UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SEPTEMBER 30, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

333-06609-01
Commission file number 333-06609-02

SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 48-1165245
DELAWARE 43-1746537
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)

4900 Main Street, Kansas City, Missouri, 64112
- --------------------------------------------------------------------------------
(Address of principal executive offices)

(816) 559-1000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No

As of November 1, 1997, Sprint Spectrum Finance Corporation had Common Stock
outstanding of 100 shares.

SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997

INDEX

Page
Number
-----------

Part I - Financial Information................................... 1 - 11

Item 1a. Financial Statements - Sprint Spectrum L.P........ 1 - 7

Consolidated Condensed Balance Sheets................... 1

Consolidated Condensed Statements of Operations......... 2

Consolidated Condensed Statements of Cash Flows......... 3

Notes to Consolidated Condensed Financial Statements.... 4 - 7

Item 1b. Financial Statements - Sprint Spectrum Finance
Corporation............................................... 8 - 11

Condensed Balance Sheets................................ 8

Condensed Statements of Operations...................... 9

Condensed Statements of Cash Flows...................... 10

Notes to Condensed Financial Statements................. 11

Item 2a. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Sprint Spectrum L.P. 12 - 17

Item 2b. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Sprint Spectrum
Finance Corporation....................................... 18

Part II - Other Information

Item 1. Legal Proceedings.................................. 19

Item 2. Changes in Securities.............................. 19

Item 3. Defaults On Senior Securities...................... 19

Item 4. Submission of Matters to a Vote of Security Holders 19

Item 5. Other Information................................... 19

Item 6. Exhibits and Reports on Form 8-K.................... 19 - 20

Signature......................................................... 21 - 22

Exhibits

PART I.
Item 1a.

SPRINT SPECTRUM L.P.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)

September 30, December 31,
1997 1996
------------------ --- ------------------
- ---------------------------------------------------------------------- ---
(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents...................................... $ 71,557 $ 49,988
Accounts receivable, net....................................... 66,945 3,310
Receivable from affiliates..................................... 32,262 14,021
Inventory...................................................... 80,240 72,414
Prepaid expenses and other assets.............................. 24,754 14,260
------------------ ------------------
Total current assets......................................... 275,758 153,993

INVESTMENT IN PCS LICENSES, net................................... 2,099,153 2,122,908

PROPERTY, PLANT AND EQUIPMENT, net................................ 2,819,871 1,408,680

MICROWAVE RELOCATION COSTS, net................................... 229,135 135,802

OTHER ASSETS, net................................................. 107,680 77,383

================== ==================
TOTAL ASSETS...................................................... $ 5,531,597 $ 3,898,766
================== ==================

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
Accounts payable............................................... $ 225,669 $ 196,146
Payable to affiliates.......................................... 2,981 5,626
Accrued expenses............................................... 194,795 59,200
Current maturities of long-term debt .......................... 11,228 5,049
------------------ ------------------
Total current liabilities.................................... 434,673 266,021

LONG-TERM COMPENSATION OBLIGATION................................. 24,844 11,356

CONSTRUCTION OBLIGATIONS.......................................... 864,840 714,934

LONG TERM DEBT.................................................... 2,423,211 686,192

COMMITMENTS AND CONTINGENCIES

LIMITED PARTNER INTEREST IN CONSOLIDATED SUBSIDIARY............... 5,000 5,000

PARTNERS' CAPITAL AND ACCUMULATED DEFICIT:
Partners' capital.............................................. 3,228,793 2,767,564
Accumulated deficit............................................ (1,449,764) (552,301)
------------------ ------------------
Total partners' capital...................................... 1,779,029 2,215,263

================== ==================
TOTAL LIABILITIES AND PARTNERS' CAPITAL........................... $ 5,531,597 $ 3,898,766
================== ==================

See notes to consolidated condensed financial statements.

PART I.
Item 1a.
SPRINT SPECTRUM L.P.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------- -----------------------------------
1997 1996 1997 1996
- ------------------------------------------ --------------- ---------------- ---------------- ----------------

OPERATING REVENUES:
Service............................. $ 41,188 $ - $ 50,554 $ -
Equipment........................... 31,346 - 56,833 -
--------------- ---------------- ---------------- ----------------
Total operating revenues.......... 72,534 - 107,387 -

OPERATING EXPENSES:
Cost of service..................... 43,441 3,880 100,729 6,979
Cost of equipment................... 122,569 - 201,402 -
Selling, general and administrative. 205,172 82,058 471,748 156,197
Depreciation and amortization....... 84,054 1,197 184,736 1,835
--------------- ---------------- ---------------- ----------------
Total operating expenses.......... 455,236 87,135 958,615 165,011

LOSS FROM OPERATIONS................... (382,702) (87,135) (851,228) (165,011)

OTHER INCOME (EXPENSE):
Interest, net ...................... (39,243) 3,445 (50,140) 4,043
Other income........................ 1,031 355 3,906 570
Equity in loss of unconsolidated
partnership....................... - (11,152) - (92,284)
--------------- ---------------- ---------------- ----------------

Total other income (expense)...... (38,212) (7,352) (46,234) (87,671)

=============== ================ ================ ================
NET LOSS............................... $ (420,914) $ (94,487) $ (897,462) $ (252,682)
=============== ================ ================ ================

See notes to consolidated condensed financial statements.

PART I.
Item 1a.
SPRINT SPECTRUM L.P.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)

Nine Months Ended
September 30,
-----------------------------------------------
1997 1996
------------------------------------------------------------------ ---------------------- ----------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss...................................................... $ (897,462) $ (252,682)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Equity in loss of unconsolidated partnership................ - 92,284
Depreciation and amortization of property and intangibles... 184,736 1,835
Amortization of debt discount and issuance costs............ 35,328 3,706
Changes in assets and liabilities:
Receivables............................................... (81,876) (8,960)
Inventory................................................. (7,826) -
Prepaid expenses and other assets......................... (8,984) (10,092)
Accounts payable and accrued expenses..................... 167,972 64,141
Long term compensation obligation......................... 13,488 7,125
----------------------
----------------------
Net cash used in operating activities................... (594,624) (102,643)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.......................................... (1,418,018) (356,059)
Microwave relocation costs.................................... (96,852) (72,039)
Loan to unconsolidated partnership............................ - (172,000)
---------------------- ----------------------
Net cash used in investing activities................... (1,514,870) (600,098)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing under revolving credit agreement................ 370,000 -
Proceeds from long-term debt and vendor financing............. 1,327,553 524,200
Payments on long-term debt.................................... (1,490) (11)
Debt issuance costs........................................... (20,000) (12,769)
Partner capital contributions................................. 455,000 669,509
Dividends paid................................................ - (19,015)
---------------------- ----------------------
Net cash provided by financing activities............... 2,131,063 1,161,914

---------------------- ----------------------
INCREASE IN CASH AND CASH EQUIVALENTS........................... 21,569 459,173

CASH AND CASH EQUIVALENTS, Beginning of period................... 49,988 1,123

---------------------- ----------------------
CASH AND CASH EQUIVALENTS, End of period......................... $ 71,557 $ 460,296
====================== ======================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid, net of amount capitalized..................... $ 12,226 $ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:
- A PCS license covering the Omaha MTA and valued at $6,229
was contributed to the Company by Cox Communications
during the nine months ended September 30, 1997.

- Accrued interest of $24,820 was converted to vendor financing
during the nine months ended September 30, 1997.

- Capital expenditures of $1,418,018 for the nine month period
ended September 30, 1997 are net of construction obligations
of $149,906.

See notes to consolidated condensed financial statements.

PART I.
Item 1a.
SPRINT SPECTRUM L.P.
Notes to Consolidated Condensed Financial Statements (Unaudited)

The information contained in this Form 10-Q for the three- and nine-month
interim periods ended September 30, 1997 and 1996 has been prepared in
accordance with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In
the opinion of management, all adjustments considered necessary, consisting only
of normal recurring accruals, to present fairly the consolidated financial
position, results of operations, and cash flows for such interim periods have
been made (See Note 1).

Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The results of operations for the
nine months ended September 30, 1997 are not necessarily indicative of the
operating results that may be expected for the year ended December 31, 1997.
These unaudited consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's 1996 Annual Report on Form 10-K.

1. Organization

Sprint Spectrum L.P. (the "Company") is a limited partnership formed in Delaware
on March 28, 1995, by Sprint Spectrum Holding Company, L.P. ("Holdings") and
MinorCo, L.P. ("MinorCo") both of which were formed by Sprint Enterprises, L.P.,
TCI Spectrum Holdings, Inc. (formerly known as TCI Telephony Services, Inc., as
successor to TCI Network Services), Cox Telephony Partnership and Comcast
Telephony Services (together the "Partners"). The Company was formed pursuant to
a reorganization of the operations of an existing partnership, WirelessCo, L.P.
("WirelessCo") which transferred certain operating functions to Holdings. The
Partners are subsidiaries of Sprint Corporation ("Sprint"), Tele-Communications,
Inc. ("TCI"), Cox Communications, Inc. ("Cox"), and Comcast Corporation
("Comcast" and together with Sprint, TCI and Cox, the "Parents"), respectively.
The Partnership and certain other affiliated partnerships offer services as
Sprint PCS.

The partners of the Company have the following ownership interests as of
September 30, 1997 and 1996:

Sprint Spectrum Holding Company, L.P. (general partner)....greater than 99%
MinorCo, L.P. (limited partner)................................less than 1%

The Company is consolidated with its subsidiaries, WirelessCo, Sprint Spectrum
Equipment Company, L.P. ("EquipmentCo"), Sprint Spectrum Realty Company, L.P.
("RealtyCo") and Sprint Spectrum Finance Corporation ("FinCo"). WirelessCo was
formed on October 24, 1994 to invest in and hold the PCS licenses. On May 15,
1996, EquipmentCo and RealtyCo were organized for the purpose of holding PCS
network-related real estate interests and assets. On May 20, 1996, FinCo was
formed to be a co-obligor of the senior notes and senior discount notes.

Emergence from Development Stage Company - Prior to the third quarter, the
Company reported its operations as a development stage enterprise. The Company
has commenced service in the majority of the MTAs in which it owns a license. As
a result, the balance sheet and statements of operations and of cash flows are
no longer presented in development stage format.

2. Summary of Significant Accounting Policies

Basis of Presentation - Prior to July 1, 1996, substantially all wireless
operations of Sprint Spectrum L.P. and subsidiaries and Holdings were conducted
at Holdings and substantially all operating assets and liabilities, with the
exception of the interest in an unconsolidated subsidiary and the ownership
interest in PCS licenses, were held at Holdings. As of July 1, 1996, Holdings
transferred these net assets, and assigned agreements related to the wireless
operations to which it was a party to Sprint Spectrum L.P. (the
"Reorganization").

Revenue Recognition - Operating revenues for PCS services are recognized as
service is rendered. Operating revenues for equipment sales are recognized at
the time the equipment is delivered to a customer or an unaffiliated agent.

Cost of Equipment - The Company uses multiple methods of distribution of its
inventory in each of its markets including third-party national and regional
retailers, Company-owned retail stores, its direct sales force and
telemarketing. Cost of equipment varies by distribution channel and includes the
cost of multiple models of handsets, related accessory equipment and warehousing
and shipping expenses.

Accounts Receivable - Accounts receivable are net of an allowance for doubtful
accounts of approximately $3.8 million and $202,000 at September 30, 1997 and
December 31, 1996, respectively.

Investment in PCS Licenses and Other Intangibles - During 1994 and 1995, the
Federal Communications Commission ("FCC") auctioned PCS licenses in specific
geographic service areas. The FCC grants licenses for terms of up to ten years,
and generally grants renewals if the licensee has complied with its license
obligations. The Company believes it has and will continue to meet all
requirements necessary to secure renewal of its PCS licenses. The Company has
also incurred costs associated with microwave relocation in the construction of
the PCS network. Amortization of PCS licenses and microwave relocation costs
will commence as each service area becomes operational, over estimated useful
lives of 40 years. Accumulated amortization for PCS licenses and microwave
relocation costs totaled approximately $35.2 million and $1.7 million as of
September 30, 1997 and December 31, 1996, respectively.

Capitalized Interest - Interest costs associated with the construction of
capital assets (including the PCS licenses) incurred during the period of
construction are capitalized. The total interest capitalized for the three and
nine months ended September 30, 1997 was approximately $16.9 million and $87.2
million, respectively.

Major Customer - The Company markets its products through multiple distribution
channels, including Company-owned retail stores and third-party retail outlets.
Sales to one third-party retail customer exceeded 10% of Equipment revenue in
the consolidated condensed statements of operations for the three and nine
months ended September 30, 1997.

Income Taxes - The Company has not provided for federal or state income taxes
since such taxes are the responsibility of the individual Partners.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Paging Services - The Company has commenced paging services pursuant to
agreements with Paging Network Equipment Company ("PageNet") and Sprint
Communications Company, L.P. ("Sprint Communications"). For the nine months
ended September 30, 1997 and 1996, Sprint Communications received agency fees of
approximately $8.6 million and $2.5 million, respectively.

Reclassifications - Certain reclassifications have been made to the 1996
financial statements to conform with the 1997 financial statement presentation.

3. Long-Term Debt and Borrowing Arrangements

The long-term debt of the Company as of September 30, 1997 and December 31, 1996
is summarized as follows (in thousands):

September 30, December 31,
1997 1996
---------------- -----------------

11% Senior Notes due in 2006 $ 250,000 $ 250,000
121/2% Senior Discount Notes due in 2006, net of unamortized
discount of $187,340 and $214,501 at September 30, 1997 and
December 31, 1996, respectively 312,660 285,499
Credit facility - term loans 300,000 150,000
Credit facility - revolving credit 370,000 -
Vendor financing 1,177,553 -
Note payable to affiliate due in 1998 5,000 5,000
Other 19,226 742
---------------- ------------------

Total debt 2,434,439 691,241
Less current maturities 11,228 5,049
---------------- ------------------

Long-term debt $ 2,423,211 $ 686,192
================ ==================

Bank Credit Facility - The Company entered into an agreement with The Chase
Manhattan Bank ("Chase") as agent for a group of lenders for a $2 billion bank
credit facility dated October 2, 1996. The proceeds of this facility are to be
used to finance working capital needs, subscriber acquisition costs, capital
expenditures and other general Company purposes.

The facility consists of a revolving credit commitment of $1.7 billion and a
$300 million term loan commitment. As of September 30, 1997, the term loans bear
a weighted average interest rate of 8.25%. The amount available under the total
revolving credit commitment will be increased upon the achievement of certain
financial and operating conditions as defined in the agreement. As of September
30, 1997, $370 million had been drawn at a weighted average interest rate of
8.49% and $80 million remained immediately available. Commitment fees for the
revolving portion of the agreement are payable quarterly based on average unused
revolving commitments. Subsequent to September 30, 1997, the Company borrowed an
additional $35 million under the revolving credit facility.

Vendor Financing - As of October 2, 1996, the Company entered into financing
agreements with Northern Telecom, Inc. ("Nortel") and Lucent Technologies, Inc.
("Lucent" and together with Nortel, the "Vendors") for multiple drawdown term
loan facilities totaling $1.3 billion and $1.8 billion, respectively. The
proceeds of such facilities are to be used to finance the purchase of goods and
services provided by the Vendors.

On April 30, 1997, the Company amended the terms of its financing agreement with
Nortel. The amendment provides for a syndication of the financing commitment
between Nortel, several banks and other vendors (the "Nortel Lenders"). The
commitment provides financing in two phases. During the first phase, the Nortel
Lenders will finance up to $800 million. Under the second phase, the Nortel
Lenders will finance up to an additional $500 million upon the achievement of
certain operating and financial conditions. As of September 30, 1997, $506
million had been borrowed at an interest rate of 8.98% with $294 million
remaining available under the first phase. In addition, the Company paid $20
million in origination fees upon the initial draw down under the first phase and
will be obligated to pay additional origination fees on the date of the initial
draw down loan under the second phase. Subsequent to September 30, 1997, the
Company borrowed an additional $32.8 million under the Nortel facility.

On May 29, 1997, the Company amended the terms of its financing agreement with
Lucent. The amendment provides for a syndication of the financing commitment
between Lucent, Sprint and other banks and vendors (the "Lucent Lenders"). The
Lucent Lenders have committed to financing up to $1.5 billion through December
31, 1997, and up to an aggregate of $1.8 billion thereafter, with Sprint
financing up to $300 million. The Company pays a facility fee on the daily
amount of certain loans outstanding under the agreement, payable quarterly. The
Lucent agreement terminates June 30, 2001. As of September 30, 1997, the Company
had borrowed approximately $671 million under the Lucent facility at a weighted
average interest rate of 8.97%. Subsequent to September 30, 1997, the Company
borrowed an additional $79.1 million under the Lucent facility.

The Nortel and Lucent agreements provide for conversion of accrued interest on
the outstanding debt into additional principal through February 8, 1998 and
March 30, 1998, respectively.

Certain amounts included under Construction Obligations on the consolidated
condensed balance sheets may be financed under the Vendor Financing agreements.

Part I.

Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
CONDENSED BALANCE SHEETS

September 30, December 31,
1997 1996
----------------------------------------------------------------- -- -------------------- -- -------------------
(Unaudited)
ASSETS

Receivable from parent......................................... $ 100 $ 100
-------------------- -------------------

TOTAL ASSETS................................................... $ 100 $ 100
==================== ===================

STOCKHOLDER'S EQUITY

Common stock, $1.00 par value; 1,000 shares authorized; 100
shares issued and outstanding............................... $ 100 $ 100
-------------------- -------------------

TOTAL STOCKHOLDER'S EQUITY..................................... $ 100 $ 100
==================== ===================

See notes to condensed financial statements.

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

Nine Months Ended Period from
Three Months Ended Inception to
September 30, September 30, September 30,
-----------------------------------
1997 1996 1997 1996
---------------- --------------- ------------------- ------------------

Operating Revenues................ $ - $ - $ - $ -

Operating Expenses................ - - - -
---------------- --------------- ------------------- ------------------

Net Income........................ $ - $ - $ - $ -
================ =============== =================== ==================

See notes to condensed financial statements.

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Period from
Ended Inception to
September 30, September 30,
1997 1996
--------------------- ---------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net income to net cash used in operating
activities:
Net income..................................................... $ - $ -
Changes in assets and liabilities:
Receivables................................................. - (100)
--------------------- ---------------------
Net cash used in operating activities..................... - (100)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock.......................................... - 100
--------------------- ---------------------
Net cash provided by financing activities................. - 100
--------------------- ---------------------

INCREASE IN CASH AND CASH EQUIVALENTS............................. - -

CASH AND CASH EQUIVALENTS, Beginning of Period...................... - -
--------------------- ---------------------

CASH AND CASH EQUIVALENTS, End of Period............................ $ - $ -
===================== =====================

See notes to condensed financial statements.

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
NOTES TO CONDENSED FINANCIAL STATEMENTS

The information contained in this Form 10-Q for the three- and nine-month
interim periods ended September 30, 1997 has been prepared in accordance with
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of
management, all adjustments considered necessary, consisting only of normal
recurring accruals, to present fairly the consolidated financial position,
results of operations, and cash flows for such interim periods have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The results of operations for the nine months
ended September 30, 1997 are not necessarily indicative of the operating results
that may be expected for the year ended December 31, 1997. These unaudited
condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's 1996 Annual Report on
Form 10-K.

1. ORGANIZATION

Sprint Spectrum Finance Corporation ("FinCo"), a Delaware corporation, was
formed on May 21, 1996 and is a wholly-owned subsidiary of Sprint Spectrum L.P.
(the "Partnership"). FinCo was formed to be a co-obligor of $250 million in
Senior Notes and $500 million in Senior Discount Notes.

The Partnership contributed $100 to FinCo on May 21, 1996 in exchange for 100
shares of common stock.

PART I.
Item 2a.
SPRINT SPECTRUM L.P.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with Sprint
Spectrum L.P.'s consolidated condensed financial statements and notes thereto.
The term "Company" refers to Sprint Spectrum L.P. and its subsidiaries,
including FinCo, WirelessCo, RealtyCo, and EquipmentCo. As of July 1, 1996,
Holdings transferred substantially all operating assets and liabilities to the
Company. The Company's financial information as presented includes the pooled
operations of Holdings through June 30, 1996.

The Company includes certain estimates, projections and other forward-looking
statements in its reports as well as in presentations to analysts and others and
in other material disseminated to the public. There can be no assurances of
future performance and actual results may differ materially from those in the
forward-looking statements. Factors which could cause actual results to differ
materially from estimates or projections contained in forward-looking statements
include:

- the establishment of a market for new digital PCS services;
- the introduction of competitive service plans and pricing and other
effects of vigorous competition in the markets in which the Company
currently operates or intends to market its services;
- the impact of technological change which may diminish the value of
existing equipment which may, in turn, result in the need to incur
additional costs to upgrade previously sold communications equipment;
- the cost of entering new markets necessary to provide services;
- the impact of any unusual items resulting from ongoing evaluations of
the Company's business strategies; the effects of unanticipated delays
or problems with the development of technologies and systems used by
the Company;
- requirements imposed on the Company and its competitors by the Federal
Communications Commission ("FCC") and state regulatory commissions
under the Telecommunications Act of 1996;
- the possibility of one or more of the markets in which the Company
will compete being impacted by variations in political, economic or
other factors over which the Company has no control;
- the effects of unanticipated delays resulting from zoning or other
disputes with municipalities; and
- unexpected results in litigation.

General

The Company is an enterprise formed for the purpose of establishing a nationwide
personal communications service ("PCS") wireless telecommunications network. The
Company acquired PCS licenses in the FCC's A Block and B Block PCS auction,
which concluded in March 1995, to provide service to 29 major trading areas
("MTAs") covering 150.3 million Pops. Additionally, Cox contributed to the
Company, effective February 6, 1997, a PCS license for the Omaha MTA covering
1.7 million Pops. The Company has also affiliated and expects to continue to
affiliate with other PCS providers. Pursuant to affiliation agreements, each
affiliated PCS service provider will use the Sprint(R) (a registered trademark
of Sprint Communications Company, L.P.) brand name.

Affiliations and Network Coverage

Holdings owns a limited partnership interest in American PCS, L.P. ("APC"). In
September 1997, Holdings increased its ownership in APC through additional
capital contributions and will become the managing partner upon FCC approval.
APC, through subsidiaries, owns a PCS license for and operates a broadband
GSM (global system for mobile communications) PCS system in the Washington D.C./
Baltimore MTA, and is in the process of building a CDMA overlay for its
existing GSM PCS system. APC has affiliated with the Company and is marketing
its products and services under the Sprint brand name.

Holdings also owns a 49% limited partnership interest in Cox Communications PCS,
L.P. ("Cox PCS"), a limited partnership that owns a PCS license for the Los
Angeles-San Diego MTA covering 21.5 million Pops. Cox, which previously owned
this license, contributed the license to Cox PCS on March 31, 1997, and is
managing partner of Cox PCS. The Company signed an affiliation agreement with
Cox PCS on December 31, 1996.

The Company also provides various services to PhillieCo, L.P. ("PhillieCo"), a
limited partnership organized by and among subsidiaries of Sprint, TCI and Cox
that owns a PCS license for the Philadelphia MTA covering 9.1 million Pops. In
addition, SprintCom, Inc. ("SprintCom"), an affiliate of Sprint, participated in
the FCC's D and E Block auction which ended January 14, 1997, and was awarded
licenses for 139 of 493 Basic Trading Areas ("BTAs") covering 70 million Pops,
all of which are geographic areas not covered by the Company's owned PCS
licenses or licenses owned by PhillieCo, APC or Cox PCS. The Company is in the
process of negotiating an agreement with SprintCom to build out the network
infrastructure in certain BTA markets where SprintCom was awarded PCS licenses.
In accordance with an agreement among the Partners and the Amended and Restated
Agreement of Limited Partnership of MajorCo, L.P. (renamed Sprint Spectrum
Holding Company, L.P.) dated January 31, 1996 (the "Partnership Agreement"),
SprintCom is required to offer to enter into an affiliation agreement with
Holdings with respect to such BTA licenses pursuant to which SprintCom's systems
in such areas would be included in the Company's national PCS network, although
no assurance can be given that SprintCom and Holdings will enter into any such
affiliation agreement.

In July, 1997, the Company announced that it had signed PCS and analog cellular
phone roaming agreements with several major wireless providers. The agreements
will allow Sprint PCS customers using Sprint PCS phones to roam on PCS and
analog cellular networks of, among others, Mobility Canada, AT&T Wireless,
PriCellular Corporation, Vanguard Cellular, and 360(Degree) Communications
Company when they leave the digital coverage of the Sprint PCS network.

Emergence From Development Stage and Continuing Risk Factors

Prior to the third quarter, the Company reported its operations as a development
stage enterprise. During the development stage, the Company incurred
expenditures in conjunction with PCS license acquisitions, initial design and
construction of the PCS network, engineering, marketing, administrative and
other start-up expenses. The Company has now commenced service in the majority
of the MTAs in which it owns a license and expects to continue to incur
additional construction costs as it expands coverage in existing license areas.
Additionally, the Company will require substantial working capital to fund
initial operating activities, including the up-front customer acquisition costs
(including subsidies of the sales of handsets, advertising, and marketing
promotions). The extent to which the Company is able to generate operating
revenue and earnings is dependent on a number of business factors, including
maintaining existing financing, generating operating revenues, and attaining
profitable levels of market demand for the Company's products and services.

Liquidity and Capital Resources

The buildout of the Company's PCS network and the marketing and distribution of
the Company's PCS products and services will continue to require substantial
capital. The Company currently estimates that its capital requirements (capital
expenditures, the cost of its existing licenses, working capital, debt service
requirements and anticipated operating losses) for the period from inception
through the end of 1998 (based on the Company's current plans for its network

buildout in its current license areas) will total approximately $8.9 billion (of
which approximately $6.5 billion had been expended as of September 30, 1997).
After 1998, the Company will also require additional capital for coverage
expansion, volume-driven network capacity and other capital expenditures for
existing and new license areas (if any), working capital, debt service
requirements and anticipated further operating losses. Costs associated with the
network buildout include switches, base stations, towers, antennae, radio
frequency engineering, cell site construction and microwave relocation.
Management estimates that capital expenditures associated with the buildout will
total approximately $3.9 billion through 1997, including $3.2 billion through
September 30, 1997. Actual amounts of the funds required may vary materially
from these estimates and additional funds would be required in the event of
significant departures from the current business plan, unforeseen delays, cost
overruns, unanticipated expenses, regulatory changes, engineering design changes
and other technological risks.

The Company currently has minimal sources of revenue to meet its capital
requirements and has relied upon equity capital contributions, advances from
Holdings, third party debt and public debt. The Holdings partnership agreement
provides for a planned equity capital to be contributed by the Partners ("Total
Mandatory Contributions"), which represents the sum of $4.2 billion, which
includes agreed upon values attributable to the contributions of certain
additional PCS licenses by a Partner. The Total Mandatory Contributions amount
is required to be contributed in accordance with capital contribution schedule
to be set forth in approved annual budgets if requested by the Holdings
partnership board (or by the Chief Executive Officer of Holdings pursuant to
authority to be granted in each annual budget or such other authority as may be
delegated to the Chief Executive Officer by the Holdings partnership board). The
partnership board of Holdings may request capital contributions to be made in
the absence of an approved budget or more quickly than provided for in an
approved budget, but always subject to the Total Mandatory Contributions limit.
The proposed budget for 1997 has not yet been approved by the partnership board,
however, the Company is continuing to act under the authority of the 1996
approved budget as adjusted pursuant to the Holdings partnership agreement. The
Amended and Restated Capital Contribution Agreement (the "Amended Agreement")
was executed effective October 2, 1996. The Amended Agreement recognized that
through December 31, 1995, approximately $2.2 billion of the Total Mandatory
Contributions had been contributed to Sprint Spectrum L.P., and designates that
approximately $1.0 billion of the balance of the Total Mandatory Contributions
shall be contributed to Sprint Spectrum L.P. As of September 30, 1997, $3.0
billion had been contributed to the Company. The Company's business plan and the
financial covenants and other terms of the Secured Financing (defined below)
will require such additional equity financing prior to the end of 1998, absent a
new financing source. The $1.0 billion portion of the $4.2 billion not required
to be invested in the Company may be used by Holdings to fund its other
affiliate commitments and make other wireless investments. Amounts budgeted by
the Partners in future years will determine the extent to which the commitments
will actually be utilized.

In October 1996, the Company entered into a credit agreement with The Chase
Manhattan Bank, as administrative agent for a group of lenders, for a $2.0
billion senior secured credit facility (the "Bank Facility"). The proceeds of
the Bank Facility are to be used to finance working capital needs, subscriber
acquisition costs, capital expenditures and other general purposes of the
Company. The Bank Facility consists of a $300 million term loan commitment and a
revolving credit commitment of $1.7 billion. Of the $300 million term facility,
$150 million was drawn down subsequent to closing, and the remaining $150
million was drawn down in January, 1997. As of September 30, 1997, $370 million
had been borrowed and $80 million remained available under the revolving credit
facility. Availability under the Bank Facility will increase subject to the
Company meeting certain performance criteria.

Also in October 1996, the Company entered into credit agreements for up to an
aggregate of $3.1 billion of senior secured multiple drawdown term loan
facilities from two of its network infrastructure equipment vendors. As amended
in April 1997, the Nortel facility will provide up to $1.3 billion in senior
secured loans. The Lucent facility, as amended in May 1997, will provide up to
$1.8 billion in senior secured loans (together the "Vendor Financing" and
together with the Bank Facility, the "Secured Financing"). The Company will use

the proceedsfrom the Vendor Financing to fund the purchase of the equipment and
software manufactured by the vendors as well as substantially all of the
construction and ancillary equipment (e.g., towers, antennae, cable) required to
construct the Company's PCS network. These facilities will serve as the primary
financing mechanism for the buildout of the network.

Borrowings under the Secured Financing are secured by the Company's interest in
WirelessCo, RealtyCo and EquipmentCo and certain other personal and real
property (the "Shared Lien"). The Shared Lien equally and ratably secures the
Bank Facility and the Vendor Financing. The Secured Financing is jointly and
severally guaranteed by WirelessCo, RealtyCo and EquipmentCo and is non-recourse
to the Partners and the Parents.

In August 1996, Sprint Spectrum L.P. and FinCo issued $250 million aggregate
principal amount of the 11% Senior Notes and $500 million aggregate principal
amount at maturity of 12 1/2% Senior Discount Notes (together, the "Notes"). The
Senior Discount Notes were issued at a discount to their aggregate principal
amount at maturity and generated proceeds of approximately $273 million. Cash
interest on the Senior Notes will accrue at a rate of 11% per annum and is
payable semi-annually in arrears on each February 15 and August 15, commencing
February 15, 1997. Cash interest will not accrue or be payable on the Senior
Discount Notes prior to August 15, 2001. Thereafter, cash interest on the Senior
Discount Notes will accrue at a rate of 12 1/2% per annum and will be payable
semi-annually in arrears on each February 15 and August 15, commencing February
15, 2002. FinCo was formed solely to be a co-obligor of the Notes. FinCo has
only nominal assets and no operations or revenues, and Sprint Spectrum L.P. will
be responsible for payment of the Notes. On August 15, 2001, Sprint Spectrum
L.P. will be required to redeem an amount equal to $384.772 per $1,000 principal
amount at maturity of each Senior Discount Note then outstanding ($192 million
in aggregate principal amount at maturity, assuming all of the Senior Discount
Notes remain outstanding at such date). The proceeds of approximately $509
million from the issuance of the Notes (net of approximately $14 million of
underwriting discounts, commissions, and offering expenses) were used to fund
capital expenditures, including the buildout of the nationwide PCS network, to
fund working capital requirements, to fund operating losses and for other
partnership purposes. Sprint purchased, and continues to hold, approximately
$183 million principal amount at maturity of the Senior Discount Notes.

Sources of funding for the Company's further financing requirements may include
additional vendor financing, public offerings or private placements of equity
and/or debt securities, commercial bank loans and/or capital contributions from
Holdings or the Partners. There can be no assurance that any additional
financing can be obtained on a timely basis and on terms acceptable to the
Company and within limitations contained in the Notes, the agreements governing
the Secured Financing and any new financing arrangements. Failure to obtain any
such financing could result in the delay or abandonment of the Company's
development and expansion plans and expenditures or the failure to meet
regulatory requirements. It also could impair the Company's ability to meet its
debt service requirements and could have a material adverse effect on its
business.

For the year-to-date period ended September 30, 1997, the Company used cash of
$594 million in operating activities, which consisted of the operating loss of
$897 million less depreciation and amortization of $220 million and a net change
in working capital of $83 million. Cash used in investing activities totaled
$1.5 billion, consisting of capital expenditures and microwave relocation costs.

Results of Operations

For the Three and Nine Months Ended September 30, 1997

Operating Revenues/Margin

The Company emerged from the development stage in the third quarter of 1997,
and, as a result, the majority of the year-to-date service revenue was generated
in the third quarter. Equipment revenues reflect the sales of handsets and
accessory equipment through Sprint PCS channels (including Sprint PCS retail
stores, telemarketing, and business channels) and to third party vendors. The
negative margin from equipment sales results principally from the Company's
subsidy of handsets. Cost of service consists principally of switch and cell
site expenses, including site rental, utilities and access charges. Prior to
service launch, such costs were incurred during the network buildout and testing
phases.

Selling Expenses

The Company's selling expenses for the third quarter of 1997 were $64.2 million
compared to $7.7 million for the third quarter of 1996. For the nine months
ended September 30, 1997, selling expenses increased to $106.7 million from $8.7
million for the same nine months of 1996. These increases were due to costs
incurred during the initial commercial service launch in various markets and to
costs incurred in conjunction with local and national advertising for existing
markets. Such costs include participation with Sprint in an NFL sponsorship,
development and production expenses associated with advertisements in various
media (i.e., television, radio, print), and the development of printed brochures
to promote the Company's products and services. The Company expects selling
expenses will continue to increase as the Company expands its sales and
marketing activities.

General and Administrative

General and administrative expenses for the third quarter increased from $74.3
million in 1996 to $141.0 million in 1997. General and administrative expenses
for the nine months ended September 30, 1996 and 1997 were $147.5 million and
$365.0 million, respectively. Increases for both the three and nine month
periods were due principally to increases in salary and related benefits,
computer equipment and related expenses and professional and consulting fees.
Salaries and benefits, computer equipment and related expenses increased due to
an increase in employee headcount. Professional and consulting fees increased
due to the use of consultants and other experts to assist with the continuing
development and enhancement of the Company's sophisticated information systems,
continued rollout and tailoring of employee training, and various other
projects.

Depreciation and Amortization

Depreciation and amortization expense for the third quarter of 1997 was $84.1
million compared to $1.2 million for the same period in the prior year.
Depreciation and amortization expense of $184.7 million for the nine months
ended September 30, 1997, was an increase from $1.8 million for the same period
in 1996 as network equipment in launched markets has been placed in service and
amortization of PCS licenses and microwave relocation costs in those same
markets commenced.

Other Income/Expense:

Interest Income/Expense

Interest income decreased from $3.5 million for the three months ended September
30, 1996 to $1.9 million for the three months ended September 30, 1997 as the
average daily invested cash balance decreased during the comparative periods due
to the receipt in the prior year of partner equity contributions in advance of
capital and operational requirements. Interest income decreased from $4.5
million for the nine months ended September 30, 1996 to $3.2 million for the
nine months ended September 30, 1997.

Interest expense increased to $41.2 million for the three months ended September
30, 1997, versus $0.1 million for the same period in 1996. For the nine months
ended September 30, 1997, interest expense increased to $53.4 million from $0.4
million for the same period in 1996. The balance of the Company's construction
accounts eligible for interest capitalization declined during the period as
markets launched commercial service and equipment was placed in service
Additionally, interest expense continues to increase as borrowings increase.

Other Income

Equity in loss of unconsolidated partnership for the three and nine months ended
September 30, 1996 represents the Company's share of the losses in APC before
the ownership interest was transferred to Holdings on August 31, 1996. The
Company retained the rights and obligations under the affiliation agreement with
APC. In addition, the Company participates in an affiliation agreement with Cox
PCS. Fees earned under these agreements of $1.0 million and $3.9 million,
respectively for the three and nine months ended September 30, 1997 are shown in
Other income.

For the Three and Nine Months Ended September 30, 1996

The Company incurred losses of $94 million and $253 million for the three and
nine months ended September 30, 1996, respectively. These losses include equity
in loss of an unconsolidated subsidiary of $11 million and $92 million for the
three and nine month periods, respectively. There was no amortization of PCS
licenses during the nine-month period as PCS service had not been launched
commercially.

PART I.
Item 2b.
SPRINT SPECTRUM FINANCE CORPORATION
(A Wholly-Owned Subsidiary of Sprint Spectrum L.P.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Sprint Spectrum Finance Corporation ("FinCo"), a Delaware corporation, was
formed on May 21, 1996 and is a wholly-owned subsidiary of Sprint Spectrum L.P.
FinCo has nominal assets, does not conduct any operations and was formed to be a
co-obligor of the securities issued by the Company. Certain institutional
investors who might otherwise be limited in their ability to invest in
securities issued by partnerships by reasons of the legal investment laws in
their states of organization or their charter documents, may be able to invest
in the Company's securities because FinCo is a co-obligor. Accordingly, a
discussion of the results of operations, liquidity and capital resources of
FinCo are not presented.

PART II.
Other Information

Item 1. Legal Proceedings