carolina: Mecklenburg County (Charlotte) Wake County (Raleigh) South Carolina: Anderson, Greenville and Spartanburg Counties (Greenville) Richland and Lexington Counties (Columbia) Tennessee: Davidson County (Nashville) Shelby County (Memphis) B-1

EXHIBIT "C" NOTICES To Company: Charles R. Morgan Executive Vice President and General Counsel BellSouth Corporation Suite 2002 1155 Peachtree Street, N.E. Atlanta, Georgia 30309-3610 To Executive: Rafael de la Vega 8965 Old Southwick Pass Alpharetta, Georgia 30022 C-1

EXHIBIT "D" Domestic BellSouth Telecommunications, Inc. BellSouth Enterprises, Inc. Cingular Wireless LLC BellSouth Long Distance, Inc. BellSouth Advertising & Publishing Corporation L.M. Berry and Company (d/b/a The Berry Company) International Abiatar S.A. BellSouth Chile S.A. BellSouth Colombia S.A. BellSouth Comunicaciones S.A. BellSouth Guatemala y Compania, S.C.A. BellSouth International, Inc. BellSouth Inversiones S.A. BellSouth Panama S.A. BellSouth Peru, S.A. BellSouth Shanghai Centre, Ltd. CellCom Israel Ltd. Compania de Radiocomunicaciones Moviles S.A. Compania de Telefonos del Plata S.A. Otecel S.A. SONOFON A/S StarMedia Network, Inc. Telcel C.A. Telefonia Celular de Nicaragua, S.A. D-1

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 CINGULAR WIRELESS LONG TERM COMPENSATION PLAN (As Amended and Restated Effective as of January 1, 2004) 1.0 Purpose. The purpose of the Cingular Wireless Long Term Compensation Plan (the "Plan") is to provide Executives and Non-Executives with long term compensation as set forth in the Plan and subject to additional objectives and requirements that may be determined and set forth by the Administrator. The Plan, originally effective January 1, 2002, was amended and restated in its entirety effective January 1, 2003, and is further amended and restated in its entirety effective January 1, 2004 as set forth herein. 2.0 Definitions. Each term set forth in this Section 2.0 shall have the respective meaning set forth opposite such term for purposes of this Plan, and when the defined meaning is intended the term is capitalized. "Administrator" means the Board, the Compensation Committee, or the Company Administrator, as applicable. "Award" means a final award payable under Section 6.0 following approval by the Administrator. "BellSouth" means BellSouth Corporation. "Beneficiary" means the person designated by an Executive to receive any Award paid following the Executive's death as determined pursuant to Section 8.2. "Board" means the Board of Directors of the Cingular Wireless Corporation. "Chief Executive Officer" means the Chief Executive Officer of the Company. "Chief Financial Officer" means the Chief Financial Officer of the Company. "Chief Operating Officer" means the Chief Operating Officer of the Company. "Code" means the Internal Revenue Code of 1986, as amended from time to time.

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 "Compensation Committee" means a committee of the Board which satisfies the requirement of Section 162(m)(4)(C)(i) of the Code and has responsibility for oversight of the Company's compensation and benefits programs. "Company" means Cingular Wireless LLC, a Delaware limited liability company. "Company Administrator" means the Chief Executive Officer or a person designated by the Chief Executive Officer 1) to administer the Plan for Executives other than the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and Executives who are direct reports to the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, and 2) to administer the Plan for Non-Executives. "Consolidated EBITDA" means consolidated earnings before interest, taxes, depreciation and amortization for the Plan Year for which an Award based on Performance Units or Performance Stock Units is paid, as determined through the audited consolidated statement of income of the Company, adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment (other than provisions for operating losses or income during the phase-out period), unusual or infrequently occurring events and transactions that have been publicly disclosed and the cumulative effects of changes in accounting principles, all as determined in accordance with generally accepted accounting principles. "Corporation" means Cingular Wireless Corporation, a Delaware corporation. "Covered Employee" means a Participant whom the Compensation Committee deems may be or become a "covered employee," as defined in Section 162(m)(3) of the Code, for any Plan Year that such Award may result in remuneration to the Participant and for which Plan Year such Participant may receive remuneration over $1 million which would not be deductible under Section 162(m) of the Code but for the provisions of the Plan and any other "qualified performance-based compensation" plan (as defined under Section 162(m) of the Code of the Company; provided, however, that the Compensation Committee may determine that a Participant has ceased to be a Covered Employee prior to payment of any Award. "Disability" means being eligible for and approved for Long Term Disability benefits under the Company's group long term disability plan for employees. "Dividend Equivalent Payments" means a cash payment equal to the dividends paid on a common share of BellSouth or SBC stock during the Performance Period. The Administrator shall determine when dividend equivalent payments are to be paid. "Executive" means any executive of the Company or any Subsidiary who is a member of the executive compensation group under the Company's compensation practices and who is identified by the Administrator as eligible to participate in the Plan. Page 2

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 "Fair Market Value" shall mean the closing price on the New York Stock Exchange ("NYSE") for Shares on the relevant date, or if such date was not a trading day, the next preceding trading date, all as determined by the Administrator. A trading day is any day that the Shares are traded on the NYSE. In lieu of the foregoing, the Administrator may select any other index or measurement to determine the Fair Market Value of the Shares under the Plan. "Grant or Grants" means a grant of Performance Units, Restricted Stock Units or SA Units to a Participant from the Administrator pursuant to the provisions of Section 6.0 of the Plan. "Non-Executive" means any employee that is not a member of the executive compensation group under the Company's compensation practices. "Participant" means any Executive or Non-Executive who is eligible to participate in this Plan as determined by the Administrator. "Performance Units" shall mean cash units awarded to Participants pursuant to this Plan. "Plan" means this Cingular Wireless Long Term Incentive Plan, as amended from time to time. "Plan Year" means the calendar year. "Retirement" means the termination of employment for reasons other than Death or Disability, on or after the date on which (1) the Participant is first eligible, upon termination employment, for retiree health coverage in accordance with the terms of the Company's health plan (or the health plans of SBC or BellSouth with respect to certain Participants who transferred from BellSouth and SBC to Cingular as part of the formation of Cingular and met certain age and service requirements at the time of their contribution to Cingular and whose retire health coverage will be provided by either BellSouth or SBC) all as determined by the Company's health plan and the Administrator, in its sole discretion or (2) the Participant is eligible to retire under any other guidelines established by the Administrator. "Restricted Stock Units" or "RS Units" shall mean units granted to Participants with the value of each unit determined by the stock prices of a Share of common stock of BellSouth and SBC as of the Valuation Date pursuant to Section 6.3 of the Plan. Each Restricted Stock Unit shall be eligible to receive Dividend Equivalent Payments as determined by the Administrator. Restricted Stock Units do not have any ownership or voting rights related to the underlying Shares of common stock of BellSouth or SBC. "SA Units" or "Stock Appreciation Units" shall mean the stock appreciation units granted to Participants pursuant to Section 6.2 of the Plan. Page 3

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 "SA Unit Exercise Date" means the date on which exercise of a SA Unit occurs under the Plan. "SA Unit Exercise Price" means the Fair Market Value of a Share on the SA Unit Exercise Date. "SA Unit Grant Date" means the date on which a SA Unit is granted to a Participant under the Plan. "SA Unit Grant Price" means the Fair Market Value of a Share on the SA Unit Grant Date. "SBC" means SBC Communications, Inc. "Shares" means shares of common stock of BellSouth or SBC, as applicable, under Section 6.2 of the Plan. When granting Restricted Stock Units or SA Units, the Administrator, in its discretion, shall determine the percentage of each Restricted Stock Unit or SA Unit that is attributable to BellSouth Shares and SBC Shares, respectively. "Subsidiary" means any corporation, joint venture or partnership in which the Cingular Wireless owns directly or indirectly (i) with respect to a corporation, stock possessing at least ten percent ( 10% ) of the total combined voting power of all classes of stock in the corporation, or (ii) in the case of a joint venture or partnership, a ten percent ( 10% ) or more interest in the capital or profits of such joint venture or partnership. "Valuation Date" shall mean the date on which the Valuation Price of Restricted Stock Units is determined. "Valuation Price" shall mean the value of each Restricted Stock Unit based on the average of the closing prices on the New York Stock Exchange ("NYSE") for Shares for the 10 trading days preceding the Valuation Date. A trading day is any day that the Shares are traded on the NYSE. In lieu of the foregoing, the Administrator may select any other 10 day trading period to determine the value of each Restricted Stock Unit. 3.0 Effective Date. The Plan was originally effective beginning for Awards granted for the 2002 Plan Year. The Plan was amended and restated effective January 1, 2003 and further amended and restated as set forth herein effective January 1, 2004 and shall remain in effect until terminated by the Board. 4.0 Administration. Page 4

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 This Plan shall be administered by the Board or Compensation Committee, as applicable, for the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and any Executive who is a direct report to the Chief Executive Officer, the Chief Operating Officer, and the Chief Financial Officer. The Plan shall be administered by the Company Administrator for all other Executives and Non-Executives. The Administrator shall (a) determine who is an eligible Participant under the Plan, (b) determine the number of Grants made under the Plan to each Participant, (c) determine the Performance Goals (as defined in Section 6.1(d) for determining Awards, (d) determine the terms and conditions of all Grants under the Plan, (e) determine the Fair Market Value of Shares, (f) approve and provide for payment for all Awards, (g) establish the Valuation Date and the Valuation Price, (h) interpret the Plan, and (i) make all other decisions relating to the operation of the Plan. The Administrator's actions and determinations under the Plan shall be completely at its sole, absolute and final discretion, and all such actions and determinations shall be final and binding on all persons. No Administrator shall be personally liable for any action, determination, or interpretation with respect to the Plan or Awards. All Administrators shall be protected and indemnified by the Company, to the fullest extent permitted by applicable law, in respect of any such action, determination or interpretation. The Administrator may adopt such regulations and guidelines as it deems are necessary or appropriate for the administration of the Plan. 5.0 Eligibility. Executives and Non-Executives shall be eligible for Awards under this Plan. Executives are not rendered ineligible by reason of being a member of the Board. The Administrator may establish such additional rules for eligibility as it determines are appropriate. The actual payment of an Award to any eligible Participant shall be at the discretion of the Administrator as provided in Sections 4.0, 6.3 and related sections of the Plan. 6.0 Grants and Payment of Awards 6.1 Performance Units (a) Grants of Performance Units. Subject to the terms of the Plan, Performance Units may be granted to Participants at any time and from time, as determined by the Administrator. The Administrator shall have complete discretion in determining the number of Performance Units granted to each Participant and the conditions for the receipt of an Award based on a Grant of Performance Units. (b) Value of Performance Units. A Performance Unit shall be equal in value to a fixed dollar amount determined by the Administrator. (c) Performance Period. The Performance Period for Performance Units is the period over which the Performance Goals are measured. The Performance Period shall be set by the Administrator for each Grant; however, in no event shall a Grant have a Performance Period of less than two Plan Years. Page 5

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 (d) Performance Goals. For each Grant of Performance Units, the Administrator shall establish performance objectives ("Performance Goals") for determining whether Awards based on Performance Units are payable. Performance Goals shall include payout tables, formula or other any other standards determined by the Plan Administrator, in its sole discretion, to be used in determining the extent to which the Performance Goals are met and Awards are payable. (e) Awards Based on Performance Units. The amount of any Award to be paid to an eligible Participant shall be determined by the Administrator in its discretion as set forth in Section 4.0 based on the attainment of Performance Goals, subject only to the limits of Section 6.1(f). Awards shall be based on and payable for a Performance Period. All Awards for a Performance Period determined by the Administrator under this Section 6.1 shall be paid by the Company and its Subsidiaries in cash as soon as is practicable following Administrator certification as provided in Section 6.1(f). Except as otherwise determined by the Administrator, a Participant must be actively employed by the Company on the last day of the last Plan Year of any Performance Period and on the date of payment of any Award as a condition precedent to the receipt of any Award. Participants not meeting this requirement will be considered to have not met the requirements for receipt of the Award and shall not be paid such Award. Notwithstanding this condition and requirement, Participants who do not meet this condition due to Death, Retirement or Disability, shall be entitled to the receipt of a pro-rated payment for the Performance Period. No other partial or pro-rated payments are permitted under the Plan. In the event of the Participant's death, any Award payable shall be made to the Participant's Beneficiary, as governed by Section 7.2. The Administrator shall have the sole discretion to determine the date on which payments are made. (f) Application of Section 162(m) to Performance Units. (1) In the event that the Company becomes subject to the requirements of Section 162(m) of the Code, Awards payable to Covered Employees after such time shall constitute "qualified performance-based compensation" and shall be subject to the achievement of an overall performance goal based on Consolidated EBITDA in order that payments are deductible under Section 162(m) of the Code. (2) In the event the Company becomes subject to the provisions of Section 162(m) of the Code, Awards payable after such time to Covered Employees shall only be payable under this Plan for a Plan Year if the Company has positive Consolidated EBITDA for the Plan Year. Furthermore, the maximum award that may be payable under this Plan for a Plan Year (i) to a Covered Employee who is the Chief Executive Officer for any part of the Plan Year, and (ii) to each other Covered Employee will be (i) 0.5% and (ii) 0.3%, respectively, of Consolidated EBITDA for the Plan Year. This resulting amount for any Plan Year shall be the limit established for purposes of Section 162(m) of the Code, and the actual amount paid to any Executive shall only be that amount, if any, determined by the Administrator under Sections 6.1 and related sections of the Plan. (3) In the event that Awards payable to any Covered Employee become subject to the limitations of Section 6.1(f)(2) above, the Compensation Committee shall determine the maximum amounts that may be paid under Section 6.1(f)(2) for the Plan Year to any Page 6

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 Covered Employee and shall certify that any Awards determined under Section 6.1 are within such limits. (g) Deferral of Awards Based on Performance Units. Payments may be subject to deferral under any deferral plan established by the Company for this purpose, provided that in the event Section 162(m) is applicable, any additional amounts credited to any Covered Employee under any such deferral plan or program during the period of deferral shall be determined based either on a reasonable rate of interest or on a specific investment or deemed investment, including Company stock, as may be determined by the Compensation Committee within the limits of the regulations under Section 162(m) of the Code. 6.2 Stock Appreciation Units (a) Grants of Stock Appreciation Units. Subject to the terms of the Plan, Stock Appreciation Units may be granted to Participants at any time and from time to time, as determined by the Administrator. The Administrator shall have complete discretion in determining the number of SA Units awarded to each Participant. (b) Vesting of SA Units. Participants shall vest in SA Units according to the vesting schedule adopted by the Administrator. In the event of a Participant's Death, Retirement or Disability, all outstanding SA Units shall become fully vested. (c) Exercise of SA Units. Subject to subsection (d) below, SA Units, once vested, shall be exercisable over the period established by the Administrator, which period shall not exceed (10) years from the date the SA Units are granted. (d) Lapse of SA Units. (1) Termination of Employment. In the event of his termination of employment with the Company for any reason, a Participant's vested SA Units shall lapse at the end of the three month period following the Participant's termination date or the remaining life of the SA Unit, whichever is earlier. A terminated Participant's unvested options shall lapse on his termination date. Any lapsed SA Units shall be void, without value and unexercisable. (2) Termination of Employment Due to Retirement, Death or Disability. Notwithstanding the foregoing subsection, the vested SA Units of Participant who terminates employment with the Company on account of Death, Retirement or Disability shall lapse at the end of the five year period following the Participant's Death, Retirement or Disability or the remaining life of the SA Unit, whichever is earlier. (e) Payment of Award at Exercise. Upon the exercise and settlement of a SA Unit in accordance with the terms of this Plan and other requirements set forth by the Administrator, the Participant shall receive a payment equal to the excess, if any, of the SA Unit Exercise Price for the number of SA Units being exercised at that time over the SA Unit Grant Price for such SA Units. Such payment shall be made in cash. The Administrator shall have the sole discretion to Page 7

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 determine the date on which payments are made. (f) Transferability During Lifetime. During the lifetime of a Participant to whom SA Units have been granted, only the Participant (or such Participant's legal representative) may exercise such Grant and receive payment of an Award. No Grant of SA Units may be sold, assigned, transferred, exchanged, or otherwise encumbered or made subject to any creditor's process, whether voluntary, involuntary or by operation of law, and any attempt to do shall be of no effect. (g) Transferability Upon Death. In the event of a Participant's death, all of such person's outstanding SA Unit Grants will transfer to the maximum extent permitted by law to such person's Beneficiary (subject to the provisions of Section 7.2 of the Plan) subject to additional rules and restrictions that may be adopted by the Administrator. (h) Application of Section 162(m) on SA Units. In the event the Company becomes subject to the provisions of Section 162(m) of the Code, Awards based on SA Units shall constitute "qualified performance based compensation" and the maximum Grant that may be made to a Covered Employee under the Plan for a Plan Year is 750,000 SA Units. 6.3 Restricted Stock Units (a) Grants of Restricted Stock Units. Subject to the terms of the Plan, Restricted Stock Units may be granted to Participants at any time and from time to time, as determined by the Administrator. The Administrator shall have complete discretion in determining the number of RS Units awarded to each Participant. (b) Vesting of RS Units. Participants shall vest in RS Units according to the vesting schedule adopted by the Administrator. The date on which the vesting schedule is fulfilled shall be the Valuation Date. (c) Value of RS Units. A Restricted Stock Unit shall be equal in value to the Valuation Price on the Valuation Date as determined by the Administrator. The Valuation Price shall be used in establishing the cash payment to be paid once the vesting requirements as adopted by the Administrator have been satisfied. (d) Awards Based on Restricted Stock Units. Once the vesting requirement adopted by the Administrator has been fulfilled, an Award shall be paid to an eligible Participant based on the Valuation Price on the Valuation Date as determined by the Administrator. All Awards shall be paid by the Company and its Subsidiaries in cash as soon as is practicable following the Valuation Date. Except as otherwise determined by the Administrator, a Participant must be actively employed by the Company on the Valuation Date to receive an Award. Any unvested Grant will be cancelled following separation of employment. Notwithstanding this condition and requirement, Participants who do not meet this condition due to Death, Retirement or Disability, shall be entitled to the receipt of a pro-rated Award. In the event of the Participant's death, any Award payable shall be made to the Participant's Beneficiary, as governed by Section 7.2. The Administrator shall have the sole discretion to determine the date on which payments are made. Page 8

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 (e) Dividend Equivalent Payments related to Restricted Stock Units. Participants shall be eligible to receive Dividend Equivalent Payments for each unvested Restricted Stock Unit that has been granted to a Participant. All Dividend Equivalent Payments will be settled in cash. The Administrator shall have the sole discretion to determine the date on which payments are made. (f) Maximum Grant. The maximum Grant of RS Units that can be made to a Participant is 250,000 RS Units. 6.4 Complete Discretion. Notwithstanding any other provision in this Plan or related documents, the Administrator shall, at all times, have the sole and complete discretion to determine whether any Awards are to be paid under the Plan, the amount of any such Awards and the recipient of any such Awards. 7.0 Miscellaneous Administrative Provisions. 7.1. Amendment and Termination. The Administrator shall have the unilateral right to amend, modify, suspend or terminate the Plan at any time for any reason; provided, that in the event Section 162(m) is applicable, approval by shareholders shall be required as provided in the regulations under Section 162(m) of the Code for any amendment that would have the effect of changing the class of employees eligible for consideration for Awards under Section 5.0, materially changing the definition of Consolidated EBDITA, changing the formula in Sections 6.1(f)(2) and 6.2(h) for determining the maximum amount of Grants or Awards paid to any Executive or changing the provisions of Section 6.1(g) regarding the credit of additional amounts on deferred Awards. 7.2. Beneficiary . A Participant may name, from time to time, any beneficiary or beneficiaries (which may be named contingently or successively) as his or her Beneficiary for purposes of the Plan. Each designation shall be on a form prescribed by the Administrator, will be effective only when delivered to the Company, and when effective will revoke all prior designations by the Participant. If a Participant dies with no such beneficiary designation in effect, or if the Administrator determines that there is any question about the legal right of the designated beneficiary , such Participant's Beneficiary shall be his or her estate. The Administrator shall set forth additional rules and requirements regarding the rights of Beneficiaries to receive payment of an Award or exercise a vested SA Unit following the Participant's death. 7.3. No Right to Awards. No person shall have any claim to receive a Grant or to be paid an Award under the Plan and there is no obligation for uniformity of treatment of eligible Participants under the Plan. The selection of a Participant to receive Grants or be paid Awards and the amount and payment of Awards rests completely in the absolute and final discretion of the Administrator. The Administrator's discretion is limited only by the maximum amount of a Grant or Award that it may pay as provided in Sections 6.1(f)(2) and 6.2(h), if applicable. Neither the existence of this maximum, nor any prior practice by the Administrator as to the Page 9

CINGULAR WIRELESS LLC EXHIBITS - Cingular Wireless Long Term Compensation Plan amended and restated effective January 1, 2004 EXHIBIT 10.61 payment or amount of awards, creates an obligation by the Committee to pay any award for any Plan Year or to pay an award equal to the maximum or any other amount 7.4 No Right to Employment/Continued Service or Awards. The making of a Grant or payment of an Award under the Plan shall impose no obligation on the Company or any Subsidiary to continue the employment or service of a Participant and shall not lessen or affect the Company's or Subsidiary's right to terminate the employment or service of such Participant. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions of Grants and Awards and the Administrator's determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated). 7.5. No Funding. This Plan shall be unfunded and no assets of the Company or a Subsidiary shall be segregated for the purpose of paying any Awards. 7.6. Taxes or Deductions. The Company or any Subsidiary shall withhold from any payment under the Plan such taxes as it deems are sufficient to cover any withholding taxes that may become required with respect to such payment. The Company or any Subsidiary shall have the right to require the payment to it of any such taxes and require that any person furnish information deemed necessary by such company to meet any tax reporting obligation before making any payment under the Plan. The Company shall also withhold any other authorized or required amounts or deductions. 7.7 Other Incentive Plans. Nothing in this Plan shall prevent the Company and its subsidiaries from maintaining other incentive compensation plans providing for the payment of incentive awards to employees, provided that the requirements of Section 162(m), if applicable, are met by the Company in the administration and operation of such other plans. 7.8 Company Benefit Plans. The terms of the Company's benefit plans shall determine whether Awards are included as compensation or earnings under the particular benefit plan. 7.9 Governing Law and Venue. This Plan and all related documents shall be governed by the laws of the State of Georgia, without regard to the conflict of laws provisions thereof (except to the extent provisions of federal law may be applicable). Acceptance of a Grant shall be deemed to constitute consent to the jurisdiction and venue of the Superior Court of Fulton County, Georgia and the United States District Court for the Northern District of Georgia for all purposes in connection with any suit, action, or other proceeding relating to such Grant or a corresponding Award, including the enforcement of any rights under this Plan or other document, and shall be deemed to constitute consent to any process or notice of motion in connection with such proceeding being served by certified or registered mail or personal service within or without the State of Georgia, provided a reasonable time for appearance is allowed. Page 10

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXECUTIVE SUMMARY BELLSOUTH ("BST") BILLING AND COLLECTIONS AGREEMENT Cingular and BST have agreed to enter into a new Billing and Collections Agreement ("B&C") that will supercede the existing Billing and Collections agreement. The B&C outlines the billing and collection processes between the two companies and the associated costs to perform those services. The B&C is effective as of September 1, 2003 and has a term of 3 years. Thereafter, the term shall continue on a monthly basis until either a new agreement is in place, or until the agreement is amended. The B&C is effective for all BST Markets where Combined Billing is available. The pricing for the B&C costs to be charged to Cingular will have an average cost of a $1.13 per invoice. This cost including OCA charges (Outside Collection Agency) is approximately $1.40 per invoice. For comparative purposes, Cingular's internal B&C costs plus OCA fees is $1.22. The bad debt under this agreement will now be fully recoursed, beginning with the September PARS Statement, which corresponds to the December 2002 revenue month. Under the previous agreement, bad debt was withheld at 3.2% each month. The new B&C provides for full recourse of the actual bad debt incurred by BST. BST and Cingular have agreed on two provisions to aid in the management of bad debt. First, BST will use Cingular's credit scoring model. Second, BST and Cingular will meet quarterly to review and modify collection procedures.

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Approval Route Sheet ****** PLEASE EXPEDITE ****** EXECUTIVE SUMMARY DATE:9-29-03 PROJECT NAME: BILLING AND COLLECTIONS (B AND C) AGREEMENTS FOR CINGULAR AND FROM BELLSOUTH AND SBC ATTACHMENTS: 1. BELLSOUTH B AND C CONTRACT 2. SBC B AND C CONTRACTS 3. SBC ALLOY HOLDINGS INC. REIMBURSEMENT AGREEMENT FOR B AND C INITIATIVE COMMENTS: YOUR IMMEDIATE REVIEW AND APPROVAL OF ATTACHED BILLING AND COLLECTION INITIATIVES IS REQUESTED. THESE TERMS AND CONDITIONS HAVE BEEN EVALUATED AND ACCEPTED BY LEGAL AND BUSINESS OWNERS AT CINGULAR, SBC AND BELLSOUTH. ONCE YOUR AUTHORIZATION IS SECURED, WE WILL BEGIN PREPARATION AND CIRCULATION OF LEGAL DOCUMENTS FOR CINGULAR BOARD OF DIRECTORS WRITTEN CONSENT. PLEASE ADVISE WITH ANY QUESTIONS. THANKS, STEVE GRAY APPROVALS <TABLE> <CAPTION> NAME TITLE SIGNATURE DATE APPROVED ---- ----- --------- ------------- <S> <C> <C> <C> Steve Gray V.P. Affiliate Relations /s/ Steve Gray 9-29-03 Larry Carter Sr. V.P. Sales Ops /s/ Larry Carter 10/3/03 Rick Lindner CFO /s/ Rick Lindner 10/6/03 Mark Feidler COO /s/ Mark Feidler 10/6/03 Stan Sigman President & CEO /s/ Stan Sigman 10/7/03 </TABLE> IMMEDIATELY UPON FINAL SIGNATURE, PLEASE RETURN TO: DENISE SENN EXECUTIVE ASSISTANT TO VICE PRESIDENT, AFFILIATE RELATIONS 5565 GLENRIDGE CONNECTOR, SUITE 1093 A ms 1040 ATLANTA, GEORGIA 30342 1) THE REQUIRED TURNAROUND TIME FOR SIGNATURE IS NO MORE THAN 24 HOURS FROM THE TIME THE DOCUMENT IS RECEIVED FOR YOUR SIGNATURE. 2) WHEN A DELEGATED MANAGER SIGNS THESE DOCUMENTS, PLEASE FILE A DELEGATION AUTHORITY NOTICE WITH A COPY TO THE ADDRESS SHOWN ABOVE.

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT TABLE OF CONTENTS 1. SCOPE OF THIS AGREEMENT AND RELATIONSHIP TO OTHER DOCUMENTS 2. ENTIRE AGREEMENT 3. HEADINGS 4. AMENDMENTS AND WAIVERS 5. REGULATORY CONSIDERATIONS 6. GENERAL DESCRIPTION OF SERVICES TO BE PURCHASED 7. END-USER AUTHORIZATION AND IDENTIFICATION 8. DATA FORMAT AND CONTENT 9. DATA EXCHANGE 10. ERRORS AND OMISSIONS 11. LOST OR DAMAGED DATA 12. REJECTED INVOICES AND ADJUSTMENTS 13. BILL SPECIFICATIONS 14. SERVICE AND TEXT APPROVAL 15. AGE OF CHARGES 16. END-USER DISPUTES 17. INQUIRY 18. COLLECTIONS AND TREATMENT 19. NO DENIAL OF TELEPHONE SERVICE 20. OPERATING PROCEDURES 21. ACCOUNTS RECEIVABLE 22. SETTLEMENTS AND BILLING AND COLLECTIONS CHARGES 23. SETTLEMENTS OF CLAIMS OPERATING PROCEDURES 24. TAXES 25. FUTURE ENHANCEMENTS 26. LIMITATION OF LIABILITY 27. INDEMNITY 28. WARRANTY DISCLAIMER 29. CONFIDENTIALITY AND PUBLICITY 30. TRADEMARKS, TRADE NAMES AND SERVICE MARKS 31. SOFTWARE 32. ASSIGNMENT 33. AUTHORIZATION TO CONDUCT BUSINESS 34. NOTICES AND DEMANDS 35. NO THIRD-PARTY BENEFICIARIES 36. TERMINATION UPON EVENT OF DEFAULT BY A PARTY 37. AGREEMENT TERMINATION 38. OBLIGATIONS SURVIVE TERMINATION 39. SEVERABILITY OF PROVISIONS 1 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 40. UNLAWFUL USE 41. TERM OF AGREEMENT 42. FORCE MAJEURE 43. CONFLICT OF INTEREST 44. GOVERNING LAW 45. FRAUD 46. CLIENT USE OF DATA FORMATS WITH OTHER PARTNERS 47. AUDITS 48. LATE PAYMENT CHARGES ON END-USER ACCOUNTS 49. INTEREST ON END-USER ACCOUNTS 50. DEPOSITS ON END-USER ACCOUNTS 51. NPA/NXX FILE 52. NPA SPLIT PROCEDURES 53. INTEREST ON SETTLEMENTS, CLAIMS, AND LATE PAYMENT 54. END-USER BANKRUPTCY ATTACHMENT 1 PRICING ATTACHMENT 2 CONFLICTS OF INTEREST ATTACHMENT 3 CONTRACT ADMINISTRATORS ATTACHMENT 4 PAYMENT AND/OR BILLING ADDRESSES ATTACHMENT 5 LIST OF ABBREVIATIONS ATTACHMENT 6 DEFINITION OF TERMS 2 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT This agreement ("Agreement") is entered into by and among BellSouth Telecommunications, Inc., a Georgia corporation (herein referred to as "BST"), and Cingular Wireless LLC. (Cingular), a Georgia corporation, (herein referred to as "Client"), to be effective the first day of September, 2003. Client and BST are hereinafter collectively referred to as the "Parties". Client shall purchase Service as described in this Agreement including Attachment Number 1 for a period of three (3) years from the effective date of the contract. WHEREAS, BST offers certain billing and collections services pursuant to the Agreement; and WHEREAS, Client desires to avail itself of those services as more particularly described below: NOW, THEREFORE, in consideration of the terms and conditions contained herein, BST and Client hereby mutually agree as follows: 1. SCOPE OF THIS AGREEMENT AND RELATIONSHIP TO OTHER DOCUMENTS A. It is expressly understood and acknowledged that the service (the "Service") which is the subject of this Agreement is provided solely pursuant to and under the terms, conditions, rates and charges as set forth in the Agreement and Attachment One (1) which is hereby made a part of this Agreement. B. Any services offered by BST to or for Client for which terms and conditions, including rates, are not specifically established herein may be offered on an Individual Case Basis ("ICB") for which necessary additional terms and conditions, including rates, shall be negotiated separately. The Parties may amend the Agreement to provide for such services, which shall then be governed by this Agreement. Any such amendment shall be in writing and signed by both parties. 2. ENTIRE AGREEMENT The Agreement, together with all amendments and attachments hereto, constitutes the entire agreement between Client and BST, which supersedes all prior agreements or contracts, oral or written representations, statements, negotiations, understandings, proposals and undertakings with respect to the subject matter hereof. 3. HEADINGS The headings of the Sections herein are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement. 3 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 4. AMENDMENTS AND WAIVERS This Agreement or any part hereof or any attachments hereto may not be modified or amended except by written agreement signed by or on behalf of both Parties. No waiver or consent to any default under this Agreement shall be effective unless the same shall be in writing and signed by or on behalf of the Party against whom such waiver or consent is claimed. In addition, failure to strictly enforce any term, right or condition of this Agreement shall not be construed as a waiver of such term, right or condition. 5. REGULATORY CONSIDERATIONS If any regulatory authority of competent jurisdiction should determine that any or all of the services offered pursuant to this Agreement cannot be provided as untariffed, unregulated services, this Agreement shall have no further force or effect and BST shall have no further duty to perform the affected Service under this Agreement. If in such instance BST, in its sole discretion, shall decide to tariff a regulated service, Client may elect to obtain such service pursuant to the approved tariff. If Client elects to continue the service on or after the effective date of the tariff, all terms and conditions in the tariff shall apply, and provision of the service by BST shall be governed solely by said tariff. 6. GENERAL DESCRIPTION OF SERVICES TO BE PURCHASED A. SERVICE DESCRIPTION Combined billing is a single bill containing charges for both BST and the Client, provided to End-Users subscribing to both BST and Client services. Based on End-User request for combined billing, the Client shall provide to BST an invoice containing the Client charges/credits, associated taxes, and informational text for products and services listed in Section 6.B. below for billing to authorized BST End-Users. An authorized BST End-User (hereinafter known as the "End-User") is the responsible billing party that has agreed to purchase services from the Client and also purchases telephone service from BST. The Client will also provide to BST Adjustments for Client charges appearing on the Client's bill pages. BST will edit the invoices and Adjustments and bill error-free invoices to such authorized BST End-Users. BST will perform treatment and collections services on behalf of the Client for such invoices. BST may involve outside collection agencies for collection of Client revenues. The Client may initiate transactions for validation that the BST End-User account information matches Client billing information, confirming that Client invoices should be included in the bill for BST services. Under this Agreement, BST shall provide Billing and Collection Services for Client charges and credits submitted by invoice and Adjustments through BST's Flexible Invoicing System for Host Carrier Identification Code ("CIC") ACOO and Traffic CICs AC01 and AC11. 4 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- Billing and Collection Services for other Entity Code(s) representing Cingular Wireless shall be pursuant to either an addendum to this Agreement or a separate Agreement. B. PRODUCTS/SERVICES BILLED BY CLIENT Under this Agreement, the Client can bill charges/credits associated with the following products and services: 1). Wireless services, associated End-User equipment and accessories, applicable taxes and/or interest, Adjustments, refunds of deposits and early contract termination charges. 2). The charges/credits associated with the above products and services are referred to as "charges". The Client will provide BST with an invoice containing all charges, associated taxes, and related text information for a given End-User. 3). Under this Agreement, the Client can only bill charges associated with services and products provided by the Client, either directly or by resale. Such billing may include amounts for approved services provided by third parties but related specifically to the service provided the End-User by Client, with services approved through the process described in Section 14.A. 7. END-USER AUTHORIZATION AND IDENTIFICATION A. The Client shall bill charges to current (live) BST End-Users and End-Users who have disconnected their BST service and remain on the customer tollguide database. BST is not obligated to send charges to End-Users that have disconnected their BST service and have been deleted from the customer database. BST agrees, under normal circumstances, to maintain disconnected accounts on the customer toll guide database for a minimum of 61 days. BST will not establish an End-User account solely to render Client Charges. B. It is the responsibility of the enrolling Party to ensure that the End-User of record of the BST account agrees to accept billing responsibility for the Client's charges to be included on the BST bill. Only charges for End-Users who have accepted the terms and conditions of the Client service, including the combined billing, will be sent to BST for billing. Where required by regulatory mandate, BST will not allow combined billing and Cingular will not provide charges for an End-User that has requested that a third-party billing block be placed on their wireline account. C. The Client is responsible for maintaining the BST Billing Telephone Number ("BTN") for an End-User and for mapping the Client account invoice to this BTN. BST will not bill charges based on the Client's account identification number for the End-User since it 5 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- is different from BSTs. Multiple invoices for different Client customers and Client accounts may be billed to the same BST wireline End-User account. D. Client agrees that charges for services it has rendered will be sent to BST only one time for inclusion in End-User bills, except those charges that were rejected by BST as Unbillable due to error and are being resent by Client. Duplicate charges will not be sent by the Client to BST for billing. However, BST will continue to bill customers in conformity with terms and conditions herein for past-due amounts. E. BST will provide, when available, the End-User billing name, address, social security number or Federal Tax ID and the billing telephone number associated with the wireline telephone number provided to associate the Client invoice with the End-User wireline bill. This information will be associated with the Billing Telephone Number (BTN) on which the wireline bill is rendered. Client agrees that this data will not be used by Client for any purposes other than the billing of Client's customers. BST will mechanically notify Client of changes to the BTN and End-User billing name and address after they occur, in the normal course of business. It is the responsibility of the Client to correct Client records to reflect the new End-User BTN for any subsequent invoices sent to BST. F. Certain BST wireline accounts are ineligible for Client combined bill arrangement. Those include but are not limited to BST accounts for the following: BST Reseller, Coin Phone Service, BST Official, Foreign Exchange, and Independent Company, WATS, and other accounts not yet determined to be mutually agreed upon at a later date. These accounts will be identified to Client as ineligible in the Landline Telephone Number Validation ("LLTNV") process and any invoices sent on these accounts will be rejected. BST will also reject data sent by the Client for disconnected accounts that are no longer on the Customer toll guide database. G. Both parties are responsible for explaining to perspective End-Users any eligibility or enrollment denials resulting from their company's enrollment procedures. If combined billing is not possible, the Client will be responsible for billing its charges to the End-User directly. 8. DATA FORMAT AND CONTENT The Client and BST will exchange data that is formatted according to mutually agreed upon specifications. If changes are required to these specifications, BST will notify Client at least ninety (90) days before targeted implementation. Both parties agree to implement these changes in the mutually agreed upon timeframe. The Client agrees to pay BST for implementation of any customized format changes requested by Client If a BST proposed format specification revision requires a change to Client systems, responsibility for paying for such revision will be handled on an ICB. 6 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- Client will pass End-User charges to BST via the Flexible Invoicing Service ("FLEX") for inclusion on BST's bill. 9. DATA EXCHANGE BST supports the use of electronic data transmission (e.g. Sterling Commerce's CONNECT:Direct(TM)) for data delivery. CONNECT:Direct(TM) electronic data transmission is the primary data exchange method. Data transfer via cartridge will be used as the backup/alternate data delivery method when electronic data transmission cannot be used. The specific data delivery method such as cartridge size or electronic data transmission version must be a method that can be supported within BST's and Client's data processing centers. Client and BST must mutually agree on the use of a backup/alternate delivery method if needed. Dates and times for data exchange will be negotiated and agreed upon by both Parties. Any changes required for the data exchange process must be coordinated between the Parties and should allow sufficient time for the agreed upon changes to be tested and implemented. Receipt of data files will automatically start the processing of the Client's data. BST will not change its End-User bill period to accommodate Client's billing schedule. The software for electronic data transfer and the physical line location will be negotiated and agreed upon by both Parties. When a dedicated line is used, the Client will be responsible for ordering and purchasing the data transmission circuits, any additional hardware and paying all costs associated with installation and usage charges. The Client will be responsible for providing the telephone line and modem to transmit data to BST. Should a non-standard modem be required on the BST end, the Client must obtain, purchase, install, and maintain this equipment and assumes all associated maintenance charges. Since the equipment is in a secure area, access for the purpose of maintenance must be arranged with BST in advance. Upon receipt of the Client's data, BST will verify through the mechanized editing of the file that the total transmission reported by the Client is the total received and entered into the BST Billing System. BST's control of the Client's data will begin upon receipt of the data at the BST processing location. BST will determine whether the data can be processed and provide confirmation of receipt of the data to the Client. If the Client uses electronic data transmission, (the normal mode of file delivery), BST will provide transmission confirmation reports within 24 hours after the data has been processed. If the Client must use the alternate mode of data delivery, BST will either send the confirmation reports and files via the restored CONNECT:Direct(TM) connection within twenty four (24) hours, fax, or mail a copy of the confirmation reports to the Client on the next business day following processing of the data. In the event BST cannot process a Client file due to a data transmission system failure, improperly formatted data on the file, or other reasons caused by the Client, the Client will make every effort to re-send the data upon correction of the problem. BST will not be responsible for data that cannot be processed due to Client error. 7 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- The Client will retain a copy of the data sent to BST for 60 days. Failure of the Client to retain a copy of this data for at least 60 days will abrogate BST liability as set forth in this section and in Section 11. BST will retain a copy of the data sent to the Client for 60 days. In the event the Client loses or is unable to process this data, the Client can request BST to re-send the data. The first request will be done at no charge; however, subsequent requests to re-send the same data will be handled on an ICB. 10. ERRORS AND OMISSIONS If the Client discovers a Client-generated error, the Client will notify the BST designated contact by phone immediately and follow up in writing {FAX or E-mail) as soon as possible. Any action required by BST will be handled on an ICB and any cost incurred by BST for data recovery will be billed to the Client. Such recovery may include extracting data awaiting billing and correcting system impact. If BST finds or is notified of a BST error on an End-User's bill, it will make every reasonable effort to correct the error and bill correctly within the limits permitted by laws of the state in which the service is provided. Enrollment billing disputes will be handled as outlined in Section 16. BST will notify the Client in writing of a BST-generated error and corrective action. 11. LOST OR DAMAGED DATA If BST loses or damages the Client's data, BST will make every effort to recover and re-process the data. If BST is unable to re-process the data, BST will, as soon as possible, notify Client in writing to re-send the data to BST. The Client will re-send the data to BST within 48 hours (or 2 business days) of notice of request by BST. BST requires the use of the incremental pack sequence number for data packs to ensure data files are processed correctly and will control data files using the sequence number. The Client is required to repack and increment the pack sequence number and resend packs/files to BST, when the pack/file has been rejected as being a duplicate or out of sequence. BST will not be responsible for handling out-of-sequence packs for invoices, adjustments or text files (packs within the file). 12. REJECTED INVOICES AND ADJUSTMENTS Standard reports, listing all invoices and/or Adjustments that have been received from the Client, but rejected by BST will be provided to the Client. A reject reason will be provided for each invoice and/or adjustment. If the invoice or adjustment is rejected due to Client error, notification will be sent at the same time as the confirmation file is sent via the error report. All errors will be listed for each record on this report. Each invoice and/or adjustment will be reported on the Unbillable report with a return code or reason code noted. 8 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- Also, on the Unbillable report are the Unguideables. Unguideables will be reported with a unique return code(s). All rejected/unguidable invoices and/or adjustments are returned via the Unbillable file. Invoices rejected by BST due to Client formatting error may be corrected and re-sent to BST in a subsequent data exchange cycle. It will be the responsibility of the Client to secure alternate billing for the invoices that cannot be billed by BST (e.g. Unguideables). If data pack (file) contains greater than a 5% error rate for invoices or adjustments, the entire pack will be returned to Client and shall not be accepted or purchased by BST. The other packs within the file will be accepted if error threshold is not exceeded. The file will be processed except for the bad packs. After correction, the data pack (file) may be resequenced and resent to BST. 13. BILL SPECIFICATIONS Charges billed by BST for the Client will appear on a separate bill page with the Client logo (symbol and text) and Client's End-User service number within the End-User's BST bill. Client's logo will appear on every bill page containing Client charges. Only Client billed charges may appear on these pages containing Client's logo. Subject to Section 30, Client agrees to provide BST a logo image and to obtain any necessary authorizations or licenses for the use of any logo it asks BST to print. Also subject to Section 30, Client agrees to indemnify, defend and hold BST and its affiliated companies harmless against all claims, suits, costs, damages, expenses, attorneys' fees and judgments arising out of or alleged to arise from BST printing the logo and its inclusion on the End-User bill. The bill invoice page BST prepares for the Client shall be based on mutually agreeable formats. BST is responsible for the overall End-User bill format that the Clients invoices are included in. The Clients invoice may contain section headings, informational text lines, marketing messages and subtotal records. The Client is responsible for determining the sequence of the headings, informational text, charges, credits and subtotals within each invoice, and for calculating all taxes, applying discounts, and determining the total amount due for the invoice. 14. SERVICE AND TEXT APPROVAL BST will review and approve any text, marketing messages and service(s) the Client requests to have printed on the End-Users invoice. BST may reject any text, marketing message, or refuse to bill any service(s) that does not conform to reasonable BST requirements. Failure of the Client to follow this process and requirement may result in termination of this Agreement by BST. 9 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- A. SERVICE APPROVAL The Client will submit to BellSouth new and revised Service Programs, which includes new or revised Text Messages, rates, scripts, etc., and other required information for approval prior to submitting billing for these Services. BellSouth will notify the Client of its approval, or denial, of the new or revised Service Program within two (2) weeks of receipt of the Client's request. The Service Program approval will be submitted to the BST Contract Administrator at least two (2) weeks prior to planned implementation of Service Program in a method agreed to by both Parties. B. TEXT APPROVAL Bill format text wording and phrases which Client wishes to place on the BST bill must be submitted to the Bill Continuity Team for approval at least thirty (30) business days in advance of their first use on the BST bill. Client understands and agrees that BST reserves the right to approve and request changes to all words and phrases which Client wishes to place on the BST bill. The Client may request BST to modify or add additional phrases to be printed on BST's bill. Customized bill phrase changes will be handled on an ICB. The Client agrees to pay for any changes requested by it. Bill phrases which are associated with tax amounts should indicate the tax rate applied by the Client. Marketing messages for the Client may be part of the Client invoice submitted to BST for inclusion in the End-User bill. The Client must submit Marketing message text for approval to BST at least thirty (30) business days prior to the first day of the month that the marketing message text will be used. BST reserves the right to approve and request reasonable changes to all marketing message text which the Client wishes to place on the BST bill. The Client must submit Marketing message tag lines (FLEX 90 records) for approval to BST at least seven (7) business days in advance of their first use (transmission to BST) for inclusion on the BST bill. BST reserves the right to approve and request reasonable changes to all marketing message tag lines (FLEX 90 records) which the Client wishes to place on the BST bill. The Marketing Message Tag Lines submitted on FLEX 90 records must be appropriately formatted with the tag line indicator populated correctly on the record. The Client agrees to indemnify, defend and hold BST and its affiliated companies harmless against all claims, suits, costs, damages, expenses, attorneys' fees and judgments arising out of or alleged to arise from BST printing the Client's text messages, bill phrases and marketing messages on the End-User bill. When BST prints a foreign language (e.g. Spanish) End-User bill in one or more of its operating areas, the Client is encouraged to provide the invoice text information associated with its charges in the same foreign language in which the BST bill pages are printed. The 10 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- Client is responsible for the correct spelling, grammar, editing, and special characters of all foreign language text to be printed on the End-User's bills. If the Client elects to provide foreign language text, Client shall pay for all additional program modifications and testing which may be required. All such requests to support foreign language text will be handled on an ICB. Testing must be completed in FLEX and CRIS before the table entry to allow Spanish bill will be updated. 15. AGE OF CHARGES Client agrees not to send to BST charges more than 90 days old except roaming charges. The 90 day age of charge will be based on the date the charge was incurred by the End-User compared to the billing date for the BST bill on which the Client's charges will be included. Credits for charges should be submitted to BST no more than 30 days from when the Adjustment was issued by the Client. Should BST receive invoices with messages greater than 90 days old, where regulatory rules govern age of messages, they will be returned as unbillable. 16. END-USER DISPUTES It is not the intent of the Parties for BST to become involved in disputes between Client and its End-Users. In the event an End-User contacts BST with a dispute of Client changes and refuses referral to the Client Inquiry number, BST will contact the Client via an initial SP/BOC Memo, on behalf of the End-User. BST will notify the Client of a dispute, within thirty (30) days of customer's claim, via an initial SP/BOC Memo, of a dispute. The Client has 35 calendar days to resolve the End-User dispute. In the event Client sustains, with adequate documentation compliant with BST SP/BOC methods and procedures, the amount of the dispute on the End-User customer bill (no adjustment warranted), BST agrees to sustain same charges upon customer inquiry into BST service centers. If the customer then refuses to pay the disputed charges, a final recourse will be issued and an SP/BOC will be sent to Cingular as notification. If Client sustains disputed Client charges, Client will provide in it's substantiation documentation to BST, a description of the action(s) taken, result of the investigation(s) and reason(s). If the Client fails to respond to BST within the 35 calendar day time frame, BST will issue a final SP/BOC Memo to adjust and recourse the amount to the Client. If necessary for BST to initiate adjustments to the End-User for Client services, and credit for taxes is included, such tax shall be calculated by BST based on mutually agreeable procedures with tax amounts reported to Client for disposition. In the case that the End-User inadvertently receives the same Adjustment more than once, the Party responsible for any corrective action will be determined on an ICB. Unresolved or recurring disputes from an End-User regarding Client billing between BST and the Client could result in suspension or termination of the combined billing arrangement for that End-User on behalf of the Client. If the End-User is removed from the combined 11 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- billing arrangement, the Client is responsible for excluding the End-User billing from billing data sent to BST. For enrollment disputes where BST or Client initiates combined billing to a BST account holder other than the intended End-User, Client charges for the given period will be recoursed to Client. BST will make every effort to recourse these charges in a timely manner. Client will be notified within 90 days from End-User notification to BST of a disputed enrollment. If BST fails to notify Client within 90 days of learning about the inaccurate billing, BST shall be responsible for any incorrectly billed Client charges. If End-User notification to BST of an enrollment dispute exceeds 90 days, fraud assessment and profile procedures will apply, up to and including recourse of fraudulently billed amounts to Client. Client-initiated Adjustments to Client charges appearing on the Client bill pages will be prepared and entered by Client and will be passed to BST via the FLEX adjustment feed. Adjustments submitted by Client will be applied to the End-User's wireless charges. 17. INQUIRY The services provided under this Agreement do not include the provision of billing inquiry services. For certain End-User accounts with Client billing, billing inquiry services may be provided under a separate Affiliated Company Agreement. For purposes of this Agreement, the billing inquiry service provided under said separate Affiliated Company Agreement are viewed as provided by the Client. The Client will provide its End-Users with the ability to inquire about billed accounts to the Client. Client will provide a toll-free inquiry number for any Client charges appearing in a BST bill envelope. If an End-User calls BST to ask about Client charges, BST will refer the End-User to the Client Inquiry Number. General questions, such as bill date, balance, receipt of payment will be answered by BST. Under the terms of this Agreement, BST will not have access to detailed transaction information or Client rate schedules and will not be able to respond to questions of this nature. If an End-User refuses to contact the Client, BST will forward the issue to the Client so the Client can initiate an End-User contact. The Client will contact the End-User as soon as possible after notification by BST. 18. COLLECTIONS AND TREATMENT A. BST will pursue the single balance due and the charges of both Parties included therein with equal aggressiveness and application of all BST Collection and Treatment resources and processes. In collection amounts due for services provided by the Client, BellSouth, or its contractors or agents, will use its internal Treatment and Collection processes as well as third party collection management efforts in collecting amounts due for Client service charges and Adjustments billed in the BellSouth End-User Bill. 12 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- B. "Treatment" is action taken by BellSouth to collect delinquent or unpaid amounts associated with End-User accounts. This action may include, but is not limited to: 1). Sending notices/letters, 2). Making collection calls, 3). Posting payments and Adjustments, and/or 4). Negotiating satisfactory payment arrangements with End Users. C. BellSouth collection activities will begin after BellSouth has exhausted Treatment efforts. Collection activity is the referral of End-User accounts with outstanding balances to third party collection management companies. BellSouth refers to a collection management company as an 'Outside Collection Agency' ('OCA'). The OCA charges incurred by BST for the recovery of BST and Client billed revenue will be allocated between the Parties based the percent of BST and Client billed revenue on the identifiable recovered accounts. BST will deduct Client's allocated portion of the OCA Charges from its Settlement amount due, as set forth in Section 22, the month following the month BST pays the OCA for services. D. Additionally, BST will determine if unregulated charges for Client are involved in the balance during the treatment process. When an account comes into treatment, BST will compare the Client's balance as shown on the End-User's Accounts Receivable record established for the account. If the balance exceeds a mutually agreed upon threshold, BST will notify the Client to suspend their End-User's service. After notification from BST, the Client will suspend the End-User's service and notify BST that this has been done. If non-payment of regulated wireline services results in denial of wireline service by BST, and there are Client charges on the same account, BST will notify the Client that BST has taken this action and Client agrees to suspend the Client's End-User's service. BST will notify Client when sufficient payment has been received in order to restore the Client service. Once BST has notified the Client of its receipt of payment, the End-User service must be restored within two (2) hours by Client. The Client shall not restore End-User service without notification from BST that the End-User balance has been satisfied. E. The Parties agree to meet at a minimum on a quarterly basis. The purpose of this meeting includes, but is not limited to examining the relative collections performance experienced in combined billing experienced in this channel compared to performance experienced in Client's Direct billing channel, investigating and managing improvement opportunities, and discussion of current Collections issues. BST agrees to share information on its collection and treatment practices and processes for purposes of identifying improvement opportunities. 13 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 19. NO DENIAL OF WIRELINE TELEPHONE SERVICE Client acknowledges that the Service provided pursuant to this Agreement is not related to BST's provision of telephone service to the public and that BST cannot and will not disconnect BST End-User's services for non-payment of Client charges. Where required by regulatory requirements, or Company policy, a statement on the bill will clearly indicate to the End-User that failure to pay Client's charges will not result in disconnection of regulated telephone service. 20. OPERATING PROCEDURES BST will provide the Client with operating procedures for the functions associated with the provisioning of this Agreement. These procedures include but are not limited to: A. Settlements procedures B. Treatment and Collections C. Data format requirements D. Data exchange procedures E. Management reports BST may revise or modify its Operating Procedures from time to time. If a BST revision to its Operating Procedures impacts the Clients Operating Procedures, such a revision will be mutually agreeable to both Companies. If a BST revision to its Operating Procedures does not impact the Clients Operating Procedures, Client will be informed of such revision and provided the opportunity to comment. When such Operating Procedures are revised, the Client will be provided with revised documentation. 21. ACCOUNTS RECEIVABLE A. COMMITMENT TO PURCHASE AND SELL CLIENT ACCOUNTS RECEIVABLE Client agrees to sell, assign and transfer to BST, and BST hereby agrees to purchase from Client, all of Client's right, title, and interest in and to Client Accounts Receivable to be placed on BST's bill in the performance of this Agreement. The purchase of Client Accounts Receivable by BST shall not constitute an assumption or acceptance by BST of any representation, warranty, obligation, or liability of Client with regard to any Client Accounts Receivable, or the Client product or service related thereto. During the term of this Agreement, Client shall sell, assign and transfer to BST and BST shall purchase from Client each and every such Account Receivable to be placed in the BST bill. B. CLIENT ADJUSTMENTS AND REPURCHASE COMMITMENT The Client agrees to repurchase from BST, and BST agrees to sell, assign and transfer to the Client all of BST's right, title and interest in any amount previously billed and purchased by BST which is the subject of a Client Adjustment per the conditions stated herein. The repurchase price shall be equal to the amount of the Client Adjustment. The 14 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- repurchase price shall be considered to have been paid by the Client on the Due Date of the Accounts Receivable Settlement Statement which reflects the amount of the Client Adjustment as an element of the Aggregate Purchase Price of the Client Accounts Receivable covered by the Settlement Statement. Dispute adjustments applied by BST are limited as described in Section 16. All Client initiated Adjustments (RTAs) to Client charges appearing on the Client bill pages will be prepared and entered by Client and will be passed to BellSouth via FLEX. C. CLIENT UNCOLLECTIBLE REVENUES BST will purchase the value of the invoices/charges or the Accounts Receivable when the data is received and accepted. After the purchase of the Client's Accounts Receivable, a portion of the same Accounts Receivable may prove to be uncollectible for BST eight to nine months from the date of purchase after all standard treatment and collection activities have been exhausted. In such circumstances THE UNCOLLECTIBLE REVENUE WILL BE RECOURSED IN FULL TO CLIENT THROUGH THE SETTLEMENT PROCESS AS REALIZED NET BAD DEBT. The process from receipt of billing to write-off averages approximately nine ("9") months. These provisions for full recourse of uncollectible revenue as Realized Net Bad Debt will apply to all Client charges and credits submitted by invoice and Adjustments through BST's Flexible Invoicing System for Host Carrier Identification Code ("CIC") AC00 and Traffic CIC's AC01 and AC11. If, in the future, the Parties modify or expand the business relationship and desire to change this term, the Parties agree that such change must be mutually agreed upon in either an amendment to this agreement or in another agreement prior to effecting such change and the Client acknowledges that this may require the establishment of another "CIC". Uncollectibles recourse will begin on the September 2003 PAR statement, (associated with December 2002 revenues), due to the estimated nine-month lag between billing and Net Bad Debt write-off. When Client charges appear on a BST customer bill, the Client amount becomes a part of the "total balance due". If an End-User fails to clear the total balance due, then subsequent bills do not detail the remaining amount due by entity designation ( i.e. BST, Client, etc.). BST procedures allow analysis of the account when and if the account becomes past due or uncollectible. This analysis determines what amounts owing, if any, are due to Client charges based on the billing history of the uncollectible amount. Client charges that become uncollectible are fully recourseable to the Client. Should BST recover any portion of the revenue after it has been written off, BST will share such recoveries with Client based on an apportionment of the actual Client billed revenue on the customer account. BST will pass such recoveries to Client by reducing the realized Net Bad Debt amount for the Settlement reporting period. 15 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- Existing payment allocation methodology will be used to apportion End-User payments to Client revenues in the event an End-User makes a partial payment on the total BST balance due. For Treatment purposes only, Regulated services receive payment application prior to unregulated services. Payments to satisfy unregulated balances are apportioned in the same proportion as the percentage of the unregulated balance attributed to each provider, oldest charges receiving payments first. For Net Bad Debt determination, the balance being written off is apportioned in the same proportion as the percentage of the total (regulated plus unregulated) balance attributed to each provider. Net Bad Debt apportionment occurs at the individual end user account level if the billing history is available and at the RAO level if the end user account billing history is not available. D. COLLECTION OBLIGATIONS AFTER RECOURSE BST relinquishes it collection obligations back to Client after BST adjusts a Client charge off an End-User account and recourses the revenue to Client as a post billing adjustment. After BST relinquishes its obligations Client may pursue independent collection activities. Client collection activities will not include any reference to BST other than a statement that such Client charges were initially billed in the BST End-User bill. When BST recourses an Uncollectible amount to Client as Realized Net Bad Debt, BST does NOT relinquish its collection obligations back to Client. Consequently, Client will not pursue any independent collection activities of Realized Net Bad Debt after receipt of the recourse amount. E. REPORTING OF UNCOLLECTIBLE REVENUE TO CLIENT A summary report of the realized uncollectibles will be provided on a standard monthly report and attached to the Purchase of Accounts Receivable ("PAR") statement. Additionally, if desired by Client, BST will provide Client a monthly uncollectible reporting in EMI record format detailing the write offs and recoveries. 22. SETTLEMENTS AND BILLING AND COLLECTIONS CHARGES A. The Settlement Amount will be calculated as follows: Amount of Client billing charges accepted for the report month - Total End-User Adjustments for the report month - Total Unbillable charges for the report month - Total uncollectibles for the report month - OCA Expense - Total Other Charges and Credits for report month ------------------------------------------------ = Net Settlement Amount 16 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- B. BST will mail the settlement statement in time for it to be received by the Client by the sixteenth (16) workday of the month following close of the report month. If the calculated settlement indicates BST owes Client, the electronic funds transfer or settlement check will be processed so as to be received by Client by the last workday of the month following the report month. In the event Client remittance is not paid in full by the date contained in the paragraph herein, interest charges shall apply as set forth in Section 53 relative to charges owed to Client by BST. If the calculated settlement indicates Client owes BST, Client will remit the amount due to be received by BST within thirty days following report month close. If payment is not received within thirty days, interest charges will apply as described in Section 53 of this Agreement. Upon written notification by BST to Client, BST may, in its sole discretion, suspend billing services if outstanding charges are not paid in full on time as described herein. If agreed to by the Parties, electronic funds transfer may be used to accomplish the settlement. C. The BST Billing and Collections Services billing will be accomplished via the Cost Based Billing (CBB) system. This is the standard affiliate inter-company settlements process. The BST charges for billing services rendered to the Client will be billed by the BST Cost Based Billing group (CBB) on behalf of BST. The charges for services rendered will be billed the month following the month the charges are incurred. The billing services provided by BST will be billed at the rates set forth in Attachment 1. The charges calculated by the CBB group for services provided by BST to the Client will be processed through the BellSouth Global Inter-Company Settlement (GIS) system. BST will generate billing by the thirtieth (30th) day of the month following the month charges are incurred, and as set forth in Attachment 1. Payment is due within thirty (30) days of the posted date of the bill and should be remitted to the BST address shown in Attachment 5. If payment is not received within thirty days, interest charges will apply as described in Section 53 of this Agreement D. Settlement Reserve BST will not require and does not maintain any "Settlement Reserve" against which future uncollectibles or adjustments would be offset. Following termination of this Agreement, Client shall continue to receive recoursed uncollectibles and adjustments for revenues submitted for billing under this Agreement. 23. SETTLEMENTS OF CLAIMS In the event that Client disputes the settlement statement or Billing and Collections Services bill, the Client must submit to BST a documented claim in writing for the disputed amount. The Client will submit any dispute promptly but no later than six (6) months from report month so that the information relevant for the investigation of the dispute may be reviewed 17 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- by both Parties. Both Parties will use best efforts to resolve the dispute. The responsibilities are as follows: A. DISPUTE DATE AND DOCUMENTATION The dispute date is the date on which BST receives the Client's documented claim in writing. Such documentation must include, at a minimum, but is not limited to: l). The nature of the dispute, including the basis for the Client's belief that the settlement or Billing and Collections Services bill is incorrect 2). The amount of money in dispute identified by category; e.g., Billed Revenue, Adjustments 3). The report month and the RAO(s) for the settlement statement 4). Any applicable transmission dates or sequence pack numbers BST may request the Client to provide any additional information if needed. Any request for additional information will not affect the established dispute date if the Client meets the written documentation requirements stated herein. B. RESOLUTION OF DISPUTE If after investigation of the dispute, the statement in question is found by BST to be correct and the Client concurs with BST's findings, both Parties will consider the dispute settled. If the statement is found to be incorrect by both Parties, the dispute will be settled as follows: 1) The amount determined to be the settlement amount for the claim will be documented in BST's findings as the "settlement claim amount". 2) If a credit is due the Client, the settlement claim amount due less any disputed amounts associated with the claim withheld by the Client will be credited to the Client on a subsequent settlement. Interest charges will apply as described in Section 53 of this Agreement. 3) In the event that payment is due BST, the same provisions as set forth in this section will apply as with payments due the Client. Interest charges will apply as described in Section 53 of this Agreement. C. ESCALATION OF SETTLEMENTS DISPUTE In the event that a settlements dispute is not resolved in a timeframe acceptable to either the Client or BST the dispute should first be escalated to the Contract Administrators and then Cingular's Controller and BST's Accounts Receivable Management-Assistant Vice President. If not resolved by the above, the dispute shall be escalated to the Cingular President and to the BST Vice President-Finance, Chief Financial Officer-Domestic Operations. VERSION FINAL. SEPTEMBER 3, 2003 18

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 24. TAXES All taxes including but not limited to Federal, State, or local sales, use, excise, gross receipts or other taxes or tax-like fees imposed on or with respect to Client's services, excluding however, advalorem property taxes, state and local privilege and license taxes based on gross revenue, taxes measured by net income, and any taxes or amounts in lieu of the foregoing excluded items, are hereinafter collectively referred to as "Taxes", unless otherwise specifically named. BST shall print and bill in the format required and the time frame specified, applicable Taxes, as provided by Client to BST, to End User Customers, as mutually agreed upon. Client shall calculate and provide to BST all applicable taxes related to Client's services. BST shall collect taxes computed by Client from End User Customers on Client's behalf and remit such Taxes to Client through the settlement process. BST shall not remit Taxes to Client when it is not able to do so as a result of legal restrictions; however, Client reserves the right to challenge such determination. BST shall not be entitled to retain or receive any statutory fee or share of Taxes that the person collecting or remitting such Taxes is entitled under applicable law. BST is providing this service for a specific fee. BST shall not report related Client's revenues as its own receipts for gross receipts tax purposes or any other tax purposes. BST shall not be responsible for calculating and billing any foreign state taxes associated with a jurisdiction where the call originates in a state other than the billing state, unless the foreign state tax information is calculated by Client and provided to BST for printing on End User Customers bill. Should any Federal, State or local jurisdiction determine that sales, use, gross receipts or any other taxes (including interest, penalties, and surcharges thereon) are due by BST as a result of BST's provision of this service and such taxes have not already been billed by BST and paid by Client, BST shall advise Client and Client shall be liable for any such tax, interest, penalties and surcharges, and Client shall immediately reimburse BST the amount of such tax, interest, penalties and surcharge paid by BST. If Client disagrees with BST's determination that any taxes are due by BST as a result of BST's provision of this service, Client shall, at its option and expense (including immediate payment of any such assessment), have the right to seek a ruling as to the inapplicability of any such tax or to protest any assessment and participate in any legal challenge to such assessment, but shall be liable for any tax, penalty, surcharge and interest ultimately determined to be due. All communications with taxing authorities regarding Taxes applicable to Client shall be the responsibility of the Client. Client understands and agrees that BST is merely providing Services with respect to the billing and collection of Taxes hereunder. Client shall file all tax returns and pay or remit all such Taxes to the imposing authority. VERSION FINAL. SEPTEMBER 3, 2003 19

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- TAX INDEMNITY AND RECOURSE BST agrees to pay and hold Client harmless from and defend (at BST's expense) Client from and against any liability or loss resulting from tax, penalties, interest, additions to Tax, or other charges or payable expenses (including reasonable attorney's fees) incurred by Client as a result of: l). The failure of BST to bill End User Customer Taxes as required by Client through the Invoice Billing Service; or 2). BST's recalculation or alteration of Taxes sent to BST through the Invoice Billing Service. This sub-paragraph does not apply to recourse adjustments initiated by BST or to adjustments received by other than the mechanized Invoice Processing feed. Such indemnity shall be provided to Client on an after Tax basis. Client shall indemnify and hold harmless, and defend (at Client's expense) BST from and against any liability or loss resulting from any Taxes, penalties, interest, additions to Tax, or other charges or payable expenses (including reasonable attorney's fees) incurred by BST as a result of: 1). Client's failure to pay any Tax or file any return or other information as required by law or the Agreement; or, 2). BST complying with the Agreement or with any determination or direction by or advice of Client provided in writing by Client or BST correctly using information provided in writing by Client in performing any Tax-related service hereunder; or 3). BST acting or failing to take any action with respect to any Tax which is subject of the Agreement. Notwithstanding, the above, such indemnity is conditioned upon BST providing Client or Client providing BST with notice (which notice shall be given allowing the Party time to file a response, but in no event more than 10 business days of receipt of assessment) of any additional Tax, penalties, or interest due with respect to this Agreement. BST shall receive a copy of all filings in any such proceeding, protest or legal challenge, all rulings issued in connection therewith and all correspondence between Client and the taxing authority. If Client disagrees that any Taxes are payable by BST, disagrees with an assessment of any additional Taxes, penalties, interest, additions to Tax surcharges, or other charges or payable expenses due by BST as a result of BST's billing to Client for services under this Agreement, Client shall, at its option and expense (including, if required by a taxing authority, payment of such Tax, penalties and interest prior to final resolution of the issue have the right to seek administrative relief, a ruling, judicial review (in a manner deemed appropriate by Client), as to the applicability of any Tax, penalty or interest, or to protest any assessment and direct and legal challenge filed with the Internal Revenue Service or in a court of Law such assessment, and shall be liable hereunder for any such amount ultimately determined to be due. VERSION FINAL. SEPTEMBER 3, 2003 20

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- Any legal proceeding or any other action with respect to BST and with respect to any asserted Liability or additional taxes due by BST shall be under BST's direction, but Client shall be consulted. Any legal proceeding or any other action with respect to Client and with respect to any asserted liability of additional taxes due by Client shall be under Client's direction, but BST shall be consulted. In any event, both Client and BST shall fully cooperate with each other as to the asserted liability. Client shall bear all the costs of any such action undertaken at its specific request. BST shall bear the costs of any such action undertaken absent such a request from Client. 25. FUTURE ENHANCEMENTS Once the Client's initial service establishment is complete for the service purchased under this Agreement, the Client may request enhancements and/or modifications to its service. There are cases when additional work is required due to Client requests such as new bill phrases, new product billing, re-sends of data, etc. All such Client requests will be handled as additional work requests unless the work is a result of changes initiated by BST. The Client should provide a written request completely detailing the service modifications needed. If more information is needed by BST, BST will provide Client with a list of questions and issues. Once complete specifications are provided by Client, BST will provide a response with the time and cost estimate. The Client will have up to forty (40) working days to provide written authorization concurring with BST's time and cost estimate and authorizing BST to begin the work. The timeframe for implementation will be dependent upon receipt of written authorization to proceed. The cost for performing the enhancement will be billed to the Client on its billing and collections statement for portions of the work as they are completed by BST. This billing will typically be one month in arrears. (Ex. billing for work undertaken for a project in January will be billed on the February bill.) If the Client cancels a request, it will be billed for the work completed to date of cancellation. Client modifications requested may also require additional recurring processing expense for BST. In those cases, new recurring rates may be established or the rates for existing rate elements may be increased. The Client will be charged at rates set forth in Attachment 1 for the non-recurring development work required for BST to develop and implement the request. TESTING New procedures, which require mutual testing, must be coordinated by both Parties and a mutually acceptable test schedule timeline and frequency established. Since future enhancements are determined on an ICB, testing must be included in this process. VERSION FINAL. SEPTEMBER 3, 2003 21

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 26. LIMITATION OF LIABILITY The Client agrees that BST assumes no liability for any action or claim arising out of BST's billing or determination to refuse to bill any of Client's charges. The liability of BST for damages arising out of mistakes, omissions, interruptions, delays, errors or defects in rendering services hereunder and not caused by the negligence of the Client shall in no event exceed an amount equivalent to the proportionate charges to the Client for the service which was affected by such mistakes, omissions, interruptions, delays, errors, or defects. Neither Party shall be liable for lost profits, lost savings or other such damages, including without limitation special, exemplary, indirect, incidental or consequential damages arising out of or in connection with this Agreement or in connection with either Party's failure to perform its obligations hereunder. 27. INDEMNITY Both parties represent and warrant that any data files which are to be processed by either company and any bill or notice formats comply with the criteria and requirements set forth in this Agreement, any governmental laws, codes and regulations, and any attachments, exhibits, addendum's, amendments and good business practices. Each Party shall defend at its own expense and indemnify and hold the other Party harmless from all claims, lawsuits, actions, complaints, damages, demands, liabilities, penalties, interest and expense, (including reasonable attorney's fees) arising out of either company's breach of the foregoing representation and warranties. 28. WARRANTY DISCLAIMER THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) NOT SPECIFIED HEREIN RESPECTING EQUIPMENT FURNISHED OR SERVICES PERFORMED UNDER THE AGREEMENT. 29. CONFIDENTIALITY AND PUBLICITY A. All business-sensitive and competitive information disclosed by Client or BST during the negotiation of this Agreement as well as information generated during the performance of the Services covered by this Agreement are considered proprietary and confidential to the disclosing Party and shall not be disclosed to a third party. Also, neither Party shall use information except to perform duties pursuant to this Agreement. Each Party shall use the same standard to protect such information as it uses to protect its own similar confidential and proprietary information unless such information was previously known to the other Party free of any obligation to keep it confidential, or has been or is subsequently made public by either Party or a third party. B. Unless otherwise required by applicable law or regulatory agency, each Party agrees that it shall not, without the prior written consent of the other Party, make any news release, VERSION FINAL. SEPTEMBER 3, 2003 22

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- public announcement, or denial or confirmation of the whole or any part of their agreement which names the other Party, or an affiliated company of the other Party. C. The Parties acknowledge that this Agreement contains confidential information which may be considered proprietary by either or both Parties, and agree to limit distribution of this Agreement to those individuals in their respective organizations, and in their affiliated companies, with a need to know the contents of the Agreement or to meet the requirements of a court, regulatory body or government agency having jurisdiction over either Party provided that such Party will seek commercial confidential status for the Agreement to the extent such designation can reasonably be secured. 30. TRADEMARKS, TRADE NAMES AND SERVICE MARKS BST agrees to submit to Client all advertising, sales promotions, press releases, and other publicity matters relating to this Agreement or mentioning or implying the trade names, logos, trademarks or service marks (collectively called "Marks") of Client or language from which the connection of said Marks therewith may be inferred or implied, or mentioning or implying the names of any personnel of Client. BST further agrees not to publish or use such advertising, sales promotions, press releases, or publicity matters without Client's prior written consent. A. LICENSE FOR MARKS. The Parties retain exclusive ownership of their trademarks, service marks, logos and trade names ("MARKS"). Client hereby grants to BST a personal, nonexclusive, limited right, assignable only as provided within this Agreement, to reproduce Client's Marks for use as defined herein and as necessary for fulfilling any obligations or exercising any rights under this Agreement. Client agrees that BST may affix such Client Marks to materials provided for hereunder. BST shall strictly adhere to all graphic standards and marking requirements required by Client as may be revised or supplemented from time to time. In the case of BellSouth's Marks, the parties acknowledge that any license to use applicable BellSouth marks must be obtained from BellSouth's corporate affiliate, BellSouth Intellectual Property Marketing Corporation. 1). Client and its Affiliated Companies' trade names, logos, trademarks and service marks are the property of Client. In response to Client's request to have BST affix certain trademarks, trade names, logos, symbols, decorative designs, (hereinafter collectively called "Marks") to the material furnished hereunder, Client hereby grants to BST a personal, nonexclusive, limited right, assignable only as provided within this Agreement, to reproduce and affix Client's Marks for use as defined herein and as necessary for fulfilling any obligations or exercising any rights under this Agreement. BST shall strictly adhere to all graphic standards and marking requirements required by Client as may be revised or supplemented from time to time. VERSION FINAL. SEPTEMBER 3, 2003 23

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 2). BST's and its Affiliated Companies' trade names, logos, trademarks and service marks are the property of BellSouth Intellectual Property Corporation ("BIPCO"). In response to BST's request to have Client affix certain trademarks, trade names, logos, symbols, decorative designs, (hereinafter collectively called "Marks") to the Material furnished hereunder, Client agrees to comply with the terms of the Trademark License Agreement attached as Appendix A. Client shall not affix, use, or otherwise display such Marks on the Material or use the Marks in any manner inconsistent with the terms of the Trademark License Agreement. BIPCO shall retain all right, title, and interest in any and all Marks, packaging design and finished artwork provided to BST. 3). Neither party will use the name, logo, trademarks or service marks of the other Party without obtaining advance written approval from the other party regarding such use, including use in a domain name. The request for approval will include the specific copy for which use is proposed. B. OWNERSHIP OF WORK PRODUCT "Work Product" means all software (object and source code), technical information, inventions, discoveries, improvements, methods, techniques, training material, processes, specifications, works of authorship, documentation, data format and other information conceived, developed or first reduced to practice by a Party, its employees, consultants or representatives, under or resulting from this Agreement. Unless otherwise agreed to by authorized representatives of the Parties, in writing, in advance of the creation of the Work Product, the Party developing such information shall own all right, title, and interest, including copyright, in and to the Work Product. C. CONFIDENTIALITY It may be necessary for BST to provide Client with certain proprietary and confidential information, specifically software containing data format information, solely for the purpose(s) of data exchange. Client may share data format information with its partner companies provided both Client and partner companies agree that each shall protect the information from any use, distribution or disclosure except as permitted hereunder. Client and its partner companies will use the same standard of care to protect the information as its uses to protect its own similar confidential and proprietary information, but not less than a reasonable standard of care. Client may provide data format information only to its partner companies who: (i) have a substantive need to know such information in connection with this Agreement; (ii) have been advised of the confidential and proprietary nature of such information; and (iii) have personally agreed in writing to protect from unauthorized disclosure all confidential and proprietary information, of whatever source, to which they have access in the course of their employment. VERSION FINAL. SEPTEMBER 3, 2003 24

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 31. SOFTWARE The Parties or their contractors or agents may develop specifications, drawings, documentation, concepts, methods, techniques, processes, adaptations and ideas including, but not limited to software (hereinafter "Software") for the purpose of rendering Services under this Agreement. Unless otherwise agreed by authorized representatives of the Parties, in writing, in advance of the creation of the Software, the Party developing such information shall own all right, title, and interest, including copyright, in and to the Software. The Client may share data format information for the purpose of data exchange with its partner companies provided those companies use the formats internally only. 32. ASSIGNMENT Neither Party shall assign any right, obligation or duty, in whole or in part, or any other interest hereunder, without the written consent of the other Party, which consent shall not be unreasonably withheld. Provided, however, that either Party, may, without the other Party's consent, assign this Agreement to any of its Affiliated Companies or may subcontract the performance of any of its obligations hereunder to such an affiliate company provided that such affiliate is financially and technologically able to perform the Assignor's duties under this Agreement. If assigned to an Affiliated Company by BST, this Agreement, and rates contained herein, may be modified by mutual agreement by the Contract Administrators for BST and the Client. If new terms and conditions cannot be mutually agreed upon, either Party may terminate this agreement without any further liability hereunder other than for services previously rendered. Client understands and agrees that at its sole discretion, BST may delegate any duty in this Agreement to an affiliate for such affiliate to perform on behalf of BST. 33. AUTHORIZATION TO CONDUCT BUSINESS A. Client and BST shall comply with the provisions of all applicable federal, state, county and local, laws ordinances, orders, tariffs, regulations and codes. The Parties shall indemnify each other for, and defend each other against, any loss or damage sustained because of the indemnifying Party's noncompliance. B. The Parties shall obtain and keep current all federal, state, and local licenses or approvals that may be required for the performance of this agreement. Upon request, copies of all required licenses and approvals shall be furnished to each other. If either Party does not comply with such a request within thirty (30) days, the other Party shall have no further duty to perform pursuant to this Agreement. Client and BST shall indemnify, defend and hold each other harmless against any loss, cost, or damages (including attorney's fees) sustained as a result of either Party's failure to obtain or comply with any necessary licenses or approvals. VERSION FINAL. SEPTEMBER 3, 2003 25

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- C. BST shall obtain and keep current all federal, state and local licenses or approvals and comply with other such regulations as may be applicable to the billing performed by BST hereunder. D. This Agreement applies to End-User customers to which Client chooses to provide combined billing for Client-provided services in the BST operating territory. Such billing may include amounts for services approved per procedures described in Section 14 that are provided by third parties but relate specifically to the service provided to the End-User by Client. This Agreement cannot be used to bill charges belonging to other third parties. E. The Agreement applies to billing and collections services in the BST operating territory which encompasses the nine states of Alabama, Kentucky, Louisiana, Mississippi, Tennessee, Florida, Georgia, North Carolina and South Carolina. It also includes limited areas in adjacent states to the extent that BST has existing customers to whom it sends bills and any other areas where Client may operate in the future within the BST operating territory. 34. NOTICES AND DEMANDS A. Except as otherwise provided under this Agreement or in the attachments hereto, all notices, demands or requests which may be given by one Party to the other Party shall be in writing and shall be deemed to have been duly given on the date delivered in person or deposited, postage prepaid, in the United States mail via verified mail return receipt requested or sent by telex or cable and addressed as follows: BST: BellSouth ARM Billing & Collections Name: Cingular B&C Account Manager Address: 1025 Lenox Park 8B77 City/State/Zip: Atlanta, Georgia 30319 Client: Controller Name: Cingular Wireless LLC. Address: 5565 Glenridge Connector City/State/Zip: Atlanta, Georgia 30342 B. Tax related notices should be sent to: BellSouth: Director - State and Local Taxes Name: BellSouth Corporation Address: Room 16J07 1155 Peachtree St. NE City/State/Zip: Atlanta, Georgia 30309-3610 26 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- C. The above addresses may be changed by written notice given by such Party to the other Party pursuant to this section. 35. NO THIRD-PARTY BENEFICIARIES This Agreement is not intended to create any third-party beneficiary rights and shall not provide any person not a party to this Agreement with any remedy, claim, liability, reimbursement, cause of action or other right. 36. TERMINATION UPON EVENT OF DEFAULT BY A PARTY A. Upon the occurrence of an event of default (as hereinafter defined) by a Party, and so long as such event of default shall be continuing, the aggrieved Party may elect to give notice to the defaulting Party that the Agreement is terminated and, if the aggrieved Party shall elect, proceed by appropriate court action, either at law or in equity, to recover damages for the breach thereof. The occurrence of any of the following shall constitute an event of default: 1). Any Party shall fail to pay any amounts due under this Agreement and such failure to pay shall continue for more than thirty (30) business days after written notice from the aggrieved Party. 2). Any representation or warranty made by a Party in this Agreement or in any report, certificate, financial statement or other statement furnished pursuant to the provisions of this Agreement or otherwise, shall prove to have been false or misleading in any material respect as of the date on which the same was made. 3). Any Party shall fail in any material respect to duly observe or perform any covenant, condition or agreement made by it in this Agreement and shall continue to fail to do so for a period of thirty (30) business days after receipt of written notice thereof. A "business day" or "Working day" shall mean a calendar day, excluding Saturdays, Sundays, and all holidays celebrated by BST. On an annual basis, prior to the beginning of each calendar year, BST shall provide Client a list of said holidays. B. The foregoing does not represent the sole and exclusive remedy of a Party upon the occurrence of an event of default by another Party. 37. AGREEMENT TERMINATION Either Party may terminate this Agreement at its sole discretion without cause by providing the other Party with a ninety (90) day written notice. Upon discontinuance of services, all charges incurred by the Client will be due to BST. Any settlements owed to the Client will be paid by BST. 27 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 38. OBLIGATIONS SURVIVE TERMINATION The Parties agree that the termination of this Agreement pursuant to any provision or section hereof, or for any other reason, shall not affect or terminate any obligation or liability incurred or assumed by either Party prior to the effective date of termination of this Agreement, and the provisions of this Agreement shall survive its termination with respect to conclusion of any unresolved matters relating to the Services performed prior to termination. Upon termination of this Agreement by either Party for default or convenience, each Party will be responsible for paying any and all outstanding amounts due to the other Party. With respect to Client, these amounts, which must be paid to BST, may include, but are not limited to, unbillables, uncollectibles, unguideables, and Billing and Collections Services charges which relate to services provided under this Agreement, and may include amounts that occur subsequent to the date of termination. 39. SEVERABILITY OF PROVISIONS Except as expressly provided in this Agreement, if any part of this Agreement is held or construed to be invalid or unenforceable, such provision shall be severed from this Agreement and all other terms and conditions of this Agreement shall remain in full force and effect to the extent permissible or appropriate in furtherance of the intent of this Agreement as if such severed provision had never been a part hereof. 40. UNLAWFUL USE The service provided under this Agreement will not be used by the Client for any unlawful purpose. If the Client uses the service for any unlawful purpose, the Client will indemnify, defend and hold the company harmless against any and all damages and expenses, arising in any manner, due to the Client's use of the service in any unlawful way. The Client's use of this service for an unlawful purpose will be grounds for BST to immediately terminate this Agreement without notice. 41. TERM OF AGREEMENT This Agreement shall continue in effect for the term provided in this Agreement. After the primary term expires, unless otherwise terminated by either Party, this Agreement will be extended in one-month increments until terminated. Upon termination by either Party certain charges as specified in this Agreement or attachments and amendments may be applicable. This Agreement will continue to apply to invoices received prior to termination throughout the remainder of the billing month. 28 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 42. FORCE MAJEURE Neither Party shall be held liable for any delay or failure in performance of any part of this Agreement from any cause beyond its control and without its fault or negligence, such as acts of God, acts of civil or military authority, government regulations, embargoes, epidemics, war, terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear accidents, floods, strikes, power blackouts, volcanic action, other major environmental disturbances, unusually severe weather conditions, inability to secure products or services of other persons or transportation facilities, or acts or omissions of transportation common carriers. Provided, however, that the Party affected by the force majeure shall remedy the delay or failure as quickly as commercially reasonable. 43. CONFLICT OF INTEREST The terms and conditions contained in Attachment 2, Conflict of Interest, are hereby made part of this Agreement. 44. GOVERNING LAW This Agreement shall be deemed to be a contract made and performed under the laws of the State of Georgia, and the construction, interpretation and performance of this Agreement and all transactions hereunder shall be governed by the domestic law of such State. 45. FRAUD Cloning Fraud detection, deterrence, and control procedures are the responsibility of the Client. Subscription Fraud, as defined by BST Security, may be detected by either BST or the Client. The Client agrees to notify BST immediately if Subscription Fraud is detected. BST agrees to notify Client immediately if Subscription Fraud is detected. Any billed revenues involved in fraud that are not adjusted by the Client may be recoursed by BST to the Client. 46. CLIENT USE OF DATA FORMATS WITH OTHER PARTNERS The Agreement hereby acknowledges the Client's use of the BST proprietary data formats for the purpose of data exchange with other combined billing partner companies. These formats may only be used by BST approved partner client entities for this purpose. The Client must secure written non-disclosure agreements to protect this proprietary material from such partner client entities which will utilize BST's proprietary data formats. 47. AUDITS The Client has the right to perform one Audit or Examination annually of BST records relating to services purchased under this Agreement. The Audit or Examination will be at BST locations and in accordance with terms and conditions set forth in this section for all services purchased under this Agreement. 29 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- A. TERMS AND CONDITIONS 1). The Client will initiate an Audit or Examination by giving BST written notification of its intent to perform an Audit or Examination at least 90 calendar days before the Client's desired start date. 2). On Site a). An Audit or Examination will be performed during normal day-shift BST business hours. b). An Audit or Examination is limited to a maximum period of two weeks on-site, provided all key personnel are available at the start and throughout the Audit or Examination. c). An Audit or Examination is limited to three (3) states. 3). Miscellaneous a). BST costs for special extractions of Client data will be paid by the Client. b). Each Party bears its own costs and expenses during the Audit or Examination c). If an independent auditing firm is used for the Audit or Examination, the independent firm must sign a non-disclosure agreement with the Client and BST. d). All information exchanged is considered proprietary and its use limited to the audit purpose only unless written agreement is secured from BST and the Client. e). BST will respond to Client Audit findings within mutually agreed-upon timeframes. 4). Handling of Material a). BST and Client materials are considered proprietary and cannot be copied or removed from the premises. b). Observation of BST employees' contacts with End-Users is prohibited. c). Interviews with BST non-management employees are prohibited. B. WRITTEN NOTIFICATION AND TIME FRAME REQUIREMENTS 1). The Client will provide BST written notification of its intent to perform an Audit or Examination at least ninety (90) calendar days prior to desired start date. The request must contain the following information: a). Objective of the Audit or Examination b). Start date and Duration for on-site activities c). Participants Names, Addresses, and Phone Numbers 30 VERSION FINAL. SEPTEMBER 3, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- d). Scope (may not change once the Audit or Examination begins) e). Data request identifying data or documents to be examined (may not change once the Audit or Examination begins) f). Site or location of Audit or Examination (must be mutually agreeable) g). Data request sample size 2). BST must respond to the Audit or Examination request within fifteen (15) calendar days and acknowledge that the time, location and date are acceptable or, based on good and reasonable cause, change the date to a mutually agreed-upon alternative. 3). Once the start date is established, BST will schedule a pre-review meeting within 30 calendar days of the Client receipt of the written notification by BST. The pre-review meeting cannot be less than 45 calendar days before the Audit or Examination. Pre-review activities include but are not limited to: a). Clarification and concurrence of Client requests b). Review of sample documentation c). Concurrence of materials and documents to be provided during the Audit or Examination C. FINAL REPORT AND CLAIM PAYMENT 1). Within forty-five (45) calendar days of the Audit or Examination conclusion, the Client will provide to BST a report, in writing, identifying any deficiencies found and documenting any claims associated with the Audit or Examination. If this time frame cannot be met, the Client will negotiate an extension. 2). Upon receipt of the report, BST will investigate all findings and claims and provide a written response to the Client within forty-five (45) calendar days of receipt of the Client report. In the event this timeframe cannot be met, BST will negotiate an extension. 3). The response will detail BST investigative actions and its proposed resolutions which will be one of the following: a). No settlement due. b). The Parties concur that a settlement is due the Client from BST. c). The Parties concur that a settlement is due BST from the Client. 4). The Client will provide concurrence with or objection to BST written response within forty-five (45) calendar days of receipt of the written response. D. BILLING OF A CLAIM BST will include the mutually agreed-upon claim amount and any associated interest payment as described in Section 53 of this Agreement on either a subsequent billing and collection bill or Settlement statement due the Client. VERSION FINAL. SEPTEMBER 3, 2003 31

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 48. LATE PAYMENT CHARGES ON END-USER ACCOUNTS Where authorized by appropriate regulatory agencies, BST will apply late payment charges automatically to End-User bills based on balance due. A late payment charge is applied when any undisputed portion of a previous month's bill has not been paid in full prior to the subsequent bill date. Any payment of these charges by End-User, waiver or adjustment of late payment charges is considered BST revenue and does not involve Client settlements, even though the basis for the late payment charges could include Client invoice revenues. The Client is not permitted to bill late payment charges assessed by the Client on combined bills. 49. INTEREST ON END-USER ACCOUNTS Interest calculated on BST charges or paid by BST to End-Users will not use Client invoice revenues in the basis for calculation. Client End-Users will not receive interest from BST for any Client services. Interest paid to End-Users by the Client must be included in the Client invoice, identified to the End-User, and be represented as a "net" of Client charges when provided to BST on the invoice. 50. DEPOSITS ON END-USER ACCOUNTS If a deposit is required to establish Client service to an End-User, the deposit for Client services must be determined and secured by the Client. Charges for or refunds for deposits may be included in the invoice sent to BST for inclusion in the End-User bill. The Client will be responsible for holding the End-User deposits. 51. NPA/NXXFile BST will provide to the Client a mechanized file of BST NPA/NXX/RAO information for Client use in mapping Client bill cycles to BST bill cycles, if Client desires to do so. This file will be provided each bill cycle of BST (there are 20 bill cycles per month) and will contain the complete set of data each time. If BST revises the specifications for the NPA/NXX/RAO data file, BST will notify Client at least ninety (90) days before the changes are implemented. 52. NPA SPLIT PROCEDURES The Client understands that it has multiple options for NPA split notifications. BST recommends that a combination of options be employed by the Client. The Client will be responsible for updating it's NPA/NXX splits.ide NXX information.) VERSION FINAL. SEPTEMBER 3, 2003 32

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- 53. INTEREST ON SETTLEMENTS, CLAIMS, AND LATE PAYMENT. A. The interest paid on late payment and claim payment amounts is .67% per month (.0222% per day simple interest) or 8% annually. The resulting amount will be rounded to the nearest penny; i.e., to two decimal places. B. Calculation of Interest Payments 1). Treatment and Collection Services Bills For Treatment and Collection Services bills, the interest rate stated above will be applied as a late payment factor to the portion of the Client payment not received by BST on the payment due date. It is calculated for the number of days from the payment due date to, and including, the date BST receives the full payment from the Client. 2). Treatment and Collection Claim Payments For Treatment and Collection Services bill claim payments, the interest rate stated above will be applied to the amount owed. Interest will accumulate beginning either on the date the written documented claim is received by BST or from the bill payment due date, whichever occurs later. 3). Settlements Payments For Settlements payments, the interest rate stated above will be applied as a late payment factor to the portion of the balance due not received by the Party owed by the Settlement due date. It is calculated for the number of days from the payment due date to, and including the date the Party owed receives full payment from the indebted Party. 4). Settlements Claim Payments For Settlements claim payments, the interest rate stated above will be applied to the amount owed. Interest will accumulate beginning either on the date the written documented claim of the monies in question is received by BST or from the settlement due date, whichever occurs later. 5). Audit Claim Payments For Audit claim payments, the interest rate stated above will be applied as follows: a. Application of the interest payment to the claim amount will start on the date the claim is received under the conditions that all supporting documentation is attached to the claim and that both Parties mutually agree that the documentation is accurate and sufficient. When supporting documentation has to be gathered by either or both Parties, application of the interest payment will begin the day both Parties mutually agree that the supporting documentation is complete and sufficient and on the claim revenue amount. VERSION FINAL. SEPTEMBER 3, 2003 33

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 BILLING AND COLLECTIONS SERVICES OPERATING AGREEMENT BETWEEN BELLSOUTH AND CINGULAR -------------------------------------------------------------------------------- b. Application of the interest payment will stop on the date the claim revenue amount is posted to the Customers Treatment and Collection bill and/or settlement due either Party. c. Interest payment will not be applied to any claim payment if it is determined that the claimant was responsible for the circumstances that caused the error(s). Both Parties will mutually agree on whether or not the interest payment should be applied when multiple circumstances and factors contributed to the error(s). 54. END-USER BANKRUPTCY If an End-User declares bankruptcy, BST will be responsible for handling of Bankruptcy filings regarding amounts the End-User owes BST and Client. Cingular Wireless LLC. BellSouth Telecommunications, Inc. By: By: ------------------------ ------------------------------ Title: Title: --------------------- ---------------------------- Date: Date: ---------------------- ----------------------------- CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- VERSION FINAL. SEPTEMBER 3, 2003 34

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 ATTACHMENT 2 CONFLICTS OF INTEREST BST does business with thousands of contractors and suppliers. It is a fundamental policy of BST that such dealings shall be conducted on a fair and impartial basis, free from improper influences, so that all participating contractors and suppliers may be considered on the basis of the quality and cost of their product or service. We are also committed to doing business with contractors and suppliers in an atmosphere that is in keeping with the highest standards of business ethics. Although we recognize that the exchange of gifts and entertainment is customary in some businesses, we believe this practice often raises embarrassing questions about the motives of both the giver and receiver. Therefore, this company has for some time followed a policy that its employees shall not accept from customers, suppliers of property, goods, or services, or from any other persons, any gifts, benefits, or unusual hospitality that may in any way tend to influence them, or have the appearance of influencing them, in the performance of their jobs. Employees of BST who are authorized to make purchases or negotiate contract are aware of this policy. We believe that firm adherence to this policy will help establish better business relationships between BST and its contractors and suppliers. We solicit your cooperation in achieving that objective. VERSION FINAL. SEPTEMBER 3, 2003 38

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 ATTACHMENT 3 CONTRACT ADMINISTRATORS BellSouth Telecommunications, Inc. BellSouth ARM Billing & Collections Manager 1025 Lenox Park Blvd. 8B77 Atlanta, Georgia 30319 Cingular Wireless LLC. Controller Cingular Wireless LLC. 12525 Cingular Way Suite 3210 Alpharetta, Georgia 30004 Cingular Corp. Controller Cingular 5565 Glenridge Connector Atlanta, Georgia 30345 VERSION FINAL. SEPTEMBER 3, 2003 39

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 ATTACHMENT 4 PAYMENT AND/OR BILLING ADDRESSES BellSouth Telecommunications, Inc. Phyllis Camp, Treasurer Building A, Room 197 5775 Peachtree Dunwoody Atlanta, Georgia 30342 Cingular Wireless LLC. Corporate Accounting/Cash Accounting Manager Cingular Wireless LLC. 12525 Cingular Way Suite 3210 Alpharetta, Georgia 30004 Cingular Corp. Corporate Accounting/Cash Accounting Manager Cingular Corp 5565 Glenridge Connector 300 Atlanta, Georgia 30345 VERSION FINAL. SEPTEMBER 3, 2003 40

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 ATTACHMENT 5 LIST OF ABBREVIATIONS AAN Account Activity Notification BST BellSouth Telecommunications, Inc. BTN Billing Telephone Number CBB Cost Based Billing group ICB Individual Case Basis LLTNV Landline Telephone Number Validation NPA Numbering Plan Area (Area Code) NXX Exchange Code PAR Purchase of Accounts Receivable T&C Time and Cost VERSION FINAL. SEPTEMBER 3, 2003 41

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Attachment 6 DEFINITION OF TERMS The terms in this section appear in this Agreement with their initial letters capitalized, whether in the singular or plural, and shall have the respective meanings specified in this section for all purposes of this Agreement unless otherwise expressly indicated. 1. Accounts Receivable: An account evidencing a legally enforceable right to payment for goods, sold, rented, or leased or for services rendered. 2. Adjustment: A credit or debit applied to an End-User's account correcting amounts previously applied to the End User's account. Adjustments to the End-User account will be the responsibility of the Client. The Client will apply adjustments and transmit to BST for inclusion on the End-User bill. BST will only make adjustments to End-User charges as part of the End-User Dispute process, fraud process, enrollment error correction or at the explicit request of Client. 3. Agreement: This document which consists of all Sections and Appendices. It is intended to describe the relationship between BST and Client where BST is providing billing, treatment and collection services to the Client. 4. Audit: The review of billing and/or collection data encompassing multiple subjects; i.e. data receipt, calculation of balance due, bill presentation, bill rendering. 5. Bill Date: The date reflected on the face of the BST Customer Bill which designates either the first calendar day of the Billing Period, if BST charges are billed in advance, or the calendar day immediately following the last day of the Billing Period, if BST charges are billed in arrears. In the case of a Final Bill, the Bill Date shall be the date the bill is prepared by BST, and reflected on the face of said Final Bill. 6. Billing Period: The period of time beginning on a Bill Date and ending on the calendar day immediately prior to the subsequent Bill Date. 7. Bill Rendering: Preparation, printing, and mailing of Customer charges for services rendered along with BST's local exchange telecommunications services to the End-User. 8. Billing Telephone Number (BTN): The primary number assigned to the End-User who is responsible for receiving the BST bill. Multiple telephone lines and numbers may be associated with one BTN. May or may not be an actual dialable number. VERSION FINAL. SEPTEMBER 3, 2003 42

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 9. BST Customer Bill: The bill rendered by BST to a Customer which evidences and Accounts Receivable of BST. 10. Business Day: Any weekday of the year, excluding federal or state holiday and any holidays observed by a Party, when the principal administrative offices of both Parties are open for and legally transacting business. 11. CBB: Cost Based Billing System: The billing system used to collect and bill billing and collection charges between BellSouth Affiliates. 12. Claim: A Customer dispute concerning a charge or settlement amount which has not been resolved. 13. Client: The Party purchasing Billing and Collection Services under this Agreement. 14. CONNECT:Direct(TM): A communications protocol product of Sterling Corporation which is used to electronically transmit data files. Supports speeds up to 56 Kbps with restart capability for speeds less than 56 Kbps. 15. Combined Billing: Billing containing multiple services from the Client and BST which combine different platforms or technologies, such as bills combining wireline, wireless and entertainment services. 16. Data Transfer. The process of delivering standard format data, such as invoice data, or records via Connect: Direct and cartridge tape. 17. Data Transmission (Also referred to as "electronic data transmission"): The process of sending standard format data from one location to another using standard transmissions software programs, i.e. CONNECT:Direct(TM), etc. 18. Denial of Service: The interruption of the End-User's local exchange service as defined in BST's General Subscriber Services Tariff (GSST). 19. Dispute: This term has two different meanings within the Agreement depending on the context. When discussing End-Users and post-billing adjustments, a dispute is classified by BST as an inquiry in which the End-User has notified the Client of a claim and the Client, after investigation, sustains the charges and the End-User continues to refuse to pay and contacts BST for assistance. When discussing Treatment and Collections Service charges, Settlement, and audit claims, a dispute is defined by BST as a disagreement between the Client and BST as to the amount due or owed. 20. Due Date: The date any Billing Amount is due for payment. VERSION FINAL. SEPTEMBER 3, 2003 43

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 21. Editing: The verification of data format and type in accordance with documented specifications. 22. End-User Customer: Any Person or Entity in whose name a BST Customer Bill is rendered who subscribes to BST services or to Client services. 23. Examination: The review of a single B&C issue or subject related to this Agreement; e.g., the examination of Unbillables. 24. Final Bill: The BST Customer bill, including all revisions thereto, reflecting a final Total Balance Due which is issued following BST termination of BST service to the Customer. 25. Fraud: When service is established with false data for the sole purpose of defrauding with no intent to pay. 26. Invoice: The Customer provides all data that will appear on its End-User bill page(s) in the form of an "invoice". The invoice may contain various types of data such as local calls, toll-related charges, unregulated services, taxes, plan discounts, promotional information, etc. 27. Late Payment Charge: A charge to compensate an entity for the time value of money only for the period between the time a Settlement Amount is due to be paid and the time the amount actually is paid if said Settlement Amount is not paid on the Due Date. 28. Late Payment Period: The number of calendar days between the date a Billing Amount is due to be paid, but is not paid in full, and the date said Billing Amount is paid. 29. Net Bad Debt Rate: For BST, for a given month, the current month corporate book write off divided by the current month's billing. 30. Non-recurring charges: Charges that are one-time only. 31. Purchase Date: The Purchase Date of any Account Receivable shall be determined each data month. 32. Purchase of Accounts Receivable: Statement sent to the Client by BST detailing the amount due the Client. Includes Client transmitted revenues and associated taxes received, and recourse and/or settlement amounts such as uncollectibles, adjustments for a given settlement period. 33. Order of Magnitude: Correspondence from the Client to BST requesting a mutually non-binding Time and Cost (T&C) estimate for implementing a new service or VERSION FINAL. SEPTEMBER 3, 2003 44

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 initiating a change to an existing service. This enables the Client to gain knowledge and understanding before making a commitment. 34. Payment Availability Period. The average number of days between the billing period date of an End-User bill and the date payment for the bill is deposited in BST's account. 35. Post-Billing Adjustment: Normally BST-initiated credits issued to Client End-User accounts for Client charges that have billed to these End-User accounts, which in turn modifies (adjusts) the total settlement balance due the Client from BST. Client initiated credits can be included within the invoice and do not appear as "adjustments" on the BST settlement statement. Client initiated Adjustments passed to BST on the separate FLEX adjustments file will appear as "adjustments" on the settlement statement. 36. Processing Site: A designated BST site which processes End-User billing data to produce bills. BST currently has multiple processing sites, some are physically co-located. 37. Program Development: Programming and programming related work performed by BST to meet a specific Client request for creation and implementation of a new service or changes to existing service(s). 38. Record: A telecommunications industry standard used to refer to the unique layout that contains information for End-User billing, account information, or other information. 39. Recourse: The process of removing Client charges from a BST End-User account and returning those charges to the Client for further handling. May be performed like an adjustment on either a live or current BST End-User account or on a final or disconnecting BST account. 40. Recurring Charges: Periodic charges that repeat on a frequent basis, such as monthly. 41. Regional Data Center (RDC): A physical BST location which contains the computer hardware which multiple processing sites share for bill processing. For example, the RDC in Birmingham processes bills for the Atlanta, Macon, and Birmingham Processing Sites. 42. Service Program: A specific service or program billed by Client using any EMI charge or credit record. 43. Settlement Period: The period of time which begins on the first of each calendar month and goes through the end of that month. VERSION FINAL. SEPTEMBER 3, 2003 45

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 44. Time and Cost Estimate (T&C): Supplied by BST to the Client in response to the Client's initial Feasibility Estimate (FE) request. The T&C estimate provides the date of scheduled implementation and associated costs to develop and implement the requested service or existing service change. With OMs, the T&C estimate is mutually non-binding. 45. Total Balance Due: That amount reflected on the BST Customer's bill representing the total amount due from a Customer, including all current amounts, past due amounts, and Adjustments, and payable to BST as Accounts Receivable to BST. 46. Treatment: Any action taken by BST to collect delinquent or unpaid End-User accounts. 47. Unbillable: Client data which BST is unable to bill to an End-User. There are two types of unbillables; l) rejects due to record formatting problems, and 2) unguideables. 48. Unguideable: Client records that can not be matched to a BST billing number. Unguideable records are classified as one of the Unbillable types. 49. Uncollectible: Revenue that has been earned but cannot be collected, i.e. BST cannot collect because the End-User does not pay the charge. VERSION FINAL. SEPTEMBER 3, 2003 46

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT A AGREEMENT FOR BILLING AND COLLECTION SERVICES BETWEEN CINGULAR WIRELESS Ameritech IN, MI, OH: CIC 50009 / ACNA COS Ameritech IL: 50910 / ACNA C27 Ameritech IN: 50911 / ACNA C28 SWBT: CIC 436M / ACNA SBM PB: CIC 8010 / ACNA ZPW NB: CIC 8011 / ACNA ZNW and AMERITECH ILLINOIS AMERITECH INDIANA AMERITECH MICHIGAN AMERITECH OHIO AMERITECH WISCONSIN SOUTHWESTERN BELL TELEPHONE COMPANY PACIFIC BELL NEVADA BELL EFFECTIVE , 200 through , 200 ----------------------- --- ----------------------- --- REVISED: JUNE 20, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <S> <C> <C> <C> 1.0 INTRODUCTION ..............................................................................1 1.1 AGREEMENT AND EFFECTIVE DATE .......................................................1 1.2 PARTIES ............................................................................1 1.3 BACKGROUND .........................................................................2 1.4 DEFINITIONS ........................................................................2 2.0 TERM ......................................................................................2 3.0 MODIFICATIONS .............................................................................3 4.0 COMPLIANCE WITH LAW .......................................................................3 5.0 SCOPE OF SERVICES .........................................................................3 5.1 ASSUMPTIONS ........................................................................3 5.2 PROVISION OF BILLING AND COLLECTION SERVICES .......................................4 5.3 BILL PROCESSING SERVICE ............................................................4 5.4 MASTER FILE MAINTENANCE ............................................................6 5.5 MESSAGE INVESTIGATION CENTER .......................................................7 5.6 PAYMENT AND REMITTANCE PROCESSING ..................................................8 5.7 TREATMENT AND COLLECTION SERVICE ...................................................8 5.8 INQUIRY SERVICES PROVIDED BY SBC TELCO .............................................9 5.9 PURCHASE OF ACCOUNTS RECEIVABLES (PARS) ............................................9 5.10 TAXES-MESSAGE READY BILLING .......................................................10 5.10.1 APPLICATION OF TAXES TO END USERS .........................................10 5.10.2 TAX EXEMPTION .............................................................12 5.10.3 FILING OF TAX RETURNS .....................................................12 5.10.4 TAXES IMPOSED ON SERVICES PERFORMED BY THE SBC TELCO ......................12 5.10.5 TAX INDEMNIFICATION .......................................................13 5.11 RATES AND CHARGES FOR SERVICES ORDERED ............................................14 5.12 (OMITTED INTENTIONALLY) ...........................................................16 6.0 CUSTOMER OBLIGATIONS .....................................................................16 6.1 SUBMISSION OF CHARGES .............................................................16 6.1.1 ALLOWABLE MESSAGES/CHARGES (AMERITECH, SWBT, PACIFIC, NEVADA ONLY) ........16 6.1.2 UNALLOWED MESSAGES/CHARGES ................................................18 6.1.3 TRUE AND CORRECT MESSAGES/CHARGES .........................................21 6.1.4 THRESHOLD STANDARDS .......................................................23 6.2 INQUIRY SERVICES PROVIDED BY CUSTOMER .............................................24 6.3 CERTIFICATION .....................................................................24 6.4 ADVERTISING/PUBLICITY .............................................................25 6.5 (OMITTED INTENTIONALLY) ...........................................................25 7.0 DISPUTES AND CLAIMS ......................................................................26 7.1 DISPUTE/CLAIM RESOLUTIONS .........................................................26 7.2 LIMITATION PERIOD .................................................................26 8.0 LIMITATION OF LIABILITY ...........................................................26 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <S> <C> <C> 9.0 TERMINATION OF SERVICE ...................................................................27 10.0 INDEMNIFICATION ..........................................................................28 11.0 PROPRIETARY INFORMATION ..................................................................29 12.0 FORCE MAJEURE ............................................................................29 13.0 AMENDMENTS AND WAIVERS ...................................................................30 14.0 ASSIGNMENT ...............................................................................30 15.0 NOTICES AND DEMANDS ......................................................................31 16.0 THIRD-PARTY BENEFICIARIES ................................................................31 17.0 GOVERNING LAW ............................................................................32 18.0 SEVERABILITY .............................................................................32 19.0 ENTIRE AGREEMENT .........................................................................32 20.0 HEADINGS .................................................................................32 21.0 SUSPENSION OF PERFORMANCE; RIGHT TO WITHHOLD; AND OFFSET .................................33 22.0 SUB-CONTRACTING ..........................................................................33 23.0 WARRANTIES ...............................................................................33 24.0 INTELLECTUAL PROPERTY ....................................................................34 25.0 OTHER BUSINESS, NO INTEREST CREATED ......................................................34 26.0 SOFTWARE .................................................................................34 27.0 SURVIVABILITY OF OBLIGATIONS .............................................................34 28.0 REALIGNMENT OF LOCAL EXCHANGE TELEPHONE FRANCHISES .......................................34 </TABLE> ii

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 LIST OF EXHIBITS Appendix 1 Glossary Appendix 2 Addresses for Notices and Demands Exhibit A Price Schedule Exhibit B Financial Settlements Exhibit C Invoice Billing Services Exhibit D Thresholds Exhibit E Marketing Messages Exhibit F Proprietary Information Exhibit G Miscellaneous Services Exhibit F SBC Support iii

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 AGREEMENT FOR BILLING AND COLLECTION SERVICES PRINCIPAL AGREEMENT 1.0 INTRODUCTION 1.1. AGREEMENT AND EFFECTIVE DATE This Agreement for Billing and Collection Services (hereinafter "Agreement") is entered into effective_______________________, 20____ ("Effective Date") between the parties (hereinafter collectively referred to as "Parties" and each individually as "Party"). This Agreement supersedes all prior and contemporaneous Billing and Collection Services agreements and understandings, whether written or oral, between the Parties. All prior and contemporaneous Billing and Collection Services agreements and understandings are hereby terminated. This Agreement contains "the entire agreement of the Parties with respect to the provision of Billing and Collection Services. 1.2. PARTIES A. The Parties are identified as follows: CINGULAR WIRELESS (hereinafter referred to as "Customer"): B. and the following Telephone Companies in the SBC family of companies ("SBC Telcos") [X] Ameritech Illinois [X] Ameritech Indiana [X] Ameritech Michigan [X] Ameritech Ohio [X] Ameritech Wisconsin [X] Nevada Bell [X] Pacific Bell [ ] Southern New England Telephone Company [X] Southwestern Bell Telephone Company 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Place an "x" in the box next to the SBC Telco(s) that will provide Billing and Collection Services. Customer may add additional SBC Telcos, subject to SBC Tetco's approval, by notifying SBC Telco of its desire to obtain Billing and Collection Services (subsequent set-up charges will apply). The term and conditions of this Agreement shall apply to any SBC Teleco added by Customer after the Effective Date. The termination date of this Agreement as to any SBC Telco added by Customer after the Effective Date shall be coterminous with the termination date of this Agreement. Except where expressly provided otherwise, all references in this Agreement to "SBC Telco" shall mean each SBC Telcp individually above, as if this Agreement constitutes a separate Agreement between Customer and each SBC Teleo. If only one SBC Telco is identified above, then all references to "SBC Teleo" shall include only the single identified SBC Teleo, and all plural pronouns shall be deemed to include the singular. Any reference to a "Party" shall mean Customer or any single SBC Teleo, and any reference to "Parties" shall mean, as the context requires, Customer and a single SBC Teleo, or Customer and all SBC Telcos. 1.3 BACKGROUND The SBC Telcos perform billing and collection activities for their own account with respect to End User subscribers ("End Users") who subscribe to local exchange telecommunications services from the SBC Telcos in their operating territories; The SBC Telcos have offered to provide billing and collection services ("Services") to Customer for certain permitted types of telecommunications related messages with respect to End Users who are also served by Customer; and Customer wishes to purchase the Services from the SBC Telco(s). 1.4 DEFINITIONS The definitions contained in the Glossary attached as Appendix 1 to this Agreement shall apply to the entire Agreement. Any terms or words used in this Agreement which are not specifically defined in Appendix 1 or elsewhere in the Agreement are understood by the parties to have their ordinary meaning. 2.0 TERM 2.1 This Agreement shall be effective as to each SBC Teleo as of the Effective Date set forth in Section 1.0 and shall continue for a period of three (3) years, unless earlier terminated, canceled, or withdrawn as described in Section 9.0. 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 3.0 MODIFICATIONS 3.1 Customer acknowledges that SBC Telco has the right to modify this Agreement and its Exhibits B through G of this Agreement, including associated attachments, for any material order, regulation, or statutory change that significantly impacts in SBC Telco's opinion the provision of Billing and Collections Services to Customer, giving thirty (30) days notice of such change within sixty (60) days of such material order, regulation or statutory change. Customer may terminate this Agreement or any of the individual specific services upon thirty (30) days notice upon being notified of such change. (In reference to pricing modification, see paragraph 5.11.4 of this Agreement.) 4.0 COMPLIANCE WITH LAW The Parties shall comply with all applicable legal and regulatory requirements. No provisions in this Agreement shall cause or be construed to cause either Party to violate any legal or state/federal regulatory requirement. 5.0 SCOPE OF SERVICES Commencing on the Effective Date, the SBC Telcos agree to provide the following Billing and Collection Services to Customer for the Carrier Identification Code ("CIC") pursuant to the terms and conditions of this Agreement. 5.1 ASSUMPTIONS 5.1.1 The Customer will provide messages to SBC Telco in standard EMI format and will conform to SBC Telco's requirements for the specific EMI record types and valid field values utilized by SBC Telco. SBC Telco retains the sole right to modify its standards for EMI record types and acceptable field values for the messages submitted to SBC Telco for billing. 5.1.2 SBC Telco requires the Customer to submit the original number dialed by the End User, in the call detail record unless agreed to otherwise by SBC Telco in writing. 5.1.3 SBC Telco and the Customer will use a data transmission communication protocol or other transmission medium acceptable to SBC Telco, to pass messages as well as other data files between SBC Telco and the Customer. 3

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.2 PROVISION OF BILLING AND COLLECTION SERVICES 5.2.1 SBC Telcos' Billing and Collection Services (B&C Services) shall be provided in accordance with this Agreement and any applicable laws, rules, regulations and tariffs. This Agreement and its Exhibits attached hereto and incorporated herein, complement such tariffs to the extent that this Agreement is not in conflict or inconsistent therewith. To the extent there is any conflict or inconsistency between this Agreement and its Exhibits and such tariffs, the provisions of such tariffs shall control SBC Telco's B&C Services in that jurisdiction, unless the Agreement and its Exhibits are approved by the regulatory body which governs SBC Telco's B&C Services in that jurisdiction. In the latter event, the Agreement and its Exhibits shall control as authorized by any such jurisdictional regulatory body. However, it is the intention of the parties that this Agreement and its Exhibits, to the extent not in conflict with the provisions of such tariffs, are to be construed to the extent possible in harmony with any such tariffs. 5.3 BILL PROCESSING SERVICE Bill Processing Service is the receipt of rated message detail from Customer, posting of rated messages together with any applicable taxes, interest, or late payment charges on the End User monthly bill, which is rendered to SBC Telco wireline End Users, and receipt of payments. 5.3.1. Customer will provide to SBC Telco for Bill Processing Service only its messages billed within SBC Telco's operating area. Notwithstanding the foregoing, nothing herein shall prohibit Customer from providing roaming service to its subscribers, and SBC Telco shall provide Bill Processing Service for such roaming service. Customer will submit only messages for billing which are acceptable under federal, state, and local laws and regulations and SBC Telco's Operating Procedures. 5.3.2. Customer shall furnish to SBC Telco billing information to enable SBC Telco to render a bill including the telephone number or other billing indicator of the account to be billed by SBC Telco, a description of the products and services being billed. Customer will record, assemble, edit, and rate its messages for SBC Telco, and will deliver such messages to SBC Telco at intervals and in accordance with SBC Telco's specifications and Operating Procedures. 4

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.3.3 Where Customer provides rated messages to SBC Telco, said messages will be in accordance with the rates and charges effective in the Customer's tariffs or published price list. 5.3.4 Billings which are submitted by the Customer to provide bi-monthly, quarterly, or any other interval of billing greater than monthly will not be allowed. Any such billing will be considered a breach of this Agreement and SBC Telco may elect to terminate the Agreement pursuant to Section 9, Termination of Services. 5.3.5 The Customer will use commercially reasonable efforts to submit billings on a regular and consistent basis of at least once every week and if the Customer fails to submit billings within three (3) months from the effective date of this Agreement, Customer will be deemed to have breached this Agreement and SBC Telco may elect to terminate it immediately. 5.3.6 The Customer shall notify SBC Telco of any billing problems that impact the requirement to submit billings on a regular and consistent basis after commencement of services. If the Customer fails to provide such notice and fails to submit billings on a regular and consistent basis of at least once every week after commencement of services, Customer will be deemed to have breached this Agreement and SBC Telco may elect to terminate pursuant to Section 9, Termination of Services. SBC Telco at its sole option may withhold payment of any monies due the Customer, until such time that the Customer submits billings at least once a week and demonstrates that such billings are true and correct. 5.3.7 In accepting information to be billed on behalf of Customer, SBC Telco will confirm both the receipt of the billing information and the total amount of the billing information received. SBC Telco will provide confirmation in a format determined by the SBC Telco. 5.3.8 Amounts that are billed on behalf of and owed to Customer shall be separately stated on the End User customer's bill, either by regular mail or electronically. 5.3.9 SBC Telco will provide Bill Processing Service for Customer' messages subject to SBC Telco's ability to process such messages consistent with its specifications, and Operating Procedures. Except for charges for roaming service, Customer will not submit for billing, any domestic message or international message that is more than ninety (90) days old unless a specific SBC Telco approves in writing in advance of such billing. Roaming charges must be submitted within one hundred twenty (120) days. 5

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.3.10. SBC Telco shall provide support services to Customer as more particularly described on Exhibit H. 5.4 MASTER FILE MAINTENANCE 5.4.1. SBC Telco will provide Master File Maintenance services for the Customer messages for those Customer's End Users for which SBC Telco has Bill Processing Service responsibilities. Balance due amounts previously billed by the Customer are not to be included as a message or other related charges to be billed by SBC Telco. Any Customer violation of this provision will materially affect the essence of this Agreement and will constitute a substantial breach of its terms. SBC Telco reserves the right to return to the Customer any such messages prior to billing the End User. In the event that SBC Telco places any such messages on an End User bill, SBC Telco reserves the right to adjust the End User bill for such messages as it deems fit. Adjustments will be recoursed to the Customer. 5.4.2 Rated Customer messages are required to provide Master File Maintenance. The Customer will provide rated messages to be filled by SBC Telco. The Customer will deliver its messages to be billed by SBC Telco to a location specified by SBC Telco. The Customer will uniquely identify its deniable and non-deniable service charges to enable SBC Telco to identify and segregate such messages. It is the responsibility of the Customer to maintain, and to re-supply to SBC Telco if necessary, for a minimum of ninety (90) days from the date of receipt by SBC Telco, a back-up file of all rated messages provided to SBC Telco. This will allow SBC Telco to reconstruct lost records. If the Customer fails to maintain a back-up file of messages to SBC Telco throughout the prescribed timeframe, SBC Telco will not be liable for any such lost records. 5.4.3. SBC Telco will create and send to the Customer a confirmation report that contains information regarding acceptances or rejections of the Customer data into SBC Telco's data entry processing. 5.4.4. Rated Customer messages input to the Master File Maintenance, which have been received by SBC Telco and that SBC Telco cannot bill for any reason, will be processed in accordance with SBC Telco's methods and procedures. Based on the error encountered, any such message may be 1) returned to the Customer without review by SBC Telco, or 2) reviewed by SBC Telco's Message Investigation Center (see Section 5.5). Upon completion of the review, the billable messages will be posted. 5.4.5. SBC Telco will return unbillable messages to the Customer. Customer messages received by SBC Telco that exceed the age of message limits 6

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 will be treated as unbillable messages and returned to the Customer without investigation. 5.4.6. SBC Telco will return to the Customer messages that are to be billed to an End User that has elected a local service provider other than SBC Telco. 5.4.7. In the event the Customer requests data that has previously been successfully provided by SBC Telco to Customer, the data, if available, will be re-provided to the Customer through the Time and Cost procedure. 5.4.8. Customer message detail determined to be lost as a result of the Master File Maintenance processing will be recovered, if possible, by SBC Telco. In the event the data cannot be recovered by SBC Telco and the Customer's obligation to re-supply the data has expired, SBC Telco will in all instances assume that the data lost is attributable to direct dialed long distance service and will estimate the messages and associated revenues as follows: a) Unless otherwise agreed to by the Customer and SBC Telco, Cingular's average direct-dialed per minute rate billed its End Users will be used to calculate the revenues associated with the lost records. A reduction to the calculated revenue loss, for projected billing and collection charges, adjustments and uncollectibles, will be made based on the per message charge and bill rendering charge. The number of bill rendering charges will be based on the Customer's average number of messages per bill rendered. This estimate will be used to adjust the Amount Due the Customer as specified Exhibit B. 5.5 MESSAGE INVESTIGATION CENTER 5.5.1 SBC Telco will provide Message Investigation Center (MIC) services to the Customer for the investigation of the Customer's messages that are unbillable under certain error codes to an End User (pre-billing errors). In these instances, SBC Telco will utilize its methods and procedures to determine the dollar level at which investigation of messages will occur and/or for the return of messages to the Customer. SBC Telco will not be liable to the Customer for revenue associated with messages that are unbillable. 5.5.2 SBC Telco will recover customer messages determined to be lost, as a result of MIC services at no charge. In the event SBC Telco cannot recover the messages, procedures defined in Section 5.4 will be utilized to estimate an adjustment to the Customer's Amount Due. 7

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.6 PAYMENT AND REMITTANCE PROCESSING 5.6.1 Payment and remittance processing service consists of receiving and applying to End User accounts sums due to Customer's products and services billed by SBC Telcos. 5.6.2 Partial Payments on accounts may be applied by SBC Telcos first to amounts owed for charges for which telephone service may be disconnected for nonpayment and SBC Telcos' own products and services. 5.7 TREATMENT AND COLLECTION SERVICE 5.7.1 Treatment and Collection service is the method of securing payment of past due charges for Customer's products and services. SBC Telcos provide treatment and collection services in an attempt to control or collect appropriate outstanding balance due amounts. Treatment and Collection services include, but are not limited to, preparation and mailing of account status notices to End Users, imposition of late payment fees where authorized and permitted by law, and the initiation of final collection efforts. SBC Telcos shall provide treatment and collection services to Customer in connection with End User accounts which SBC Telcos provides payment and remittance processing. 5.7.2 The SBC Telco will utilize the same steps and procedures in collecting the Customer's accounts as it does on its own behalf. The SBC Telco will determine and collect deposits from End Users for which the SBC Telco provides Billing and Collection Services according to regulatory requirements and the SBC Telco deposit policy. The SBC Telco deposit policy is nondiscriminatory with regard to the entity on behalf of which the service is billed. 5.7.3 Where appropriate regulatory authority permits denial of services and/or by Customer's contract with the End User, Customer authorizes SBC Telco to deny service and disconnect End Users for non-payment in accordance with such procedures. 5.7.4 This Agreement does not obligate SBC Telco to terminate End User services for non-payment. Upon completion of SBC Telco collection procedures for non-payment of any charges appearing on the End User Bill, SBC Telco may adjust, in its sole discretion, such charges with recourse to Customer. In addition, the Parties acknowledge that changes in applicable laws or regulations may prevent SBC Telco from terminating or threatening to terminate End User service for non-payment of any Customer charges, and that such actions may require changes in SBC Telco procedures. 8

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.8 INQUIRY SERVICES PROVIDED BY SBC TELCO 5.8.1 Inquiry service is an optional service and billed as defined in Exhibit A. Inquiry services include acceptance, referral, and/or resolution of End User communications and claims regarding billing. The Inquiry Services provided to Customer by SBC Telco include, but are not limited to, the following post-billing inquiries: a) Dispute of billing charges b) Explanation of billed charges 5.8.2 The SBC Telco will follow standard procedures by which it will perform the Inquiry Services related to End User charges for Customer's services. 5.8.2.1 The SBC Telco will provide standard procedures for its Business Offices to handle, resolve, and/or refer End Users inquiries and claims to Customer. 5.8.2.2 The SBC Telco will preform standard claim investigation functions for Customer in order to resolve inquiries. 5.8.2.3 Following standard procedures, the SBC Telco may determine an adjustment is necessary/appropriate, due to a claim related to Customer's service, at its sole discretion, and enter the adjustment into the billing system. 5.8.3 SBC Telco shall not be liable for any loss in the Customer's revenues associated with Customer adjusted charges initiated by SBC Telco under terms of this Agreement. 5.8.4 If Inquiry services are not ordered initially and are requested at a later date, a subsequent Start-Up fee will be assessed as defined in Exhibit A. 5.9 PURCHASE OF ACCOUNTS RECEIVABLE (PARS) 5.9.1 In order to perform the billing and collection function, SBC Telco will purchase the Customer's accounts receivables represented by the Customer's charges included in bills rendered by SBC Telco. SBC Telco's purchase of the Customer's accounts receivables shall be with full recourse of all charges either uncollected for any reason or disputed and credit/refunded back to the end-user customer (debit uncollected 9

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 charges back to the Customer). The parties agree there are no third party beneficiaries to this. The Customer and SBC Telco further agree that, under the terms of this agreement, the purchase of the Customer's accounts receivables is a revenue neutral process to SBC Telco, and that the procedures defined in Exhibit B, which are utilized for the purchase of Customer's accounts receivables, result in a revenue neutral process for SBC Telco. The parties agree that Customer is obligated to forward only true, correct and owing charges to the SBC Telco for billing and collection, that the SBC Telco will not knowingly bill disputed or unauthorized charges, that it is a breach of contract for Customer to forward disputed and/or unauthorized charges to the SBC Telco for billing and collection and that the SBC Telco may terminate billing and collection for Customer, in whole or in part and at any time without liability, as a result of end user complaints lodged with the SBC Telco, FCC, any state PUC, commission, or regulatory agency; or any suit filed or investigation commenced related to Customer's alleged tender of disputed or unauthorized charges to SBC Telco or any other local exchange carrier. The parties further agree the SBC Telco does not financially benefit from billing Customer's disputed and unauthorized charges and, instead, incurs additional, significant expense and loss of end-user good will. 5.10 TAXES - MESSAGE READY BILLING 5.10.1 APPLICATION OF TAXES TO END USERS 5.10.1.1 In performing Services, the SBC Telco will apply and bill to End Users the applicable federal, state or local sales, use, excise, gross receipts or other taxes or additional charges imposed on End Users or imposed on Customer and collected from End Users with respect to Customer's services billed hereunder by the SBC Telco, excluding state and local taxes for jurisdictions outside of the areas in which the SBC Telcos provide local exchange services. All such taxes and charges are referred to in the singular as "Tax" and in the plural as "Taxes." Customer shall be responsible for applying and providing all tax information for state and local tax jurisdiction outside of the areas in which SBC Telcos provide local exchange services. 5.10.1.2 Customer authorizes SBC Telco to apply, bill, record and collect all applicable taxes due and payable by Customer's End Users on the service provided by Customer for the period of time coincidental with this Agreement between Customer and SBC Telco. 10

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.10.1.3 In applying and billing Taxes on behalf of Customer, SBC Telco will use the same Tax procedures as it applies to its own similar services. SBC Telco makes no warranties or representations as to whether its Tax procedures accurately reflect the requirements of the applicable Tax laws. If Customer elects to have SBC Telco apply its Tax procedures, Customer shall have the sole responsibility for verifying the correct application of Tax laws to Customer's services. Customer may, upon written request, review the SBC Telco's Tax procedures applicable to the billing of Customer's services. Customer shall be responsible for advising SBC Telco in writing of any changes in the Tax laws affecting the taxability of Customer's services. 5.10.1.4 Customer may request in writing that SBC Telco apply modified Tax procedures to the billing of Customer's services if either of the following applies: a) The modifications reflect changes in the Tax laws applicable to Customer's services to be billed under this Agreement; or b) The modifications are pursuant to an investigation of what Customer believes are errors in the SBC Telco tax procedures and, if SBC Telco deems appropriate, the modifications correct the alleged error. 5.10.1.5 Provided reasonable advance notice is given and no undue burden is imposed upon SBC Telco in implementing such changes, SBC Telco agrees to use reasonable efforts to implement such modified Tax procedures on a timely basis based upon the effective date of service or the statutory effective date of a Tax law change. SBC Telco shall charge Customer for such implementation services at the Time and Cost ("T&C") rates specified in Exhibit A hereto. Whenever the SBC Telco estimates that the time required for it to implement a change in the Tax law would preclude its implementation by the statutory effective date, the Parties will together apply to the taxing authority for an appropriate extension of the effective date of a change. 5.10.1.6 Both parties acknowledge that SBC Telco is merely acting as Customer's agent with respect to the calculation, billing and collection of Taxes under this Agreement. SBC Telco shall not be entitled to retain or receive from Customer any statutory fee or share of Taxes to which the person collecting such Taxes is entitled under applicable law. 11

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.10.1.7 All communications with taxing authorities regarding Taxes applicable to Customer shall be the responsibility of Customer. 5.10.2 TAX EXEMPTION 5.10.2.1 The SBC Telco, in its performance of Services, will apply the exemption status it has determined for the End User and maintain exemption certificate information derived from its exemption certificates. The SBC Telco's exemption certificate information will be used as a basis for exempting End Users from Taxes on Customer's services billed hereunder by SBC Telco. The Customer understands that SBC Telco makes no warranty as to the validity of the End User exemption certificates and that the Customer relies upon SBC Telco's use of the exemption certificate at the Customer's own risk. 5.10.2.2 The Customer may review information relating to an End User's exemption status and request through the Time and Cost process, as defined in Exhibit A, that SBC Telco reverse the exempt status for purposes of the Customer's service if the Customer provides SBC Telco written instructions to make the status change. 5.10.3 FILING OF TAX RETURNS 5.10.3.1 Customer shall be solely responsible for filing all returns for Taxes imposed on or with respect to Customer's services billed under this Agreement and paying or remitting all such Taxes and other items and any applicable interest or penalties. Upon reasonable request, SBC Telco shall furnish to Customer on a timely basis all information in SBC Telco's possession that is necessary for Customer to file its Tax returns. Customer shall promptly notify SBC Telco if such information is not received. Requests for such information are subject to T&C Charges in accordance with Exhibit A if SBC Telco must make multiple submissions or use customized formats for Customer. 5.10.4 TAXES IMPOSED ON SERVICES PERFORMED BY THE SBC TELCO 5.10.4.1 Customer shall be responsible for payment of all sales, use or other taxes of a similar nature imposed on SBC Telco's performance of services under this Agreement, excluding any income tax payable by the SBC Telco on its revenues from such services. SBC Telco agrees to use reasonable efforts to invoice Customer for such taxes at the time SBC Telco's invoice 12

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Customer for the underlying service performed; provided, however, that this obligation shall not be deemed to prohibit SBC Telco from invoicing for such taxes at a later date to correct errors or omissions from the earlier invoice. If any federal, state or local jurisdiction notifies SBC Telco that any additional sales, use or other taxes (including interest, penalties and surcharges thereon) are due as a result of SBC Telco's performance under this Agreement, Customer shall promptly reimburse SBC Telco for such tax, interest, penalty and surcharge upon notice thereof; provided, however, that Customer shall not be required to reimburse SBC Telco for any interest, penalties or surcharges which are omission due solely as a result of a negligent act or omission of SBC Telco. 5.10.5 TAX INDEMNIFICATION 5.10.5.1 Customer agrees to defend, indemnify and hold the SBC Telco harmless from and against any liability or loss, as to services billed hereunder by the SBC Telco to Customer's End Users, resulting from any Taxes, penalty, interest, additions to Tax, Surcharges or other charges or expenses payable or incurred by the SBC Telco as a result of: a) The provision by the SBC Telco of services covered by this Agreement, as provided in Section 5.10.4; b) The delay or failure of Customer (to the extent not attributable to any negligent act or omission of the SBC Telco) to pay any Tax or such other item or file any return or other information as required by law, tariff or this Agreement; c) SBC Telco's compliance with any of its obligations under this Agreement, or with any determination or direction by or advice of Customer, or using information provided by Customer in performing any Tax-related service hereunder; or d) A determination by the IRS, or any other taxing authority, whether in response to a ruling request or in the course of an audit of either Party, that the SBC Telco is responsible for collecting and remitting federal, state or local taxes and filing the applicable tax returns. 5.10.5.2 Consistent with the indemnity provided above, Customer shall, at its option and expense (including, if required by a taxing 13

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 authority, payment of any such Tax, penalty, interest, addition to Tax, Surcharge, or other charges, prior to final resolution of the issue), have the right to seek administrative relief, a ruling, judicial review (original or appellate level) or other appropriate review (in a manner deemed appropriate by Customer), as to the applicability of any Tax, penalty, interest, addition to Tax, Surcharge, or other charges or to protest any assessment and direct any legal challenge to such assessment, but shall be liable hereunder for any such amount ultimately determined to be due. 5.10.5.3 SBC Telco shall promptly notify Customer of any proposed assessment of any additional Taxes, penalty, addition to Tax, Surcharge or interest due by SBC Telco in sufficient time to enable Customer the opportunity to seek administrative relief, a ruling, judicial review (original or appellate) or other appropriate review as to the applicability of such other Taxes or additional charges prior to any assessment of additional Taxes. Customer shall assume, at its expense, the sole defense of such Claim through counsel selected by SBC Telco. SBC Telco shall, when requested by Customer and at Customer's expense, cooperate or participate with Customer in any such proceeding, protest or legal challenge. SBC Telco may at its option and expense be represented by separate counsel. Customer shall pay the full amount of any judgment, award or settlement with respect to the Claim and all other expenses related to the resolution of the Claim. If Customer unjustifiably refuses to defend a Claim or fails to promptly assume the defense after its tender, SBC Telco may retain counsel of its choosing, and Customer shall reimburse SBC Telco for all costs of the defense as well as the amounts specified in the preceding sentence. 5.11 RATES AND CHARGES FOR SERVICES ORDERED 5.11.1 Rates and charges applicable to the Billing and Collection Services covered by this Agreement are attached hereto as Exhibit A. It is understood that applicable tariffs take precedence over any and all rates and charges contained therein. 5.11.2 For services provided each month during the term of this Agreement, Customer agrees to pay the SBC Telco, price schedule of rates, as set forth on Exhibit A. Monthly charges for service shall be on the basis of usage multiplied by the appropriate price set forth in Exhibit A, subject to satisfaction of the monthly minimum amount. 14

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 5.11.3 For the purposes of billing the Customer for SBC Telco services provided under this Agreement, the determination of rates and charges and procedures for intrastate messages originating and terminating in one state and billed to an End-User in another state (billing state), will be based on the rates, charges and procedures of the billing state and subject to that jurisdiction's regulations. 5.11.4 SBC Telco may modify rates to this Agreement to simplify the SBC Telcos' rates or due to changes in the billing and collection regulatory environment or changes in the SBC Telcos' costs in providing Billing and Collection Services only once per year during the Term of Agreement. Such rate increases shall not exceed more than 10% of the current rate. The Parties must mutually agree to the rate increase, however, if Customer is unwilling to agree, this Agreement will terminate thirty (30) days after the rate increase becomes effective. The limitations in this paragraph shall not apply to increases solely and directly due to postal increases or rate changes to tariffed rates. 5.11.5 When bill rendering services are ordered, the Customer will make an upfront initial "start-up" payment as indicated on Exhibit A. Such payment will be included with the Customer's submission of this signed Agreement to SBC Telco. A separate start-up charge is associated with Invoice Billing as indicated on Exhibit A. Notwithstanding the above, Customers who are renewing existing bill rendering services are not subject to additional initial start-up payments. 5.11.6 The Customer purchasing bill rendering services will make a guaranteed minimum purchase of services from SBC Telco under this Agreement, as specified in Exhibit A. 5.11.7 SWBT, AMERITECH, SNET ONLY - Calculation of the monthly minimum purchase of services will be based on the Customer's monthly billed volumes. A comparison will be made of actual amount billed to the Customer and the monthly minimum purchase of services. The Customer will pay no less than the applicable monthly minimum purchase of services for that month. Minimums will be tracked on a monthly basis. 5.11.8 PACIFIC BELL AND NEVADA BELL ONLY - Calculation of the annual (consecutive 12 months) minimum purchase of services shall be based on the Customer's annual billed volumes. A comparison will be made of actual amount billed to the Customer and the minimum annual purchase of services. This comparison will be made ninety (90) days after completion of each year of the contract. The Customer will pay no less than the applicable yearly minimum purchase of services for that year. 15

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 a) Minimums will be tracked on a monthly basis requiring one-twelfth (1/12) of the annual minimum to be satisfied each month. Any year to date monthly minimum short fall will be calculated in the Customer's reserve requirement as defined in Exhibit B of this Agreement. 5.12 (OMITTED INTENTIONALLY) 6.0 CUSTOMER OBLIGATIONS 6.1. SUBMISSION OF CHARGES Messages that may be processed for billing under this Agreement include only the Message types identified as permitted in this Section. SBC Telco may at any time, in its sole discretion, modify this Section to add or delete Message types that it is willing to bill for Customer under this Agreement. Additionally, SBC Telco may reject, in its sole discretion, any Message types for billing regardless of whether they appear in this Section. Customer shall not submit any Message types for billing under this Agreement which are not permitted under this Section or which are of a type that SBC Telco has otherwise indicated it will not accept for billing. 6.1.1 ALLOWABLE MESSAGES/CHARGES (AMERITECH, SWBT, PACIFIC, NEVADA ONLY) a) Customer Billing which may be processed under the terms of this Agreement: 1. Customer charges for wireless services; and 2. Customer other charges to its subscribers provided Customer has complied with all applicable laws and regulations regarding the billing of such charges. b) SWBT ONLY: With respect to Pay-Per-Call Services, a Pay-Per-Call Service Billing Charge will apply to Customer's 900 Pay-Per-Call Services submitted to SWBT for inclusion on the End User's bill. An Expanded Message Billing Charge (defined in paragraph 6.1.1.d.) will also apply. c) SWBT ONLY: An Expanded Message Billing Charge, per message billed, will apply to the Customer's billings submitted to SWBT for inclusion on the End Users' bills: 16

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 i) Billing of voice mail services that are required to be submitted in EMI Record Types 010117, 010217, 810117, and 810217. ii) Billing of enhanced services, as defined in SWBT's methods and procedures that are required to be submitted in EMI Record Types 010118, 010218, 810118, and 810218. iii) Billings using EMI Record Types 42XXXX that may be utilized for the billing of non-transmission services only as authorized in writing by SWBT. iv) Other EMI Record Types requested by Customer and agreed to by the Customer and agreed to by SWBT in writing. v) Billings of Pay-Per-Call Services (Information Services) that are required to be submitted in EMI Record Type 010116. d) PACIFIC BELL/NEVADA BELL ONLY: Pacific Bell/Nevada Bell (PB/NB) agrees to bill Information Services Calls which are defined as recorded programs, interactive information programs, or programs advertised as being an information or entertainment service for which the caller pays a charge of any type for making the call. Subject to the following: i) All information Service Calls must be sent in the 01-01-16 record layout that will be used exclusively for Information Service Call transactions. Other xx-xx-16 record types approved by Telcordia and agreed to for processing by PB/NB, may also be utilized. ii) The billing record must contain the following information: - the number the end user actually dialed - the name of the service or a brief description, using a 12 character category as defined/ approved by PB/NB iii) The record must carry an indicator to identify the transaction as regulated or non-regulated. iv) All Information Service Calls will appear in an Information Services section on the End User bill. v) PB ONLY: The Customer will not send charges for any transactions containing harmful matter as defined in the California Penal Code 313. vi) The Customer will not send Information Calls that do not adhere to FCC and CPUC/NPUC regulations or State and Federal laws. vii) The Customer will establish procedures for promptly resolving all End User inquires. 17

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 viii) The Customer will provide the End User, upon request, with a specific Information Provider's name, address, and/or telephone number. ix) If the Customer sustains any or all of an Information Service Call charge and the End User appeals to PB/NB to resolve the dispute, PB/NB will issue an adjustment to the End User for the full amount and recourse the amount of the adjustment with an associated processing charge to the Customer. x) The Customer is responsible for blocking End Users from their information Services at the End User's or PB's/NB's request. xi) Consistent with PB's/NB's tariffs, PB/NB will not deny basic telephone service solely for the End User's failure to pay for Information Service Calls. xii) In the event a Customer fails to comply with any provision of this policy, PB/NB will give the Customer written notice for the breach. xiii) The Customer acknowledges that PB/NB will include a consumer rights notification when the Customer's Pay-Per-Call services are submitted to PB/NB for billing, using PB's/NB's standardized wording. f) Customer will submit the verbiage of all text phrases associated with Miscellaneous Charges/Enhanced Services and all Marketing Messages to SBC Telco for review and must receive written confirmation by SBC Telco prior to submitting such messages for bill processing. Detailed procedures regarding the review process can be found in the Billing and Collection Services Product Binder. Such reviews are required for both Message Ready and Invoice Ready Customers. 6.1.2 UNALLOWABLE MESSAGES/CHARGES The Customer will not submit billings under the terms of this Agreement for the following (SBC Telco reserves the right at its discretion, on thirty (30) days written notice, to include additional billings under this list): a) All billings containing charges which in whole or part relate, or reasonably give the appearance of relating to goods or services provided outside the message or references to telephone numbers, unless Customer has complied with all applicable laws and regulations regarding the billing of such messages and has obtained End User approval to bill for such messages. 18

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 b) Charges which have been previously billed to the End User by the Customer. c) Charges for collect calls associated with Pay-Per-Cal (Information Services) billings, including the transport of such calls. d) Charges for information regarding credit cards, credit repair or monitoring, or any information related to an End User's commercial credit record. e) Charges for information regarding sweeptstakes and/or giveaways. f) Charges for services that Customer has any reason to believe that such charges may result in End User complaints to SBC Telco. g) Charges for services billed to any geographically restricted SBC Telco calling card, where the call does not meet the applicable geographic restriction. h) Charges for 800 Services to an originating End User (caller as opposed to called Party). i) Charges for information provided outside the message. j) Charges for services billed to a SBC Telco WATS End User account. k) Charges for services billed to End Users who subscribe to local access services through a Local Service Provider other than SBC Telco. SBC Telco will provide the Customer with the account owners OCN with return code 50, where available. l) Monthly Fees or fees other than a per-call fee for access to any service in which the Customer provides or purports to provide audit information or audio entertainment produced or packaged by the Customer, whether such access is provided directly or through a voice mail box service or other means, unless agreed to in writing by SBC Telco. m) Charges or fees for products or services offered on the Internet, such as, but not limited to, e-charges or e-commerce services. n) Charges for services billed to End Users who specifically request not to be billed for Customer services on the SBC Telco bill. 19

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Customer agrees it will not forward such billing to SBC Telco after notification from the End User. o) Charges for calling card calls placed outside of the effective dates of the SBC Telco End User account. SBC Telco will dictate acceptable dates, if any, before and after the effective date. p) Charges which consist of combined individual call records and/or other charges to produce bulk billed services; q) Charges for service billed to a bill restricted End User account. r) Charges for pre-paid calling cards, calling cards or debit cards or any fee associated with pre-paid calling cards, calling cards or debit cards. MTS usage charges associated with calling cards or debit cards are permissible as defined in 6.1.1. s) Charges for services which are publicly accessible, multi-party connections, commonly known as "GAB" or "chat" services. SNET ONLY - Billing of 1+ pre-subscribed end user messages is not allowed. 6.1.2.1 IMAGE POLICY The Customer agrees, as a condition of SBC Telco's performance under this Agreement, that SBC Telco will not provide Billing and Collection Services which SBC Telco deems harmful to its image. The Customer will not submit billings, or continue to submit billings, to be processed by SBC Telco under this Agreement where such billings are for or associated with, but not limited to the following: a) Services which explicitly or implicitly advocate child pornography, b) Services which advocate bigotry, racism, sexism or other forms of discrimination, c) Services which, through advertising, content or delivery, are deceptive, or that may take unfair advantage of minors or the general public, d) Charges which do not comply with federal and/or state laws, regulations or rules, 20

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 e) Services or charges, that in the sole opinion of SBC Telco, result in excessive End-User complaints about being billed for services or goods the End-User claims they did not order or receive. 6.1.3 TRUE AND CORRECT MESSAGES/CHARGES 6.1.3.1 For the purposes of this Agreement, "Unauthorized Messages" are those Messages which: 1) Are not listed under Section 6.1.1) Result from "slamming," i.e., improperly switching the End User; 3) Result from "cramming," i.e., the submission of unauthorized, deceptive or ambiguous charges for inclusion on the End User bill; or 4) Involve deceptive or fraudulent billing activities. 6.1.3.2 As used in this Section, the term "Unauthorized" means the Messages were either not authorized by the End User or are not authorized by SBC Telcos' for billing under this Agreement. 6.1.3.3 Customer warrants and represents that: a) Customer will submit only true and correct billings for charges properly authorized by End users. b) The Customer offering the product or service has thoroughly informed the End-User of the product or service being offered, including all associated charges, and has explicitly informed the End-User that the associated charges for the product or service will appear on the End-User's local telephone bill. c) The End-User has clearly and explicitly consented to obtain the product or service offered and to have the associated charges appear on the End- User's local telephone bill and, if applicable, the consent has been verified according to state or federal laws or regulatory requirements. d) Customer will not use a check, draft, or other negotiable instrument or employ a box or container used to collect entries for sweepstakes, contests, or drawings to change or add to the End User's account any supplemental telecommunications services such as but not limited to: property or services for which any charge or assessment appears on a billing statement directed to a consumer by a local exchange carrier or telecommunications carrier, 21

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 including but not limited to personal 800 number services, calling card plans, internet advertisement and website services, voice mail services, internet access services and service maintenance plans. 6.1.3.4 The Customer agrees that the Customer will obtain the End User's consent, or authorization, according to all applicable state or federal laws or regulatory requirements, including those governing verification of and retention of records of such consent or authorization. 6.1.3.5 The Customer offering a product or service to be submitted to SBC Telco for billing to an End-User may not use any fraudulent, unfair, misleading, deceptive, or anti-competitive marketing practice to obtain that End-User, including the use of negative option marketing, illegal sweepstakes, and contest. 6.1.3.6 If a Customer is notified by SBC Telco that an End-User has reported to SBC Telco that a charge made by the Customer is unauthorized, the Customer shall immediately cease to submit billing for the product or service to SBC Telco for that End-User. 6.1.3.7 Customer agrees that SBC Telco may remove, at its sole discretion, any charge from the telephone bill that any End-User claims was unauthorized, and SBC Telco may issue a credit to the End-User, at its sole discretion, for any such claimed unauthorized charge with recourse to the Customer. 6.1.3.8 It is the responsibility of the Customer to ensure that all charges submitted by the Customer comply with the above obligations. If the Customer has forwarded billings that do not comply with the above obligations, SBC Telco may decline to process and may return any such billings, or SBC Telco may delay the processing of Customer's billings to allow the Customer the time necessary to establish methods, procedures, programming or other steps necessary to ensure that Customer's billings comply with the above obligations. 6.1.3.9 Customer acknowledges and agrees that the Customer's failure to comply with the obligations above shall constitute a substantial and material breach of this Agreement and SBC Telco shall have the right to terminate the Agreement immediately pursuant to Section 9 for such breach. 6.1.3.10 Customer, and their employees, sales agents or representatives do not and will not engage in any deceptive or fraudulent 22

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 practice in marketing the services for which Customer is submitting billing to SBC Telco. 6.1.3.11 It is the continuing responsibility of the Customer to ensure that its services to be billed by SBC Telco comply with the foregoing standards set forth above and all statutory, legal and regulatory requirements. Customer will render all necessary assistance to SBC Telco to enable SBC Telco to perform a review of the Customer's messages, as SBC Telco shall determine is required, in order to help identify objectionable or improperly formatted messages on a timely basis. Nothing herein is intended to allow the Customer to wait for notification for SBC Telco before complying with SBC Telco's billing standards. Prior to sending messages to SBC Telco for billing services, the Customer is to take reasonable steps to screen, from the Customer's message billing files, all billing to be sent to SBC Telco in order to comply with said standards. 6.1.3.12 Notwithstanding anything to the contrary elsewhere in this Agreement, upon receipt of a facially valid subpoena or other valid process order, SBC Telco may disclose to federal, state, and local public and law enforcement agencies and to other local exchange carriers any information it may have concerning Unauthorized Messages involving Customer. The provision of such information will not subject SBC Telco to any liability of claim by either the Customer or anyone claiming to be a third party beneficiary of this Agreement. The parties agree there are no and will be no third party beneficiaries of and/or to this Agreement and, to the fullest extent permitted by law, Customer authorizes SBC Telco to release such information. SBC Telco shall have no obligation to give Customer notice of such disclosures. 6.1.4 THRESHOLD STANDARDS 6.1.4.1. The Customer acknowledges that SBC Telco has established performance thresholds to monitor and evaluate the Customer's billing. SBC Telco's complaint and/or adjustment thresholds are set forth in Exhibit D. The Customer agrees that SBC Telco shall have the right to modify the standards in Exhibit D upon sixty (60) days advance written notice to the Customer and without Customer's consent. Customers who exceed the pre-determined thresholds, as defined by SBC Telco, are subject to termination under Section 9 of this Agreement. 23

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 6.2 INQUIRY SERVICES PROVIDED BY CUSTOMER 6.2.1 Inquiry services include acceptance of End User communications, claims, and inquiries regarding/questions billing. 6.2.2 Customer in its performance of Inquiry shall comply with all laws, rules, and regulations. Customer shall respond to End User inquiries in accordance with Customer's procedures. Customer shall not threaten End Users with actions that are not authorized by law. 6.2.3 SBC Telco will refer all Customer's End Users to the Customer. The Customer will provide a toll free Inquiry number and, if applicable, and address for the End User and SBC Telco to utilize in contacting the Customer. This toll free number will appear on the Customer's page of the SBC Telco bill. The Customer's toll free Inquiry number must be adequately staffed to ensure that the Customer is accessible to End User and SBC Telco during normal business hours. The Customer will be charged a manual adjustment charge for each adjustment issued by SBC Telco as defined in Exhibit A. 6.2.4 If SBC Telco is contacted by the End User regarding Customer's charges, SBC Telco may at its sole discretion, immediately remove disputed charges for an End User and recourse said charges back to the Customer. If SBC Telco generates an End User requested adjustment, SBC Telco shall advise the End User that: 1) the disputed amount will be removed from the SBC Telco bill; and (2 Customer may independently pursue collection activities. The Customer will be charged a manual adjustment charge for each adjustment issued by SBC Telco as defined in Exhibit A. 6.2.5 All such adjustments will be reflected on SBC Telco's adjustment report issued to the Customer. 6.2.6 Customer shall provide full or partial adjustments of billed charges as necessary to satisfy the End User. Customer shall submit End User adjustments to SBC Telco within five (5) business days after agreeing to adjust charges for the End User. 6.3 CERTIFICATION Customer warrants and represents that it has obtained and will keep current all necessary jurisdictional certificates and certifications required to conduct the business for which it will submit charges for billing under this Agreement. Upon request, Customer will provide satisfactory evidence of all such certifications. SBC Telco shall have not obligation to process any Customer billing that is forwarded on behalf of a Client which has not obtained proper 24

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 certification or whose certification is revoked or suspended. Failure to obtain or retain proper certification or to furnish satisfactory proof thereof shall constitute a material default under this Agreement for which SBC Telco may terminate this Agreement under Section 9. For the purposes of this Section, "certification" includes any registration of similar filing or approval required by any regulatory agency having jurisdiction over Customer or any of its Clients. 6.4 ADVERTISING/PUBLICITY 6.4.1 Neither Customer nor its Clients shall publish or use the name, service mark or trademark of the SBC Telcos or any SBC Telco Affiliates in any advertising, telemarketing, direct mail or other promotions or any other publicity material relating to the Services provided under this Agreement or any products or services of Customer or its Clients billed under this Agreement without the prior written authorization of SBC Telco. 6.4.2 Neither Customer nor its Clients, nor their employees, contractors or agents, shall make any misrepresentations concerning their affiliation with the SBC Telcos or any SBC Telco Affiliates, or imply that products or services of Customer or its Clients are associated with or endorsed by the SBC Telcos or SBC Telco Affiliates. 6.4.3 In the event of any violations of this Section, SBC Telco may give notice of immediate Termination under Section 9. In addition, Customer shall reimburse SBC Telco for any out of pocket expenses incurred by SBC Telco in investigating such violation, as well as for any lost profits or costs associated with the loss or restoral of End User accounts. 6.4.4 Customer agrees that a continued violation of this Section would cause the SBC Telcos or their Affiliates irreparable injury for which they would have no adequate remedy at law, and that the SBC Telcos or their Affiliates shall be entitled to seek immediate injunctive relief prohibiting such violation, in addition to any other rights and remedies available to them. Customer waives any right to require that the SBC Telcos or their affiliates post a bond to make such injunctive relief enforceable. 6.4.5 Customer shall include, and SBC Telcos and their Affiliates shall be made third party beneficiaries of, similar rights and obligations to those set forth in this Section in Customer's agreements with its Clients. 6.5 (OMITTED INTENTIONALLY) 25

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 7.0 DISPUTES AND CLAIMS 7.1 DISPUTE/CLAIM RESOLUTIONS 7.1.1 In the event of disputes/claims that may arise under this Agreement or the Tariff(s), the Parties shall discuss and negotiate the issues surrounding the dispute/claim between the Parties' authorized representatives, with informal escalation within the Parties' organizations as necessary to pursue and achieve resolution as expeditiously as possible. 7.1.2 Any suit arising out of or relating directly or indirectly to this Agreement, whether of validity, interpretation, performance or otherwise, will be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made and to be performed in Texas without regard to Texas' choice of law rules. All actions and proceedings arising out of or relating directly or indirectly to this Agreement and General Release will be filed and litigated exclusively in the State District Court for Dallas, Texas. Customer expressly consents to the jurisdiction of that court, agree that venue is proper in that court, and expressly waives any objection to the jurisdiction and/or venue of that court. Customer states, acknowledges, and recognizes that the majority of its contacts with SBC Telco are in Dallas and that jurisdiction and venue are proper in Dallas, Texas. 7.2 LIMITATION PERIOD No Claim under this Agreement may be made or brought by any Party more than two (2) years after the date of the event that gave rise to the Claim. 8.0 LIMITATION OF LIABILITY 8.1 SBC Telco's aggregate liability to customer for all direct damages, including without limitation contract damage and damages for injuries to persons or property, whether rising from a breach of this Agreement, breach of warranty, negligence, strict liability, or any other tort with respect to the services, is limited to the amount of direct damage actually incurred. Customer releases SBC Telco and its parents, subsidiaries, affiliates, officers, directors, employees, agents, and representatives from any liability in excess of this amount. For the purposes of this agreement, Customer's "Direct Damages" with respect to any messages submitted for billing include only its out of pocket expenses, and do not include any lost profits. 26

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 8.2 In no event shall SBC Telcos be liable to Customer for any incidental, consequential, or special damages, including without limitation lost revenues, profits or savings, even if they have been advised of the possibility of such damages. Customer waives any claim against the SBC Telcos for punitive or exemplary damages. 8.3 With respect to indemnified third party claims, neither party shall have any liability to the other for any incidental, consequential, or special damages, including without limitation lost revenues, profits or savings, even if such party has been advised of the possibility of such damages, if the party seeking indemnification could have avoided incurring such damages by including limitation language in that party's contract with such third party. 8.4 The right to recover damages, if any, within the limitations specified in this section is Customer's exclusive remedy, without in any way limiting the application of this section. 9.0 TERMINATION OF SERVICE 9.1 Either Party shall have the right to terminate this Agreement: a) at any time, with or without cause, upon one hundred twenty (120) days prior written notice to the other party; or b) immediately, upon written notice to the other Party, if continued performance would cause a Party to be in violation of (i) any order of any court or regulatory agency having jurisdiction of such Party, or (ii) any law, statute, ordinance or regulation to which the Party is subject, or 9.2 SBC Telco shall have the right to terminate this Agreement: a) Upon thirty (30) days prior written notice in the event of a default by Customer in any payment obligation, if such default is not cured within such thirty (30) day period; b) Upon thirty (30) days prior written notice, if Customer fails to comply with the requirements of Sections 6.1 and/or 6.4 and such failure is not corrected within such thirty (30) day period. 9.3 Customer shall have the right to terminate this Agreement: a) If a Force Majeure Condition occurs and results in a delay or failure in performance of a material obligation of an SBC Telco under this Agreement for more than sixty (60) days, or 27

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 b) In the event of a modification of this Agreement or SBC Telco procedures under Section 3, Modifications, which has a material adverse impact upon Customer's current operations, provided that notice of termination is given and made effective at anytime within thirty (30) days after Customer's receipt of notice of such modification. 9.4 Upon termination of this Agreement by either Party under Section 9.1, the Parties shall be responsible for paying any and all outstanding amounts due to the other Party. With respect to Customer, these amounts may include, but are not limited to, Customer unbillables, post-billing adjustments, uncollectibles moneys, and charges for Services that occur for a period of twelve (12) months after the termination of this Agreement as provided in Exhibit B. With respect to SBC Telco, these amounts may include, but are not limited to, all outstanding net amounts due for PAR. 10.0 INDEMNIFICATION 10.1 Except as otherwise provided in this Agreement, without regard to whether services are provided under Tariff or contract, Each Party (the "Indemnifying Party") will indemnify and hold harmless the Other Party ("Indemnified Party") from and against any loss, cost, claim, liability, damage or expense (including reasonable attorney's fees) to Third Parties, relating to or arising out of negligence, misconduct, or breach of this Agreement by the Indemnified Party, its employees, agents, or contractors, and associated with this Agreement. In addition, the Indemnifying Party will defend any action or suit brought by a Third Party against the Indemnified Party for any loss, cost, claim, liability, damage or expense relating to or arising out of the negligence, misconduct, or breach of this Agreement by the Indemnified Party, its employees, agents, or contracts, under this Agreement. In addition, the Customer agrees to indemnify, defend, and hold SBC Telco harmless from any and all loss, cost, claim, liability, damage, or expense (including reasonable attorney's fees) arising from the accuracy of the billing charges submitted by the Customer to SBC Telco, regardless of whether such charges are due and owing. 10.2 The Indemnified Party will notify the Indemnifying Party promptly in writing of any written claims, lawsuits, or demand by Third Parties for which the Indemnified Party alleges that the Indemnifying Party is responsible under this section and tender the defense of such claim, lawsuit or demand to the Indemnifying Party. The Indemnified Party also will cooperate in every reasonable manner with the defense or settlement of such claim, demand or lawsuit. The Indemnifying Party will not be liable under this subparagraph for settlements by the Indemnified Party of any claim, demand or lawsuit unless the Indemnifying Party has approved the settlement in advance or unless the defense of the claim, demand or lawsuit has been tendered to the Indemnifying Party in writing and the Indemnifying Party has failed promptly to undertake the defense. 28

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 10.3 Notwithstanding any other provision of this Section 10, the parties acknowledge that SBC Telco has no knowledge of the validity of message payment obligations (billing charges) sent to SBC Telco for billing and collections under this Agreement, and that SBC Telco therefore strictly relies upon the Customer to forward only correct billing charges that can be, if necessary, substantiated in a court of law. 10.4 Upon request, the Customer will provide to SBC Telco all evidence needed to sustain billing charges challenged by an End User, and SBC Telco may adjust said charges with recourse if the Customer does not provide all evidence needed to substantiate billing charges which are challenged by an End User. SBC may adjust any billing charges challenged by an End User if in SBC Telco's sole opinion, the circumstances involved in the dispute, should be handled between the Customer and the End User. The Customer certifies, when forwarding billing charges to SBC Telco, that said charges are true and correct, and accurately reflect proper charges legally owed by the billed Party (End User). This Customer certification of validity shall apply to all billing charges forwarded to SBC Telco under this Agreement by the Customer from whatever source. Should SBC Telco incur liability for billing and collection of any billing charges forwarded by the Customer, the Customer will defend, indemnify, and hold harmless SBC Telco for any loss, cost, claim, damage or expense (including reasonable attorney's fees) arising from such billing and collection. 10.5 The Customer shall indemnify SBC Telco for any claim, loss, damage, expense (including reasonable attorney's fees) or liability arising in whole or in part from Customer's infringement of any patent, trademark, copyright, trade secret or other proprietary interest associated with Services provided by this Agreement. 10.6 Each Party shall defend or settle, at its own expense, any action or suit against the other for which it is responsible under this clause. Each Party shall notify the other promptly of any claim of infringement for which the other is responsible, and shall cooperate with the other in every reasonable way to facilitate the defense of any such claim. 11.0 PROPRIETARY INFORMATION Attached to this Agreement, as Exhibit F, is the Parties' understanding with respect to Proprietary Information. 12.0 FORCE MAJEURE Neither Party shall be liable or deemed to be in default under this Agreement for any delay or failure to perform resulting from (i) accidents, fire, labor disputes, epidemics, 29

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 war, terrorist act, riots, insurrections, power blackouts, acts of nature or other causes beyond its reasonable control and without its fault or negligence, (ii) acts or omissions of the other Party or of a third party (other than the non-performing Party's own agents or contractors), or (iii) compliance with any law, regulation, ruling, order or requirement of any federal, state or municipal government or department or agency or court of competent jurisdiction (a "Force Majeure Condition"). Any delay resulting there from shall extend performance accordingly or excuse performance, in whole or in part, as may be reasonable. Customer may terminate for a Force Majeure Condition which continues for more than sixty (60) days as provided in Section 9, Termination of Service. 13.0 AMENDMENTS AND WAIVERS This Agreement (or any part thereof, including Exhibits or documents referred to herein) may be modified or additional provisions may be added by written agreement signed by or on behalf of Customer, and each affected SBC Telco, unless otherwise provided herein. No amendment or waiver of any provision of this Agreement and no consent to any default under this Agreement shall be effective unless the same shall be in writing and signed by the Party against whom such amendment, waiver or consent is claimed. In addition, no course of dealing or failure of any Party to strictly enforce any term, right or condition of this Agreement shall be construed as a waiver or such term, right or condition. 14.0 ASSIGNMENT 14.1 Neither Party shall assign any right or obligation under this Agreement without the other Party's prior written consent. Any attempted assignment shall be void. 14.2 Notwithstanding Section 14.1, Customer may assign money due or to become due to it from SBC Telco for the purchase of PAR, provided (i) Customer gives SBC Telco at least thirty (30) days prior written notice of such assignment, (ii) such assignment shall not impose upon SBC Telco obligations to the assignee other than the payment of such moneys and (iii) such assignment shall not result in the filing or claim of a security interest in any PAR offered to SBC Telco for purchase under this Agreement. 14.3 Notwithstanding Section 14.1, either Party may assign this Agreement, in whole or in part, to: a) A parent corporation; b) Any company into which a Party may merge or consolidate or which acquires substantially all of its assets or stock; or 30

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 c) A wholly owned Affiliate of the parent corporation which is of a financial standing equal to or greater than that of the assignor. Any assignment under this Section shall not require the consent of the other Party, but the assigning Party shall provide written notice to the other Party within thirty (30) days of such assignment. An assignment under this Section shall not increase the scope of the Services which SBC Telco is obligated to provide by more than ten percent (10%). If the company into which Customer merges or consolidates or which merges and consolidates with Customer also has a billing and collection agreement with SBC Telco, then the more recent of the billing and collection agreements between the Parties will survive such merger or consolidation and govern the billing and collection services provided thereafter by SBC Telco to the surviving company. 14.4 Without limiting the generality of the forgoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties' respective successors and assigns. 15.0 NOTICES AND DEMANDS Except as otherwise provided under this Agreement, all notices and demands that may be given by a Party to the other Party under this Agreement shall be in writing and shall be deemed to have been duly given 1) on the date delivered in person or 2) on the date of the return receipt for those sent postage prepaid, in the United States mail via Certified Mail, return receipt requested; or, 3) on the date transmitted electronically provided that the receiving machine delivers confirmation to the sender and receipt is verified through a phone call; or, 4) on the date transmitted via electronic mail. If electronic mail delivery is selected as the method of giving notice under this section, the electronic mail record of receipt is binding as appropriate notification. If personal delivery is selected as the method of giving notice under this section, a receipt of such delivery shall be obtained. Mailing addresses for notices shall be as indicated on the Customer's current Implementation Forms. The Parties will officially indicate their electronic notice name and address if this method of notification will be employed. 16.0 THIRD PARTY BENEFICIARIES Except as provided in Section 10, this Agreement shall not provide any person not a party to this Agreement with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those exist in without reference to this Agreement, including those parties which forward billing charges to Customer to have their billing messages included by SBC Telco on End User telephone bills. 31

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 17.0 GOVERNING LAW The laws of the State of Texas shall govern the construction and interpretation of this Agreement and any Claim arising hereunder or related hereto, whether in contract or tort, without regard to Texas' choice of law rules. Any lawsuit instituted by either party in connection with this Agreement shall only be brought in the District Court of Dallas, Texas and both parties hereby consent to the personal jurisdiction of such courts. All actions and proceedings arising out of or relating directly or indirectly to this Agreement and General Release will be filed and litigated exclusively in the State District Court for Dallas, Texas. Customer expressly consents to the jurisdiction of that court, agrees that venue is proper in that court, and expressly waives any objection to the jurisdiction and/or venue of that court. Customer states, acknowledges, and recognized that the majority of its contacts with SBC Telco are in Dallas and that jurisdiction and venue is proper and accepted by all parties to this Agreement. 18.0 SEVERABILITY If any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity will affect only the portion of the Agreement that is invalid. In all other respects this Agreement will stand as if such invalid or unenforceable provision had not been a part thereof, and the remainder of the Agreement shall remain in full force and effect. Additionally, the Parties shall endeavor to replace the provision with a valid and enforceable provision acceptable to both Parties which so far as possible achieves the same economic and other benefits for the Parties as the severed provision was intended to achieve. 19.0 ENTIRE AGREEMENT This Agreement (including all Appendices, Exhibits, and/or Attachments hereto) constitutes the entire agreement between the Parties and supersedes all prior agreements, oral or written representations, statements, negotiations, proposals and undertakings with respect to the subject matter hereof. Except as otherwise provided in this Agreement, no modification, amendment, supplement to or waiver of this Agreement or any of its provisions shall be binding upon the Parties unless made in writing and duly signed by authorized representatives of both Parties. 20.0 HEADINGS The headings in this Agreement are for convenience and shall not be construed to define or limit any of the terms herein or affect the meanings or interpretation of this Agreement. 32

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 21.0 SUSPENSION OF PERFORMANCE; RIGHT TO WITHHOLD; AND OFFSET 21.1 Upon notice to Customer, SBC Telco may suspend performance of this Agreement immediately if Customer is in breach of any other agreement between the parties. Prior to suspension, SBC Telco will provide twenty (20) days written notice to Customer plus an additional twenty (20) days for Customer to cure situation. 21.2 If Customer fails to pay when due any monthly charges for Services, any recourse adjustments or any interest or other amounts due to SBC Telco under this Agreement, then in addition to any other rights SBC Telco may have under this Agreement, SBC Telco may refuse to provide any further Billing and Collection Services, directly or indirectly, to Customer, including billing and collection service on Customer Accounts received through an aggregator, affiliate or other agent of Customer. If SBC Telco does accept any Customer accounts for Services while Customer is past due on any amounts owing to SBC Telco, then SBC Telco may deduct the amounts owed from any PAR owed to Customer or its agent on Customers' behalf. Prior to the commencement of any action described in this paragraph 21.2, SBC Telco will provide twenty (20) days written notice to Customer plus an additional twenty (20) days for Customer to cure situation. 21.3 Notwithstanding anything contained herein to the contrary, if the financial condition of the Customer becomes impaired and/or the Customer fails to pay its obligations to SBC Telco as they become due or when services are terminated, the Customer agrees SBC Telco shall be entitled to withhold any funds, which otherwise might be due, or become due to the Customer hereunder, to satisfy any unpaid or potential obligation of the Customer to SBC Telco, including, but not limited to, any amounts due under this Agreement, any access charges due SBC Telco, any amounts due SBC Telco under applicable tariff, under any other agreement, or otherwise. 22.0 SUB-CONTRACTING SBC Telcos shall have full power and authority to enter into contracts with third parties to perform the services to be provided under this Agreement. Upon notice from SBC Telcos, Customer agrees to cooperate with such third parties to the extent reasonably requested by SBC Telcos. Nothing in this paragraph shall relieve SBC Telcos of its obligations under this Agreement. 23.0 WARRANTIES SBC Telco makes no warranties, expressed or implied, including, but not limited to, warranties with respect to tax procedures applied to billing and the implied warranties of merchantability and fitness for a particular purpose. Customer shall have not the right to 33

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 24.0 INTELLECTUAL PROPERTY Except as otherwise expressly provided herein, nothing contained in this Agreement shall be construed as conferring by implication, estoppel, or otherwise any license or right under any patent, trademark, trade name, copyright, or other intellectual property right of either Party. 25.0 OTHER BUSINESS, NO INTEREST CREATED Nothing in this Agreement shall be deemed to create any interest in favor of SBC Telcos or Customer in the assets, revenues, earnings or otherwise in the business of the other. 26.0 SOFTWARE SBC Telco or its contractors or agents may develop specifications, drawings, documentation, concepts, methods, techniques, process, adaptations, and ideas including, but not limited to, software (hereinafter "Software") for the purpose of rendering Services to Customer under this Agreement. Unless otherwise agreed in writing by authorized representatives of the Parties, in advance of the creation of the Software, SBC Telco shall own all right, title, and interest, including copyright in and to the Software. 27.0 SURVIVABILITY OF OBLIGATIONS NOTWITHSTANDING EXPIRATION OR TERMINATION OF THIS AGREEMENT, THE PROVISIONS OF THIS AGREEMENT AND EACH PARTY'S OBLIGATIONS HEREUNDER, WHICH BY THEIR NATURE OR CONTEXT ARE REQUIRED OR INTENDED TO SURVIVE, SHALL SURVIVE AND REMAIN IN FULL FORCE AND EFFECT AFTER SUCH EXPIRATION OR TERMINATION. 28.0 REALIGNMENT OF LOCAL EXCHANGE TELEPHONE FRANCHISES In the event SBC Telco sells, exchanges, or transfer a local exchange telephone franchise(s) in which SBC Telco provides services under this Agreement, SBC Telco agrees to the following: a) To notify the Customer of the sale, exchange, or transfer of a local exchange franchise and the proposed closing date, provided information regarding the sale, 34

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 exchange, or transfer is not confidential or prohibited by law, regulation, court or regulatory order, or agreement from being disclosed to third parties. If information regarding the sale, exchange, or transfer is confidential, SBC Telco will notify Customer at the earliest reasonable opportunity when such information is no longer confidential and such disclosure is not prohibited by law, regulation, court or regulatory order, or agreement from being disclosed to third parties. If SBC Telco fails to notify Customer, SBC Telco shall not be liable for any loss, cost, expense, damages, or liabilities resulting from failure to notify Customer. b) SBC Telco shall have no obligation to perform Services in local exchange telephone franchises that have been sold, exchanged, or transferred to another party. c) Subject to the terms of the sale, exchange, or transfer, SBC Telco shall cooperate with Customer on billing and interface issues related to the sale, exchange, or transfer or local exchange telephone franchise(s) as to Services performed under this Agreement. 35

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above. <Table> <S> <C> SBC TELCO CINGULAR WIRELESS ----------------------------------- (Name of Customer) ----------------------------------- (Customer's Address) ----------------------------------- ----------------------------------- ----------------------------------- (Customer's Telephone Number) By: By: ----------------------------------- ------------------------------- (Signature) (Signature) Name: James Walsh Name: -------------------------------- ----------------------------- (Print) (Print) Title: Director - Billing and Title: Collection Services ----------------------------- ------------------------------- Date: Date: -------------------------------- ----------------------------- </Table> 36

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary Definitions. As used in this Agreement (including the Appendices, Exhibits, and Attachments hereto), the terms set forth below will have the following respective meanings and will be equally applicable to both the singular and plural forms of the terms defined: Adjusted Revenue: The total in a settlement period of Accepted Revenues plus Taxes and Surcharges, less Recoursed Adjustments, less discounts, and unbillables, and plus Rebills. This is the amount to which the Uncollectible Factor is applied to determine the monthly Allowance for Uncollectibles. Adjustments: An Adjustment is the removal of a disputed charge from the End User's bill. Anticipated Uncollectibles Anticipated Uncollectibles are estimated (Allowance for amounts representing the portion of the Uncollectibles): Adjusted Revenue which the SBC Telco expects will ultimately become Realized Uncollectibles, as determined by applying the Uncollectible Factor. Bill Date: The date of the SBC Telco End User Bill or the date of the Statement of Amount Due SBC Telco, whichever applies. Bill Message: A communication containing promotional, informational, or legally required messages that are acceptable to SBC Telco and printed in the Customer's portion of the End User Bill. Bill Processing: The processing of B&C Customer messages and the preparation and mailing of statements to End Users on behalf of the B&C Customer. Bill Rendering: The preparation and mailing to an End User statements of amounts due. Billed Revenues: The total amount of Customer charges inclusive of Taxes and Surcharges, which are billed to SBC Telco End User accounts during a specific period. 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary <Table> <S> <C> Billing and Collection Charges which make up the Amount Due SBC Services Charges: Telco for Billing and Collection Services provided to Customer under contract or applicable tariffs. Business Day(s): Any day of the week other than Saturday, Sunday, or a Holiday. Connect:Direct/NDM: A communications protocol product of Sterling Corporation which is used to electronically transmit data files between SBC Telcos and Customer. Customer: Customer, for the purposes of this contract, means the purchaser of SBC Telco Billing and Collections Services. Customer Message: The individual call detail including Customer's charges to the End User. Data Set: The file containing End User messages which is transmitted by Customer to the SBC Telco for billing. Data Transmission: The process of sending standard format call detail or records from one location to another using standard transmission software programs, such as Connect:Direct/NDM software. </Table> 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary <Table> <S> <C> Date Created: A six-position numeric field in the EMI header record that identifies the date a pack or Data Set was created by Customer. Denial of Service: Consists of denying an End User's access to the network or portions of the network in cases of insufficient payment. EMI: Exchange Message Interface, the industry standard format for the exchange of message data between carriers. End User(s): The End User is a SBC Telco customer for local exchange service, exclusive of resellers of local exchange service. End User Bill(s): The billing media used to convey to End Users the charges for telephone services of SBC Telco as well as for Customer, and other Entities for which SBC Telco provides billing and collection services. Final Bill: A bill rendered to an End User for outstanding amounts following disconnection of all associated services. Final True-Up: Settlement, between the SBC Telco and Customer, of Recoursed Adjustments and Uncollectible Bad Debt following the end of SBC Telco provision of Billing and Collection Services to Customer. Inquiries: The communications, either written or oral, to the SBC Telcos concerning End User billing. Inquiry Services: The answering of End User questions, either written or oral, concerning disputed charges and billed amounts, including explaining charges and credits, investigating claims, and adjusting charges. </Table> 3

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary <Table> <S> <C> LEC: Local Exchange Carrier, which is the local telephone company that renders the bill to the End User. Message: "Message" or "Messages" means all EMI formatted records forwarded by Customer to the SBC Telco for bill processing which contain billing information such as service details, charges, mechanized credits, and adjustments. Message Processing Charge: A rate charged by the SBC Telco for each Customer message accepted and billed. Netting: The amount due the Customer minus the amount due SBC Telco. Pack: A term used to describe a group of invoices or messages, separated by header and trailer records that the Customer submits to the SBC Telco. Page: One side of the sheet of paper upon which the End User Bill is printed, or if the sheet is folded and printed as a folio, one of the four resulting pages. PAR: Purchase of Accounts Receivable Payment and Processing: The process by which payments are received and applied to Remittance the End User's balance due for services provided by Customer. Pay-Per-Call Services: Any service in which any person provides audio information, audio entertainment or the provision of a product; the charges which are assessed on the basis of the completion of the call, for which the caller pays a per-call or per-time interval change. Pre-subscribed: An End User has selected Customer or another carrier as its primary interexchange carrier for the purpose of providing intraLATA and/or interLATA, telecommunications services. </Table> 4

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary <Table> <S> <C> Purchase of Accounts The monthly purchase by SBC Telco of Receivable (PAR): Customer's End User receivables that include confirmed revenues, Unbillables, Uncollectibles, Taxes, and Adjustments. Purchase of Accounts The statement which the SBC Telco provides Receivables (PAR) monthly to Customer as identification of Statement: the Net Purchase Amount Due Customer for the Purchase of Accounts Receivable, which is supported by all associated back up detail reports. Rebill(s) or Rebilling: Rebills are End User messages which the SBC Telco bills back to the same or a different End User account after investigation determines the proper End User account the messages belong to. Recoursed Adjustments: Recoursed Adjustments are amounts that the SBC Telco removes from End User balances and charges back to Customer via a deduction on the Purchase of Accounts Receivable Statement. They may be initiated by Customer, the SBC Telco or by the End User and include, but are not limited to, adjustments made to End User Bills to correct charges on current or prior bills; amounts removed from End User balances at the direction of Customer, amounts removed from the End User balances by SBC Telco to comply with legal or regulatory requirements. Recoveries: Moneys received in payment of an outstanding balance of Realized Uncollectibles. Revenue Account Office A standard designation of a local phone (RAO): company. May be used in conjunction with EMI to identify the specific phone company who sent or shall receive such transactions. A large company may have multiple data centers or divisions within the company with different RAOs. </Table> 5

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary SBC Telco: The SBC Telephone Companies as defined in the Principal Agreement, which are the Parties performing Services for Customer under this Agreement. Text Phrase: A communication of a non-promotional nature from Customer to End Users which clarifies or explains charges appearing in the Customer's portion of the End User Bill. Time and Cost (T&C) An estimation of the number of hours, Estimate: expense and implementation date necessary to complete a project requested by Customer. Toll Master File Maintaining a file of unbilled message Maintenance: details in line number order or account sequence. Maintaining message details with an account in a predetermined sequence. Toll Master File Maintenance takes Service Order (guide) activity into account, and new installs, finals, and telephone number changes will cause rearrangements of the master file sequence. Additional information is also maintained to identify unique services/options to which the billing account subscribes. Treatment The various activities involved in obtaining payment from an End User whose account is in arrears. May include but is not limited to letters, phone calls, and collection agency involvement. True-Up: The process of comparing Realized Uncollectibles to an amount withheld as Anticipated Uncollectibles for a certain time period. the difference is either due Customer (over-withholding) or the SBC Telco (under-withholding). 6

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 1 Glossary <Table> <S> <C> Unbillables: Consists of messages that have been sent to the SBC Telco for processing that the SBC Telco cannot bill for various reasons including but not limited to messages that cannot be associated with a billing account. Invoice errors cause the entire invoice to error. Message Ready Billing usage will error on a message by message basis. Uncollectible Bad An amount applied to the accounts receivable Debt Allowance: to recognize potential End User revenue losses on final accounts resulting from failure of the End User to pay legally earned service revenues. Uncollectible Factor: The percentage applied to Adjusted Revenues to determine the Anticipated Uncollectibles for a given timeframe. Uncollectibles: Amounts lawfully billed to End Users by the SBC Telco, which, after standard intervals and application of standard collection procedures, the SBC Telco determines are impracticable of collection and are written off as bad debt on final accounts. </Table> 7

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Appendix 2 Addresses for Notices and Demands The initial addresses for notices under Section 15, Notices and Demands, of the Principal Agreement are set forth below. The Parties shall promptly notify each other of any changes in the addresses or titles to whom notices are required to be sent under Section 15, and shall prepare an amended Appendix 2 to reflect such changes. To Customer: Brian Kerr 12525 Cingular Way Alpharetta, GA 30004 Copies of all notices from Customer to SBC Telco shall be sent as specified above to: Industry Markets 4 SBC Plaza Floor 18 Dallas, TX 75202 ATTN: Director - Billing and Collections With a copy to: Legal - Southwestern Bell Telephone Company 1 SBC Plaza Floor 30 Dallas, TX 75202 ATTN: Senior Counsel (B&C) 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT B BILLING AND COLLECTION SERVICES: FINANCIAL SETTLEMENTS MAY 13, 2002

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B TABLE OF CONTENTS SOUTHWESTERN BELL TELEPHONE, PACIFIC BELL, NEVADA BELL: <TABLE> <CAPTION> Page <S> <C> 1.0 SETTLEMENT TERMS..........................................................................................2 1.1 AMOUNT DUE THE CUSTOMER...........................................................................2 1.1.2. Calculation of Amount Due the Customer...................................................2 1.1.3. Uncollectible Bad Debt Allowance (Discounted)............................................5 1.1.4. Uncollectible True-Up....................................................................7 1.1.5. Reserve Requirement......................................................................9 1.1.6 PARS Issuance Date (SWBT Only)..........................................................11 1.1.7. Payment Date............................................................................11 1.1.8. Payment Method..........................................................................12 1.1.9. Payment Detail..........................................................................13 1.1.10. Late Payment Charge.....................................................................13 1.1.11. Late Payment Resulting from Bank Error..................................................13 1.1.12. Negative Amount due the Customer........................................................13 1.2. AMOUNT DUE SBC TELCO...........................................................................14 1.2.1. Calculation of Amount Due SBC Telco.....................................................14 1.2.2. Billing Detail..........................................................................14 1.2.3. Payment Date............................................................................14 1.2.4. Payment Method..........................................................................15 1.2.5. Payment Detail..........................................................................15 1.2.6. Timeframe for Statement Issuance........................................................15 1.2.7. Late Payment Charge.....................................................................16 1.2.8. Late Payment Resulting from Bank Error..................................................16 1.2.9. Right to Net............................................................................16 1.3. SETTLEMENTS OF DISPUTED AMOUNTS................................................................17 1.3.1. Notification of Disputed Amount.........................................................17 1.3.2. Payment of Disputed Amount..............................................................17 1.3.3. Ultimate Settlement of Disputed Amount..................................................18 SOUTHWESTERN BELL TELEPHONE: 2.0 CUSTOMER BILLING STATEMENT.......................................................................21 2.1.1. Bill Processing Service.................................................................21 2.1.2. Billing Information.....................................................................23 2.2. Customer Bill Format....................................................................23 PACIFIC BELL AND NEVADA BELL: 3.0 CARRIER BILLING REQUIREMENTS..............................................................................27 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B TABLE OF CONTENTS <TABLE> <S> <C> AMERITECH: Page 4.0 SETTLEMENT TERMS..................................................................................30 4.1 Net Purchased/Collected Amount Due Customer....................................................30 4.1.1 Formula for Calculation of the Net Purchase/Collected Amount Due Customer...............30 4.1.2 Final True-Up Upon Cessation of Billing and Collection Services.........................37 4.1.3 Statement of Amount Due the Customer....................................................39 4.1.4 Payment Date............................................................................40 4.1.5 Payment Method..........................................................................40 4.1.6 Payment Detail..........................................................................40 4.1.7 Late Payment Penalty....................................................................40 4.1.8 Late Payment Resulting from Bank Error..................................................41 4.2 AMOUNT DUE THE AOC.............................................................................41 4.2.1 General...................,.............................................................41 4.2.2 Payment Date............................................................................41 4.2.3 Payment Method..........................................................................42 4.2.4 Payment Detail..........................................................................42 4.2.5 Netting of Amount Due AOC...............................................................42 4.2.6 Late Payment Penalty ...,,.':...:.......................................................43 4.2.7 Late Payment Resulting from Bank Error..................................................43 4.3 SETTLEMENT OF DISPUTED AMOUNTS.................................................................44 4.3.1 Notification of Disputed Amount.........................................................44 4.3.2 Payment of Disputed Amount..............................................................44 4.3.3 Ultimate Settlement of Disputed Amount..................................................44 4.3.4 Retention of Supporting Data Concerning Disputed Amount.................................44 SOUTHERN NEW ENGLAND TELEPHONE: 5.0 SETTLEMENT TERMS.................................................................................47 5.1. Amount Due Customer............................................................................47 5.1.1. Formula for Calculation of Amount Due Customer..........................................47 5.1.2. Derivation of Uncollectible Bad Debt Allowance..........................................48 5.1.3. Uncollectible True-up...................................................................49 5.1.4. Final True-ups at Termination...........................................................50 5.1.5. Payment Date............................................................................50 5.1.6. Payment Method..........................................................................51 5.1.7. Assignment of Accounts Receivable.......................................................51 5.2. Amount Due SNET................................................................................51 5.2.1. Calculation of Amount Due SNET..........................................................51 5.2.2. Netting Process...........................................................................52 </TABLE> ii

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB SECTION 1 - APPLICABLE FOR: - SOUTHWESTERN BELL TELEPHONE (SWBT) - PACIFIC BELL (PB) - NEVADA BELL (NB) 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB (SECTION 1.0 IS APPLICABLE TO SOUTHWESTERN BELL TELEPHONE, PACIFIC BELL AND NEVADA BELL ONLY) 1.0 SETTLEMENT TERMS 1.1 AMOUNT DUE THE CUSTOMER 1.1.1 SBC Telco will purchase the Customer's account receivable due for bills rendered or to be rendered by SBC Telco to the Customer's End Users. 1.1.1.1 The Customer agrees to submit new billings to SBC Telco no less than once a week. 1.1.1.2 The Customer and SBC Telco agree that in the event the calculation of any purchase of Accounts Receivable, as defined herein, results in a negative amount due the Customer, SBC Telco may hold payment or recalculate any pending accounts receivable purchase(s) as defined further herein. 1.1.2. Calculation of Amount Due the Customer SBC Telco purchases the Customer's accounts receivable based on Pre End User Billing. The Customer will receive a Purchase of Accounts Receivable Statement (PARS) which will reflect the Customer's accounts receivables. The calculation of the dollar amount due the Customer for the purchase of accounts receivable when the Customer provides files of rated messages is as follows: 1.1.2.1 Calculation with netting of B&C charges Total Current Billable Amount + Billed Taxes +/- Surcharges + Rebills - Returns (Unbillables) +/- Recourse Adjustments (including taxes) - Uncollectible Bad Debt Allowance + Customer messages lost by SBC Telco 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB +/- Uncollectible True-Up Amounts (including any reserve requirements) ------------------------------------------- = Amount due the Customer - Amount due SBC Telco for Billing and Collection Services ------------------------------------------- = Net Purchase of Account Receivable Amount 1.1.2.2 Calculation without netting of B&C charges Total Current Billable Amount + Billed Taxes +/- Surcharges + Rebills - Returns (Unbillables) +/- Recourse Adjustments (including taxes) - Uncollectible Bad Debt Allowance + Customer messages lost by SBC Telco +/- Uncollectible True-Up Amounts (including any reserve requirements) ------------------------------------------- = Amount due the Customer 1.1.2.2.1. At the request of the Customer, SBC Telco will purchase the accounts receivable, without netting, after the Customer has purchased more than eighteen (18) months of bill rendering services and has established a consistent service and billing pattern with End Users. SBC Telco will have complete discretion in determining if the Customer's billing meets the criteria for which SBC Telco is willing to provide the purchase of the Customer's accounts receivable without netting. 1.1.2.3 Definitions of Elements on PARS 3

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB Total Current Billable Amount is the total amount billable to the Customer's End Users for the Customer services excluding any taxes applicable to such services. The total amount of billable revenue will be determined for the Customer for each file received. Billed Taxes is the amount of taxes billed to End Users for Customer charges since the last settlement. Timely and accurate remittance of taxes to the taxing agency is the responsibility of the Customer. Surcharges is the total of applicable surcharges collected on the Customer's behalf by SBC Telco. Timely and accurate remittance of surcharges to the reporting agency is the responsibility of the Customer. Rebills represent the value of messages that have been adjusted from an End User account and processed to be billed to the same or another End User. Returns (Unbillables) represent the value of messages that have been rejected for billing by SBC Telco and returned to the Customer. Recourse Adjustments are the amounts debited or credited each settlement period to the Total Current Billable Amount. Recourse adjustments include SBC Telco and Customer initiated End User Adjustments, and Uncollectible Adjustments, defined as follows: - End User Adjustments are the billed amounts, which SBC Telco removes from End User balance due, in accordance with this agreement. - Uncollectible adjustments are the amount of non-deniable revenues adjusted through SBC Telco's uncollectible system on final accounts at time of write-off. Uncollectible Bad Debt Allowance is an amount deducted from Total Current Billable Amount adjusted for Billed Taxes and Recourse Adjustments to compensate for losses resulting from failure of End Users to pay Final Customer Bill amounts due. Derivation of the Uncollectible Bad Debt Allowance is defined in Section 1.1.3. Customer messages lost by SBC Telco will be estimated by SBC Telco based upon procedures defined in this 4

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB Agreement and, if not previously calculated in the Purchase of Accounts Receivable, SBC Telco will add to the Amount Due the Customer. Uncollectible True-Up Amounts are amounts resulting from quarterly true-up calculations as defined in Section 1.1.4. Amount Due the Customer represents the Net Purchase amount for Accounts Receivable. Amount Due SBC Telco equals all charges due or to become due to SBC Telco under this Agreement and any applicable tariff. Net Purchase of Accounts Receivable amount is the Amount due the Customer less the Amount Due SBC Telco. 1.1.3. Uncollectible Bad Debt Allowance (Discounted) For each settlement, SBC Telco will subtract an uncollectible bad debt allowance amount for Uncollectibles from the Total Current Billable Amount, adjusted by Recourse Adjustments, Billed Taxes, Surcharges and Unbillables. Uncollectibles are amounts billed by SBC Telco to End Users on final End User bills that are added to the Uncollectible (realized) Accounts of SBC Telco. SBC Telco will determine the Customer's uncollectible bad debt allowance amount for Uncollectibles for each settlement by multiplying the Total Current Billable Amount, adjusted by Recourse Adjustments, Billed Taxes, Surcharges and Unbillables by the Customer uncollectible factor as determined below: 1.1.3.1. New Customers Until valid uncollectible data can be accumulated by SBC Telco on the Customer, normally 6 (six) to 9 (nine) months of realized uncollectible monthly activity, the Customer's uncollectible factor will be set at 25% for the first two months, defined as the Customer submitting billings to SBC Telco no less eight consecutive weeks over a two calendar month time frame. After the first two months of billings as defined above, the factor will set to an industry average for like billings or another surrogate factor acceptable to SBC Telco, and will be applied to the Customer's account receivables; provided however, the 5

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB two month reserve will in no event be less than 50% of the largest one month's billing submitted to SBC Telco by the Customer. 1.1.3.2. Existing Customers To determine the Customer uncollectible bad debt allowance factor, SBC Telco will determine from its bill records the dollar amount billed on the final End User bills which have deemed as uncollectible. These amounts are added to the realized uncollectible accounts (uncollectible amount) for the most recent quarterly period as defined by SBC Telco. This uncollectible amount will include adjustments to account for any payments received by SBC Telco for outstanding final Customer billed amounts that were declared uncollectible prior to the most recent quarter. The uncollectible amount will not include uncollected late payment charges applied to the End User bill. 1.1.3.3. An uncollectible apportionment system will be used by SBC Telco each month to determine the total realized uncollectible amounts for each Customer which is provided Bill Processing Service by SBC Telco. 1.1.3.4. SWBT only - The realized uncollectible amount for the Customer determined through the apportionment system, will be divided by the Total Current Billable Amount, plus or minus returns, plus rebills, plus or minus Recourse Adjustments, plus taxes for the same quarter to develop the Customer uncollectible bad debt allowance factor. PB/NB only - The realized uncollectible amount for the Customer determined through the apportionment system, will be divided by the Total Current Billable Amount, plus or minus returns, plus rebills, plus or minus Recourse Adjustments, for the same quarter to develop the Customer uncollectible bad debt allowance factor. 1.1.3.5. This uncollectible apportionment system will utilize actual Customer realized uncollectible amount from End User accounts in order to determine realized amounts. 1.1.3.6. The most recent uncollectible bad debt allowance factor will be used by SBC Telco until a revised uncollectible 6

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB bad debt allowance factor is determined in the succeeding study period. 1.1.3.7. In the event of negative or zero uncollectible bad debt allowance factor occurs, SBC Telco may utilize either an industry average factor, the Customer's prior quarter factor, or another surrogate factor which represents the Customer's prior uncollectible history. 1.1.3.8. Notwithstanding the above, SBC Telco retains the right to adjust the Customer's uncollectible bad debt allowance factor should the Customer's uncollectibles, adjustments and/or billable revenues fluctuate to such an extent as to appear unstable and insufficient to cover projected write-offs, or abruptly change. 1.1.4. Uncollectible True-Up SBC Telco will determine the time at which the history of the Customer's realized uncollectibles is sufficient to establish the Customer specific uncollectible bad debt allowance factor (normally 9 to 12 months of realized uncollectible monthly activity). After this Customer specific factor has been developed and applied for a quarterly period, the following uncollectible true-up procedure will be implemented. 1.1.4.1. During the quarterly period, if the realized uncollectible (write-offs) plus the required uncollectible reserve amount as defined below in Section 1.1.5 (reserve) differ from the total uncollectible bad debt allowance amount discounted from each settlement (discounted uncollectibles) plus the reserve currently held by SBC Telco, a true-up amount will be calculated. This difference shall equal the true-up amount. SBC Telco will net the true-up amount from the Purchase of Accounts Receivable Amount due the Customer. The formula for the true-up is as follows: Total Current Quarter's Realized Uncollectibles + The current quarter's required reserve amount ---------------------------------------------------- = Total current quarter's realized uncollectible and reserve requirement - The appropriate quarter's discounted uncollectibles 7

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB - Prior quarter's reserve amount held by SBC Telco --------------------------------------------------- = +/- True-up amount A positive true-up amount will be due SBC Telco and a negative true-up amount will be due the Customer. 1.1.4.2. This formula allows for an actual true-up on realized uncollectibles and the maintenance of an ongoing required reserve amount. 1.1.4.3. The true-up amount will be calculated at the end of the month following the close of the quarterly period. The true-up settlement will be included in the calculation of the Amount Due the Customer. 1.1.4.4. If the actual net bad debt realized is greater than the Estimated Bad Debt, SBC Telco will deduct the difference from the next available purchase of accounts receivable or, if the next scheduled purchase of accounts receivable is less than the difference, SBC Telco may issue a separate invoice to the Customer for the difference. The Customer will pay such separate invoice within 5 business days of receipt. In the event the Customer fails to pay the separate invoice within 5 business days of receipt, SBC Telco may immediately discontinue any or all billing services offered under this Agreement. 1.1.4.5. A final true-up will be performed on 9 -12 months of data following the termination of billing and collections Bill Rendering services. The formula for the final true-up is: All realized uncollectibles not previously tuned-up - All discounted uncollectibles not previously trued-up - Current reserve held by SBC Telco ---------------------------------------------------- = Final true-up amount A positive true-up amount will be due SBC Telco and a negative true-up amount will be due the Customer. 1.1.4.6. The final true-up will be calculated by the end of the 9* to 8

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB 12th month following termination of billing and collections Bill Rendering services. The true-up settlement will be made within 90 days thereafter. 1.1.5. Reserve Requirement SBC Telco will apply the following procedures in calculating the required reserve amount: 1.1.5.1. Until such time as SBC Telco has established a Customer specific uncollectible factor, the reserve requirement will be based on no less than 50% of the largest one month's billings submitted to SBC Telco by the Customer. 1.1.5.2. For Customers whose total adjustments exceed 10% of the Customer's billed revenues in any one (1) month or should the Customer's uncollectibles adjustments and/or billed revenues fluctuate to an extent as to appear unstable or insufficient to cover projected write-offs, or abruptly change, the required reserve amount will be calculated as follows: Total realized uncollectibles for the current quarterly period x (multiplied) .667 + The amount of adjustments experienced in the prior three months of billings with respect to live accounts. Current reserve held by SBC Telco + The amount of revenues adjusted in the prior three months through SBC Telco's uncollectible system on final accounts at write-off ------------------------------------------ = Required Reserve Amount The required reserve amount for Customers not subject to procedures defined in 1.1.5.1 and 1.1.5.2 above will be established and maintained by SBC Telco as a current reserve and will be determined by calculating the total realized uncollectibles for the current quarterly period x (multiplied) .667. 1.1.5.3. (Pacific Bell and Nevada Bell only) In addition to the Customer's reserve requirement defined above, the Customer's minimum annual purchase of service requirements will be reviewed on a quarterly basis and 9

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB any prorated short fall will be maintained in the reserve requirement based on the following calculation: Number of months of services for the current term of the Agreement (less any reduction of time for service start up) x (multiplied) one-twelfth (1/12) of the annual required minimum purchase of service - All annual billing and collection charges ------------------------------------------- = Required Reserve Amount A positive amount will be calculated into the Customer's reserve requirement. A negative amount will not require a reserve requirement for the minimum annual purchase of service. 1.1.5.4. Notwithstanding the above, SBC Telco at its sole discretion reserves the right to increase the reserve amount, if the Customer's uncollectibles, adjustments, minimum annual purchase of service (Pacific Bell and Nevada Bell), and/or billable revenues fluctuate to such an extent that the reserve no longer appears sufficient to cover the projected write-offs. This may be accomplished by increasing the bad debt allowance factor and/or by withholding payments due to the Customer, as SBC Telco shall deem necessary to cover the risk involved or require the Customer to fund the increased reserve amount. 1.1.5.5. Deposits and Reserves In the event the Customer has not established credit with SBC Telco or has information services billings that are 25% or greater of its projected or actual total billed revenue, or has repeatedly failed to pay SBC Telco in a timely manner for Billing and Collection Services provided by SBC Telco under previous billing agreements, or fail to pay the charges for the services provided under this Agreement in a timely manner, SBC Telco shall have the right to require a deposit from the Customer to guarantee payment. The deposit shall be the actual or estimated charges for services, including amounts for anticipated Adjustments and uncollectibles, for providing the Service to the Customer for a four month period. The anticipated Adjustments and 10

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB uncollectibles shall be based on the greater of the Customer's historical Adjustment and uncollectible for the Customer's type of telecommunications services. SBC Telco reserves the right to increase the deposit in the event the Customer's billing volumes increase to the extent that the existing deposit no longer represents the actual charges for services, over a four month period. Upon termination of the service, SBC Telco shall credit the amount of the deposit to the Customer's account and any remaining credit balance will be refunded or credited to the Customer's account prior to termination of the Service if the Customer has promptly paid all relevant charges for a period of one year. 1.1.6 PARS Issuance Date (SWBT Only) SWBT ONLY - SWBT will issue the Purchase of Accounts Receivable Statement to the Customer no later than fifteen (15) business days following the entry of message data into SWBT's Master File Maintenance system for program processing for all applicable SWBT data processing centers, (normally three (3) to six (6) business days from date of receipt). Notwithstanding the above, the Purchase of Accounts Receivable Statement will not be issued when the amount due the Customer is a negative amount. SWBT will issue a preliminary PAR. 1.1.7. Payment Date SWBT ONLY - For pre End User billing purchase of the Customer's accounts receivable, the net amount due the Customer from SWBT for each file or rated messages will be payable on the payment date which will determined by adding forty-two (42) days to the date the files are processed by SWBT. Files will be processed in all data centers within three (3) to six (6) business days of receipt by SWBT. PB/NB ONLY - For pre End User billing purchase of the Customer's accounts receivable, the net amount due the Customer from Pacific Bell/Nevada Bell for each file or rated messages will be payable on the payment date which will determined by adding fifty (50) days to the date the files are processed by Pacific Bell/Nevada Bell. Files will be processed in all data centers within three (3) to six (6) business days of receipt by Pacific Bell/Nevada Bell. 1.1.7.1. If such payment date falls on a Sunday or on a Holiday which is observed on Monday, payment date shall be the first non-Holiday day following such Sunday or Holiday. 11

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB 1.1.7.2. If such payment date falls on a Saturday or on a Holiday which is observed on Tuesday, Wednesday, Thursday or Friday, the payment date shall be the last non-Holiday day preceding such Saturday or Holiday. 1.1.7.3. SWBT ONLY - SWBT may, for ease of administration, combine payments due for files received on different days within a five (5) day period. The settlement date will then be determined by adding forty-two (42) days to the midpoint of the period (said period not to exceed five (5) days) over which the billable messages are received. PB ONLY - Pacific Bell may, for ease of administration, combine payments due for files received on different days within a five (5) day period. The settlement date will then be determined by adding fifty (50) days to the midpoint of the period (said period not to exceed five (5) days) over which the billable messages are received. NB ONLY - Nevada Bell may, for ease of administration, combine payments due for files received on different days within a calendar month period. The settlement date will then be determined by adding fifty (50) days to the midpoint of the period (said period not to exceed calendar month) over which the billable messages are received. 1.1.8. Payment Method Any payment to the Customer from SBC Telco of one hundred thousand dollars ($100,000) or more must be transmitted by SBC Telco to a designated bank account of the Customer (to be provided to SBC Telco by the Customer) by electronic funds transfer. Any payment to the Customer from SBC Telco less than one hundred thousand dollars ($100,000) may be paid at SBC Telco's option by electronic fund transfer as described above or by check or draft to the payee's address (to be provided to SBC Telco by the Customer). If any portion of the net settlement amount is received by the Customer in funds that are not immediately available to the Customer, then a late payment charge shall be due the Customer, unless the payment is being held for reserve requirements. SBC Telco will have full responsibility for ensuring that payment is received by the payment date. 12

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB 1.1.9. Payment Detail Any draft payment to the Customer from SBC Telco must be accompanied by the reference number utilized by SBC Telco for the Purchase of Accounts Receivable Statement being paid. 1.1.10. Late Payment Charge Any payment received by the Customer after the payment date or any payment received in funds, which are not immediately available to the Customer on the payment date, will be subject to a late payment charge. The late payment charge shall be the portion of the Amount Due the Customer (as defined in 1.1.) received after the payment date times a late factor. The late factor shall be six percent (6%) per annum prorated on a daily basis (6% divided by 365), or the maximum rate allowed by law in each state jurisdiction, whichever is less. Any late payment charge may be remitted separately to the Customer or at SBC Telco's option combined with a Purchase of Accounts Receivable payment. 1.1.11. Late Payment Resulting from Bank Error Any late payment resulting from bank error will not be subject to the late payment charge provided SBC Telco can verify that it was not at fault. Rather, the discrepancy will be resolved by the bank(s) involved. It is the responsibility of SBC Telco to notify the bank(s) involved and coordinate resolution of the discrepancy. 1.1.12. Negative Amount due the Customer The Customer and SBC Telco agree that in the event the calculation of any Purchase of Accounts Receivable results in a negative amount due the Customer, SBC Telco may at its sole discretion 1) recalculate and reduce the amount of prior pending accounts receivable purchase(s) by the current negative amount due, or 2) hold payment of any pending account receivable purchase(s), otherwise due the Customer, without penalty until such time as the Customer submits new billings which are sufficient to result in SBC Telco's calculation of a subsequent Purchase of Accounts Receivable with a positive amount due the Customer, taking into consideration the negative amount due from prior purchase(s), or 3) issue a bill to the Customer for the amount due SBC Telco. 13

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB 1.1.12.1. The Customer and SBC Telco agree that the payment date for accounts receivable purchase(s) suspended for payment as defined above will be due the Customer ten (10) additional business days from the date on which a positive or recalculated amount due is calculated by SBC Telco or ten (10) additional business days from the original payment date, whichever is later. 1.1.12.2. In addition to any other remedies, should the Customer fail to submit new billings in the required weekly interval to offset the negative amount due, SBC Telco may apply the Customer's reserve amount to offset and proceed with Termination of Services, as defined in this Agreement. 1.2. AMOUNT DUE SBC TELCO 1.2.1. Calculation of Amount Due SBC Telco The amount due SBC Telco equals all appropriate billing and collection service charges for services provided under this Agreement, or tariffs, including amounts resulting from uncollectible true-up and reserve requirements. These charges will be summarized for the Customer. 1.2.2. Billing Detail Billing and Collection Service charges will be provided to the Customer in the format described in 2.0, entitled Customer Billing Statement. 1.2.3. Payment Date 1.2.3.1. Based on Pre-End User Billing with netting If the Amount Due the Customer is less than the amount due SBC Telco, the difference is due from the Customer to SBC Telco within 30 days following the date of the Purchase of Accounts Receivable statement. SBC Telco at its option may net any negative amount due SBC Telco as set forth in 1.1.12. If the payment date would cause payment to be due on a Saturday, Sunday or SBC Telco/Customer bank Holiday, payment for the amount due SBC Telco will be as defined in 1.2.3.2.1. or 1.2.3.2.2. 14

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB 1.2.3.2. Based on Pre-End User Billing without netting The payment date is determined by adding 30 days from the preparation date of the statement detailing the amount due SBC Telco (ASBS report from SWBT, Open Billing report from PB/NB). The statement is to be issued in accordance with Section 1.2.6. If the payment date would cause payment to be due on Saturday, Sunday or SBC Telco/Customer Bank Holiday the payment for the amount due SBC Telco will be defined as in 1.2.3.2.1. or 1.2.3.2.2. 1.2.3.2.1. If such payment date falls on a Sunday or on a Holiday which is observed on a Monday, the payment date shall be the first non-Holiday day following such Sunday or Holiday. 1.2.3.2.2. If such payment date falls on a Saturday or on a Holiday which is observed on Tuesday, Wednesday, Thursday or Friday, the payment date shall be the last non-Holiday preceding such Saturday or Holiday. 1.2.4. Payment Method Any payment to SBC Telco from the Customer of one hundred thousand dollars ($100,000) or more must be transmitted by the Customer to a designated bank account of SBC Telco (to be provided to the Customer by SBC Telco) by electronic funds transfer. Any payment to SBC Telco from the Customer less than one hundred thousand dollars ($100,000) may be paid by check or draft to the payee's address (to be provided to the Customer by SBC Telco), or by electronic fund transfer to a designated bank account or SBC Telco (to be provided to the Customer by SBC Telco). If any portion of the net settlement amount is received by SBC Telco in funds which are not immediately available to SBC Telco, then a late payment charge shall be due SBC Telco. The Customer will have full responsibility for ensuring that payment is received by the payment date. 1.2.5. Payment Detail Any payment to SBC Telco from the Customer must be accompanied by the SBC Telco invoice number being paid. 1.2.6. Timeframe for Statement Issuance 15

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB Statements detailing the amount due SBC Telco (i.e., ASBS reports from SWBT, Open Billing reports from PB/NB) must be received by the Customer at least 20 days prior to the payment date to allow the Customer adequate time to process payment. Statements not received within this timeframe will not be subject to the late payment charge for the number of days the statement was late. It is the Customer's responsibility to prove that a statement was received after the specified timeframe. 1.2.7. Late Payment Charge Any payment received by SBC Telco after the payment date or any payment received in funds, which are not immediately available to SBC Telco on the payment date, will be subject to a late payment charge. The late payment charge shall be the portion of the amount due SWBT (as defined in 1.2.1.) received after the payment date multiplied by a late factor. The late factor shall be six (6%) per annum prorated on a daily basis (6% divided by 365), or the maximum rate allowed by law in each state jurisdiction, whichever is less. Any late payment charge may be billed separately by SBC Telco or at SBC Telco's option netted against a Purchase of Accounts Receivable payment. 1.2.8. Late Payment Resulting from Bank Error Any late payment resulting from bank error will not be subject to the late payment charge provided the Customer can verify that it was not at fault. Rather, the discrepancy will be resolved by the bank(s) involved. It is the responsibility of the Customer to notify the bank(s) involved and coordinate resolution of the discrepancy. 1.2.9. Right to Net 1.2.9.1. SBC Telco reserves the right to net against the Customer accounts receivable purchases all Billing and Collection Services which SBC Telco has not received payment on or prior to the Payment Date of the statement detailing the amount due SBC Telco. 1.2.9.2. Furthermore, SBC Telco has the right to net outstanding non-Billing and Collection Service charges, either billed on the same billing statement as Billing and Collection Services charges or separately billed, to the Customer's accounts receivable purchases for those charges for which 16

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB SBC Telco has not received payment on or prior to the Payment Date of the statement detailing the amount due SBC Telco. These non-Billing and Collection Service charges can include, but are not limited to, Account Maintenance, Billing Name and Address, Mechanized Data Gathering, Customer Name and Address, Customer Name and Location, and On-Line Inquiry. 1.2.9.3. SBC Telco may, at its sole discretion, process all future Purchase of Accounts Receivable under netting. SBC Telco will apply any late payment penalty incurred by the Customer. SBC Telco will notify the Customer if such netting is required. 1.2.9.4. Should the Customer fail to submit new billings in the required weekly interval to offset the amount due, SBC Telco may apply the Customer's reserve amount to offset the amount due and proceed with Termination of Service, as defined in this Agreement. 1.3. SETTLEMENTS OF DISPUTED AMOUNTS 1.3.1. Notification of Disputed Amount Should either Party dispute any portion of the amount due (as defined in Sections 1.1 and 1.2) then, prior to initiating formal dispute resolution proceedings, said Party shall notify the other Party in writing of the nature and basis of the dispute. The Customer may file a substantiated claim with SBC Telco regarding Billing and Collection Charges or revenue billed and not remitted as well as revenue not billed under this Agreement. SBC Telco may file a substantiated claim with the Customer for acts taken under this Agreement. Such claims must provide detailed documentation. 1.3.2. Payment of Disputed Amount 1.3.2.1 Payment Under Protest Should a dispute arise regarding an amount due under this Agreement, a Party may, notwithstanding the continuing existence of the dispute, pay under protest the disputed amount due in accordance with settlement terms defined in Sections 1.1 and 1.2, buy each Party shall reserve and have 17

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB claim against the other Party for reimbursement should the dispute finally be resolved in favor of the claimant. 1.3.2.2. Payment Withheld The claiming Party at its option may withhold payment of disputed amounts, when such a claim is made in writing with documentation and received by the other Party prior to the payment due date. The claiming Party will pay all non-disputed amounts as described in Section 1.1. or 1.2 by the payment due date. 1.3.3. Ultimate Settlement of Disputed Amount The Party receiving the claim shall have 30 days from the notification date, or other mutually agreed period, to process the claim and notify the claiming Party of the claim status. 1.3.3.l. For payment made under protest Should the claim, in whole or in part, ultimately be resolved in favor of the Party who has made payment under protest, that Party shall be entitled to a refund, with interest to the remittance date or as otherwise agreed to by the Parties, from the other Party. Interest on the settlement amount shall be calculated as follows: - If the claim is received within six (6) months of the disputed charge(s), the interest will be calculated according to the late payment charge factor described in Paragraphs 1.1.10 or 1.2.7 from the date of the disputed payment amount. - If the claim is received after six (6) months of the disputed charge(s), the interest will be calculated from receipt of the claim notification according to the late payment charge factor described in Paragraph 1.1.10 or 1.2.7. After written notice to the paying Party that the claim has been sustained, the total amount due, with interest, to the remittance date or as otherwise agreed to by the Parties, shall be remitted no later than 30 calendar days following resolution. 1.3.3.2. For payment of disputed amounts when payment has been withheld 18

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT, PB, NB Should the claim, in whole, ultimately be resolved in favor of the Party withholding payment, that Party will not be liable for the disputed amount of the claim. Should the claim, in whole or part, ultimately be resolved in favor of the other Party, the Party withholding payment shall immediately pay with interest to the remittance date or as otherwise agree to by the Parties, to the other Party. Interest on the settlement amount shall be calculated as defined in 1.3.3.1. 19

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT SECTION 2 - APPLICABLE FOR: - SOUTHWESTERN BELL TELEPHONE (SWBT) 20

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT (SECTION 2.0 IS APPLICABLE TO SOUTHWESTERN BELL TELEPHONE ONLY) 2.0 CUSTOMER BILLING STATEMENT The Customer's billing statement is produced through SWBT's Ancillary Service Billing System (ASBS). 2.1 Each Carrier Billing Statement will reflect prices for the following elements as ordered: 2.1.1. Bill Processing Service - Message Bill Processing: This per message charge is applicable for all MTS messages which are passed from SWBT's Master File Maintenance System to SWBT Bill Processing Program(s). - Expanded Message Billing Charge: A variable per message charge for SWBT approved telecommunications related services or products billed through SWBT. - Pay Per Call Service Billing Charge: A per message charge for services - Inquiry Services: A per message charge for billed messages, when inquiry services are purchased. - Bill Rendering - Message Billed: A per bill rendered charge for message billed services. - Bill Rendering - Invoice Billing: An optional per page per bill rendered charge for Invoice Billing and Collection Services. The Customer may elect to purchase services on a rate element basis or choose to purchase services on a per page billed basis. (Note: This option can only be provided on a five state basis for both intrastate and interstate services.) This per billed option includes the following individual rate element in the per page prices: - Data transmission of the Customer's invoice billing records - Bill rendering - Message billing processing - Mechanized end user adjustments - Marketing messages (5 lines) - Marketing messages (up to 20 lines) 21

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT - Summary (Text) Records - Expanded message billing charge All other standard Billing and Collection Service rate elements, as defined in Exhibit A of this Agreement, will be charged to the Customer on a per use basis. - End User Adjustment (Manual): A per adjustment charge for manual adjustments to End User accounts to adjust Customer charges when SWBT provides Support Services without Inquiry or initiated by the Customer when SWBT provides Support Services with Inquiry. - Mechanized End User Adjustment: A per adjustment record charge for adjustments which are sent in by the Customer in EMI format for mechanized adjustments processing. - Marketing Message (5 lines): A per phrase requested, per bill rendered charge. - Marketing Message (6-20 lines): A per phrase requested, per bill rendered charge. - Billing and Collection Development Charge: Per hour charge applicable for analysis, design, development, testing and implementation of the Customer requested business. Overtime per hour rates are two times the per hour rate. - Clerical Staff Charge: Per hour charge for clerical utilization required for the Customer requested business. Overtime per hour rates are two times the per hour rate. - CPU Utilization Charge: Per hour charge for CPU utilization required for the Customer requested business. Minimum on hour increments. - Data Transmission using CMDS I Network: A per record charge for data sent or received when data transmission requires use of the CMDS I network. - Data Transmission using Customer Provided Networks: A per record charge for data sent or received when data is transmitted between the Customer provided network and SWBT. - Overnight Delivery of Magnetic Tape(s): A per page charge for overnight delivery of magnetic tape not prepaid by the Customer. 22

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT - Phrase Summary (Text) Record: A per record charge applicable for EMI "015127" records submitted by the Customer and processed by SWBT. 2.1.2. Billing Information - Standard SWBT CRIS Billing Information: A per record written charge to supply End User billing information created through normal daily system operations. - Customer (i.e., End User) Name and Address: A per request received for CNA services. - ICB (Individual Case Basis): Additional ICB charges will apply as appropriate. - PIU (Percent of Interstate Usage) Allocation of Charges: The Customer provided PIU factor will be utilized for the allocation of charges to the appropriate jurisdiction when a service cannot be specifically identified as interstate or intrastate. The Bill Rendering service will allocate on a 50% PIU basis when both intestate and intrastate Customer services are present on the End User's bill. 2.2. Customer Bill Format 2.2.1. Requirements for Customer Billing Statements (ASBS) Statements for Billing and Collection Services will be issued separately from access bills, and will include, but not be limited to, the following: 2.2.1.1. All billed amounts detailed by rate element by jurisdiction, and associated with the period in which they were incurred. 2.2.1.2. Adjustments (volumes and expenses) to billed amounts, in sufficient detail to permit the Customer to identify the reason for adjustment, the time period affected (with each adjustment broken out for the specific month covered), interstate/intrastate jurisdiction, and rate element. 2.2.1.3. Charges will be identified by type of service category and by interstate/intrastate jurisdiction. 2.2.1.4. Taxable/Surcharge amounts and percent of tax/surcharge amounts will be identified by state and local jurisdiction. 23

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT These statements are produced through the Ancillary Service Billing System (ASBS). 2.2.2. Overall Identification Requirements for Customer Billing Statements Each Customer Billing Statement will contain the following overall identification information: - Company: Name of Customer. - Bill Date: The date the statement is created. - State: The state in which the Billing and Collection Service were performed. - Bill Period From and Through Dates: Period of time in which the service was provided. - Type of Account: The identification of the type of account covered by the statement should read "Ancillary Services Billing System". - Originating Company Code: The name that uniquely identifies the Local Exchange Company issuing the statement (if applicable). 2.2.3. Detail of Adjustment Requirements for Customer Billing Statements Each Customer Billing Statement will contain the following Details of Adjusted Amounts by Rate Element: - Adjusted Date: The date the adjustment was applied. - Adjustment Phrase: Description of the type of adjustment. Includes the previous billing period from and through dates to which the adjustment applies (month by month specific). Also includes the specific rate element being adjusted. - Adjustment Amount/Volume Rate-Intrastate: The amount, volume and rate of the adjustment to intrastate charges. 24

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SWBT 2.2.4. SWBT reserves the right, from time to time, to change the format of its Customer Billing Statement. 25

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B PB, NB SECTION 3 - APPLICABLE FOR: - PACIFIC BELL (PB) - NEVADA BELL (NB) 26

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B PB/NB (SECTION 3.0 IS APPLICABLE ONLY TO PACIFIC BELL AND NEVADA BELL ONLY) 3.0 CARRIER BILLING REQUIREMENTS 3.1. Pacific/Nevada shall bill Customer via the Carrier Billing Statement for services rendered in accordance with the charges outlined in this Agreement. 3.1.1. Invoicing to Customer shall be on a monthly basis. Each Carrier Billing Statement shall be for approximately 30 days depending upon data processing cutoff dates used by Pacific/Nevada. 3.1.2. Detail of the charges shall be included on Pacific's/Nevada's Carrier Billing Statement by rate element as shown in the Rate Schedule (Exhibit A). 3.1.3. Pacific's/Nevada's Carrier Billing Statement shall be mailed to Customer via overnight mailing services or NDM as mutually agreed to by the Parties. Copies shall be provided only as mutually agreed to by Pacific/Nevada and Customer. Customer shall receive the Carrier Billing Statement no later than 22 days prior to the billing due date. 3.1.4. Billing information shall be segregated between interstate and intrastate. Pacific/Nevada shall calculate the current applicable Percent of Interstate Usage (PIU) using the most current actual usage when applying PIU. 3.1.5. The Carrier Billing Statement shall be provided in the following format: 3.1.5.1. Pacific's/Nevada's Carrier Billing Statement shall include all charges billed to Customer for services provided under this Agreement. Only those rate elements that are billed by Pacific/Nevada for Customer shall be included on the Carrier Billing Statement. For example, if Pacific/Nevada does not provide "inquiry" for Customer, that rate element shall not be shown on the Carrier Billing Statement. If a service is normally provided by Pacific/Nevada, the appropriate rate element(s) shall be shown on the Carrier Billing Statement whether or not applicable for a billing period. 3.1.5.2. The detail of adjustments shall be provided to Customer when applicable. This information shall include the 27

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B PB/NB category adjusted, a short description of the adjustment, the bill period, applicable rates an units, jurisdiction of the adjustment (i.e., interstate or intrastate) and the original Carrier Billing Statement number to which the adjustment is being made. 3.1.5.3. Where appropriate, any charges for developmental work made on behalf of Customer shall be based on the applicable hourly rate as set forth in the Rate Schedule (Exhibit A). 3.1.5.4. A separate amount shall be shown for interstate (which includes international) and intrastate. 3.1.5.5. Outside collection agency fees shall be included. Pacific/Nevada shall prorate such agency fees to Customer as a percent of total fees paid by Pacific/Nevada to outside collection agencies in a given month. This percent is based on the ratio of Customer "recovered dollars" collected on behalf of Pacific/Nevada against the End User's Single Balance Due. The term "recovered dollars" refers to the amount of outstanding End User charges which have been collected by the outside collection agency on behalf of Pacific/Nevada. 3.1.5.6. The Carrier Billing Statement total includes all outstanding amounts due from Customer. 3.1.5.7. Pacific/Nevada reserves the right from time to time, to change the format of the Customer Billing Statement. 28

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech SECTION 4 - APPLICABLE FOR: - AMERITECH 29

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech (SECTION 4.0 IS APPLICABLE ONLY TO AMERITECH ONLY) 4.0 SETTLEMENT TERMS 4.1 Net Purchased/Collected Amount Due Customer 4.1.1 Formula for Calculation of the Net Purchase/Collected Amount Due Customer The Ameritech Operating Company (AOC) will use the following formula for the calculation of the Net Purchase/Collected Amount Due Customer for the Purchase/Collection of Accounts Receivable: Total Revenue Accepted + Total Billed Taxes/Surcharges (AOC-generated) +/- Recoursed Adjustments, Duplicates, Unbillables and Rebills - Anticipated Uncollectibles +/- Uncollectible Settlement True-Up +/- Reserve for Recoursed Adjustments - Gross Receipts Tax (if applicable) ----------------------------------------------- = Net Purchased/Collected Amount Due Customer A. Total Revenue Accepted Customer will provide data sets or transmissions to the AOC on a prearranged schedule. The AOC edits the data sets for untimely messages. The AOC also edits to assure the data sets balance to totals predetermined by Customer and supplied in the data set trailer records. If there are no edit errors found in the pack header or trailer records, individual message records are edited for acceptability. The AOC purchases all the message records in the pack that are determined to be acceptable. The revenue on the Purchase/Collection of Accounts Receivable Statement(s) will include all revenues accepted from the transmissions for a specific journal month. The revenue on the Purchase/Collection of Accounts Receivable Statement(s) will include all revenues accepted from the transmissions for a specific journal month. 30

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech B. Total Billed Taxes/Surcharges (AOC-generated) Billed Taxes include all AOC-generated Federal, State, and Local taxes and additional charges due to taxes that have been billed to the End User. Surcharge amounts include all amounts billed to the End User as directed by Customer. C. Recoursed Adjustments, Duplicates, Unbillables, and Rebills 1. Recoursed Adjustments Recoursed Adjustments are amounts that the AOC removes from end user balances and charges back to the Customer via a deduction on the Purchase/Collection of Accounts Receivable Statement. They may be initiated by the Customer or by the end user and include, but are not limited to, adjustments made to end user bills to correct the charges on current or prior bills; lawfully billed amounts removed from end user balances at the direction of the Customer; and disputed billed amounts removed from end user balances. 2. Discounts Discounts are credits to an end user's account and may apply on either an individual message basis or a bulk basis. Discounts are subtracted on the Purchase/Collection of Accounts Receivable Statement. 3. Unbillables Unbillables are messages or invoices which remain unidentified after standard AOC investigation (e.g. messages from a billing telephone number where no account can be found), messages with invalid data which are detected after successful processing of the transmission and which fail standard AOC correction procedures (e.g. invalid NPA NXX RAO combination) or third number and/or collect messages received for billing on an account which includes a "toll billing exception" indicator. 4. Rebills Rebills are End User messages or invoices that the AOC bills again to the same or other End User accounts after having adjusted the message amounts and applicable taxes. The original messages written off 31

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech resulted in an Adjustment to End Users' accounts and Adjustment to the Purchase/Collection of Accounts Receivable Statement. Therefore, the rebills must be added back into the Purchase/Collection of Accounts Receivable Statement. The Federal, State, or Local taxes associated with the rebill would be included in the "Total Billed Taxes" portion of the Purchase/Collection of Accounts Receivable Statement. D. Uncollectible Bad Debt Allowance (for Bad Debt on Accounts Which Have Received Final Bills) The AOC will subtract on the Purchase/Collection of Accounts Receivable Statement an amount for Anticipated Uncollectibles. Anticipated Uncollectibles are estimated amounts representing the portion of the Total Revenue Accepted, plus or minus Taxes and Surcharges, Recoursed Adjustments, Duplicates, Unbillables, and Rebills - which the AOC expects will ultimately become Realized Uncollectibles. Realized Uncollectibles are amounts lawfully billed to End Users by the AOC, which, after standard intervals and application of standard collection procedures, the AOC determines to be impracticable of collection and which are added to the AOC's Realized Uncollectible Accounts and identified with Customer. The AOC will determine the amounts for Anticipated Uncollectibles by multiplying the Total Revenue Accepted, plus or minus adjustments, by the Uncollectible Factor, rounded to the nearest 1/100,000th. The Uncollectible Factor will be determined as described in subsections 1 to 3 as follows: 1. Uncollectible Factor Initial Period (New Billing and Collection Customer only) At the time a new Customer orders Billing and Collection Services, the AOC will determine the Customer's Uncollectible Factor for the Initial Period. The Initial Period shall be the first nine months for which the Customer is provided Billing and Collection Services if the ninth month is the last month in a calendar quarter (i.e., March, June, September, or December). If the ninth month is the first or second month in a calendar quarter, then the Initial Period shall 32

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech be the first eight or ten months for which the Customer orders such service. 2. Uncollectible Factor - Subsequent Periods At the end of the Initial Period that Billing and Collection Services are provided to the new Customer, and at three-month intervals thereafter, the AOC will revise the Uncollectible Factor to be used in determining the Anticipated Uncollectible amounts for the ensuing three-month period. Existing Customers, who extend the term of their billing agreement(s), will not begin a new nine-month initial period. Rather, their existing Uncollectible Factor, as may be updated at the previously established quarterly intervals, will be carried forward to the new or extended agreement. Where the AOC and Customer enter into a new billing agreement, use of the existing Uncollectible Factor and the previously established quarterly intervals shall not be construed to incorporate by reference any terms or conditions of any previous Billing and Collections agreement between the AOC and Customer. 3. Calculation of the Uncollectible Factor The Uncollectible Factor will be revised as follows: (a) The AOC will determine the total amount of all End User billing which, after standard intervals and application of standard collection procedures, was written off to the Realized Uncollectible Accounts of the AOC during the most recent three-month period. This Realized Uncollectible amount will reflect any payments, applicable deposits, and accrued interest converted to payments, or Recoursed Adjustments as described in Section 4.1.1.C preceding, which were applied during the most recent three-month period to End User accounts whose unpaid balances have been included in the Realized Uncollectible amounts for the same or earlier periods. (b) This total Realized Uncollectible amount will be used by the AOC in an apportionment study to determine the Uncollectible Bad Debt Allowance for each billing entity during the three-month period. Apportionment percentages used to determine each entity's Realized Uncollectibles will be based on the proportion of charges for those end 33

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech user accounts written off during the three-month period. (c) Customer's Realized Uncollectible amount in the AOC for the most recent three-month period will be divided by Customer's Adjusted Revenue, in such AOC, plus or minus adjustments, for the three-month period ending six (6) months prior to the end of the most recent three-month period. The result of this calculation will be the Uncollectible Factor to be used by the AOC in the ensuing three-month period. (d) This factor will be used by the AOC as follows: <TABLE> <CAPTION> Months of Study Months Factor Applied ---------------------------------------------- <S> <C> <C> <C> <C> <C> OCT NOV DEC JAN FEB MAR ---------------------------------------------- JAN FEB MAR APR MAY JUN ---------------------------------------------- APR MAY JUN JUL AUG SEP ---------------------------------------------- JUL AUG SEP OCT NOV DEC ---------------------------------------------- </TABLE> E. Uncollectible Settlement True-Up The AOC will true-up the difference between the amount of Anticipated Uncollectibles (Allowance for Uncollectibles) withheld and the amount of Realized Uncollectibles which actually resulted. The difference will be the Uncollectible Settlement True-Up. If the Realized Uncollectibles exceed the Anticipated Uncollectibles, the difference will be deducted from the Amount Due to the Customer. If the Anticipated Uncollectibles exceed the Realized Uncollectibles, the difference will be added to the Amount Due to the Customer. The True-Up Settlement will be implemented in the month following the end of the Initial Period that Billing and Collection Services are provided to a new Customer. The AOC will subtract the sum of the Realized Uncollectibles incurred during the Initial Period from the sum of the Anticipated Uncollectibles (Allowance for Uncollectibles) which were withheld during the period extending from the seventh previous month back through the first month of the initial period. The difference will be the True-Up Settlement that will appear on the Purchase/Collection of 34

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech Accounts Receivable Statement issued the month following the end of the Initial Period. For example, if the Initial Period is January through September, the True-Up Settlement will be implemented on the October Purchase/Collection of Accounts Receivable Statement. The sum of the Realized Uncollectibles for January through September will be subtracted from the sum of the Anticipated Uncollectibles for January through March. The difference will be the True-Up Settlement amount that will appear on the October Purchase/Collection of Accounts Receivable Statement. After settling for the Initial Period, the True-Up Settlement will continue on a monthly basis. The amount of Realized Uncollectibles for the first previous month will be subtracted from the amount of Anticipated Uncollectibles for the fourth previous month. The difference will appear on the Purchase/Collection of Accounts Receivable Statement as the True-Up Settlement for the fourth previous month. For example, after settling for the Initial Period on the October Purchase/Collection of Accounts Receivable Statement, the True-Up Settlement for the November Purchase/Collection Statement will be calculated as follows: The amount of Realized Uncollectibles for October will be subtracted from the amount of Anticipated Uncollectibles for July. The difference will be reflected on the November Purchase/Collection of Accounts Receivable Statement as the True-Up Settlement for July. F. Reserve Requirement The AOC will apply the following procedures in calculating the required reserve amount: 1. Until such time as the AOC has established a Customer specific uncollectible factor, the reserve requirement will be based on no less than fifty percent (50%) of the largest one month's billings submitted to the AOC by the Customer. 2. For Customers whose total adjustments exceed 10% of the Customer's billed (accepted) revenues in any one (1) month or should the Customer's uncollectibles adjustments and/or billed (accepted) revenues fluctuate to an extent as to appear unstable or insufficient to 35

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech cover projected write-offs, or abruptly change the required reserve amount will be calculated as follows: + Total realized uncollectibles for the current quarterly period x .667 + The amount of adjustments experienced in the prior three months of billings with respect to live accounts = Required Reserve Amount 3. The required reserve amount for Customers not subject to procedures defined in F.1 and F.2 above will be established and maintained by AOC as a current reserve and will be determined by calculating the total realized uncollectibles for the current quarterly period x .667. 4. Notwithstanding the above, AOC at its sole discretion reserves the right to increase the reserve amount, if the Customer's uncollectibles, adjustments, and/or billable revenues fluctuate to such an extent that the reserve no longer appears sufficient to cover the projected write-offs. This may be accomplished by increasing the bad debt allowance factor and/or by withholding payments due to the Customer, as AOC shall deem necessary to cover the risk involved or require the Customer to fund the increased reserve amount. AOC can satisfy the reserve requirement for any AOC by netting a customer's PAR from any other AOC. 5. During the quarterly period, if the required uncollectible reserve amounts as defined above in Section F (Reserve) differ from the total Reserve currently held by AOC, a true-up amount will be calculated. This difference shall equal the Reserve True-Up amount. AOC will net the Reserve True-Up amount from the Purchase of Accounts Receivable Amount due the Customer. The formula for the Reserve true-up is as follows: Reserve True-up Formula + Total Current Quarter's required reserve amount - Prior quarter's reserve amount held by AOC ------------------------------------------ 36

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech = + Reserve True-Up Amount - A positive true-up amount will be due AOC and a negative true-up amount will be due the Customer. AOC may continue to hold the Reserve amount through the Final True-Up Upon Cessation of Billing and Collection Services. G. Gross Receipts Tax Income from Accounts Receivable may be subject to a State Gross Receipts Tax. If applicable, the Customer will compensate the AOC for this additional tax liability including a gross-up designed to offset the additional tax liability caused by the reimbursement. The AOC will calculate the Gross Receipts Tax amount each bill month and subtract it in the calculation of the Net Purchase/Collected Amount Due the Customer. 4.1.2 Final True-Up Upon Cessation of Billing and Collection Services For a period of one year after the AOC ceases to provide Billing and Collection Services to Customer, the AOC shall continue to determine Recoursed Adjustments as set forth in Section 4.1.1.C preceding, which are made during this one-year period. The AOC will also continue to determine the Realized Uncollectible amounts that occur during this one-year period. The AOC will continue to provide the Customer the Purchase of Accounts Receivable Statement during this one-year period and will pay any net amounts owed to Customer. If the "Net Due" is negative, amounts are to be paid within twenty (20) calendar days from the Customer's receipt of the Purchase of Accounts Receivable Statement Date, interest will be charged at the rate described in Paragraph 4.1.7. A. Recoursed Adjustments If a Reserve has not been established under Section 4.1.1.F in a sufficient amount to cover anticipated Recoursed Adjustments, the AOC will subtract from the last regular Purchase of Accounts Receivable Statement(s) an amount for anticipated Recoursed Adjustments during this one-year period. The AOC will calculate the amount to be subtracted by multiplying the total Recoursed Adjustments for the previous twelve (12) months, as detailed on the Purchase/Collection of Accounts Receivable Statements, 37

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech times 25%. If in the AOC's discretion, the Reserve established under Section 4.1.1.G preceding is insufficient to cover anticipated Recoursed Adjustments during this one year period, then the AOC may increase the amount of the Reserve consistent with the calculation under this Section 4.1.2.A. This amount subtracted for anticipated Recoursed Adjustments will be used on a monthly basis as an offset against Recoursed Adjustments incurred by End User accounts on behalf of Customer during the one-year period. Customer may make additional payments for anticipated Recoursed Adjustments. After the one-year period has elapsed, the AOC will determine the settlement amount by which the Recoursed Adjustments exceeded or were less than the anticipated Recoursed Adjustment. The AOC will prepare a Settlement Statement one month after the one-year period has elapsed which will reflect the final settlement amount. The AOC will provide Customer a copy of that statement and will make available to Customer all documentation used in preparation of the Settlement Statement. The AOC will pay Customer the amount by which the actual Recoursed Adjustments are less than the anticipated Recoursed Adjustments or the Reserve amount, as applicable. Customer will pay the AOC the amount by which actual Recoursed Adjustments exceeded the anticipated Recoursed Adjustments or Reserve amount. Amounts owed are to be paid within twenty (20) calendar days of receipt of the Settlement Statement (Payment Date). B. Uncollectibles The true-up settlement will continue on a monthly basis during the one-year period to settle for the last six months of billing prior to the end of the contract. The AOC will make twelve (12) additional monthly true-ups. For the first six (6) months, the AOC will subtract the amount of Realized Uncollectibles from the amount of Anticipated Uncollectibles held in reserve. The difference will be included in the True-Up Settlement Section on the Purchase of Accounts Receivable Statement(s). The AOC will pay the Customer the amount by which the Anticipated Uncollectibles exceeded the Realized Uncollectibles. The Customer will pay the AOC the 38

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech amount by which Realized Uncollectibles exceeded Anticipated Uncollectibles. At the end of the one-year period, the AOC will pay the Customer the amount by which the Anticipated Uncollectibles exceed the Realized Uncollectibles. C. Special Anticipated Uncollectibles The AOC may subtract from the last regular Purchase of Accounts Receivable Statement(s) an amount for a Special Anticipated Uncollectible amount. The AOC and Customer will agree upon the amount to be subtracted. This Special Anticipated Uncollectible Amount will be used on a monthly basis as an offset against Realized Uncollectibles incurred during the one-year period. If the Special Anticipated Uncollectible Amount does not occur before the one-year period has elapsed, the AOC shall pay the Customer the Unused Special Anticipated Uncollectible Amount. D. Unbillables The Unbillable Amount will be subtracted on a monthly basis during the one-year period. The Unbillable Amount will be included on the Purchase/Collection of Accounts Receivable Statement(s). E. Other Collection Fee The Other Collection Fee (outside collection agency fees) will continue to be included on the Purchase/Collection of Accounts Receivable Statement in the True-Up Settlement Section during the one-year period. F. Netting Against Reserve or Other Amounts Withheld If the Reserve or any amount withheld for a specific type of anticipated adjustments under Section 4.1.2 is exhausted during the one year true up period, the AOC may net any amounts owed by Customer for such anticipated adjustment against amounts withheld for any other type of anticipated adjustment. 4.1.3 Statement of Amount Due the Customer A Statement of Amount Due, e.g., the Purchase/Collection of Accounts Receivable Statement, will be provided to the Customer by the AOC on a monthly basis. 39

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech 4.1.4 Payment Date The payment of the Purchase/Collection of Accounts Receivable Statement is paid once per month. The Payment Date is calculated by adding to the transmission receipt the average number of days to bill (15 days for Message Ready, 6 days for Invoice Ready), then adding the lag days (43 days), and then calculating a weighted average of the transmissions. (Refer to Attachment I for an example of the Payment Date Calculation.) If the calculated Payment Date is a Saturday, Sunday, or AOC/Customer bank Holiday, payment for the Net Purchase/Collected Amount will be due to the Customer as follows: A. If such Payment Date falls on a Sunday or on a Holiday which is observed on a Monday, the Payment Date shall be the first non-Holiday day following such Sunday or Holiday. B. If such Payment Date falls on a Saturday or on a Holiday which is observed on Tuesday, Wednesday, Thursday, or Friday, the Payment Date shall be the last non-Holiday day preceding such Saturday or Holiday. 4.1.5 Payment Method Any payment to the Customer from the AOC may be paid by check, or draft to the payee's lock box address, or by electronic funds transfer to a designated bank account. Payment must result in immediately available funds on the Payment Date. If any portion of the Net Purchase/Collected Amount is received by the Customer in funds that are not immediately available to the Customer, then a Late Payment Penalty shall be due the Customer. The AOC will have full responsibility for ensuring that payment is received by the Payment Date. 4.1.6 Payment Detail Any payment to the Customer from the AOC must identify the Purchase/Collection of Accounts Receivable Statement being paid. 4.1.7 Late Payment Penalty If any portion of the Net Purchase/Collected Amount is received by the Customer after the Payment Date, or if any portion of the Net Purchase/Collected Amount is received by the Customer in 40

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech funds which are not immediately available to the Customer, then a Late Payment Penalty shall be due the Customer. The Late Payment Penalty shall be the portion of the Net Purchase/Collected Amount (as defined in Paragraph 4.1.1) received after the Payment Date, times a late factor, compounded daily for the number of calendar days from the Payment Date to and including the date that the funds are made available to the Customer. The factor for each day shall be the lesser of: A. The highest interest rate (in decimal value) which may be levied by law for commercial transactions in the State in which the AOC provides Billing and Collection Services to the Customer, or B. 0.000454 per day compounded daily, resulting in an effective annual rate of 18%. 4.1.8 Late Payment Resulting from Bank Error Any late payment resulting from bank error will not be subject to the Late Payment Penalty provided the AOC can verify that it was not at fault. Rather, the banks involved will resolve the error. It is the responsibility of the AOC to notify the banks involved and coordinate resolution of the error. 4.2 AMOUNT DUE THE AOC 4.2.1 General A Statement of the Amount Due the AOC will be provided to the Customer by the AOC on a monthly basis. The Amount Due the AOC equals all appropriate Billing and Collection Services charges billed under contract or any applicable tariffs. Access charges are not to be considered a portion of the Amount Due the AOC as part of this Agreement. 4.2.2 Payment Date The Amount Due the AOC is due from the Customer on the same date as the bill date but in the following month unless the bill is received by the Customer less than twenty (20) calendar days prior to that date, in which case the due date shall be twenty (20) calendar days after the Customer's receipt of the bill. It is the Customer's responsibility to substantiate that a bill was received after the specified time frame. If the Payment Date would cause 41

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech payment to be due on a Saturday, Sunday, or AOC/Customer/bank Holiday, payment for the Amount Due the AOC will be as follows: A. If such Payment Date falls on a Sunday or on a Holiday which is observed on a Monday, the Payment Date shall be the first non-Holiday day following such Sunday or Holiday. B. If such Payment Date falls on a Saturday or on a Holiday which is observed on Tuesday, Wednesday, Thursday, or Friday, the Payment Date shall be the last non-Holiday day preceding such Saturday or Holiday. 4.2.3 Payment Method Any payment to the AOC from the Customer may be paid by check or draft to the payee's address (to be provided to the Customer by the AOC) or by electronic funds transfer to a designated bank account of the AOC (to be provided to the Customer by the AOC). Payment must result in immediately available funds on the Payment Date. If any portion of the Amount Due to the AOC is received by the AOC in funds that are not immediately available, then a Late Payment Penalty shall be due the AOC. The Customer will have full responsibility for ensuring that payment is received by the Payment Date. 4.2.4 Payment Detail Any payment to the AOC from the Customer must identify the AOC invoice being paid. 4.2.5 Netting of Amount Due AOC 4.2.5.1. AOC reserves the right to net against the Customer accounts receivable purchases all Billing and Collection Services which AOC has not received payment on or prior to the Payment Date of the statement detailing the amount due AOC. 4.2.5.2. Furthermore, AOC has the right to net outstanding non-Billing and Collection Service charges, either billed on the same Billing statement as Billing and Collection Services charges or separately billed, to the Customer's accounts receivable purchases for those charges for which AOC has not received payment on or prior to the Payment Date of the statement detailing the amount due AOC. These non-Billing and Collection Service charges 42

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech can include, but are not limited to, Account Maintenance, Billing Name and Address, Mechanized Data Gathering, Customer Name and Address, Customer Name and Location, and On-Line Inquiry. 4.2.5.3. AOC may, at its sole discretion, process all future Purchase of Accounts Receivable under netting. AOC will apply any late payment penalty incurred by the Customer. AOC will notify the Customer if such netting is required. 4.2.5.4. Should the Customer fail to submit new billings in the required weekly interval to offset the amount due, AOC may apply the Customer's reserve amount to offset the amount due and proceed with Termination of Service, as defined in this Agreement. 4.2.6 Late Payment Penalty Any payment received by the AOC after the Payment Date, or any payment received in funds which are not immediately available to the AOC on the Payment Date, will be subject to a Late Payment Penalty. The Late Payment Penalty shall be the portion of the Amount Due the AOC (as defined in Paragraph 4.1.1) received after the Payment Date times a late factor, compounded daily for the number of calendar days from the Payment Date to and including the date that the funds are made available to the AOC. The late factor for each day shall be the lesser of: A. The highest interest rate (in decimal value) which may be levied by law for commercial transactions in the State in which the AOC provides Billing and Collection Services to the Customer, or B. 0.000454 per day compounded daily, resulting in an effective annual rate of 18%. 4.2.7 Late Payment Resulting from Bank Error Any late payment resulting from bank error will not be subject to the Late Payment Penalty provided the Customer can verify that it was not at fault. Rather, the banks involved will resolve the error. It is the responsibility of the Customer to notify the banks involved and coordinate resolution of the error. 43

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Ameritech 4.3 SETTLEMENT OF DISPUTED AMOUNTS 4.3.1 Notification of Disputed Amount Either Party may dispute any portion of the Amount Due (as defined in Paragraphs 4.1.1 and 4.2.1). Said Party shall notify the other Party in writing of the nature and basis of the dispute. The claim period shall be limited to six (6) months from the issuance by AOC of the statement of Amount Due. 4.3.2 Payment of Disputed Amount Should the dispute not be resolved by the Payment Date, the payer shall, notwithstanding the continuing existence of the dispute, pay the billed amount in accordance with settlement terms defined in Subsections 4.1 and 4.2, but said Party shall reserve and have claim against the other Party for reimbursement if the dispute is resolved at a later date in favor of the claimant. 4.3.3 Ultimate Settlement of Disputed Amount The Party receiving the notice of dispute shall have 30 calendar days from the notification date, or other mutually agreed period, to process the claim and notify the claiming Party of the claim status. Should the claim, in whole or in part, ultimately be resolved in favor of the claimant, the claiming Party shall be entitled to a financial settlement from the other Party to the extent the claim was sustained. If appropriate, interest on the financial settlement amount shall be calculated and remitted as follows: A. Interest will be calculated according to the late factor described in Paragraphs 4.1.7 or 4.2.6 and will include the period from the date such overpayment/underpayment was made available to the payee through the date that the overpayment/underpayment was made available to the payer. B. After written notice to the claiming Party that the claim has been sustained, the total amount of the financial settlement shall be remitted no later than 31 calendar days following resolution. 4.3.4 Retention of Supporting Data Concerning Disputed Amount Both parties shall retain such detailed information as may reasonably be required for resolution of the disputed amount during the tendency of the dispute. 44

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B Attachment I Ameritech Payment Date Calculation The following example is for illustrative purposes only. <TABLE> <CAPTION> A B C D E F G H --------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> <C> 3/2/05 15 43 4/29/05 4/29/05 0 21,601.16 0.00 3/9/05 15 43 5/6/05 4/29/05 7 26,331.44 184,320.08 3/15/05 15 43 5/12/05 4/29/05 13 32,774.99 426,074.87 3/23/05 15 43 5/20/05 4/29/05 21 20,337.08 427,078.68 3/30/05 15 43 5/27/05 4/29/05 28 26,283.33 735,933.24 ------------------------- 127,328.00 1,773,406.87 </TABLE> I 1,773,406.87 + 127,328.00 = 14 J 5/13/05 (Assuming 5/13/05 is not a weekend, holiday, etc.) A Accepted Revenue Date B Average Days to Bill (15 days is used for Message Ready; 6 days is used for Account Ready) C Lag Days D Payment Date (A + B + C) E Earliest Payment Date Received F D-E G Revenue by Tape H Weighted Tape (F x G) I Total Weighted Tape/Total Tape Revenue J Payment Date all Tapes (E + I) 45

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET SECTION 5 - APPLICABLE FOR: - SOUTHERN NEW ENGLAND TELEPHONE (SNET) 46

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET SECTION 5.0 IS APPLICABLE ONLY TO SOUTHERN NEW ENGLAND TELEPHONE.) 5.0 SETTLEMENT TERMS 5.1. Amount Due Customer Accounts Receivable - Southern New England Telephone (SNET) will purchase accounts receivable for messages billed to Customer end user accounts billed under this Agreement in accordance with the provisions of this Section 5. 5.1.1. Formula for Calculation of Amount Due Customer SNET will use the following formula for calculation of the dollar amount due Customer for the purchase of accounts receivable prior to netting of the Billing Services Charges: Amount of Rated Messages Received +/- Recourse Adjustments - Uncollectible Bad Debt Allowance +/- Quarterly Uncollectible True-up Amount - Unbillables + Federal Excise Tax (if Customer to remit directly) + Connecticut State Sales Tax (Customer required to remit) -------------------------------------------------------------- = Amount Due Customer Where: A. Amount of Rated Messages Received is the amount of the messages received by SNET from Customer for billing. B. Recourse Adjustments are the amounts debited or credited for end user adjustments in accordance with SNET' Inquiry Procedures, plus any Customer initiated adjustments. 47

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET C. Uncollectible Bad Debt Allowance is an amount deducted on the Purchase of Accounts Receivable Statement to compensate for losses resulting from failure of the end user to pay final bill amounts due. Derivation of the Uncollectible Bad Debt Allowance is set forth in Section 5.1.2 below. D. Quarterly Uncollectible True-up Amount reflects the amount by which the Uncollectible Bad Debt Allowance differs from the net realized uncollectibles. E. Unbillable messages are messages that cannot be posted to an end user account. F. Amount Due Customer represents the Net Purchase amount for Accounts Receivable. 5.1.2. Derivation of Uncollectible Bad Debt Allowance For each purchase of accounts receivable, SNET shall subtract from the total accounts receivable an amount for uncollectibles, subject to the following process: A. Initial Factor The uncollectible percentage will be 5.00% for the first three (3) full quarters of billing. At the end of the third full quarter of billing, a true-up will be performed and a new factor will be calculated, and shall be revised for each calendar quarter thereafter. B. Factor Calculation B.1) Except as provided in B.2 below, the uncollectible factor will be determined by dividing Customer's realized uncollectible by Customer's total end user revenue billed for the prior quarter net of adjustments. B.2) If 900 Service messages received for processing represent thirty percent (30%) or more of the total volume of messages received for processing (without editing) during a given calendar month then the uncollectible factor shall be ten percent (10%) or the factor calculated pursuant to B.1 48

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET above, if the factor calculated pursuant to B.1 above is greater than ten percent (10%). C. Total Realized Uncollectible The total realized uncollectible is the amount of final customer bills remaining unpaid after SNET's standard collection efforts are completed. (Deposits held by SNET are applied to final bills when rendered.) This amount reduced by any payments received by SNET for outstanding uncollectibles from prior periods equals the total net realized uncollectible. D. Net Realized Uncollectible Customer's net realized uncollectible is computed monthly by applying an apportionment percentage for Customer as determined by SNET's monthly uncollectible apportionment study to the total realized uncollectible for the month. E. Factor Development The following table reflects the months used in the uncollectible bad debt factor development and months to which such factor shall apply. <TABLE> <CAPTION> Uncollectible Total Amount Billed Realized (Net Adjustments) Factor Applied for months of: for months of: to months of: -------------- ------------------- -------------- <S> <C> <C> Oct, Nov, Dec Jul, Aug, Sep Jan, Feb, Mar Jan, Feb, Mar Oct, Nov, Dec Apr, May, Jun Apr, May, Jun Jan, Feb, Mar Jul, Aug, Sep Jul, Aug, Sep Apr, May, Jun Oct, Nov, Dec </TABLE> If the factor calculated pursuant to section 5.1.2.B.1 is above ten percent (10%), this higher factor shall remain in effect for a given quarter and shall not be reduced to ten percent (10%) until the calculated uncollectible factor is less than or equal to ten percent (10%) for three consecutive months. 5.1.3. Uncollectible True-up 5.1.3.1. Except as otherwise provided in 5.1.3.2 below, if the net realized uncollectibles differ from the factored amount 49

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET withheld from billed revenues, a true-up amount shall be calculated and either billed or remitted to the Customer, as appropriate. The true-up amount shall be calculated by the end of the month following the close of each quarter. 5.1.3.2. If 900 Service messages received for processing represent thirty percent (30%) or more of the total volume of messages received for processing (without editing) during a given calendar month (900 first month of purchase) then the total of all uncollectible bad debt allowance amounts shall be accrued for twelve (12) months. This twelve (12) months of allowance amounts shall be compared to the total amount of Customer's realized uncollectibles for all months prior to the true-up. The true-up shall be calculated on the twenty-fourth (24th) month following the 900 first month of purchase. Subsequent true-ups shall be calculated every twelve (12) months for the prior twelve (12) month period. 5.1.4. Final True-ups at Termination 5.1.4.1. Upon termination of this Agreement, SNET shall withhold additional amounts thereby establishing a reserve to offset any service related costs and/or charges that may occur after settlement of Customer's final submission of Contract Messages. If the uncollectible bad debt allowance withheld for the Quarter prior to termination notice is less than the highest amount withheld during any Quarter during the previous eighteen (18) months, SNET shall reduce the Final purchase of accounts receivable by the difference. During the period of one (1) year following the settlement of Customer's final submission of messages, SNET shall subtract from the reserve amount any subsequent service related charges and/or Customer's Net Realized Uncollectible amounts. In the event that the service related charges and/or Customer's Net Realized Uncollectible amounts exceed the reserve during such one (1) year period, SNET shall invoice Customer for such excess. SNET shall, one (1) year following the settlement of Customer's final submission, provide Customer with a final accounting and remit any remaining amounts withheld or shall invoice Customer as appropriate. 5.1.5. Payment Date 50

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET 5.1.5.1 The date and revenue value of all Casual Billing transmissions (accepted messages) will be tracked by SNET from the first through the last day of each calendar month. The revenue value of Casual Billing transmissions received on each day of the month will be multiplied by the day (date) of the month that the transmission is received, plus one (1), to determine a weighted revenue value for all transmissions. At the end of each calendar month, the weighted revenue value of all Casual Billing transmissions for the month will be divided by the actual revenue value of all Casual Billing transmissions for the month. The result, using conventional rounding, will be the Average Transmission Receipt Date for the month. The cash lag time period referenced above will be added to each month's Average Transmission Receipt Date to determine the actual date of Payment (wire transfer) from SNET for each month's total transmissions. A copy of the Average Transmission Receipt Date calculation, including the Obligation ID and Serial Number of all transmissions received, will be attached to the PAR. For Casual Billing customers who provide only one transmission in a calendar month, the transmission receipt date alone will be utilized to calculate the Payment Date, and the formula referenced above will not apply. 5.1.6. Payment Method Any payment to the Customer from SNET will be transmitted by SNET to Customer such that the funds will be available to Customer on the payment date. 5.1.7. Assignment of Accounts Receivable Customer is prohibited from assigning, transferring, selling, exchanging, or giving the accounts receivable to any other entity or person. Any such assignment, transfer, sale, exchange or gift is null and void and will subject Customer to all liabilities, expenses, costs including attorney's fees expended and incurred by SNET in pursuing exclusive ownership to the accounts receivable. 5.2. Amount Due SNET 5.2.1. Calculation of Amount Due SNET The amount due SNET is calculated based on the rates contained in Exhibit A, multiplied by the appropriate unit amounts for each month plus any applicable taxes. 51

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit B SNET 5.2.2. Netting Process SNET shall deduct the amount due SNET from Customer as calculated in Section 5.2.1. above from the amount due Customer from SNET as described in Section 5.1. of this Exhibit. Furthermore, SNET has the right to net outstanding non-Billing and Collection Service charges, either displayed on the same billing statement as Billing and Collection Services charges or separately billed, to the Customer's accounts receivable purchases for those charges for which SNET has not received payment on or prior to the Payment Date of the statement detailing the amount due SNET. These non-Billing and Collection Service charges can include, but are not limited to, Account Maintenance, Billing Name and Address, Mechanized Data Gathering, Customer Name and Address, Customer Name and Location, and On-Line Inquiry. 52

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT C BILLING AND COLLECTION SERVICES: INVOICE BILLING SERVICE REVISED MAY 25, 2001

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <S> <C> <C> 1.0 DESCRIPTION OF INVOICE BILLING AND COLLECTION SERVICES..................1 2.0 TRANSMISSION............................................................1 3.0 UNBILLABLES.............................................................2 4.0 TAXES...................................................................2 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit C Ameritech, SWBT, PB, NB NOTE: Invoice Billing is not available in Southern New England Telephone. 1.0 DESCRIPTION OF INVOICE BILLING AND COLLECTION SERVICES 1.1. Invoice Billing and Collection Services consist of End User billing data records that have been invoice prepared and sent to SBC Telco as an End User invoice. The invoice will contain call detail that has been rated by the Customer and/or summary records which may contain credits, adjustments, promotions, discounts, other charges and taxes that have been calculated by the Customer. SBC Telco will not be required to perform any additional calculations on the Customer portion of the End User bill. 1.2. SBC Telco maintains the sole right to modify and/or require bill presentation formats in a manner consistent with SBC Telco's own bill presentation format. 2.0 TRANSMISSION 2.1 The Customer will transmit invoices in synchronization with the End User's billing cycle as assigned by SBC Telco. SBC Telco will not be required to alter existing cycles. The Customer will transmit invoices no less than five (5) calendar days prior to SBC Telco's scheduled End User billing period dates (e.g., End User bill period 2/22/05 should be transmitted no later than 2/18/05). 2.2 Upon receipt of the invoices, SBC Telco will process them in such a way that they may be incorporated with an End User's next bill from SBC Telco according to SBC Telco's normally scheduled billing cycle. 2.3 If SBC Telco receives transmissions from the Customer for End Users who do not fall in SBC Telco's next billing cycle, SBC Telco will hold the Customer invoice for that End User until the appropriate billing cycle. 2.4 SBC Telco is to reroute the invoices to the correct SBC Telco billing cycle if the Customer has routed them to the incorrect SBC Telco billing cycle. 2.5 Invoice formatted messages will not be forwarded to SBC Telco with non-invoice formatted messages. If the Customer submits messages for both invoice and non-invoice presentation on the end user bill, a separate entity (CIC Code) will be required for each. 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT C AMERITECH, SWBT, PB, MB 3.0 UNBILLABLES 3.1 For purposes of invoice billing error investigation, the invoice will not be split apart by SBC Telco if some of the messages are billable and some are not. The entire invoice will be returned to the Customer with the appropriate error code. 4.0 TAXES 4.1 The Customer will apply all applicable taxes to the End User invoice data. SBC Telco will not calculate additional taxes on the Customer invoice data. SBC Telco will bill the End User in the format provided by the Customer within its invoice. 4.2 The Customer acknowledges that SBC Telco will not maintain tax reports for invoice billing. The Customer is solely responsible to maintain all required tax information within their own system. 4.3 SBC Telco will remit payment to the Customer for the collected taxes as part of the purchase of accounts receivables payment. 4.4 Billed Taxes are defined for invoice billing to represent the billed taxes (federal, state, and local) associated with all the Customer revenue amounts included in the transmission. The Customer is responsible for determining, calculating, and advising SBC Telco of all taxes. MAY 2001 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT D BILLING AND COLLECTIONS: THRESHOLDS REVISED DECEMBER 9, 2002

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <CAPTION> Page <S> <C> <C> 1.0 Southwestern Bell, Pacific Bell, Ameritech...........................1 2.0 Nevada Bell and SNET.................................................1 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit D 1.0 SOUTHWESTERN BELL, PACIFIC BELL, AMERITECH Complaint thresholds are measured using the number of complaints from Customer's End Users that are recorded by the SBC Telco's business offices. The complaint threshold for the above SBC Telcos is as follows: <TABLE> <CAPTION> Bills Rendered Per Month Complaint Percentage ------------------------ -------------------- <S> <C> 80,000 bills rendered or less 0.5% 80,001 - 300,000 bills rendered 0.2% 300,001 + bills rendered 0.1% </TABLE> The formulas for determining specific complaint thresholds will be calculated by multiplying the number of bills rendered by the appropriate percentage. Therefore, the number of allowable complaints for each category would be as follows: 1. 80,000 bills rendered or less will have a range of 0 - 400 complaints per month for two out of every three consecutive months. 2. 80,001 - 300,000 bills rendered will have a range of 401 - 600 complaints per month for two out of every three consecutive months. 3. 300,001 + bills rendered will have a range beginning with 601 complaints per month for two out of every three consecutive months. 2.0 NEVADA BELL AND SNET To be determined 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT E BILLING AND COLLECTION SERVICES: MARKETING MESSAGES REVISED MAY 2001

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <CAPTION> Page <S> <C> <C> 1.0 General Information.................................................1 2.0 Warranty............................................................1 3.0 Charges.............................................................2 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit E 1.0 GENERAL INFORMATION 1.1 Billing and Collection Customers can direct promotional, informational or legally required communications/messages to their End Users. 1.2 The messages that may be printed are the Customer messages that comply with SBC Telco requirements. SBC Telco reserves the right, at its sole discretion to reject any Marketing Message which in SBC Telco's opinion does not conform to the requirements or is advertising a service competitive with a service offered by SBC Telco or one of its affiliates. 1.3 Customer is limited to two (2) Marketing Messages per End User's monthly bill. 1.4 SBC Telco will exercise all reasonable efforts to accommodate an accelerated time frame for acceptance of the Customer Marketing Message that is mandated by any governmental authority with appropriate jurisdiction. 1.5 All information submitted to SBC Telco pursuant to the Marketing Messages procedures as described herein are confidential to the Customer prior to inclusion on the End User bill and will be treated by SBC Telco in a manner consistent with Exhibit F of this Agreement. 2.0 WARRANTY 2.1 If a Marketing Message is omitted from all or a portion of the applicable End User invoice, and if such omission is due to the fault or negligence of SBC Telco, SBC Telco will include the Marketing Message on the next month's bill following discovery by SBC Telco of the omission. The Customer will timely retransmit the omitted Marketing Message upon notification to do so from SBC Telco in order for SBC Telco to include it on the next month's bills. 2.1.1 If due to the time sensitivity of the original marketing Message, that is, having for its principle subject some imminent event (e.g., Mother's Day), and the foregoing remedy will not result in the End Users receiving the Marketing Message before the occurrence of such event, and accordingly the Customer does not desire to utilize the Marketing Message in the next mailing, the Customer will not send the Marketing Message. 2.1.2 This Section 2.0 will constitute the Customer's sole and exclusive remedy for the omission of a requested Marketing Message from all or a portion of its End User invoices. 2.2 The Customer agrees to defend, indemnify, and hold SBC Telco, its officers, directors, and employees harmless from and against all loss, cost, liability, claims, 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit E demands, actions, penalties, and damages, including but not limited to attorneys' fees and costs, resulting from or arising in connection with the Customer's Marketing Messages including but not limited to claims or actions for defamation, trademark, or trade secret infringement, invasion of privacy, or use of false, deceptive, or misleading advertising or practices. 2.3 SBC Telco assumes no responsibility for reviewing or editing the Customer's Marketing Message. 2.4 In the event SBC Telco misprints a Marketing Message, SBC Telco will use reasonable efforts to correct the error before the Marketing Message is mailed and at no charge to the Customer. The Customer will timely retransmit the misprinted Marketing Message upon request from SBC Telco if it will help SBC Telco in correcting the error prior to mailing. If a Marketing Message is mailed with a material error caused by SBC Telco, at the Customer's request SBC Telco will in order to correct the error, mail a corrected version of the Marketing Message as retransmitted by the Customer and as agreed upon by both Parties in writing on the next month's bill following discovery by SBC Telco of the misprint. There will be no charge to the Customer for the SBC Telco activities. The corrected version of the Marketing Message will not impact the space available to the Customer for Marketing Message text. 3.0 CHARGES 3.1 The rates for Marketing Messages will be charged in accordance with the rate elements as provided in Exhibit A of this Agreement. 3.2 The Customer will be charged for all Marketing Messages after the service has been provided and the charges will be included in the Customer's monthly carrier billing statement. All charges for Marketing Messages are subject to the Late Payment Charges. 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT F BILLING AND COLLECTIONS: PROPRIETARY INFORMATION REVISED JUNE 2001

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <CAPTION> Page <S> <C> <C> 1.0 Overview................................................................1 2.0 Identification of Proprietary Information Covered by This Exhibit.......1 3.0 Handling of Proprietary Information.....................................1 4.0 Proprietary Information Not Subject to Handling Restrictions............2 5.0 Permitted Uses..........................................................3 6.0 SBC Telco Non-Published Telephone Numbers...............................3 7.0 Filings with PUCs or Other Regulatory Agencies..........................3 8.0 Applicability of Statutes, Decisions and Rules..........................4 Schedule 1..............................................................5 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit F 1.0 OVERVIEW It is recognized by the Parties that, in connection with the B&C Services to be provided by the SBC Telcos, the SBC Telcos and the Customer will have in their possession and control information in the form of data, records, reports, computer programs, end user customer lists and other documentation some of which is proprietary to the SBC Telcos, the Customer, to both, or to other entities and which is considered confidential (hereinafter, "Proprietary Information"). 2.0 IDENTIFICATION OF PROPRIETARY INFORMATION COVERED BY THIS EXHIBIT The types or categories of the Parties' Proprietary Information intended to be covered by and protected under Exhibit F, and which is limited to information provided under the terms of this Agreement, are specifically designated by each Party in Schedule 1 of Exhibit F. For the purpose of defining the respective duties and obligations hereunder, the information set forth in Schedule I of Exhibit F is categorized and defined as follows: A. SBC Telco Proprietary Information (Exhibit F, Schedule 1, Section I) -- that which is proprietary to the SBC Telcos and will not be used by the Customer, except as necessary for the Customer to perform its obligation under this Agreement or as may otherwise be consented to in writing by the SBC Telcos. B. The Customer's Proprietary Information (Exhibit F, Schedule 1, Section II) -- that which is proprietary to the Customer and will not be used by the SBC Telcos, except as necessary for the SBC Telcos to perform its obligations under this Agreement or as may otherwise be consented to in writing by the Customer. 3.0 HANDLING OF PROPRIETARY INFORMATION Except for information not subject to the terms and conditions herein because of its prior disclosure of permitted or consented disclosure as described below, Proprietary Information of one Party ("Disclosing Party") that is possessed by the other Party ("Receiving Party"), shall be treated in accordance with the following terms and conditions: A. The Receiving Party shall put in place and strictly enforce (using all of its prerogatives, including appropriate disciplinary action or termination of employment of its employees or agents) procedures to ensure that its employees or agents are aware of and fulfill the obligation under Exhibit F to hold the Disclosing Party's Proprietary Information in confidence. 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit F B. Proprietary Information, consistent with the terms herein, will be held in confidence by the Receiving Party and its employees or agents; shall be treated with the same degree of care as the Receiving Party would treat its own Proprietary Information and, consistent therewith, shall not be disclosed to third parties; shall be used only for the purposes stated herein; and may be used or disclosed for other purposes, only upon such terms and conditions as may be mutually agreed upon by the Parties in writing. C. Each Party acknowledges that a Party's Proprietary Information, or third party information held by a Party, may be commingled with Proprietary Information of the other Party. Accordingly the Parties shall, to the extent practicable, use good faith efforts to ensure that its own or third parties' Proprietary Information shall be masked or rendered mechanically inaccessible to the other Party. However, there may be instances in which efforts to mask or screen such Proprietary Information are impracticable, or in which disclosure is inadvertent. In such instances, the Receiving Party will neither use or disclose the Proprietary Information, except as required to fulfill its obligations under this Agreement. D. Unless specifically directed otherwise by the requesting authority, each Party agrees to give notice to the other Party, prior to disclosure of Proprietary Information, of any demand to disclose or provide Proprietary Information of said other Party to other persons, under lawful process, prior to disclosing or furnishing such Proprietary Information, and the Party receiving the demand agrees to reasonably cooperate if the other Party deems it necessary to seek protective arrangements. A Party may provide Proprietary Information of the other Party to implement, effect and enforce this Agreement or the Party's tariffs; to meet the requirements of a court, regulatory body or government agency having jurisdiction over the Party; and will notify the Disclosing Party so as to give the Disclosing Party a reasonable opportunity to object to such disclosure, unless the court, regulatory body or government agency requests that the Party not notify the other Party. Nothing in this Exhibit requires either Party to support or not support the position of any person or entity on the issue of whether any particular Proprietary Information is proprietary under applicable law or this Exhibit. 4.0 PROPRIETARY INFORMATION NOT SUBJECT TO HANDLING RESTRICTIONS Notwithstanding any other provision of this Agreement, Proprietary Information described in Schedule 1 of Exhibit F shall not be deemed confidential or proprietary and the Receiving Party shall have no obligation to prevent disclosure of such Proprietary Information if it: A. Is already known to the Receiving Party without restriction as to its confidentiality; 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit F B. Is or becomes publicly known, through publications, inspection of the product, or otherwise, and through no wrongful act of Receiving Party; C. Is received from a third party without similar restriction and without breach of this Exhibit; D. Is independently developed, produced, or generated by Receiving Party; E. Is furnished to a third party by the Disclosing Party without a similar restriction on the third party's rights; or F. Is approved for release by written authorization of the Disclosing Party. 5.0 PERMITTED USES Notwithstanding other provisions of this Exhibit, either Party may provide, to the end user or any person the end user may designate through written notification upon request, any information relevant to the end user's account. Notwithstanding Section 3.B of Exhibit F, the SBC Telcos or an SBC Telco affiliate may use the Customer information, proprietary or otherwise, to provide end user inquiry services and to estimate facilities usage for jurisdictional separations, and for engineering and network planning. Such affiliate will be bound by the terms of this Exhibit. 6.0 SBC TELCO NON-PUBLISHED TELEPHONE NUMBERS The Customer agrees that it will not disclose any non-published SBC Telco end user telephone number to third parties (other than to the end user, or to an agent of the Customer). The Customer may disclose a non-published number to an agent for the purpose of contacting that end user on the Customer's behalf, but the Customer shall bind the agent not to disclose the number to anyone other than that end user. In addition, the Customer will hold the SBC Telcos harmless from any liability or loss resulting from the Customer's improper use of such non-published numbers, and shall indemnify the SBC Telcos for such loss including costs and fees of litigation. 7.0 FILINGS WITH PUCS OR OTHER REGULATORY AGENCIES The Parties agree that this Agreement and its Exhibits will be filed in those state jurisdictions that require such filings. The Parties acknowledge that this Agreement and its Exhibits contain commercially confidential information which may be considered proprietary by either or both Parties, and agree to limit distribution of the Agreement to those individuals in their respective 3

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit F organizations with a need to know the contents of the Agreement. The Parties further agree to seek (if possible) commercial confidential status for the Agreement with any regulatory commission with which the Agreement must be filed, and similarly seek such status should commission staffs, or third parties require production of the Agreement in regulatory proceedings. 8.0 APPLICABILITY OF STATUTES, DECISIONS AND RULES Notwithstanding any other provision in this Agreement, a Party's ability to disclose information or use disclosed information is subject to all applicable statutes, decisions, and regulatory rules concerning the disclosure and use of such information which, by their express terms mandate a different handling of such information, including but not limited to Section 222 of the 1996 Telecommunications Act and any regulations promulgated pursuant thereto. 4

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit F SCHEDULE 1 PROPRIETARY INFORMATION I. SBC TELCO PROPRIETARY INFORMATION A. SBC Telco end user specific information, including SBC Telco IntraLATA toll usage B. Directory Advertising C. SBC Telco specific account information and information relating to services provided by the SBC Telco to the End User. D. SBC Telco IntraLATA WATS and 800 usage E. End User information, which is defined as treatment history, return check history, treatment exemption indication, credit information, and credit class. II. CUSTOMER PROPRIETARY INFORMATION A. Customer end user PIC identification B. Customer records submitted to the SBC Telcos for billing and Customer specific reports regarding such records provided by the SBC Telcos to Customer pursuant to this Agreement. C. Customer's end user calling volumes and calling patterns submitted under this Agreement. 5

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT G BILLING AND COLLECTION SERVICES: MISCELLANEOUS SERVICES REVISED: OCTOBER 18, 2001

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G TABLE OF CONTENTS SOUTHWESTERN BELL TELEPHONE: <TABLE> <CAPTION> Page <S> <C> <C> 1.0 SERVICE ORDER ACTIVITY REPORT / ACCOUNT MARKING........................2 2.0 BILLING INFORMATION....................................................2 2.1 Bill Data..............................................................3 2.2 Service Order Activity.................................................3 2.3 Unbillable Message Records.............................................3 2.4 CNA....................................................................3 3.0 MESSAGE DATA TRANSMISSION (CMDS).......................................4 PACIFIC BELL AND NEVADA BELL: 4.0 BILLING INFORMATION....................................................7 4.1 Bill Data..................:...........................................7 4.2 Unbillable message records.............................................7 4.3 CNL....................................................................8 5.0 MESSAGE DATA TRANSMISSION (CMDS).......................................8 AMERITECH: 6.0 SERVICE ORDER ACTIVITY REPORT / ACCOUNT MARKING.......................11 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G SWBT SECTIONS 1 AND 2 - APPLICABLE FOR: - SOUTHWESTERN BELL TELEPHONE 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G SWBT 1.0 SERVICE ORDER ACTIVITY REPORT / ACCOUNT MARKING Account Marking provides the Customer a report containing service order (account) activity on End User accounts to whom SWBT has issued a bill on behalf of the Customer. The Customer must subscribe to Account Marking in order to receive the Service Order Activity Report. Charges for the Service Order Activity Report are assessed on a per record basis. The charge associated with this report can be found under the rate element of "Standard CRIS Billing Information" in Exhibit A. 2.0 BILLING INFORMATION As ordered by the Customer, SWBT will provide Billing Information to the Customer from SWBT's End User records, billing files and account database. Billing Information Services is the provision of information to the Customer from SWBT record systems labeled as Customer Records Information System (CRIS) and Customer Name and Address Bureau (CNA). Such Billing Information Service will be limited to the provision of information to the Customer relating exclusively to End User services provided by the Customer. Information relating to services provided by SWBT or any other entity will not be provided. The Customer shall order Billing Information Services for the states where it wishes to receive the services and shall specify how often it wishes the services to be provided. With each order, the Customer shall identify the authorized individual and address to receive the Billing Information Service output. When CNA information is requested, the Customer will identify in writing and include the account codes assigned by SWBT of all authorized individuals who will contact the CNA bureau. The Customer shall take every effort to make sure that Billing Information Service output is provided only to authorized personnel of the Customer or third Parties performing billing services-related business for the Customer. The Customer shall treat the information as confidential and proprietary data, and will use the information only for the purpose of providing billing services to its End Users. The Customer shall be responsible for all contacts and inquiries from its End Users concerning Billing Information Service. 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G SWBT SWBT's liability in the case of loss of data or information to be supplied to the Customer shall consist only of SWBT's charges to the Customer for such data or information. Charges rendered to the Customer by SWBT for the Billing Information Services will be included in SWBT payment process. When the Customer has ordered Bill Rendering Service, SWBT will provide billing information from its CRIS records as follows if ordered by the Customer: 2.1 Bill Data Bill Data is a copy of the Customer's pages of the End User bill, billed by SWBT on behalf of the Customer. 2.2 Service Order Activity Service Order Activity (SOA) consists of a report, which provides information regarding activity on End User accounts, to which SWBT has issued a bill on behalf of the Customer. 2.3 Unbillable Message Records Unbillable message records are those Customer message records sent to SWBT for billing which SWBT does not recognize as being associated with a SWBT End User or has errored out of the system due to System edits. 2.4 CNA Upon request of the Customer, SWBT will provide name and town information from its CNA bureau. The CNA name and town data, but not street address, will be provided only when the Customer needs the information to authorize a call, to bill a call, or to handle an emergency situation. The information will be provided on per-request basis by voice telecommunications. Name, town and state will be provided for a telephone number. A request includes the handling of one call and providing the data for one telephone number. SWBT will specify the location where requests are to be received and the method in which the request is to be made. 3

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G SWBT If the name and address associated with the telephone number is restricted due to the request of the End User, legal authority or law enforcement agency, no Name or town location will be provided. 3.0 MESSAGE DATA TRANSMISSION (CMDS) 5.1. SWBT will provide Message Data Transmission services to the Customer as described in 3.2. below. This service will consist of the transmission of rated Customer message records. SWBT maintains the right to terminate without cause Message Data Transmission services upon ninety (90) days written notification to the Customer. 5.1. SWBT will provide the transmission of Customer message records to CMDS I within five (5) business days from receipt of such records. The Customer will submit such message records to a location designated to the Customer. 5.1. SWBT will provide tracking and billing support data for the Customer based upon "received from" and "sent to" entity locations. 5.1. EMI formatted messages from the Customer are required to provide Message Data Transmission. The EMI formatted records must be delivered to a location specified by SWBT. It is the responsibility of the Customer to maintain, for a minimum of ninety (90) days from date of receipt by SWBT, a back-up file of all call detail records provided to SWBT, to allow SWBT to reconstruct lost records. If the Customer fails to maintain a back-up file for reprovisioning of messages to SWBT throughout the prescribed time frame, SWBT will not be liable for any such lost records. For transmission from one SWBT location to another SWBT location, the Customer message data determined to be lost as a result of an error in SWBT's Message Data Transmission service, will be recovered by SWBT and the Customer's obligation to resupply the data has expired, SWBT will estimate the messages' associated revenues as set forth in Paragraph 5.4.8. of the Principal Agreement to this contract. 5.1. In the event the Customer requests data that has previously been successfully provided by SWBT, the data will be reprovided to the Customer through the Time and Cost procedure. 5.1. For transmission services between SWBT and CMDS I or an Independent Exchange Company, SWBT's responsibility is limited to transmitting the data and SWBT assumes no liability for subsequent treatment of the data. The Customer is responsible for ensuring all data is properly received and processed by the receiving Exchange Company. Notwithstanding any 4

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G SWBT other provision of the Agreement, the Parties agree that the exclusive remedy for delayed transmission of the Customer's message records, including messages of any third Party for which the Customer acts as an agent, to CMDS I or to an Independent Exchange Company, will not exceed the cost SWBT charges the Customer to provide the transmission related to any such delayed message records. 5.1. Charges for Message Data Transmission services are included in the rate element for Data Transmission - CMDS and will be included in the SWBT payment process. 5

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G PB and NB SECTION 3 - APPLICABLE FOR: - PACIFIC BELL - NEVADA BELL 6

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G PB and NB 4.0 BILLING INFORMATION As ordered by the Customer, SBC Telco will provide Billing Information to the Customer from SBC Telco's End User records, billing files and account data base. Billing Information Services is the provision of information to the Customer from SBC Telco record systems such Billing Information Service will be limited to the provision of information to the Customer relating exclusively to End User services provided by the Customer. Information relating to services provided by SBC Telco or any other entity will not be provided. The Customer shall order those Billing Information Services for the states where it wishes to receive the services and shall specify how often it wishes the services to be provided. With each order, the Customer shall identify the authorized individual and address to receive the Billing Information Service output. When Customer Name and Location (CNL) information is requested, the Customer will identify in writing and include the account codes assigned by SBC Telco of all authorized individuals who will contact the CNL bureau. The Customer shall take every effort to make sure that Billing Information Service output is provided only to authorized personnel of the Customer or third Parties performing billing services-related work for the Customer. The Customer shall treat the information as confidential and proprietary data, and will use the information only for the purpose of providing billing services to its End Users. The Customer shall be responsible for all contacts and inquiries from its End Users concerning Billing Information Service. When the Customer has ordered Bill Rendering Service, SBC Telco will provide billing information from its CRIS records as follows if ordered by the Customer: 4.1 Bill Data Bill data is a copy of the Customer's pages of the End User bill, billed by SBC Telco on behalf of the Customer. 4.2 Unbillable message records Unbillable message records are those Customer message records sent to SBC Telco for billing which SBC Telco does not recognize as being 7

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G PB and NB associated with a SBC Telco End User or has errored out of the system due to System edits. 4.3 CNL Upon request of the Customer, SBC Telco will provide name and town information from its CNL bureau. The CNL name and town data, but not street address, will be provided only when the Customer needs the information to authorize a call, to bill a call, or to handle an emergency situation. The information will be provided on per-request basis by voice telecommunications. Name, town and state will be provided for a telephone number. A request includes the handling of one call and providing the data for one telephone number. SBC Telco will specify the location where requests are to be received and the method in which the request is to be made. If the name and address associated with the telephone number is restricted due to the request of the End User, legal authority or law enforcement agency, no name or town location will be provided. 5.0 MESSAGE DATA TRANSMISSION (CMDS) 5.1. SBC Telco will provide Message Data Transmission services that will consist of the transmission of rated Customer message records. SBC Telco maintains the right to terminate without cause Message Data Transmission services upon ninety (90) days written notification to the Customer. 5.2. EMI formatted messages from the Customer are required to provide Message Data Transmission. The EMI formatted records must be delivered to a location specified by SBC Telco. It is the responsibility of the Customer to maintain, for a minimum of ninety (90) days from date of receipt by SBC Telco, a back-up file of all call detail records provided to SBC Telco, to allow SWBT to reconstruct lost records. If the Customer fails to maintain a back-up file for reprovisioning of messages to SBC Telco throughout the prescribed time frame, SWBT will not be liable for any such lost records. For transmission from one SBC Telco location to another SBC Telco location, the Customer message data determined to be lost as a result of an error in SBC Telco's Message Data Transmission service, will be recovered by SBC Telco and the Customer's obligation to resupply the data has expired, SBC Telco will estimate the messages' associated revenues as set forth in Paragraph 5.4.8. of the Principal Agreement to this contract. 8

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G PB and NB 5.3. In the event the Customer requests data that has previously been successfully provided by SBC Telco, the data will be reprovided to the Customer through the Time and Cost procedure. 9

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G Ameritech SECTION 4 - APPLICABLE FOR: - AMERITECH 10

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit G Ameritech 6.0 SERVICE ORDER ACTIVITY REPORT / ACCOUNT MARKING Account Marking provides the Customer a report containing service order (account) activity on End User accounts to whom SWBT has issued a bill on behalf of the Customer. The Customer must subscribe to Account Marking in order to receive the Service Order Activity Report. The Time and Cost process will be utilized to determine the implementation charge to the Customer. Charges for the Service Order Activity Report are assessed on a per record basis. The charge associated with this report can be found under the rate element of "Service Order Activity Report" in Exhibit A. 11

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 EXHIBIT H BILLING AND COLLECTIONS: SBC SUPPORT REVISED JUNE 20, 2003

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 TABLE OF CONTENTS <TABLE> <CAPTION> Page <S> <C> <C> 1.0 FUTURE ENHANCEMENTS...............................................1 2.0 ESCALATION LIST...................................................1 </TABLE> i

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Billing and Collections Services Operating Agreement by and among BellSouth Telecommunications, Inc. and Cingular Wireless LLC, effective September 1, 2003 EXHIBIT 10.62 Exhibit H 1.0 FUTURE ENHANCEMENTS Once Cingular Wireless's initial service establishment is complete for the service purchased under this agreement they may request enhancements and/or modifications to its service. These are cases when additional work is required by SBC due to client request such as new bill phrases, new product billing, resends of data, etc. All such client request will be handled as additional requests. Cingular Wireless will provide a written request completely detailing the service modifications needed. If more information is required by SBC, SBC will provide the client with a list of questions and issues within forty-five (45) working days of its receipt of the client's request. Once complete, specifications are provided by client, SBC will provide a response with a time and cost estimate within forty-five (45) working days. 2.0 ESCALATION LIST At the time the Agreement is signed, both SBC and Cingular Wireless will submit to each other escalation lists, flow charts, or organization charts for conflict resolution. 1

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Work Order No. 03027350 Between Cingular Wireless, LLC And SBC Services, Inc.

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 WORK ORDER This Work Order, effective on the date when signed by the last party ("Effective Date"), is by and between Cingular Wireless, LLC ("Cingular"), a Delaware limited liability company, and SBC Services, Inc. ("SBC"), a Delaware corporation, and shall be governed pursuant to the terms and conditions of General Agreement Number 01018518 (the "General Agreement"). Any terms and conditions in this Work Order that modify or change the terms and conditions of Agreement Number 01018518 shall apply to this Work Order only. 1. DESCRIPTION OF MATERIAL AND/OR SERVICES: Cingular will provide wireless voice Services, Material for wireless voice Services, and the logistical Services for maintaining inventory, shipping, provisioning, receiving, and billing for the wireless voice Services and Material. These Services and Materials will be provided for the SBC Midwest region in Ohio, Indiana, and Illinois. The Service and Materials are specified in Appendix A. 2. ENTIRE AGREEMENT The terms contained in the General Agreement, this Work Order and in any other Work Orders, including all appendices and subordinate documents attached to or referenced in the General Agreement, this Work Order or in any other Work Orders, constitute the entire integrated agreement between Cingular and SBC with regard to the subject matter contained herein. This Work Order supersedes all prior oral and written communications, agreements, and understandings of the parties, if any, with respect hereto. This includes but is not limited to the Agreement by and between "Southwestern Bell Mobile Systems, LLC, d/b/a Cingular Wireless" and "Illinois Bell Telephone Company" which became effective on 16 October, 2001, and the Agreement by and between "Ameritech Network Services" and "Ameritech Mobile Communications, Inc. on behalf of the Cincinnati SMSA Limited Partnership" which became effective on 1 May, 1998. Acceptance of Material or Services, payment or any inaction by SBC, shall not constitute SBC's consent to or acceptance of any additional or different terms from those stated in this Work Order. Estimates furnished by SBC shall not constitute commitments. No oral promises or statement induced either party to enter into this Work Order and the parties agree that the only modification or amendment of the Work Order's express language is through a subsequent written document signed by the parties. 3. TERM OF AGREEMENT: a. This Work Order is effective on the date when signed by the last party ("Effective Date") and, unless Terminated or Canceled as provided pursuant to the terms and conditions of General Agreement Number 01018518, shall remain in effect for a term ending on August 31, 2006 (the "Initial Term"). The Parties may extend the term of this Work Order by mutual agreement in writing. PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 2

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 b. The Termination, Cancellation or expiration of this Work Order shall not affect the obligations of either Party to the other Party pursuant to any Order previously executed hereunder, and the terms and conditions of this Work Order shall continue to apply to such Order as if this Work Order were still in effect. 4. PERSONNEL TO PERFORM THE SERVICES: Cingular will provide adequate personnel to provide logistical Services for maintaining inventory, shipping, provisioning, and receiving for the wireless voice Services and Material. 5. LOCATION: Cingular personnel who provide the Services and Material will be located in Cingular locations in Ohio, Indiana, or Illinois or as selected by Cingular. 6. PRICES: Cingular will charge SBC for the wireless Services and Material as detailed in Appendix B. 7. PAYMENT: SBC will make payment in accordance with the General Agreement. 8. INVOICES/BILLING INFORMATION: Invoices and billing information are to be sent: SBC Midwest 2000 West Ameritech Center Drive Location #4E 14 Hoffman Estates, IL 60196 Attn: Assoc Dir - Ntwk Svcs Regulatory Supt Phone: (847)248-1404 9. PROJECT MANAGER/POINT OF CONTACT: The project manager and/or point of contact shall be: SBC Midwest 2000 West Ameritech Center Drive Location # 4E14 Hoffman Estates, IL 60196 Attn: Assoc Dir - Ntwk Svcs Regulatory Supt Phone: (847)248-1404 10. NOTICES: PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 3

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 Except as otherwise provided in this Work Order, all notices or other communications hereunder shall be deemed to have been duly given when made in writing and either 1) delivered in person, or 2) when received, if provided by an overnight or similar delivery Service, or 3) when received, if deposited in the United States Mail, postage prepaid, return receipt requested, and addressed as follows: IF TO CINGULAR: Cingular Wireless, LLC 7330 San Pedro Plaza 9th Floor San Antonio, TX 78216 Attn: Key Account Manager Phone: (214)478-4733 WITH A COPY TO: Cingular Wireless, LLC 5565 Glenridge Connector Atlanta, Georgia 30342-4756 Attn: General Counsel IF TO SBC: SBC Services, Inc. 2000 W. Ameritech Center Drive Location # 3A09B Hoffman Estates, IL 60196 Attn: SCM - IT Hardware/Office Technology Phone: (847)248-8334 WITH A COPY TO: SBC Midwest 2000 West Ameritech Center Drive Location #4E 14 Hoffman Estates, IL 60196 Attn: Assoc Director - Network Services Regulatory Support Phone: (847)248-1404 The address to which notices or communications may be given by either party may be changed by written notice given by such party to the other pursuant to this paragraph entitled "Notices". PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 4

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed, which may be in duplicate counterparts, each of which will be deemed to be an original instrument, as of the date the last Party signs. CINGULAR WIRELESS, LLC SBC SERVICES, INC. By:__________________________ By:_________________________________ Printed Name: Printed Name: Ronald P. Watt Title: Title: Executive Director - I/T Contracting Date:___________ Date:_______________ PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 5

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 APPENDIX A - MATERIAL AND SERVICES 1. CINGULAR PROVIDED MATERIALS: Cingular shall provide only the following Materials: digital/analog wireless handset, battery for wireless handset, A/C power charger, pre-paid return shipping label, and letter summarizing Services provided, Material return instructions, and Cingular customer care contacts. Pricing for digital/analog handset, battery for wireless handset, and A/C power charge is detailed in Appendix B. 2. CINGULAR PROVIDED SERVICES: Cingular shall provide only the following Services: storage of digital/analog wireless devices, batteries for wireless handsets, A/C power chargers, and summarizing letters; shipping of wireless Material to include receiving SBC orders for delivery, overnight delivery, tracking of deliveries; provisioning of wireless Services to include activations, suspensions, and cancellations; receiving of wireless Services to include receiving SBC order for recovery, standard United States Postal Service (USPS) recovery, tracking of recoveries. 3. STORAGE OF MATERIAL Cingular wall provide storage of Material at a Cingular location. The storage of this devices will include an inventory log to track location of Material. Cingular will also track the dates that the Material was either stored in inventory or removed from inventory. Cingular will utilize a first-in-first-out rotation process when managing the inventory of Material that Cingular is storing as part of this Agreement. 4. SHIPPING OF MATERIAL Cingular will provide overnight delivery of Material to the SBC ordered location. Cingular will ship, via over night delivery, SBC orders that are received by 2:00 PM Central Time. The overnight delivery will be for the next business day morning. The cost of this overnight delivery will be incurred by Cingular based on the Services provided and priced in Appendix B. Cingular will track the delivery locations and dates of delivery. 5. PROVISIONING OF WIRELESS SERVICES Cingular will keep the wireless Services suspended while the Material is in storage. Upon receiving a SBC order to ship Material to a location, Cingular will activate the wireless Service. The wireless Service will remain active until Cingular receives an SBC order to recover Material. At that time, Cingular will suspend Service. In the event SBC needs to add or reduce the quantity of Material in storage, Cingular will activate or cancel wireless Service as requested by SBC. The minimum number of wireless Service to remain active for the application is detailed in Appendix B. 6. RECOVERING OF MATERIAL Cingular will track the recovery of Material after receipt of an order placed by SBC for the Material to be returned to Cingular. A Letter of Summary will provide directions to the SBC customer on when to return Material to Cingular. Cingular will notify SBC, at e-mail address "cell_opt_exclude@msg.ameritech.com" if Cingular has not received the Material with PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 6

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 fourteen (14) days after the receipt of the SBC order to recover the Material. If Cingular has not received the Material after thirty (30) days from the receipt of the SBC order to recover the Material, Cingular will replace the Material and will charge SBC the cost of new Material based on the pricing in Appendix B. 7. LETTER OF SUMMARY Cingular will provide a letter with each shipment to an SBC customer that summaries the use of the Material and wireless Service. The content of the letter will be jointly agreed to by both Parties but will include at a minimum the directions on when to return Material to Cingular. 8. CUSTOMER CARE Cingular will provide access to Cingular's consumer customer care for the SBC customer receiving the Material and wireless Service. The contact number for this customer care is 1-866-CINGULAR. Cingular will work in good faith to provide the SBC customer with technical troubleshooting support and wireless Material operational support. Cingular will use commercially reasonable efforts to identify and remove any features that have been added to the wireless Service by the SBC customer so that no additional charges will be incurred by SBC. This-does not release SBC from liability for such additional charges if they are added to the wireless Service by the SBC customer. 9. SBC ORDERS SBC will provide orders for wireless Material and Services to Cingular via email. These orders shall include shipping, and recovery of Material from SBC customers. The following email addresses will be used for receiving orders from SBC: 1. Ameritechrecoveryprogram-il@Cingular.com 2. Ameritechrecoveryprogram-indy/oh@Cingular.com The order to ship Material must include the following information: 1. SBC Customer Name 2. SBC Customer Address (no PO Boxes allowed) 3. SBC Customer Phone Number The order to recover Material must include the following information: 1. SBC Customer Name 2. SBC Customer Address (no PO Boxes allowed) 3. SBC Customer Phone Number PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 7

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 APPENDIX B - PRICING 1. MATERIAL Currently, there are five hundred (500) handsets being held in storage by Cingular for SBC. The following pricing for Material will be for new activations and upgrades associated with increasing the quantity of Material in storage beyond the current five hundred (500) handsets being held in storage by Cingular for SBC. New activations are considered new mobile numbers that are activated by Cingular through an order placed by SBC. Upgrades are considered replacing wireless handsets for an existing mobile number that has completed 12-months of wireless Service from date of activation or has completed 12-months of wireless Service from date of a previous upgrade as part of this Work Order. It is agreed by the parties that handsets will consist of the lowest cost handset, associated battery, and A/C charger that Cingular has available for sale at that time, and within that Cingular market area. <TABLE> <CAPTION> MATERIAL DESCRIPTION PRICE -------- ----------- ----- <S> <C> <C> Handset Analog/Digital Handset $19.99 Battery NiMH Battery Free A/C Charger Standard Travel A/C Charger Free </TABLE> The following pricing will be for replacement of existing Material for an already existing mobile number that is not considered an upgrade. <TABLE> <CAPTION> MATERIAL DESCRIPTION PRICE -------- ----------- ----- <S> <C> <C> Handset Analog/Digital Handset $100 Battery NiMH Battery $ 40 A/C Charger Standard Travel A/C Charger $ 15 </TABLE> 2. SERVICES The following prices are for Services provided to an SBC customer covered under this Work Order. The SBC discount provided under terms of Agreement Number # 01020972 will be applied to individual rate plans for Services. The SBC discount provided under terms of Agreement Number # 01020972 is not available on Pooled rate plans. In the event that new Service is ordered by SBC and then the Service is deactivated, applicable termination fees will be applied by Cingular pursuant to Agreement Number # 01020972. <TABLE> <CAPTION> COST PER COST PER COST FOR COST PER MINUTE MINUTE POOLED RATE PLAN DESCRIPTION USER OVERAGE ROAMING MINUTES --------- ----------- -------- ------- ------- -------- <S> <C> <C> <C> <C> <C> Preferred Nation Pooled 5,000 minute of use per month. No $10 per $0.35 $0.69 $400 per long distance fees. month month Preferred Nation Pooled 11,000 minutes of use per month. $10 per $0.35 $0.69 $880 per No long distance fees. month month Preferred Nation Pooled 17,500 minutes of use per month. $10 per $0.25 $0.69 $1,400 per No long distance fees. month month </TABLE> PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 8

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Work Order No. 03027350 Between Cingular Wireless and SBC Services, Inc. EXHIBIT 10.63 Agreement Number 03027350 <TABLE> <S> <C> <C> <C> <C> <C> Preferred Nation 25,000 minutes of use per $10 per $0.25 $0.69 $2,000 per Pooled month. No long distance fees, month month </TABLE> The following features will be provided at no additional cost: - Detailed billing - Caller ID (only available in digital market areas) The following pricing is for Service associated with the logistics for storage, shipping, provisioning, and receiving. <TABLE> <CAPTION> SERVICE DESCRIPTION PRICE ------- ----------- ----- <S> <C> <C> Logistics Storage, shipping, provisioning, and $60.00 per receiving as detailed in Appendix A. The shipment price is based on Service being active during the month whether for a partial month or a full month. For example, if a handset gets sent out twice in a on month period, it will be subject to two (2) $60.00 shipment fees. Logistics Storage, shipping, provisioning, and $3.00 per receiving as detailed in Appendix A. The unit per price is based on a minimum of 500 month handsets ("units") per month. If the number of units is less than 500 units, 500 units will be charged. If there are more than 500 units, each additional unit will add $3.00 per month to the price per month. </TABLE> PROPRIETARY INFORMATION THE INFORMATION CONTAINED IN THIS AGREEMENT IS NOT FOR USE OR DISCLOSURE OUTSIDE SBC, CINGULAR, THEIR AFFILIATES AND THEIR THIRD PARTY REPRESENTATIVES, EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING PARTIES. 9

CINGULAR WIRELESS LLC EXHIBITS - Investment Agreement, dated as of February 17, 2004, between BellSouth Corporation and SBC Communications Inc. -------------------------------------------------------------------------------- EXHIBIT 10.64 INVESTMENT AGREEMENT INVESTMENT AGREEMENT (this "Agreement"), dated as of February 17, 2004, between BellSouth Corporation, a Georgia corporation ("BellSouth"), and SBC Communications Inc., a Delaware corporation ("SBC"). W I T N E S S E T H: WHEREAS, BellSouth and SBC are the sole owners of Cingular Wireless Corporation, a Delaware corporation ("Cingular"), and BellSouth or an Affiliate of BellSouth, SBC or an Affiliate of SBC and Cingular are the sole owners of, and Cingular is the sole manager of, Cingular Wireless LLC, a Delaware liability limited company ("Cingular LLC"); WHEREAS, simultaneously with the execution of this Agreement, Cingular, Links I Corporation, a Delaware corporation and wholly-owned subsidiary of Cingular ("Merger Sub"), Cingular LLC and AT&T Wireless, Inc., a Delaware corporation ("AWE") (and solely with respect to specific provisions, SBC and BellSouth) have entered into an Agreement and Plan of Merger, dated as of February 17, 2004 (the "Merger Agreement"), pursuant to which Merger Sub will be merged with and into AWE (the "Merger"); WHEREAS, BellSouth and SBC have agreed that upon the Closing they will make investments in Cingular sufficient for Cingular to pay the Merger Consideration; WHEREAS, in addition to making investments in Cingular, each of BellSouth and SBC wish to enter into certain transactions with Cingular LLC; and WHEREAS, following the Merger, BellSouth and SBC, desire to take certain actions, and to cause Cingular and Cingular LLC to take certain actions, in order to structure Cingular's ownership of AWE and its Subsidiaries and BellSouth's and SBC's ownership in Cingular and Cingular LLC. NOW, THEREFORE, in consideration of the promises and representations and warranties set forth herein, the parties hereto agree as follows: 1. BellSouth agrees that it will, or will cause one or more of its wholly-owned Subsidiaries to, provide to Cingular, at or prior to the Effective Time, 40% of the aggregate amount of the Merger Consideration and will cause Cingular to use such amount toward payment of the Merger Consideration; and SBC agrees that it will, or will cause one or more of its wholly-owned Subsidiaries to, provide to Cingular, at or prior to the Effective Time, 60% of the aggregate amount of the Merger Consideration and will cause Cingular to use such amount toward payment of the Merger Consideration. Such cash amounts will be provided to Cingular as loans to, and cash contributions in exchange for non-voting equity securities of, Cingular, or a combination thereof;

CINGULAR WIRELESS LLC EXHIBITS - Investment Agreement, dated as of February 17, 2004, between BellSouth Corporation and SBC Communications Inc. -------------------------------------------------------------------------------- EXHIBIT 10.64 provided, however, that the principal amounts of such loans to Cingular shall be Proportionate as between BellSouth and SBC (the term "Proportionate" means 40% with respect to BellSouth and 60% with respect to SBC unless otherwise agreed or as otherwise adjusted by future changes in their respective effective ownership interests in Cingular and Cingular LLC) and the number of non-voting equity securities of Cingular issued shall be Proportionate as between SBC and BellSouth unless otherwise agreed, and provided further that the terms and conditions of such loans and such securities shall be identical as between those loans from and securities issued to BellSouth and comparable loans from and securities issued to SBC. BellSouth and SBC agree to negotiate in good faith the terms under which such cash amounts will be provided to Cingular (including the allocation of such amounts between loans, cash equity contributions or an agreed on combination thereof, and the terms of loans and the non-voting equity securities), and to determine such terms no later than the Effective Time. 2. Each of BellSouth and SBC hereby represent and warrant to the other as follows: (a) It is a corporation duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization and has all requisite corporate power and authority to own and operate its properties and assets and to carry on its business in all material respects as it is currently conducted. (b) Other than the filings and/or notices required to effect the Merger, no notices, reports or other filings are required to be made by it or its Subsidiaries with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by it or its Subsidiaries from, any Governmental Entity, in connection with the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby, except those that the failure to make or obtain would not, individually or in the aggregate, be reasonably likely to prevent, materially delay or materially impair its ability to consummate the transactions contemplated by this Agreement. (c) The execution, delivery and performance of this Agreement by it do not, and the consummation by it of the transactions contemplated hereby will not, constitute or result in (A) a breach or violation of, or a default under, its certificate of incorporation or by-laws, (B) a breach or violation of, or a default under, the acceleration of any obligations or the creation of a lien, pledge, security interest or other Encumbrance on its assets or the assets of any of its Subsidiaries (with or without notice, lapse of time or both) pursuant to any Contract binding upon it or any of its Subsidiaries or any Law or governmental or non-governmental permit or license to which it or any of its Subsidiaries is subject or (C) any change in the rights or obligations of any party under any of its or its Subsidiaries' Contracts, except, in the case of clause (B) or (C) above, for any breach, violation, default, acceleration, creation or change that, individually or in the aggregate, would not be reasonably likely to prevent, materially delay or materially impair its ability to consummate the transactions contemplated by this Agreement. 2

CINGULAR WIRELESS LLC EXHIBITS - Investment Agreement, dated as of February 17, 2004, between BellSouth Corporation and SBC Communications Inc. -------------------------------------------------------------------------------- EXHIBIT 10.64 (d) It has all requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations under this Agreement. This Agreement is a legal, valid and binding agreement of it enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 3. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 4. Neither party hereto may assign any of its rights or obligations under this Agreement without the prior written consent of the other party hereto and any such purported assignment shall be null and void. 5. This Agreement and any amendments hereto may be executed in one or more counterparts, each of which shall be deemed to be an original by the parties executing such counterpart, but all of which shall be considered one and the same instrument. 6. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF. EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN TORT OR CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE. 7. Capitalized terms used, but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement. 8. This Agreement will terminate and be of no further force and effect upon a termination of the Merger Agreement prior to the Effective Time, but no such termination shall relieve any party hereto for liability for any breach of this Agreement prior to the time of termination. 3

CINGULAR WIRELESS LLC EXHIBITS - Investment Agreement, dated as of February 17, 2004, between BellSouth Corporation and SBC Communications Inc. -------------------------------------------------------------------------------- EXHIBIT 10.64 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first written above. SBC COMMUNICATIONS INC. By: /s/ Rick Moore ---------------------------------- Name: Rick Moore Title: BELLSOUTH CORPORATION By: /s/ Barry L. Boniface ---------------------------------- Name: Barry L. Boniface Title: Vice President-Planning and Development 4

CINGULAR WIRELESS LLC EXHIBITS - Computation of Ratio of Earnings to Fixed Charges (Unaudited). EXHIBIT 12 Cingular Wireless LLC Computation of Ratio of Earnings to Fixed Charges (Unaudited) (Dollars in Millions) <TABLE> <CAPTION> Period from Year Ended December 31, April 24, 2000 - ----------------------- December 31, 2000 2001 2002 2003 ----------------- ---------- ---------- ---------- <S> <C> <C> <C> <C> FIXED CHARGES Interest expense $ 231 $ 822 $ 911 $ 856 Interest capitalized during the period 2 16 27 15 Amortization of debt issuance expenses -- -- -- -- Portion of rental expense representative of interest 27 135 152 163 ---------- ---------- ---------- ---------- Total Fixed Charges 260 973 1,090 1,034 EARNINGS Income (loss) from continuing operations before income taxes 128 1,700 1,251 1,050 Add (deduct) the following: Amortization of capitalized interest -- -- -- -- ---------- ---------- ---------- ---------- Subtotal 128 1,700 1,251 1,050 Fixed charges per above 260 973 1,090 1,034 Less interest capitalized during the period (2) (16) (27) (15) ---------- ---------- ---------- ---------- Total earnings $ 386 $ 2,657 $ 2,314 $ 2,069 ------------------------------------------------------------------------------------------------------- Ratio of earnings to fixed charges 1.49 2.73 2.12 2.00 ======================================================================================================= </TABLE>

. . . Cingular Wireless LLC Exhibits - Subsidiaries of the Registrant EXHIBIT 21 The following companies are doing business under the trade name Cingular or Cingular Wireless. <TABLE> <CAPTION> State As of December 31, 2003 Organized ----------------------- -------------- <S> <C> CINGULAR WIRELESS LLC Salmon PCS LLC DE Cingular Wireless Consolidated Holdings, Inc. DE Peachtree Insurance Company, Ltd. (Bermuda) Bermuda Cingular Wireless Finance Corp. DE Cellular Retail Corporation DE Orlando CGSA Holdings, Inc. DE Cingular Wireless Aviation Holdings, LLC DE SBC Wireless LLC DE Southwestern Bell Mobile Systems, LLC DE Champaign CellTelCo DC Cingular Pennsylvania LLC DE Worcester Telephone Company MA Worcester Telephone Supply, LLC DE Southwestern Bell Wireless, LLC DE SWBW B-Band Development, LLC DE Texas RSA 20B2 Limited Partnership TX San Antonio SMSA Limited Partnership DE McAllen-Edinburg-Mission SMSA Limited Partnership DE McAllen-Edinburg-Mission SMSA Holdings, LLC DE McAllen-Edinburg-Mission SMSA Supply, LP DE Cingular Wireless of Texas RSA #11 Limited Partnership DE Cingular Wireless of Texas RSA #16 Limited Partnership DE Texas RSA #16 Holdings, LLC DE Texas RSA #16 Supply, LLC DE Eastern Missouri Cellular Limited Partnership DE Eastern Missouri Cellular Holdings, Inc. DE Eastern Missouri Cellular Supply Limited Partnership DE Kansas City SMSA Limited Partnership DE Kansas City SMSA Holdings, Inc. DE Kansas City SMSA Cellular Supply Limited Partnership DE Corpus Christi SMSA Limited Partnership DE Dallas SMSA Limited Partnership DE Dallas SMSA Holdings, LLC DE Dallas SMSA Supply Limited Partnership DE Oklahoma City SMSA Limited Partnership DE Oklahoma City SMSA Supply, LLC DE Lubbock SMSA Limited Partnership DE Lubbock SMSA Holdings, LLC DE Lubbock SMSA Supply Limited Partnership DE St. Joseph SMSA Limited Partnership DE Topeka SMSA Limited Partnership DE Texas RSA 6 Limited Partnership DE Missouri RSA 8 Limited Partnership DE Texas RSA 7B1 Limited Partnership DE Missouri RSA 9B1 Limited Partnership DE Texas RSA 9B1 Limited Partnership DE Oklahoma RSA 3 Limited Partnership DE Texas RSA 18 Limited Partnership DE Oklahoma RSA 9 Limited Partnership DE Texas RSA 19 Limited Partnership DE Texas RSA 20B1 Limited Partnership DE </TABLE>

<TABLE> <S> <C> Wichita SMSA Limited Partnership DE Texas RSA 9B4 Limited Partnership DE Missouri RSA 11/12 Limited Partnership DE Missouri RSA 11/12 Holdings, LLC DE Missouri RSA 11/12 Supply Limited Partnership DE Texas RSA 10B1 Limited Partnership DE Houston Cellular Telephone Company, LP TX Galveston Cellular Partnership TX Galveston Cellular Telephone Company DE Galveston Cellular, LLC DE Cingular Wireless Galveston, LP DE Texas RSA 10B3 Limited Partnership DE Cingular Wireless of Austin Limited Partnership DE Austin Cellular Supply Limited Partnership DE Austin Cellular Holdings, LLC DE Cingular Wireless Spectrum Sub A LLC DE Cingular Wireless Spectrum Sub B LLC DE Pacific Telesis Mobile Services, LLC DE Pacific Bell Wireless Northwest, LLC DE Houma-Thibodaux Cellular Partnership DC Houma-Thibodaux Cellular Supply, LLC DE GSM Facilities LLC [Joint Control - 50%] DE Pacific Bell Wireless, LLC NV Omnipoint Facilities Network 2, LLC DE Ameritech Mobile Communications, LLC DE Ameritech Wireless Communications, LLC DE Detroit SMSA Limited Partnership DE Milwaukee SMSA Limited Partnership DE Milwaukee SMSA Supply, LLC DE Madison SMSA Limited Partnership DE Madison SMSA Supply, LLC DE Cincinnati SMSA Limited Partnership DE MI RSA 5, LLC DE SBC Wireless - Puerto Rico, LLC DE Beach Holding Corporation DE CCPR Paging, Inc. DE CCPR Services, Inc. DE San Juan Cellular Telephone Company DC CCPR of The Virgin Islands, Inc. DE Cingular Supply, L.P. DE Cingular Wireless Employee Services, LLC DE RAM Communications Group, LLC DE Cingular Interactive L.P. DE BellSouth Mobility LLC GA BellSouth Personal Communications, LLC DE Cingular Real Estate Holdings of The Southeast, LLC GA Orlando SMSA Limited Partnership DE Chattanooga MSA Limited Partnership DE Chattanooga MSA Holdings, Inc. DE Chattanooga MSA Supply Limited Partnership DE Decatur RSA Limited Partnership DE Lafayette MSA Limited Partnership DE Lafayette MSA Supply, LLC DE Louisiana RSA No. 7 Cellular General Partnership DE Louisiana RSA No. 7 Cellular Supply, LLC DE Louisiana RSA No. 8 Limited Partnership DE Acadiana Cellular General Partnership DE </TABLE>

<TABLE> <S> <C> Acadiana Cellular Supply, LLC DE Westel-Indianapolis LLC DE Bloomington Cellular Telephone Company DE Cellular Radio of Chattanooga Florida Cellular Service, LLC GA Jacksonville MSA Limited Partnership DE Jacksonville MSA Supply, LLC DE Florida RSA No. 2B (Indian River) Limited Partnership DE Georgia RSA No. 1 Limited Partnership DE Georgia RSA No. 1 Supply, LLC DE Georgia RSA No. 2 Limited Partnership DE Georgia RSA No. 2 Supply, LLC DE Georgia RSA No. 3 Limited Partnership DE Georgia RSA No. 3 Supply, LLC DE Northeastern Georgia RSA Limited Partnership DE Cingular Real Estate Holdings of Georgia, LLC GA Cingular Real Estate Holdings of Atlanta, LLC GA Cingular Real Estate Holdings of Louisiana, LLC GA Cingular Real Estate Holdings of Kentucky, LLC GA Cingular Westel Real Estate Holdings, LLC GA Cingular Wireless Roadrunner LLC DE GSM Corridor, LLC [Joint Control - 50%] DE Roadrunner Operating LLC DE Cingular New England License Sub LLC DE Roadrunner Cingular License Sub, LLC DE AT&T Wireless License Sub LLC DE AT&T Wireless Roadrunner Sub I, LLC DE </TABLE>

CINGULAR WIRELESS LLC -------------------------------------------------------------------------------- EXHIBITS - Powers of Attorney EXHIBIT 24 POWERS OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS: WHEREAS, CINGULAR WIRELESS LLC, a Delaware limited liability company (the "Company"), proposes to file with the Securities and Exchange Commission, under the Securities Exchange Act of 1934, as amended, its Annual Report on Form 10-K for the year ended December 31, 2003. NOW THEREFORE, each of the undersigned hereby constitutes and appoints Richard G. Lindner, Gregory T. Hall, Sean Foley and Philip Teske, and each of them, as attorneys for him in his name, place and stead in his capacities in the Company, to execute and cause to be filed the Annual Report and thereafter to execute and file any amendment or supplement thereto deemed by them to be necessary or desirable, hereby giving and granting to said attorneys full power and authority (including substitution and revocation) to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as he might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand on the date indicated. /s/ Stanley T. Sigman President and Chief Executive Officer February 23, 2004 (Principal Executive Officer) /s/ Richard G. Lindner February 23, 2004 Chief Financial Officer (Principal Financial Officer) /s/ Gregory T. Hall February 23, 2004 Controller (Principal Accounting Officer) /s/ Richard A. Anderson February 23, 2004 Class B Director /s/ Ronald M. Dykes February 23, 2004 Class B Director /s/ Randall L Stephenson February 23, 2004 Class B Director /s/ Rayford Wilkins, Jr. February 23, 2004 Class B Director

CINGULAR WIRELESS LLC EXHIBITS - Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. EXHIBIT 31.1 302 CERTIFICATION I, Stanley T. Sigman, President and Chief Executive Officer of the Company, certify that: 1. I have reviewed this report on Form 10-K of Cingular Wireless LLC; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. [Reserved] c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Stanley T. Sigman ------------------------------------------ Date: February 24, 2004 Stanley T. Sigman President and Chief Executive Officer

CINGULAR WIRELESS LLC EXHIBITS - Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. EXHIBIT 31.2 302 CERTIFICATION I, Richard G. Lindner, Chief Financial Officer of the Company, certify that: 1. I have reviewed this report on Form 10-K of Cingular Wireless LLC; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. [Reserved] c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Richard G. Lindner ------------------------------- Date: February 24, 2004 Richard G. Lindner Chief Financial Officer

CINGULAR WIRELESS LLC EXHIBITS EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Cingular Wireless LLC (the "Company") on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission (the "Report"), I, Stanley T. Sigman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, tO the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Stanley T. Sigman ---------------------- Stanley T. Sigman President and Chief Executive Officer Date: February 24, 2004

CINGULAR WIRELESS LLC EXHIBITS EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Cingular Wireless LLC (the "Company") on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission (the "Report"), I, Richard G. Lindner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Richard G. Lindner ------------------------------ Richard G. Lindner Chief Financial Officer Date: February 24, 2004