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______________ MARCH 31, 1998______________

[ ] 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 (IRS Employer
of incorporation 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 May 1, 1998, 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 MARCH 31, 1998

INDEX

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

Part I - Financial Information........................................... 1 - 18

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)

March 31, December 31,
1998 1997
------------------ ------------------

(unaudited)
ASSETS

CURRENT ASSETS:

Cash and cash equivalents......................... $ 65,815 $ 36,821
Accounts receivable, net.......................... 101,688 96,318
Receivable from affiliates........................ 36,070 105,156
Inventory......................................... 87,515 96,907
Prepaid expenses and other assets................. 38,296 25,353
------------------ ------------------
Total current assets............................ 329,384 360,555

INVESTMENT IN PCS LICENSES, net...................... 2,072,518 2,085,836

PROPERTY, PLANT AND EQUIPMENT, net................... 3,310,862 3,132,664

MICROWAVE RELOCATION COSTS, net...................... 260,097 250,397

OTHER ASSETS, net.................................... 96,053 101,465

================== ==================
TOTAL ASSETS......................................... $ 6,068,914 $ 5,930,917
================== ==================

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
Accounts payable.................................. $ 183,090 $ 305,524
Payable to affiliates............................. 2,724 1,190
Accrued interest.................................. 55,405 45,851
Accrued expenses.................................. 266,904 227,890
Current maturities of long-term debt ............. 11,535 11,380
------------------ ------------------
Total current liabilities....................... 519,658 591,835

CONSTRUCTION OBLIGATIONS............................. 475,887 705,280

LONG TERM DEBT....................................... 3,968,590 3,101,539

OTHER NONCURRENT LIABILITIES......................... 61,281 48,975

COMMITMENTS AND CONTINGENCIES

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

PARTNERS' CAPITAL AND ACCUMULATED DEFICIT:
Partners' capital................................. 3,437,565 3,437,565
Accumulated deficit............................... (2,399,067) (1,959,277)
------------------ ------------------
Total partners' capital......................... 1,038,498 1,478,288

================== ==================
TOTAL LIABILITIES AND PARTNERS' CAPITAL.............. $ 6,068,914 $ 5,930,917
================== ==================

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
March 31,
-----------------------------------------
1998 1997
------------------ -----------------

OPERATING REVENUES....................... $ 143,810 $ 9,467

OPERATING EXPENSES:
Cost of revenues..................... 168,886 47,827
Selling, general and administrative.. 224,581 118,072
Depreciation and amortization........ 114,671 34,382
------------------ -----------------
Total operating expenses........... 508,138 200,281

LOSS FROM OPERATIONS.................... (364,328) (190,814)

OTHER INCOME (EXPENSE):
Interest, net ....................... (77,307) 808
Other income......................... 1,845 1,122
------------------ -----------------

Total other income (expense)....... (75,462) 1,930
================== =================
NET LOSS................................ $ (439,790) $ (188,884)
================== =================

See notes to consolidated condensed financial statements.

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

Three Months Ended
March 31,
----------------------------------------
1998 1997
- -------------------------------------------------------- ------------------- -------------------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss................................................... $ (439,790) $ (188,884)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization............................ 114,671 34,382
Amortization of debt discount and issuance costs......... 13,103 10,959
Changes in assets and liabilities:
Receivables............................................ 60,392 3,338
Inventory.............................................. 9,392 (57,213)
Prepaid expenses and other assets...................... (10,713) (1,482)
Accounts payable and accrued expenses.................. (72,333) (30,317)
Other non current liabilities.......................... 12,306 4,430
------------------- -------------------

Net cash used in operating activities................ (312,972) (224,787)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures....................................... (278,057) (685,157)
Microwave relocation costs................................. (7,871) (41,899)
------------------- -------------------
Net cash used in investing activities................ (285,928) (727,056)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing under revolving credit agreement............. 380,000 -
Proceeds from issuance of long-term debt................... 478,978 629,214
Change in construction obligations......................... (229,392) 362,969
Payments on long-term debt................................. (1,692) (11)
Debt issuance costs........................................ - (20,000)
------------------- -------------------
Net cash provided by financing activities............ 627,894 972,172

------------------- -------------------
INCREASE IN CASH AND CASH EQUIVALENTS........................ 28,994 20,329

CASH AND CASH EQUIVALENTS, Beginning of period................ 36,821 49,988

------------------- -------------------
CASH AND CASH EQUIVALENTS, End of period...................... $ 65,815 $ 70,317
=================== ===================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
- - Interest paid, net of amount capitalized.................. $ 35,600 $ 25

NON-CASH INVESTING AND FINANCING ACTIVITIES:
- - Accrued interest of $32,000 related to vendor financing was
converted to long-term debt during the three months ended
March 31, 1998.

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-month interim period
ended March 31, 1998 and 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 (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
three months ended March 31, 1998 are not necessarily indicative of the
operating results that may be expected for the year ended December 31, 1998.
These unaudited consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the 1997 Annual Report on Form 10-K filed by Sprint Spectrum L.P.
and Sprint Spectrum Finance Corporation.

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., Cox Telephony Partnership and Comcast Telephony
Services (together the "Partners"). 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 March
31, 1998 and 1997:

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, L.P.
("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.

Deadlock Event - The proposed budget for fiscal year 1998 has not been approved
by the Holdings partnership board, which resulted in the occurrence of a
"Deadlock Event" as of January 1, 1998 under the Amended and Restated Agreement
of Limited Partnership of MajorCo, L.P. (renamed Sprint Spectrum Holding
Company, L.P.) dated January 31, 1996 (the "Holdings Partnership Agreement").
Under the Holdings Partnership Agreement, if one of the Partners refers the
budget issue to the chief executive officers of the Parents for resolution
pursuant to specified procedures and the issue remains unresolved, buy/sell
provisions would be triggered which may result in the purchase by one or more of
the Partners of the interest of the other Partners, or, in certain
circumstances,

the liquidation of Holdings and it subsidiaries. See the 1997 Annual Report on
Form 10-K filed by the Company for further discussion on the deadlock event and
financing-related issues.

2. Summary of Significant Accounting Policies

Basis of Presentation - The assets, liabilities, results of operations and cash
flows of entities in which the Company has a controlling interest have been
consolidated. All significant intercompany accounts and transactions have been
eliminated.

Accounts Receivable - Accounts receivable are net of an allowance for doubtful
accounts of approximately $13.6 million and $9.0 million at March 31, 1998 and
December 31, 1997 respectively.

Investment in PCS Licenses - 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 will be able to secure renewal of the PCS licenses held by its
subsidiaries. PCS licenses are amortized over estimated useful lives of 40 years
once placed in service. Accumulated amortization for PCS licenses totaled
approximately $58.3 million and $45.0 million as of March 31, 1998 and December
31, 1997, respectively.

Microwave Relocation Costs - The Company has also incurred costs associated with
microwave relocation in the construction of the PCS network. Microwave
relocation costs are amortized over the remaining life of the PCS licenses.
Accumulated amortization for microwave relocation costs totaled approximately
$6.7 million and $5.2 million as of March 31, 1998 and December 31, 1997,
respectively.

Intangible Assets - The ongoing value and remaining useful life of intangible
assets are subject to periodic evaluation. The Company currently expects the
carrying amounts to be fully recoverable. Impairments of intangibles and
long-lived assets are assessed based on an undiscounted cash flow methodology.

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
months ended March 31, 1998 and 1997 was approximately $14.1 million and $34.2
million, respectively.

Debt Issuance Costs - Included in other assets are costs associated with
obtaining financing. Such costs are capitalized and amortized to interest
expense over the term of the related debt instruments using the effective
interest method. Accumulated amortization at March 31, 1998 and December 31,
1997 totaled approximately $16.5 million and $13.3 million, respectively.

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.

Reclassification - Certain reclassifications have been made to the 1997
consolidated financial statements to conform to the 1998 consolidated financial
statement presentation.

3. Long-Term Debt and Borrowing Arrangements

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. In December 1997, certain terms relating to
the financial and operating conditions were amended. As of March 31, 1998 the
term loans have a weighted average interest rate of 8.29%. As of March 31, 1998,
$985.0 million had been drawn under the revolving credit facility at a weighted
average interest rate of 8.26% with $715.0 million remaining immediately
available. Commitment fees for the revolving portion of the agreement are
payable quarterly based on average unused revolving commitments. Subsequent to
March 31, 1998, the Company borrowed an additional $105.0 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. Additionally, the commitments allow for the
conversion of accrued interest into additional principal. Such conversions do
not reduce the availability under the commitments. Interest accruing on the debt
outstanding at March 31, 1999, can be converted into additional principal
through February 8, 2000 and March 30, 2000, for Lucent and Nortel,
respectively.

On April 30, 1997 and November 20, 1997, the Company amended the terms of its
financing agreement with Nortel. The amendments provide for a syndication of the
financing commitment between Nortel, several banks and other vendors (the
"Nortel Lenders") and the modification of certain operating and financial
covenants. As of March 31, 1998, $760.5 million, including converted accrued
interest of $29.1 million, had been borrowed at an interest rate of 8.95% with
$568.6 million remaining available under the first phase. Subsequent to March
31, 1998, the Company borrowed an additional $24.2 million, including converted
accrued interest of $4.3 million, under the Nortel facility.

On May 29 and December 15, 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") and the modification of certain operating and financial covenants. The
Lucent Lenders have committed to financing up to an aggregate of $1.8 billion,
with Sprint financing up to $300 million. As of March 31, 1998, the Company had
borrowed approximately $1,331.3 million with $523.2 million remaining available
under the Lucent facility, including converted accrued interest of $54.5
million, at a weighted average interest rate of 8.82%. Subsequent to March 31,
1998, the Company borrowed an additional $36.9 million, including converted
accrued interest of $6.9 million, under the Lucent facility.

Certain amounts included under Construction Obligations on the consolidated
condensed balance sheets may be financed under the Vendors' financing
agreements.

4. Reorganization

During the first quarter of 1998 in an effort to enhance efficiency and reduce
costs, the Company reorganized and restructured certain operations under which
certain field offices were consolidated. Costs associated with this
reorganization are not significant to the Company's operations and consisted
primarily of severance pay, the write-off of certain leasehold improvements and
termination payments under lease agreements.

Part I.
Item 1b.

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

March 31, December 31,
1998 1997
- ------------------------------------------------------------ --------------- ---------------
(Unaudited)
ASSETS

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

TOTAL ASSETS................................................ $ - $ -
=============== ===============

LIABILITIES AND STOCKHOLDER'S EQUITY

Payable to parent........................................... $ 1,497 $ 1,497

STOCKHOLDER'S EQUITY:

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

Accumulated deficit......................................... (1,597) (1,597)
--------------- ---------------
Total stockholders' equity............................ (1,497) (1,497)

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY.................. $ - $ -
=============== ===============

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)

Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
--------------- -----------------

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

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

Net Loss............................. $ - $ -
=============== =================

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)

Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
---------------- ----------------

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash
used in operating activities:
Net loss........................................ $ - $ -
Changes in assets and liabilities:
Receivable from parent....................... - -
Payable to parent............................ - -
---------------- ----------------
Net cash used in operating activities...... - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock........................... - -
---------------- ----------------

Net cash provided by financing activities.. - -

---------------- ----------------
INCREASE (DECREASE) 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

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 three months
ended March 31, 1998 are not necessarily indicative of the operating results
that may be expected for the year ended December 31, 1998. These unaudited
condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in the 1997 Annual Report on Form 10-K
filed by Sprint Spectrum L.P. and Sprint Spectrum Finance Corporation.

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. FinCo pays a management
fee to the Partnership based on actual expenses paid by the Partnership of
behalf of FinCo. The losses generated by the management fee incurred by FinCo
will be funded by the Partnership.

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.

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 personal communications
services ("PCS");
- 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 impact of changes brought about by possible restructuring of partners'
ownership interests;
- 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

License and Network Coverage - 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, in
1997 Cox contributed to the Company 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) and Sprint PCSSM brand
names, trademarks of Sprint Communications Company L.P. ("Sprint
Communications").

In 1997 the Company commenced service in all 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. 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.

Affiliations - The Company currently affiliates with or provides management
services to entities in which the Partners have an ownership interest. The
Company has an affiliation agreement with American PCS, L.P. ("APC"), a
subsidiary of Holdings, which, through subsidiaries, owns a PCS license for and
operates both a broadband CDMA (code division multiple access) network and GSM
(global system for mobile communications) network in the Washington
D.C./Baltimore area MTA, which covers approximately 8.3 million Pops. APC
launched CDMA service at the end of the first quarter of 1998. The Company also
affiliates with Cox Communications PCS, L.P. ("Cox PCS"), a limited partnership
and equity investee of Holdings that owns a PCS license for the Los Angeles-San
Diego MTA covering 21.5 million Pops.

The Company provides management services to SprintCom, Inc. ("SprintCom") and
PhillieCo, L.P. ("PhillieCo"). SprintCom, a wholly-owned subsidiary 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 BTAs, covering approximately 70 million
Pops, all of which are geographic areas not covered by the Company's owned PCS
licenses or licenses owned by APC, Cox PCS or PhillieCo. PhillieCo is 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.

Roaming - The Company has entered into roaming agreements with various analog
cellular providers throughout the United States and Canada. Additionally, the
Company has negotiated roaming arrangements with other CDMA PCS carriers who
provide service in geographic areas not currently covered by the CDMA network of
Sprint Spectrum and its affiliates. As a result, Sprint Spectrum customers with
dual-mode handsets capable of transmitting over cellular and CDMA PCS
frequencies have the ability to roam automatically in areas where Sprint
Spectrum service is not available and where there are roaming agreements.

Continuing Risk Factors

Deadlock Event - A proposed budget for fiscal year 1998 has not been approved by
the Holdings partnership board, which resulted in the occurrence of a "Deadlock
Event" as of January 1, 1998 under the Holdings Partnership Agreement. Holdings
is the sole general partner of Sprint Spectrum L.P. Under the Holdings
Partnership Agreement, if one of the Partners refers the budget issue to the
chief executive officers of the Parents for resolution pursuant to specified
procedures and the issue remains unresolved, buy/sell provisions would be
triggered which may result in the purchase by one or more of the Partners of the
interest of the other Partners, or, in certain circumstances, the liquidation of
Holdings and it subsidiaries. Discussions among the Partners about restructuring
their interests in Holdings, in lieu of triggering such buy/sell procedures, are
ongoing. However, there can be no assurance these discussions will result in a
change to the partnership structure or will avert the triggering of the
resolution and buy/sell procedures referred to above or a liquidation of
Holdings.

Business Plan - The Company's business plan will require additional capital
financing prior to the end of 1998. 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 its Partners 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, the failure to meet regulatory requirements or other potential
adverse consequences.

Liquidity and Capital Resources

The continued expansion 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 year 2000 (based on the Company's current
plans for its network buildout in its current license areas) will total
approximately $12 billion (of which approximately $8.2 billion had been expended
as of March 31, 1998). 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 limited sources of revenue to meet its capital
requirements and has relied upon capital contributions, advances from Holdings,
third party debt and public debt. The Amended and Restated Capital Contribution
Agreement (the "Amended Agreement") dated October 2, 1996 between the Company
and the Partners provided for $3.2 billion in capital contributions. As of March
31, 1998 the Partners had fulfilled their obligation under the Amended
Agreement. Further capital contributions may be made by the Partners to Holdings
which may, in turn, contribute capital to the Company. However, the Partners are
not obligated to make additional capital contributions, and there can be no
assurance that such contributions will be made.

In October 1996 and as amended in December 1997, 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. As of
March 31, 1998, $300 million under the term loan and $985 million under the
revolving credit facility had been borrowed with $715 million remaining
available.

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 and December 1997, the Nortel facility provides $1.3 billion in senior
secured loans. The Lucent facility, as amended in May and November 1997,
provides $1.8 billion in senior secured loans (together the "Vendor Financing"
and together with the Bank Facility, the "Secured Financing"). The Company is
using the proceeds from the Vendor Financing to fund the purchase of the
equipment and software manufactured by the vendors as well as a substantial part
of the construction and ancillary equipment (e.g., towers, antennae, cable)
required to construct the Company's PCS network. These facilities serve as the
primary financing mechanism for the buildout and continued expansion of the
network. The Company has borrowed $2.1 billion under such facilities at March
31, 1998, of which $300 million was syndicated to Sprint.

The Bank Credit Facility agreement and the Vendor Financing agreements contain
certain restrictive financial and operating covenants, including, among other
requirements, maximum debt ratios (including debt to total capitalization),
limitations on capital expenditures, limitations on additional indebtedness and
limitations on dividends and other payment restrictions affecting certain
restricted subsidiaries. The loss of the right to use the Sprint trademark, the
termination or non-renewal of any FCC license that reduces population coverage
below specified limits, or changes in controlling interest in the Company, as
defined, among other provisions, constitute events of default.

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").
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.

The Senior Discount Notes were issued at a discount to their aggregate principal
amount at maturity and generated proceeds of approximately $273 million. 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. The Notes contain certain restrictive covenants, including,
among other requirements limitations on additional indebtedness, limitations on
restricted payments, limitations on liens, and limitations on dividends and
other payment restrictions affecting restricted subsidiaries.

For the three months ended March 31, 1998, the Company used cash of
approximately $313.0 million in operating activities, which consisted of the
operating loss of $439.8 million less depreciation and amortization of $127.8
million and a net change in working capital of $13.3 million. Cash used in
investing activities totaled $285.9 million, consisting of capital expenditures
and microwave relocation costs.

Results of Operations

For the Three Months Ended March 31, 1998

Operating Revenues/Margin

Revenues and cost of revenues have increased for the first quarter of 1998
compared to the first quarter of 1997 due to increases in the number of markets
launched and in the number of subscribers. Revenues include service and the
sales of handsets and accessory equipment through Sprint Spectrum channels
(including Sprint PCS retail stores, telemarketing, and business channels) and
to third party vendors. The negative margin results principally from the
Company's subsidy of handsets. Cost of revenues consists principally of handset
and accessory costs, interconnection costs and switch and cell site expenses,
including site rental and utilities.

Selling, General and Administrative Expenses

The Company's selling, general and administrative expenses for the first quarter
of 1998 were $224.6 million compared to $118.1 million for the first quarter of
1997. For the three months ended March 31, 1998, selling expenses increased
$36.4 million due 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), the
development of printed brochures to promote the Company's products and services,
and sales incentive

programs. The Company expects selling expenses will continue to increase as the
Company expands its sales and marketing activities.

General and administrative expenses for the first quarter increased $70.1
million 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. These additional employees have been added over
the last year to support the continued growth of the Company. 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
information systems, continued rollout and tailoring of employee training, and
various other projects. Additionally, estimated costs associated with the
reorganization and consolidation of certain Company operations have been
included in general and administrative expenses for the first quarter of 1998.
These estimated costs are not significant to the Company's operations and
include severance pay, the write-off of certain leasehold improvements and
termination payments under lease agreements.

Depreciation and Amortization

Depreciation and amortization expense for the first quarter of 1998 was $114.7
million compared to $34.4 million for the same period in the prior year 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 Expense

Interest expense increased to $78.2 million for the three months ended March 31,
1998, versus $0.1 million for the same period in 1997. 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

The Company participates in affiliation agreements with APC and Cox PCS.
Aggregate fees of $1.8 million earned under these agreements for the three
months ended March 31, 1998 are shown in other income.

For the Three Months Ended March 31, 1997

Operating Revenues/Margin

The Company commenced initial commercial operations for its PCS services in
certain markets late in the fourth quarter of 1996 and, as a result, generated
minimal operating revenues. The negative gross profit resulted primarily from
the Company's subsidy of handsets. Cost of revenues consisted 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. As markets launched, the costs were incurred to
provide service in the related markets.

Selling, General and Administrative Expenses

The Company's selling, general and administrative expense for the three months
ended March 31, 1997 increased to $118.1 million compared to the three months
ended March 31, 1996. Selling expenses increased $13.1 million due to costs
incurred in preparation of and during the initial commercial service launch in
various markets. Such costs included 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.

General and administrative expenses increased to $105.0 million for the three
months ended March 31, 1997 due principally to increases in salary and related
benefits, computer equipment and related expenses and professional and
consulting fees. Salaries and benefits and 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
information systems, continued rollout and tailoring of training programs for
the Company's sales force, and various other projects.

Depreciation and Amortization

Depreciation and amortization expense increased from $0.3 million for the three
months ended March 31, 1996 to $34.4 million for the three months ended March
31, 1997 as certain network equipment was placed in service and amortization of
PCS licenses and microwave relocation costs in the launched markets commenced.

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