As of December 31, 2006, there were approximately 230.1 million wireless customers in the United States, according to the Yankee Group. The United States has a mobile penetration rate (which is the number of subscriptions as a percentage of total population) of 77%, according to the Yankee Group, an increase from 50% in 2002. By comparison, mobile penetration rates in western European markets range from 80% to 120%, according to Current Analysis. Both the number of customers and penetration rate are projected to continue to rise in the United States, according to the Yankee Group reaching 290 million customers and 93%, respectively, in 2011.

Wireless communications are provided in the United States primarily by two broad categories of service providers: mobile network operators, or MNOs, which hold licenses to use radio frequency spectrum and own or operate wireless communications networks, including towers, base stations and switching centers and are the dominant type of service provider; and non-network operators, including mobile virtual network operators, or MVNOs, which do not operate a physical mobile network or hold FCC licenses but can access the mobile network of one or more MNOs to provide wireless communications services to their customers.

The postpaid contract model is typically characterized by having a contract for a specified term (typically one or two years), monthly billing statements with required fees paid in arrears, and substantial early termination penalties. The postpaid contract model is currently the most widely used payment method in the U.S. wireless communications market, accounting for approximately 87% of mobile customers as of the fourth quarter of 2006, with anticipated annual growth of 4% through 2011, according to the Yankee Group.

The prepaid, or pay-as-you-go, model is characterized typically as having no minimum-term contract, no monthly fee and no early termination penalties. Approximately 13% of U.S. customers used prepaid plans as of December 31, 2006, according to the Yankee Group. The prepaid model is underdeveloped in the United States as compared to other industrialized markets such as western Europe, where prepaid customers represent over 50% of the market, according to Current Analysis.

The Company develops content and have entered into relationships with third parties to procure and offer customized content, music and other services, including messaging (text or short message services, or SMS; multimedia services, such as picture messaging, instant messaging, or IM and email); music (ringtones, text tones, alerts, artist profiles and communities); web browsing and search; and downloadable games, customized wallpaper, screensavers and pictures.

The Company offers stylish handsets at affordable prices, which are attractive to the youth market. The Company currently offers eleven handset models and plan to introduce five new handsets in 2007.

The Company’s Sugar Mama program is a service enhancement and mobile media platform that allows its customers to earn up to 75 minutes in airtime by viewing advertisements from several business partners.

The Company offers its products and services on a flat per-minute basis and on a monthly basis for specified quantities, or buckets, of minutes purchased in advance.

The Company currently offers six plans under which its customers can purchase airtime in advance on a monthly basis, ranging from $14.99 per month for 100 “anytime” minutes with no separate night or weekend minutes to $99.99 per month for 1,000 “anytime” minutes and unlimited night and weekend minutes.

The Company currently offers several plans under which customers can pay for messaging services either on a monthly basis or per message basis. The Company currently offers three basic monthly pricing plans for domestic email, text, picture and instant messaging.

Net service revenue was $1,020.1 million for the year ended December 31, 2006 compared to $883.8 million for the prior year, an increase of $136.2 million, or 15.4%.

Cost of service was $299.1 million for the year ended December 31, 2006 compared to $309.3 million for the prior year, a decrease of $10.2 million, or 3.3%.

Depreciation and amortization expense for the year ended December 31, 2006 was approximately $28.4 million compared to approximately $19.4 million in the prior year, an increase of $9.0 million, or 46.2%.

Interest expense for the year ended December 31, 2006 was $52.2 million, compared to $25.0 million for the prior year, an increase of $27.2 million, or 108.6%.